CLA-2 OT:RR:CTF:TCM H026900 JRB
Roman Klimenko
UPS Trade Management Services, Inc.
2031 S. Centennial Avenue
Aiken, South Carolina 29803
RE: Reconsideration of NY N024250; Classification of an i-Pod® Speaker Tote
Dear Mr. Klimenko:
This letter is in response to your letter dated April 24, 2008 requesting the reconsideration of New York Ruling Letter (NY) N024250, dated April 4, 2008, on behalf of your client, Excalibur Electronics, Inc., concerning the tariff classification of an i-Pod® case with a portable speaker. In that ruling, U.S. Customs and Border Protection (“CBP”) classified the merchandise under subheading 4202.92.9060, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as a “[t]runks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: [o]ther: [w]ith outer surface of sheeting of plastic or of textile materials: [o]ther: [o]ther… [o]ther: [o]ther…”. For the reasons set forth below we affirm NY N024250.
FACTS:
In NY N024250 we described the merchandise as follows:
The sample submitted is referred to as a Speaker Tote for an iPod. It is a carrying case for an iPod device with an incorporated speaker. The case is designed to provide storage, protection organization and portability to a digital music player device. It is in of a clamshell design and constructed with an exterior surface of sheeting of plastic. The interior is specially fitted and designed to hold an iPod. The case has a clear plastic window and secures with a zipper closure along three sides. It has a removable, adjustable shoulder strap. It measures approximately 3.5" (W) x 5.5" (L) x 2" (D).
ISSUE:
Whether the Speaker Tote for an iPod® is classified in heading 8518, HTSUS, as a speaker or in heading 4202, HTSUS, as a case for an MP-3 player?
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
4202 Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper:
8518 Microphones and stands therefore; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof:
The Speaker Tote for an iPod® is described by both headings 4202 and 8518, HTSUS, as it is a case, as well as, as a loudspeaker. Because it is prima facie classifiable under two or more headings, it cannot be classified according to GRI 1. In pertinent part, GRI 2(b) provides that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. However, GRI 2(b) adds that the classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. Accordingly, GRI 3 is utilized when, by application of GRI 2(b), a good consists of materials or components which are prima facie classifiable under two or more headings.
GRI 3(a) states that when goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or 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, even if one of them gives a more complete or precise description of the goods.
In this case, headings 4202 and 8518, HTSUS, are equally specific in relation to one another. We cannot classify these goods by application of GRI 3(a) and therefore turn to GRI 3(b) which states:
Mixtures, 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.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system. CBP believes the EN’s should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Explanatory Note IX to GRI 3(b) states in pertinent part:
For 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.
We find that the portable speaker/plastic travel case is a composite good because no heading in the HTSUS completely describes the product; it is prima facie classifiable in two or more headings, heading 8518, HTSUS, which provides for speakers and heading 4202, HTSUS, which provides for various types of cases and similar containers; and the speaker and the case are attached together to form a practically inseparable whole. Thus, we are required to undergo an essential character analysis. EN VIII to GRI 3(b) provides guidance on determining the essential character of an item. It provides:
[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.
There have been several court decisions on "essential character" for purposes of GRI 3(b). These cases have looked to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See, Conair Corp. v. United States, 29 C.I.T. 888 (2005); Structural Industries v. United States, 360 F. Supp. 2d 1330, 1337-1338 (CIT 2005); and Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278, 1295-1356 (CIT 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007).
The EN to GRI 3(b) provides the essential character of a product can be determined by looking at several factors including the bulk, quantity, value, or as noted by the courts, the role of a constituent material in relation to the use of the good. In this case we find that the case component of the product plays the most important rule in the use of the good because the case is the portion of the product that carries and protects the iPod® player. The case is always in use when a consumer uses this particular product because the iPod® player would be carried in the case, while the consumer may not always have the speakers playing. In addition, the case makes up the bulk of the product providing the product with its shape, color, etc. Therefore, we believe that the case portion of the product provides this product with its essential character.
In cases where containers of heading 4202, HTSUS, incorporate electrical devices in their design, CBP has consistently held that the 4202 component imparts the essential character to the article as a whole. See Headquarters Ruling Letters (HQ) HQ 087057, dated December 21, 1990; HQ 089901, dated April 2, 1992; and HQ 955261, dated April 14, 1994. More specifically, in both HQ 968051, dated June 9, 2006 and HQ 967704, dated August 25, 2005, CBP held that by application of GRI 3(b), the essential character of a speaker/CD case was imparted by the 4202 component and the composite goods was classified under subheading 4202.92.9050, HTSUS. In particular, in HQ 968051, CBP dealt with the same issue as this case. In HQ 968051, CBP determined that when a composite good consists of a speaker (heading 8518) and a container (heading 4202), the container imparts the essential character because of its role in relation to the use of the goods.
In your request for reconsideration you cite to NY N019513, dated December 5, 2007. However, in the March 31, 2010 weekly Customs Bulletin, Volume 44, No. 14, we issued a notice revoking this ruling letter and NY N005234, dated February 2, 2007. Therefore, the aforementioned ruling no longer represents CBP’s views on the classification of this merchandise.
HOLDING:
By application of GRI 3(b), the Speaker Tote for an iPod® is classified in heading 4202, HTSUS, and specifically in subheading 4202.92.9050 which provides for “[t]runks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: [o]ther: [w]ith outer surface of sheeting of plastic or of textile materials: [o]ther: [o]ther… [o]ther: [o]ther…”. The column one, general rate of duty, is 17.6% ad valorem.
Duty rates are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N024250, dated dated April 4, 2008, is hereby affirmed.
Sincerely,
Myles B. Harmon
Director, Commercial and Trade Facilitation Division