CLA-2 RR:CR:GC 965130 AML
Port Director
U.S. Customs Service
Otay Mesa
9777 Via de la Amistad
San Diego, CA 92154
RE: Protest 2501-01-100012; Battery packs for mobile cellular telephones
Dear Port Director:
The following is our decision regarding Protest 2501-01-100012, dated February 14, 2001, filed by counsel on behalf of Sanyo Energy (USA) Corporation, against your classification of battery packs for mobile cellular telephones, under the Harmonized Tariff Schedule of the United States (HTSUS). Technical drawings were provided for our consideration.
FACTS:
The articles at issue are battery packs (model #s F41000729 (Nokia), F41000712 (Nokia), and F41000934 (Qualcomm)) that are specifically designed for use with mobile cellular telephones. We confirmed with your office that the fourth model, F41000894 (Nokia), is not included in any of the subject entries; however, we confirmed that the model (albeit under model 166060501, which the protestant states is identical to F41000894) is subject of a protest (5501-01-100073) at the port of Dallas/Ft. Worth. Because of the similarity of articles and issues, we include that model in the instant analysis. The protestant describes the articles as follows:
The subject battery packs are specially designed to be used with particular models of mobile cellular phones. Each model of battery pack is made specifically for one cellular telephone manufacturer and can only be used with selected models of that manufacturer’s phones. There is no commercial use for the battery packs other than with the cellular telephones for which they were specifically produced.
The battery packs, while manufactured to be used solely with specific brands and models of mobile cellular telephone, have the following similar components: one or more rechargeable storage batteries, a protective device that can shut off the battery pack when it reaches extreme temperatures (either heat or cold), a printed circuit board assembly (“PCBA”) with functions that vary with the requirements needed and the model of phone, and a plastic housing that provides protection and housing for the components previously mentioned as well as serving as a significant portion of the back/body of the telephone.
The specific models of battery packs have the following components in addition to the battery cells:
Model F41000712: contains 3 nickel metal hydride (NiMH) batteries separated by a breaker to protect against temperature anomalies, and the PCBA which is comprised of a resistor (which enables the phone to identify the type of battery pack attached to the telephone allowing proper charging through the charging circuit), a thermistor (which prevents batteries from charging or discharging at high or low temperatures), a capacitor (a filter which prevents signal noise). The plastic housing comprises approximately 75% of the back of the telephone.
Model F41000729: is similar to model F41000712 in size and shape, uses NiMH batteries equipped with a breaker, contains a small motor that provides a vibrate function, and the PCBA which is comprised of a thermistor, five resistors, two diodes, five capacitors, a transistor and a printed circuit board. Some of the components provide the same functions described in F41000712; others process incoming calls. The plastic housing comprises approximately 75% of the back of the telephone.
Model F41000934: utilizes a lithium ion battery, with a PCBA comprised of four resistors, five capacitors, a transistor and a thermistor, as well as an application specific integrated circuit (ASIC). The ASIC prevents overcharging, short circuits, and temperature anomaly damage. There is an additional component in this model called an “HS-BUS.” It is an assembly consisting of six metal pins in a plastic housing, four metal contacts, and two leads that connect to the PCBA. The plastic housing comprises approximately 40% of the back of the telephone.
Model F411000894 (or 166060501): utilizes a lithium ion battery and contains a polyswitch to protect it against temperature anomalies. The PCBA is comprised of fifteen components: four resistors, seven capacitors, a diode, a transistor, a thermistor, as well as an application specific integrated circuit (ASIC). The ASIC performs similar functions to that in F41000934. The components are enclosed and sealed in a plastic housing which is designed to fit into a cavity in the telephone.
The articles were entered in January and February, 2000, and the entries were
liquidated on November 17, December 1 and 22, 2000, with classification under subheading 8507.80.80, HTSUS, which provides for electric storage batteries, including separators therefor, whether or not rectangular (including square) parts thereof, other storage batteries, other. The protest was filed on February 14, 2001.
