CLA-2 OT:RR:CTF:TCM H039058 CkG
TARIFF NO: 8543.70.96
Mr. David Prata
OHL International at CVS Health
1 CVS Drive - Mail Code 1049
Woonsocket, RI 02895
Re: Revocation of NY E84480, NY F85877, NY I84192, NY J84806, NY L85697, NY L86633; Modification of NY E86264
Dear Mr. Prata:
This is in reference to New York Ruling Letter (NY) I84192, issued to CVS Pharmacy on July 22, 2002. In NY I84192, CBP classified an electronic learning device for children, the “Alphabet Apple”, in heading 9503, HTSUS, as a toy. We have reviewed NY I84192 and find it to be in error. For the reasons set forth below, we hereby revoke NY I84192 and six other rulings classifying similar learning devices in heading 9503, HTSUS: NY E84480, dated August 6, 1999 ("Pooh Learning Pond”, "Pooh Counting Carrots”, and the "100 Acre Wood”); NY F85877, dated May 9, 2000, concerning the classification of a “Phonics Board”; NY J84806, dated May 23, 2003 “Magnaphonics”); NY L85697, dated June 20, 2005 (the "Alphabet Machine Try Me"); and NY L86633, dated August 3, 2005 (“Talk ‘n Learn Alphabet” and the “Talk ‘n Learn Numbers”). In addition, we hereby modify one ruling, NY E86264, dated September 20, 1999, with respect to the "ABC Tutor".
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as
amended by section 623 of Title VI, notice proposing to revoke NY E84480, NY F85877, NY I84192, NY J84806, NY L85697, and NY L86633, and to modify NY E86264
was published on June 24, 2015, in Volume 49, Number 25, of the Customs Bulletin. One comment was received in opposition to the proposed action, and is addressed in the body of the ruling below.
FACTS:
In NY I84192, CBP classified the V-Tech “Alphabet Apple” in heading 9503, HTSUS. The Alphabet Apple is a plastic electronic device in the shape of an apple with a handle designed for instructing children aged 3 years and older in the fundamentals of reading. The device has 26 letter buttons on its surface for learning the alphabet, and other built-in activities such as phonics and vowel sounds.
ISSUE:
Whether the electric learning devices at issue are classifiable as toys of heading 9503, HTSUS, or electric devices of heading 8543, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the remaining GRIs 2 through 6.
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
8543: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
8543.70: Other machines and apparatus
Other:
Other:
8543.70.96: Other…….
* * * * *
9503: Tricycles, scooters, pedal cars and similar wheeled toys; dolls’
carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof…..
9503.00.0080: Other…..
* * * * *
Section XVI, Note 1(p) provides:
This section does not cover… Articles of chapter 95.
* * * *
EN 95.03(D), which provides for “other toys,” states, in pertinent part:
This group covers toys intended essentially for the amusement of persons (children or adults)….This group includes:
Toy sewing machines.
Educational toys (e.g., toy chemistry, printing, sewing and knitting
sets).
Certain toys (e.g., electric irons, sewing machines, musical instruments, etc.) may be capable of a limited use; but they are generally distinguishable by their size and limited capacity from real sewing machines, etc.
* * * * *
Section XVI, Note 1(p), HTSUS, which includes chapter 85, HTSUS, states that it does not cover articles of Chapter 95, HTSUS. Accordingly, we must first determine whether the subject articles are toys of heading 9503, HTSUS. Heading 9503, HTSUS, provides for toys.
Although the term “toy” is not defined in the HTSUS, EN 95.03 provides that heading 9503, HTSUS, covers toys intended essentially for the amusement of persons. In Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (CIT 2000), the court held that an object is a toy only if it is designed and used for amusement, diversion or play, rather than practicality. In Ideal Toy Corp. v. United States, 78 Cust. Ct. 28 C.D. 4688 (1977), the Customs Court similarly held that when amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or whether the utility is incidental to the amusement provided.
The Minnetonka court concluded that heading 9503, HTSUS, is a "principal use" provision within the meaning of Additional U.S. Rule of Interpretation 1(a), HTSUS. Therefore, classification under the heading is controlled by the principal use of goods of that class or kind to which the imported goods belong in the United States at or immediately prior to the date of the importation. In determining the class or kind of goods, the Court examines factors which may include: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels of trade in which the merchandise moves; (4) the environment of the sale (e.g. the manner in which the merchandise is advertised and displayed); (5) the usage of the merchandise; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use. See United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976); Lennox Collections v. United States, 20 CIT 194, 196 (1996).
