CLA-2:CO:R:C:G 083968 JAS

Donald L. Rosati
Volkswagen of America, Inc.
P.O. Box 3951
Troy, Michigan 48007-3951

RE: Fuel Line Repair Kit

Dear Mr. Rosati:

In your letter of March 7, 1989, to the Area Director of Customs, New York Seaport, you inquire whether components packaged together for use in repairing defective automotive fuel lines constitutes items in a set put up for retail sale for tariff purposes. Our ruling follows.

FACTS:

At your request, we will only consider whether these kits constitute goods put up in sets for retail sale. Neither the classification of individual components nor, to the extent relevant, identification of the component which gives each kit its essential character is in issue.

The merchandise in question is the Audi turbo engine kit. Each kit is individually packaged and contains a variety of retaining clips, hoses, clamps, brackets, connectors, and tee fittings, as well as fuel line covers and valve covers with their gaskets. The kits will be distributed through Volkswagen of America, Inc. to Audi dealers for their use in connection with a fuel system modification recall campaign. You state that Volkswagen AG, West Germany, will invoice Volkswagen of America, Inc. directly on a per-kit basis. The components of each kit (plus hood mat and fuel injector O- rings which are not parts of the kit) are installed in a recalled vehicle free of charge to the owner. Unused kits are returned to Volkswagen of America. Dealers are invoiced only for kits retained in inventory.

- 2 -

You maintain that because each kit consists of at least two different articles classifiable in different headings, contains articles put up together to meet a particular need, and is in a manner suitable for retail sale, it constitutes goods put up in sets for retail sale. Under General Rule of Interpretation (GRI) 3(b), Harmonized Tariff Schedule of the United States Annotated (HTSUSA), such goods are classifiable according to the component which gives them their essential character.

ISSUE:

Are the kits at issue goods put up in sets for retail sale under the HTSUSA?

LAW AND ANALYSIS:

GRI 3(a), HTSUSA, states in part that when two or more headings each refer 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. GRI 3(b) states in part that 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 component which gives them their essential character.

Relevant Explanatory Notes, which provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level, indicate that the term "goods put up in sets for retail sale" means goods that (1) consist of at least two different articles which are, prima facie, classifiable in different headings, (2) consist of products or articles put up together to meet a particular need or carry out a specific activity, (3) and are put up in a manner suitable for sale directly to users without repacking.

There is no requirement that sets actually be sold at retail. Fuel line modification kits delivered without repacking to Audi dealers who, as the ultimate consumers, will install the components on recalled cars without charge to the owners, are put up in a manner suitable for sale directly to users.

- 3 -

HOLDING:

In the described circumstances, fuel line modification kits qualify as goods put up in sets for retail sale for purposes of GRI 3(b), HTSUSA.


Sincerely,

John Durant, Director
Commercial Rulings Division