ISSUE:
Whether the battery packs at issue are classifiable as storage batteries under heading 8507, HTSUS, or as other parts suitable for use solely or principally with the apparatus of headings 8525 to 8528, under heading 8529, HTSUS?
LAW and ANALYSIS:
Initially we note that the protest was timely filed (i.e., within 90 days after but not before the notice of liquidation; see 19 U.S.C. 1514 (c)(3)(A)) and the matter is protestable (see 19 U.S.C. 1514 (a)(2) and (5)).
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The HTSUS provisions under consideration are as follows:
8507 Electric storage batteries, including separators
therefor, whether or not rectangular (including
square); parts thereof:
8507.80 Other storage batteries:
8507.80.80 Other.
* * *
8529 Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528:
8529.90 Other:
8529.90.99 Other.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise. Customs believes the ENs should always be consulted. See T.D. 89 80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The battery packs are clearly classifiable in Chapter 85, which provides for, inter alia, electrical machinery and equipment and parts thereof. Section XVI (in which Chapter 85 is found), Note 2, HTSUS, states that:
[s]ubject to note 1 to this section, note 1 to chapter 84
and to note 1 to chapter 85, parts of machines (not being
parts of the articles of heading 8484, 8544, 8545, 8546 or
8547) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings
of chapters 84 and 85 (other than headings 8485 and
8548) are in all cases to be classified in their
respective headings;
(b) Other parts, if suitable for use solely or principally
with a particular kind of machine, or with a number of
machines of the same heading (including a machine of
heading 8479 or 8543) are to be classified with the
machines of that kind. However, parts which are equally
suitable for use principally with the goods of headings
8517 and 8525 to 8528 are to be classified in heading
8517;
(c) All other parts are to be classified in heading 8485 or
8548.
Subject to certain exceptions not relevant here, goods that are identifiable parts of machines or apparatus of Chapter 84 or Chapter 85 are classifiable in accordance with Section XVI, Note 2, HTSUS. Nidec Corporation v. United States, 861 F. Supp. 136, aff'd, 68 F. 3d 1333 (1995). Parts, which are goods included in any of the headings of Chapters 84 and 85, are in all cases to be classified in their respective
headings. See Note 2(a). Other parts, if suitable for use solely or principally with a particular machine, or with a number of machines of the same heading, are to be classified with the machines of that kind. See Note 2(b).
The protestant alleges that the articles in question are parts that are suitable for use solely or principally with a particular kind of electronic device: a mobile cellular telephone. Therefore, in accordance with the section note, we must determine whether the articles are classifiable as electric storage batteries or as parts of a mobile cellular telephone.
The ENs to heading 8507, HTSUS, provide, in pertinent part, as follows:
Electric accumulators (storage batteries) are used to store electricity and
supply it when required. A direct current is passed through the accumulator producing certain chemical changes (charging); when the terminals of the accumulator are subsequently connected to an external circuit these chemical changes reverse and produce a direct current in the external circuit (discharging). This cycle of operations, charging and discharging, can be repeated for the life of the accumulator.
Accumulators consist essentially of a container holding the electrolyte in which are immersed two electrodes fitted with terminals for connection to an external circuit. In many cases the container may be subdivided, each subdivision (cell) being an accumulator in itself; these cells are usually connected together in series to produce a higher voltage. A number of cells so connected is called a battery. A number of accumulators may also be assembled in a larger container.
* * *
The protestant states that the instant merchandise will be used to power specific models of cellular phones. In support of this contention, the protestant states that the battery packs are designed and manufactured for use with a specific brand and model of cellular telephone and for no other purpose. We find, in accordance with Note 2(b) to Section XVI, that the articles are “solely or principally” intended for such use.