The physical characteristics of the articles of are not those of a toy of heading 9503, HTSUS. While the instant merchandise is often colorful, it does not otherwise have the physical characteristics of a toy. Instead, it contains a screen and controls like a machine. It is not used as a toy, mainly for amusement, but rather to teach a child the alphabet, arithmetic or other age-appropriate lessons in an engaging way. While there is no evidence regarding the manner in which the merchandise is displayed in retail stores, on-line advertisements emphasize the processing component and “engine”, and ease of use of the keyboard. These qualities are not indicative of toys either.
The instant articles are sold in toy stores or the toys department of major retailers, and thus move in the same channels of trade as toys. However, the marketing and advertisement generally reveals a focus primarily on the educational value of the systems. Product descriptions from the manufacturer or other sellers as well as user or editorial reviews place only secondary importance on the amusing or entertaining properties of the merchandise at issue, as compared to the instructional value. This indicates that the merchandise at issue is intended to supplement the education a child receives at school (or, for younger children, to get a head start on their education), rather than for play. For example, the product description on Amazon.com for the Alphabet Apple encourages customers to “Take a bite out of learning with the Alphabet Apple by VTech! Eight learning activities teach letters, spelling, time concepts and so much more. The Alphabet Apple by VTech will introduce your child to a whole new world of learning! Eight learning activities teach animals, objects and words, phonics, letters, spelling and time concepts. Press the light-up alphabet buttons to hear the 26 cheerful melodies and sound effects. This fun learning toy also features a cute singing worm that sings songs and interacts with your child.”
While the marketing of the product as well as the expectation of the ultimate purchaser (as demonstrated by product reviews online), emphasize both the learning and the amusing aspects of the device, the focus is on the educational and learning activities. As noted by the comment received in response to the proposed revocation, any amusement experienced by the child is therefore meant to facilitate the learning process and thus make the system a better learning tool, but not to change its nature as a learning device. The merchandise is used as a learning tool, and therefore its primary purpose is not that of amusement.
CBP has repeatedly rejected classification in heading 9503 for similar electronic learning devices, placing them instead in Chapter 85. See HQ H123917, dated March 28, 2011; HQ 966721, dated April 14, 2004; HQ 965734, dated September 5, 2002; HQ 962582, March 27, 2000; HQ 960279, dated December 9, 1997; HQ 956518, dated September 22, 1994; HQ 955845 dated August 22, 1994; HQ 951507 dated July 2, 1992; HQ 088494, dated April 19, 1991; HQ 087599, dated March 5, 1991; HQ 088086, dated February 7, 1991; HQ 086649, dated May 4, 1990; and HQ 086577, dated May 4, 1990.
In HQ 966721, Customs considered the LeapPad® Learning System, which taught subjects such as reading, phonics, vocabulary, foreign languages, geography, science and music, and consisted of an electronic pad, book and stylus. The book was to be placed on the pad while the stylus was used to scan words and pictures within the book, resulting in various audible responses from the electronic pad in the form of words or music. CBP noted that the device had amusement and/or entertainment value for children, but concluded that any amusement experienced by the child was secondary to the primary purpose of the system, which is to educate. The same reasoning applies to the instant articles. As CBP declared in HQ 966721, “any amusement experienced by the child is therefore meant to facilitate the learning process and thus make the system a better learning tool, but not to change its nature as a learning device.”
HQ 962582, using a similar analysis, classified another electronic learning device, the Leapfrog Create-a-Word Travel Mat, in heading 8543, HTSUS. This device was an interactive electronic talking system that taught the alphabet, phonics, spelling and reading through games and quizzes. CBP found that the device’s design and marketing suggested that it would be used principally to teach the alphabet and words, and therefore the educational value of the speller predominated over whatever play value the frog-like features provide to the speller.
