HQ 953201: IA 63/92; Magnetic Holder; Permanent Magnets; Explanatory Note 85.05; 3926.90.95; 6914.90.00; 7326.90.90

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 953201
                         March 30, 1994


CLA-2 CO:R:C:M 953201 DWS

CATEGORY: Classification

TARIFF NO.: 8505.19.00

Area Director
U.S. Customs Service
J.F.K. Airport
Building 178
Jamaica, NY 11430

RE: IA 63/92; Magnetic Holder; Permanent Magnets; Explanatory    
     Note 85.05; 3926.90.95; 6914.90.00; 7326.90.90

Dear Sir:

     This is in response to your memorandum of September 14, 1992
(CLA-2-K:C:A2 GS), relating to a request for internal advice
initiated by Gibney, Anthony & Flaherty, on behalf of International
Visual Corp., concerning the tariff classification of magnetic
holders under the Harmonized Tariff Schedule of the United States
(HTSUS).

FACTS:

     The merchandise consists of magnetic holders which are sold
and used exclusively as holders for retail store sign displays. 
The holder is comprised of three components.  One of the components
is an "L" shaped molded plastic framework which is electro-plated
to give the article a highly polished and reflective surface.  A
round hole in the shorter leg of the "L" allows it to accept
inserts and signs attached to a round peg.  This feature allows a
sign to rotate 360 degrees.  The other two components consist of
two ceramic permanent magnets and four steel plated pole plates. 
The pole plates are assembled between the magnets to prevent
demagnetization.  

     The device is placed on a metal display rack or similar metal
merchandise display, where it is held in place by the two ceramic
magnets inserted into the longer leg of the "L".

      The subheadings under consideration are as follows:

     3926.90.95: [o]ther articles of plastics . . .: [o]ther.

     The general, column one rate of duty is 5.3 percent ad
     valorem.

     6914.90.00: [o]ther ceramic articles: [o]ther.

     The general, column one rate of duty is 8 percent ad        
      valorem.

     7326.90.90: [o]ther articles of iron or steel: [o]ther:     
                  [o]ther: [o]ther: [o]ther.

     The general, column one rate of duty is 5.7 percent ad
     valorem.

     8505.19.00: [p]ermanent magnets and articles intended to
                 become permanent magnets after magnetization:
                 [o]ther.

     The general, column one rate of duty is 4.9 percent ad
     valorem.

ISSUE:

     Whether the magnetic holder is classifiable under subheading
3926.90.95, HTSUS, as an other article of plastics, under
subheading 6914.90.00, HTSUS, as an other ceramic article, under
subheading 7326.90.90, HTSUS, as an other article of steel, or
under subheading 8505.19.00, HTSUS, as a permanent magnet.

LAW AND ANALYSIS:

     Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order. 
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.

     Counsel for the importer claims that the subject merchandise
is classifiable under subheading 8505.19.00, HTSUS, as a permanent
magnet.  In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized.  The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS.  See
T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).  In part,
Explanatory Note 85.05 (pp. 1340) states that:

      [t]his heading covers electro-magnets, those electro-magnet
     operated appliances specially listed in the heading,        
      permanent magnets and permanent magnet work holders.

     (1) xxx

     (2) Permanent magnets and articles intended to become       
          permanent magnets after magnetisation.

              Permanent magnets consist of pieces of hard steel,
         special alloys or other materials . . . which have been 
         rendered permanently magnetic.  Their shape varies      
          according to the use for which they are designed. . .
         Permanent magnets remain classified here whatever their 
          use, including small magnets used, inter alia, as toys.

     It is our position that, based upon Explanatory Note 85.05,
the magnetic holder is described as a permanent magnet under
heading 8505, HTSUS.  It is stated that permanent magnets remain
classified under heading 8505, HTSUS, whatever their use.  

