CLA-2 CO:R:C:M 087021 MBR
Mr. W.J. Gonzalez
Trans-Union Customs Service, Inc.
8939 So. Sepulveda Blvd, Suite #206
Los Angeles, CA 90045
RE: Revocation of NY 838831 and NY 849878; Low Power
Transceivers; "Walkie Talkies"; Toy Set
Dear Mr. Gonzalez:
We have been asked to reconsider your ruling NY 838831,
dated April 5, 1989, concerning the classification of low power
transceivers for the amusement of children, under the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA).
FACTS:
The merchandise at issue are low-powered transceivers
("walkie talkies"). Counsel has submitted a representative
sample which is made in China by "Playtime," "The Toy Company
That Cares." They operate on a frequency of 49.82 - 48.90
megahertz ("MHz"). They have flexible antennas, a send button, a
morse code button, volume control and a plastic belt clip. They
are sold in sets of two. Each transceiver requires a 9 volt
battery. The housing has colorful blue highlighting, false
brackets and false screws, a sticker with the AT&T logo (new
models no longer have the AT&T sticker), and is constructed
entirely of plastic. The packaging states: "For ages 5 and up."
These low-powered transceivers are marketed for the amusement of
children. Our research indicates that these have a retail price
of aproximately $5.00. Ruling Letters NY 838831, dated April 5,
1989, and NY 849878, dated March 8, 1990, held that the instant
merchandise was classifiable under subheading 8525.20.20, HTSUSA,
which provides for low powered transceivers.
ISSUE:
What is the classification of low-powered transceivers
("walkie talkies") designed for the amusement of children, under
the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA)?
-2-
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUSA
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
These "walkie talkies" are low power transceivers which
operate on frequencies from 49.82 to 49.90 MHz. They are
designed primarily for the amusement of children, and are sold in
toy stores and major department stores (in the toy section).
Therefore, they are prima facie classifiable under two headings,
which are 9503 and 8525, HTSUSA. These headings describe:
8525 Transmission apparatus for radiotelephony,
radiotelegraphy, radiobroadcasting or television,
whether or not incorporating reception apparatus...:
8525.20.20 Transmission apparatus incorporating reception
apparatus: [t]ransceivers: [l]ow-power
radiotelephonic transceivers operating on
frequencies from 49.82 to 49.90 MHz
* * * * * * * * * * * * *
9503 Other toys; reduced-size ("scale") models and similar
recreational models, working or not; puzzles of all
kinds; and accessories thereof:
9503.70.80 Other toys, put up in sets or outfits, and parts
and accessories thereof: [o]ther: [o]ther
Subheading 8525.20.20, HTSUSA, falls within Section XVI.
Section XVI, Legal Note 1(p), states:
1. This section does not cover:
(p) Articles of chapter 95.
Therefore, articles which are described both in Section XVI
and Chapter 95, HTSUSA, are classifiable in Chapter 95.
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) to Chapter 95 state:
This Chapter covers toys of all kinds whether designed for
the amusement of children or adults.
Furthermore, the EN regarding heading 9503, HTSUSA, page
1588, states:
-3-
Certain toys (e.g., electric irons, sewing machines, musical
instruments, etc.) may be capable of limited "use"; but they
are generally distinguishable by their size and limited
capacity from real sewing machines, etc.
Although these low power transceivers are of a comparable
size to transceivers capable of uses other than amusement, the
instant merchandise is clearly capable of only an extremely
limited capacity. Upon inspection of the merchandise, Customs
found that these transceivers have an extremely limited effective
range (approximately 92 yards, outdoors, when in line-of-sight).
Furthermore, although the housing has an appearance of
durability, upon closer inspection, it is clearly only designed
to appear to have durable features. The fact that AT&T has given
permission for a sticker bearing its logo to be placed on the
merchandise does not persuade us that the merchandise is other
than solely designed for the amusement of children (the new
models no longer have the AT&T logo).
Counsel argues that these "transceivers are comparable in
size and capabilities to any other low-power radiotelephonic
transceivers which operate within the specified frequency range."
If this is the case, then transceivers in this frequency range
cannot be otherwise than designed exclusively for the amusement
of children or adults, and therefor properly classifiable under
the provision for toys. However, no proof of this fact has been
provided. Therefore, we believe that there may be low-power
radiotelephonic transceivers which operate on frequencies from
49.82 to 49.90 MHz, designed for uses other than amusement.
These would be distinguishable by their durable construction,
transmission range, design features, intended uses, and
commensurate increased cost.
Counsel has cited numerous TSUS court opinions. However, in
fact, these TSUS cases focused on whether the article in question
was chiefly used for the amusement of children, and thereby
classifiable under the toy provision. See Western Stamping
Corporation v. United States (Louis Marx & Co., Inc., Party in
Interest), C.D. 3554 (1968). It is Customs position that the
instant merchandise is principally used for the amusement of
children and is not an article of utility, and is therefore not
classifiable in Section XVI. See United States v. Louis Wolf &
Co., 26 CCPA 243, 246.
Further, see HQ 087305, dated September 7, 1990, for a
similar holding regarding similar merchandise.
HOLDING:
Low powered transceivers of a similar design and
construction are designed for the amusement of children and are
therefore properly classifiable within subheading 9503.70.80,
HTSUSA, which provides for toys put up in sets. The rate of duty
is 6.8 percent ad valorem.
EFFECT ON OTHER RULINGS:
For the reasons stated above, NY 849878 (dated March 8,
1990), and NY 838831 (dated April 5, 1989), are revoked under
authority of Section 177.9(d), Customs Regulations. The instant
ruling will not be applied retroactively, and will not,
therefore, affect past importations of your client's merchandise.
We recognize that pending transactions may be adversely affected
by this revocation, in that contracts for importations arriving
at a port subsequent to the issuance of this ruling will be
classified pursuant to this ruling. If such a situation arises,
your client may, at its discretion, notify this office and apply
for relief from the binding effects of the decision as may be
warranted by the circumstances.
Sincerely,
John Durant, Director
Commercial Rulings Division