us-cbp-cross-rulings-hq-085577•HQ 085577: Amplifier, tuner, and cassette deck imported together for audio rack system
HQ 085577: Amplifier, tuner, and cassette deck imported together for audio rack system
us-cbp-cross-rulings-hq-085577HQ 085577: Amplifier, tuner, and cassette deck imported together for audio rack systemGuidance
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 085577
January 10, 1990
CLA-2 CO:R:CV:G: 085577 JLV
CATEGORY: Classification
TARIFF NO.: 8527.39.00
Robert F. Seely, Esq.
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60606-3693
RE: Amplifier, tuner, and cassette deck imported together for
audio rack system
Dear Mr. Seely:
In a letter of September 12, 1989, as supplemented by a
letter of November 9, 1989, on behalf of your client, TEAC
America, Inc., you request a ruling on the tariff
classification of audio components which, after importation,
will be combined with other audio components for sale as a
stereo component rack system. This ruling is our decision on
the classification under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA).
FACTS:
The merchandise consists of a model SA-200 stereo
amplifier, a model ST-200 stereo tuner, and a model SW-200
double cassette deck. These components are individually
packed in cartons which are then packed in a single, large
shipping carton so that each large shipping carton contains
one amplifier, one tuner, and one cassette deck. Although you
state that these components will be imported from Hong Kong,
you do not state or demonstrate that Hong Kong is the country
of origin of the three stereo components.
You state that these components will not be repacked
after importation into the United States, but they will be
marketed and sold with four other components as a stereo
component rack system, Teac Model S-200CD. The additional
four components are: compact disc player, turntable,
speakers, and rack (cabinet).
- 2 -
It is your position that the merchandise is separately
classified in subheadings 8518.40.20 (the amplifier),
8527.39.00 (the tuner), and 8520.31.00 (the cassette deck),
HTSUSA, because the three components, although packed
together, do not constitute a complete set under General Rule
of Interpretation (GRI) 3(b), and because GRI 2(a) does not
apply to incomplete sets.
In your supplemental letter of November 9, 1989, you
stated that the decision in Sears, Roebuck & Co. v. United
States, __ CIT __ (Slip Opinion 89-136, September 28, 1989),
in which the court held that certain stereo components (an
incomplete stereo rack system) were separately classified, is
applicable even though the decision concerned the doctrine of
entireties for purposes of classification under the Tariff
Schedules of the United States (TSUS).
ISSUE:
Are the three components, if packed together, classified
separately when imported, or are they classified as a set
under the HTSUSA?
LAW AND ANALYSIS:
The individual components fall under headings 8518
(amplifier), 8520 (cassette deck with recording apparatus),
and 8527 (reception apparatus for radiobroadcasting), HTSUSA.
Although imported together, these components do not constitute
a composite machine for purposes of legal note 3, section XVI,
because they are not "fitted together to form a whole." The
Explanatory Notes (EN) to section XVI clearly indicate that
"fitted together to form a whole" requires that the machines
be permanently attached either to each other or by mounting on
a common base or in the same housing. Furthermore, the
imported components are not a functional unit for purposes of
legal note 4, section XVI, because they do not contribute to a
single function that is clearly defined in chapter 84 or 85.
The individual components, at the time of importation,
are complete and finished articles. However, the goods are
prima facie classifiable under three headings and, therefore,
we look to GRI 3. If the three components are composite goods
or items in a set put up for retail sale, then classification
will be determined by the component which gives them their
essential character, insofar as this criterion is applicable.
GRI 3(a) and (b).
- 3 -
The EN to GRI 3(b) provide guidance on what constitutes a
composite good and a set. EN (IX) states as follows:
(IX) For the purposes of this Rule [3(b)],
composite goods made up of different
components shall be taken to mean not only
those in which the components are attached
to each other to form a practically
inseparable whole but also those with
separable components, provided these
components are adapted one to the other and
are mutually complementary and that together
they form a whole which would not normally
be offered for sale in separate parts. * * *
As a general rule the components of these
composite goods are put up in a common
packing.
Other than the fact that these components can be connected by
cables or wires, they are not "adapted" one to the other.
This term requires that they be suited by a particular design
for use together. There is no evidence that these components
have special design features which make them mutually
complementary in a manner more so than any collection of
various similar stereo components are considered to be
"complementary." These components are the type that are
normally offered for sale as separate articles.
EN (X) defines "goods put up in sets for retail sale" as
meaning goods which satisfy three criteria. Two of the
criteria are readily satisfied: the goods consist of at least
two different articles which are, prima facie, classifiable in
different headings, and the goods are packaged in a manner
suitable for sale directly to users without repacking. The
third criterion, that the goods consist of "products or
articles put up together to meet a particular need or carry
out a specific activity," presents a more difficult issue.
Under the doctrine of entireties, as is evident from the
decision in Sears, Roebuck & Co., supra, separate components,
designed and intended to be used together, had to comprise a
complete commercial entity. GRI 3(b), however, does not state
that a set need be "complete." The components need only
satisfy the requirement that they meet a particular need or
carry out a specific activity. In this case, the three
components, although they cannot be used without the addition
of speakers, are said to be put up in a manner suitable for
sale directly to users in order to satisfy a user's need for a
balanced component stereo system.
- 4 -
The amplifier is the main power source and must be turned
on in order for the cassette deck and tuner (or compact disc
player, turntable, or speakers) to be turned on. The output
signal from the cassette deck or tuner must be sent through
the amplifier in order to properly amplify the signal for
reproduction through the speakers. The three units provide
the basic stereo components for an audio entertainment system.
We conclude, therefore, that these components are put up
together to carry out a specific activity, i.e., audio
entertainment.
Articles which constitute a set are classified as if they
consisted of the component which gives them their essential
character. Although the amplifier is the component through
which the power is supplied to all the other components and
through which the signals must be sent for proper
amplification, we conclude no one component of the set imparts
the essential character. Among the examples of criteria set
forth in EN (VIII) to GRI 3(b), only the value criterion has
any relevance. The invoice value of the amplifier, according
to the submission by counsel for the importer, is "nearly
twice" that of the cassette tape player and "over twice" that
of the tuner. However, as an audio entertainment system, the
audio signals are generated from the tuner or the cassette
deck. These components are as essential to the specific
activity as is the amplifier. Therefore, GRI 3(c) applies,
and the set is classified in heading 8527 because that is the
heading which occurs last in numerical order among the
headings which equally merit consideration.
HOLDING:
The amplifier, tuner, and cassette deck are goods put up
in a set for retain sale; no one component gives the set its
essential character; therefore, under GRI 3(c), the set is
classified in subheading 8527.39.00, HTSUSA.
Sincerely,
John Durant, Director
Commercial Rulings Division
6cc: AD NY Seaport
2cc: Chief, CIE
1cc: AC, CO
1cc: Durant
1cc: Reading File
1cc: GRI 3(b) committee
1cc: Matt Rohde
1cc: Director, Trade Operations
LIBRARY: valentin
FILE NAME: 085577
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