CLA-2 CO:R:C:M 955105 DWS

Mr. Stephen J. Leahy
Leahy & Ward
63 Commercial Wharf
Boston, MA 02110

RE: Rechargeable Storage Battery and Battery Recharger; GRI 3(b); Explanatory Notes 3(b)(VIII), 3(b)(IX), and 3(b)(X); Set; HQs 083672 and 954061; Composite Good; 8504.40.00

Dear Mr. Leahy:

This is in response to your letter of September 7, 1993, on behalf of Hotronic USA, Inc., to the District Director of Customs, Boston, Massachusetts, concerning the classification of a rechargeable nickel cadmium storage battery and a battery charger under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter has been referred to this office for a response.

FACTS:

The merchandise consists of a nickel cadmium storage battery and a battery charger, both designed to power a footwarmer. A binding ruling has been requested for the following three classification scenarios: (1) The storage battery and the battery charger as a set suitable for sale and distribution to consumers as imported; (2) The storage battery and the battery charger imported suitable for packing with no other components included in a complete footwarmer set; and (3) The storage battery and the battery charger in a footwarmer box with additional components to be added after importation. We consider scenario (3) to be identical to scenario (2). It is our understanding that the storage battery and the battery charger are separate articles and are not attached to one another.

The subheadings under consideration are as follows:

8504.40.00: [s]tatic converters.

The general, column one rate of duty for goods classifiable under this provision is 3 percent duty ad valorem.

8507.30.00: [n]ickel-cadmium storage batteries.

The general, column one rate of duty for goods classifiable under this provision is 5.1 percent ad valorem.

ISSUE:

Whether, under scenario (1), the storage battery and the battery charger constitute a set, and, if so, whether the storage battery or the battery charger imparts the essential character of the set.

Whether, under scenario (2) and (3), the storage battery and the battery charger constitute either a set or a composite good, and, if a composite good, whether the storage battery or the battery charger imparts the essential character of the composite good.

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.

SCENARIO (1)

To determine whether the storage battery and the battery charger constitute a set, we must consult GRI 3(b). It states that:

[m]ixtures, 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.

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. 54 Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Note 3(b)(X) (p. 4) states that:

[f]or the purpose of this Rule, the term 'goods put up in sets for retail sale' shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings . . .;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards)."

It is our position that the storage battery and the battery charger are a set for classification purposes. It fully satisfies all three requirements of Explanatory Note 3(b)(X), in that the set consists of two different articles which are classifiable in different headings, it consists of products put up together to carry out a specific activity (to provide a power source), and it is put up for sale directly to users without repacking.

Because the storage battery and the battery charger constitute a set, its essential character must be determined. 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.

HQ 083672, dated May 16, 1989, is cited in support of the claim that the battery charger imparts the essential character of the subject set. In that ruling, a battery charger and rechargeable batteries were held to constitute a set, and because it was held that the battery recharger imparted the essential character of the set, the set was classified under subheading 8504.40.00, HTSUS.

However, it is our position that the present merchandise is distinguishable from that of HQ 083672. The batteries contained within the set in that case were intended to be replaced, and the purpose of buying the set was so one could, with the use of the appropriate adapter, recharge all of the various sizes of consumer rechargeable nickel cadmium batteries; not necessarily those within the set. Therefore, in HQ 083672, the battery charger imparted the essential character of the set.

With regard to the subject set, its primary purpose is to power a footwarmer through the use of the included battery pack. Without the battery, it is our understanding that the footwarmer cannot operate. The battery charger is included in the footwarmer set to recharge the battery whenever it is low on power. Consequently, it is our position that the storage battery imparts the essential character of the subject set. See HQ 954061, dated May 13, 1993, wherein we held that a rechargeable lead acid battery pack set, which could be used for a variety of applications, was classifiable under subheading 8507.20.00, HTSUS. Therefore, the set containing the storage battery and the battery charger is classifiable under subheading 8507.30.00, HTSUS.

SCENARIO (2) and (3)

For classification purposes, the storage battery and the battery charger, imported together without the necessary additional components, whether or not in a footwarmer box, do not constitute a set. The two articles fail as a set because of Explanatory Note 3(b)(X)(c), in that they are not put up in a manner suitable for sale directly to users without repacking. Even if the storage battery and the battery recharger remain in the footwarmer box after importation, another packing step is needed to add the other footwarmer components to the box before the merchandise is sold to consumers. We find that the addition of the other footwarmer components constitutes repacking.

Because the storage battery and the battery charger do not constitute a set, the issue is whether they constitute a composite good.

In part, Explanatory Note 3(b)(IX) (p. 4) states that:

[f]or the purposes of this Rule, 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.

The storage battery and the battery charger constitute a composite good. Although the two articles are separable components, they are adapted one to the other, they are mutually complementary, and, as can be seen by the merchandise itself, they form a whole which would not normally be offered for sale in separate parts.

Because the articles constitute a composite good, we must determine which article imparts its essential character. As with the set in scenario (1), and for the same reasons, it is our position that the storage battery imparts the essential character of the composite good. Therefore, the subject composite good is also classifiable under subheading 8507.30.00, HTSUS.

HOLDING:

In scenario (1), the storage battery and the battery charger constitute a set, and the set is classifiable under subheading 8507.30.00, HTSUS, as a nickel cadmium storage battery.

In scenario (2) and (3), the storage battery and the battery charger constitute a composite good, and the composite good is also classifiable under subheading 8507.30.00, HTSUS.

Sincerely,

John Durant, Director
Commercial Rulings Division