     It is claimed that the magnetic holder is precluded from
classification under heading 8505, HTSUS, because of the exclusion
in Explanatory Note 85.05.  It states that:

     [t]he heading does not cover:

     (a) xxx

     (b) Electro-magnets, permanent magnets or magnetic devices  
          of this heading, when presented with machines,         
           apparatus, toys, games, etc., of which they are designed 
         to form part (classified with those machines, apparatus, 
         etc.).

     We do not agree that the magnetic holder is precluded from
classification under heading 8505, HTSUS, because of the above
exclusion.  The permanent magnet in the holder is not presented
with any article, and it is not designed to form part of another
article.  It is, however, incorporated in the subject holder along
with the steel and plastic pieces.  It is our position that the
above exclusion does not contemplate articles such as the magnetic
holder.  Consequently, we find that it is described under
subheading 8505.19.00, HTSUS.

     It is our position that the magnetic holder is a composite
good consisting of different components and is described under
headings 6914, 3926, and 7326, and 8505, HTSUS. 

      GRI 3 states that:

     [w]hen, by application of 2(b) or for any other reason,     
      goods are, prima facie, classifiable under two or more     
       headings, classification shall be effected as follows:

     (a) The heading which provides the most specific description
         shall be preferred to headings providing a more
         general description.  However, when two or more headings
         each refer to a part only of the materials or
         substances contained in mixed or composite goods or to  
          part only of the items in a set put up for retail sale,
         those headings are to be regarded as equally specific in
         relation to those goods, even if one of them gives a    
          more complete or precise description of the goods.

     (b) Mixtures, composite goods consisting of different       
          materials or made up of different components, and goods
         put up in sets for retail sale, which cannot be         
          classified by reference to 3(a), shall be classified as 
          if they consisted of the material or component which   
           gives them their essential character, insofar as this 
            criterion is applicable.

     (c) When goods cannot be classified by reference to 3(a) or 
          3(b), they shall be classified under the heading which
         occurs last in numerical order among those which equally
         merit consideration.

     Because the magnetic holder is a composite good made up of
different components which are described under different provisions
of the HTSUS, those headings are to be regarded as equally specific
under GRI 3(a).  Therefore, GRI 3(a) fails in establishing
classification, and GRI 3(b) becomes applicable.  Because the
magnetic holder is a composite good, under GRI 3(b), we must
determine its essential character.

     Explanatory Note 3(b)(VIII) (p. 4) states that:

     [t]he factor which determines essential character will vary 
      as between different kinds of goods.  It may, for example, 
       be determined by the nature of the material or component, 
        its bulk, quantity, weight or value, or by the role of a 
         constituent material in relation to the use of the goods. 
  
     We find that the essential character of the magnetic holder
is imparted by the permanent magnets, because without the magnets
the article could not adhere to its intended surface.  The article
would lose its identity as a magnetic holder and would be of little
commercial use.

      Although the permanent magnets are ceramic articles, they are
not classifiable under heading 6914, HTSUS, because heading 8505,
HTSUS, a use provision, is more specific.  A designation by
specific use prevails over a designation of general character
without special limitations as to use or other qualifications, a
classification by composition, and an eo nomine designation, unless
there is a clear legislative intent to the contrary.  Henley & Co.,
Inc. v. U.S., 49 CCPA 66, C.A.D. 793 (1962).

     Therefore, under GRI 3(b), the magnetic holder is classifiable
under subheading 8505.19.00, HTSUS. 

HOLDING:

     The magnetic holder is classifiable under subheading
8505.19.00, HTSUS, as a permanent magnet. 

     This decision should be mailed by your office to the internal
advice requester no later than 60 days from the date of this
letter.  On that date, the Office of Regulations and Rulings will
take steps to make the decision available to Customs 
personnel via the Customs Ruling Module in ACS and the public via
the Diskette Subscription Service, Lexis, Freedom of Information
Act, and other public access channels.  

                           Sincerely,



                            John Durant, Director