CLA-2 OT:RR:CTF:TCM H008626 HkP
Mr. Patrick E. Moffett
Audiovox Corporation
150 Marcus Blvd.
Hauppauge, NY 11788
RE: XM satellite radio devices from Korea; Modification of NY J89049
Dear Mr. Moffett:
This is in reference to New York Ruling Letter (“NY”) J89049, issued to you on November 4, 2003, concerning the classification of certain XM satellite radio devices, the SIR-CK2 and SIR-HK1 docking stations, under the Harmonized Tariff Schedule of the United States (“HTSUS”). In that ruling, CBP classified the docking stations under heading 8543, HTSUS, as electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85. We have determined that the tariff classification of these items is incorrect. For the reasons set forth below, we are modifying NY J89049.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification was published on August 28, 2008, in the Customs Bulletin, Vol. 42, No. 36. One comment on behalf of your corporation was received in response to this notice. A discussion of the comment and CBP’s response is found in the “Effect on Other Rulings” section below because the comment does not relate to the reclassification of the docking stations.
FACTS:
In NY J89049 the merchandise at issue was described as follows:
SIR-CK2 is a docking station designed for use with the SIR-PNP1. It employs a power adapter, a roof mounted antenna, mounting bracket and an RCA cable. The device provides power for the SIR-PNP1 as well as receiving the analog signal from it through interconnecting pins. It further transmits that signal through the RCA cable directly to the radiobroadcast receiver. It can only transmit via the cable.
SIR-HK1 is a docking station for the SIR-PNP1. It employs an AC power adapter, antenna and RCA cable. This device provides power for the SIR-PNP1, receives the signal from through interconnecting pins and transmits that signal via the RCA cable to the radiobroadcast receiver within the automobile.
U.S. Customs and Border Protection (“CBP”) previously classified these docking stations in subheading 8543.89.9695, HTSUSA. We note that pursuant to the 2007 changes to the HTSUS, the goods of subheading 8543.89.96 have been transferred to subheading 8543.70.96, HTSUS, among other subheadings.
ISSUE:
What is the correct classification of the XM docking stations under the HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs, 2 through 6, may then be applied in order.
The 2008 HTSUS provisions under consideration are as follows:
8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof:
8504.40 Static converters:
8504.40.95 Other …..
8529 Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528:
8529.10 Antennas and antenna reflectors of all kinds; parts suitable for use therewith:
8529.10.90 Other …..
8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
8543.70 Other machines and apparatus:
Other:
Other:
8543.70.96 Other …..
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
In our proposed ruling we stated that the docking stations are composite goods, the essential character of which is imparted by their antennas by virtue of their value and role in relation to the power supply. As such, we proposed classification under heading 8529, HTSUS, by virtue of a GRI 3(b) analysis. However, Note 3 to Section XVI, HTSUS, provides:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
Note 5 to Section XVI, HTSUS, provides, “For the purposes of these notes, the expression “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 85.”
The docking stations consist of an antenna, classified under heading 8529, HTSUS, and a power supply, classified under heading 8504, HTSUS. Therefore, under the principle of GRI 1, by application of Notes 3 and 5 to Section XVI, the docking stations are composite machines because they are two or more machines fitted together to form a whole. However, after considering the nature and function of the docking stations, we are unable to determine their principal function because the antenna and power supply both perform important functions and contribute to how the machines are used. The General EN to Section XVI provides, in relevant part:
(VI) MULTI FUNCTION MACHINES AND COMPOSITE MACHINES
(Section Note 3)
Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3 (c); such is the case,
for example, in respect of multi function machines potentially classifiable in several of the headings 84.25 to 84.30, in several of the headings 84.58 to 84.63 or in several of the headings 84.69 to 84.72.
GRI 3(c) provides, “When goods cannot be classified by reference to GRI 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.” Accordingly, the docking stations are classified under heading 8529, HTSUS, as antennas. Further, we find that the docking stations are precluded from classification under heading 8543, HTSUS, by the terms of that heading because they are provided for elsewhere in Chapter 85 of the tariff.
HOLDING:
By application of GRI 1 and Note 3 to Section XVI, we find that the docking stations identified as SIR-CK2 and SIR-HK1 are classified under heading 8529, HTSUS. They are specifically provided for in subheading 8529.10.90, HTSUS, which provides for: “Parts suitable for use solely or principally with the apparatus of heading 8525 to 8528: Antennas and antenna reflectors of all kinds, parts suitable for use therewith: Other.” The 2008 column one, general rate of duty is 3% ad valorem.
EFFECT ON OTHER RULINGS:
In our proposed ruling we stated that NY J89049, dated November 4, 2003, would be modified with respect to the classification of the SIR-CK2 and SIR-HK1 docking stations and that the classification of the other items described therein would remain unchanged. In the comment we received it was stated that one of the products in NY J89049, the SIR-PNP1 satellite radio receiver/tuner, was subsequently reclassified by CBP in NY K87747, dated June 20, 2004.
We find that the classification decision in NY K87747 regarding the SIR-PNP1 satellite radio receiver/tuner is without effect. This is because rulings which have been in effect for at least 60 days may only be modified in accordance with the provisions of 19 U.S.C. § 1625(c), which require that notice of the proposed action be published in the Customs Bulletin and that the public be allowed to comment on the proposed action for a period of at least 30 days. This procedure was not followed with respect to the purported reclassification of the SIR-PNP1 receiver/tuner. The original classification decision was effective on November 4, 2003, (NY J89049) and the purported reclassification was attempted on June 20, 2004 (NY K87747), more than 60 days later. NY K87747 and NY J89049 will both be subject to modification as they concern the classification of the SIR-PNP1 receiver/tuner.
Accordingly, NY J89049, dated November 4, 2003, is hereby modified with respect to the classification of the SIR-CK2 and SIR-HK1 docking stations. The classification of the other items described therein is unchanged. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division