In Headquarters Ruling Letter (HQ) 963208, dated July 14, 2000, we noted that, in relation to headings 8506 and 8507, HTSUS, that:
[T]here appears to be some ambiguity in the use of the terms “cells” and “batteries,” both in the tariff headings themselves, and to a lesser extent, in the ENs. Neither term is defined in either the tariff or the ENs. A tariff term that is not defined in the HTSUS or in the ENs is construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States,
69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982). Reference to lexicographic authorities is proper when determining the meaning of a tariff term. Hasbro Industries, Inc. v. U.S., 703 F. Supp. 941 (CIT 1988), aff'd, 879 F.2d 838 (1989).
In HQ 963208, we cited the following definitions of the term “battery”:
Van Nostrand’s Scientific Encyclopedia (D. Van Nostrand Company, Inc.,
1968) describes a “battery” as follows:
The most common usage of the word is in reference to a collection of chemical cells, normally connected in a series, for the production or storage of electrical energy.
The McGraw Hill Multimedia Encyclopedia of Science and Technology (Version 2.0, © 1995) defines “battery,” as follows:
A device which transforms chemical energy into electric energy. The term is usually applied to a group of two or more electric cells connected together electrically. In common usage, the term battery is also applied to a single cell, such as a flashlight battery.
The subject articles are not “singles cells such as a flashlight battery.” Instead, the cells that store power are components (combined in a housing that comprises a significant portion of the body of the phone with a temperature sensor and a PCBA) in a distinct article designed for use solely with specific models of cellular phones. While we are cognizant of the fundamental and longstanding tariff classification principle that Congress did not intend to foreclose the classification of future innovations and technological advancements in tariff provisions (See Simmon Omega, Inc. v. United States, 83 Cust. Ct. 14, C.D. 4815 (1979)), we believe that the articles in question are more aptly described as parts of cellular telephones than as “batteries.” Articles that are integral, constituent components of another article, without which that article could not operate in its intended capacity, have been held to be “parts” under the HTSUS. See United States v. Willoughby Camera Stores, Inc., 21 CCPA 322 (1933), Bauerhin Technologies Ltd., et al v. United States, 110 F. 3d. 774 (Fed. Cir. 1997), and related cases.
Mobile cellular telephones are classifiable under heading 8525, HTSUS. The subject battery packs, which have specific characteristics and are designed and used solely with specific models and brands of mobile cellular telephone, are parts of mobile cellular telephones. They comprise significant portions of the back/body of the telephones and contain components that control and enhance integral functions of the articles.
Not all battery packs are “parts” of the articles for which they are designed and manufactured to provide power. That determination can only be made on a case-by-case basis. See for example HQ 954061, dated May 13, 1993, in which we held that a general use battery pack not designed for any specific purpose and not similar in construction to the subject goods was classifiable under heading 8507, HTSUS. See also HQ 958944, dated February 11, 1998, in which we held that a battery pack specifically designed to operate radio-controlled toy vehicles was classifiable under
heading 9503, HTSUS. HQ 958944 noted that the tariff classification was based on the particular facts presented in the matter.
In an effort to achieve uniformity in the interpretation of the Harmonized System (HS) at the international level, Customs regards rulings from other countries that classify identical or substantially similar merchandise as instructive. However, such rulings do not constitute the official interpretation of the HS. For this and other reasons, these rulings shall not be treated as dispositive and Customs is not bound by them. Nevertheless, a ruling from Revenue Canada was brought to our attention by counsel for the protestant. In the ruling (Nokia Products Ltd. v. Deputy Minister of National Revenue, Appeal No. AP-99-082 (July 26, 2000)), the Canadian International Trade Tribunal (CITT) classified cellular telephone battery packs that are substantially similar in design and function to those at issue under heading 8529 of the Canadian Tariff (and not under heading 8507 of the Canadian Tariff). The Canadian ruling is consistent with our classification under the HTSUS.
HOLDING:
Under the authority of GRI 1 and Section XVI, Note 2(b), HTSUS, the battery packs for use with mobile cellular phones are classified under subheading 8529.90.99, HTSUS, which provides for parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: other: other.
The protest should be GRANTED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty (60) days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division