Furthermore, EN 95.03 refers to toy chemistry, printing, sewing and knitting sets as examples of educational toys. However, the educational value of such devices is—intentionally—more limited. As semi-functional representations of the actual products, the “educational” toys listed in EN 95.03 are capable of a “limited use,” but are generally distinguishable by their size and limited capacity from real sewing machines, etc. They are designed to allow the user to mimic or even undertake the basic activities of actual chemistry, printing, sewing or knitting sets. They take advantage of a child’s natural curiosity and desire to role-play at being an adult. The actual learning of principles of chemistry or development of sewing skills is thus secondary to the entertainment value of role-playing and exploding volcanoes. Therefore, products similar to the devices at issue are still not classifiable as toys if the amusement they might provide is plainly secondary to the products’ primary purpose, unless the product is a limited use representation that provides for role-playing. The subject articles are not limited use devices of a kind with those enumerated in EN 95.03, and do not provide the role-play value of the exemplars listed in the ENs. One commenter argues that the Alphabet Apple device does allow a child to mimic the adult behavior of using a laptop because it has a keyboard. However, the design of the Alphabet Apple does not resemble a laptop. CBP has classified toy laptops modeled after actual laptops in heading 9503, HTSUS (see e.g., NY N008122, dated March 15, 2007). The Alphabet Apple and the other devices at issue are thus not classifiable as educational toys under heading 9503, HTSUS.
HQ 960279 December 9, 1997, further clarified the difference between an “educational toy” of heading 9503, and an educational device:
Not all articles with educational elements are considered "educational toys" for tariff purposes. Articles which act primarily as surrogate instructors are not considered educational toys for tariff purposes. The act of surrogate instruction involves the giving of instructions or asking of questions and the confirmation of the correct answer. Such confirmation may have an element of "positive reinforcement" such as a pleasant sound verses a "sour" note. Unlike a child's own natural curiosity in an educational toy, it is this positive reinforcement which is offered to keep the child interested in the process.
The subject articles also fall into the category of “surrogate instructor” rather than that of educational toy of the kind listed in EN 95.03. The device is intended to help the child learn the same basic skills taught in school, and as Customs noted in HQ 088494, “Although certain aspects of school can be amusing, we do not agree that school is designed for the amusement of children.”
Thus, the Alphabet Apple is not designed or used primarily for the amusement of children or adults and is therefore not classifiable in Chapter 95. There is no provision in the HTSUS for educational articles per se. Therefore the subject merchandise is classified as an electrical machine or apparatus of heading 8543, HTSUS.
In contrast, we note that educational devices are properly classified as toys when they satisfy the principal use criteria outlines in United States v. Carborundum Co., and when they share the characteristics of educational toys laid out in EN 95.03 and HQ 966721 and HQ 960279. For example, in HQ H195956, dated February 27, 2012, CBP classified a science kit in heading 9503, HTSUS, because it satisfied the criteria laid out in previous rulings for toys of heading 9503, as an article of: 1) limited use, 2) limited capacity and 3) representational of a grown-up version of the same article. Similarly, CBP has classified educational toys such as chemistry sets (see e.g., NY B85837, dated June 5, 1997) and a toy ATM (see e.g., NY N202159, dated February 17, 2012). These articles are clearly limited-use representations of adult versions of the same article.
CBP has also classified other devices with an educational aspect in heading 9503, HTSUS, because their design indicated that their principal use was for amusement. NY N174233, dated August 2, 2011, CBP classified the “Musical Bubbles Octopus in heading 9503, HTSUS. The brightly colored waterproof plastic toy shaped like an octopus is a battery operated interactive toddler bath toy. The toddler presses the shape buttons to interact with the sea creatures and learn about the instruments they are playing, along with the shapes, characteristics and sounds of the sea creatures. When the bubble making mechanism is engaged a stream of bubbles cascades into the tub while the toy plays music, says fun phrases and makes sounds.
Similarly, in NY N262498, dated April 3, 2015, CBP classified the “Adventure Bus” and “Alphapup” as toys of heading 9503, HTSUS. The “Adventure Bus” is a plastic yellow bus, approximately 10”(L) x 4.5”(W) x 7”(H), with working doors and wheels, a fold out picnic table, a STOP sign that folds out, and 3 animal figures that fit into spaces on the bus which all provide for imaginary play. When the bus sign atop the bus is rotated it reveals 3 different locations that also produce songs and phrases relating to each location. Additional songs and phrases are sounded when the driver of the bus is pressed. The “Adventure Bus” can be used to teach a toddler vocabulary and motor skills. The “Alphapup” is a plastic dog measuring approximately 12”(L) x 4.5”(W) x 7”(H) that contains wheels that turn, a tail that wags, and soft floppy fabric ears. It can be pulled by means of a short leash attached to a plastic handheld bone. On the “body” of the pup there are 28 “keys” (14 on each side), that have the letters of the alphabet on them. When depressed they produce sayings that teach the alphabet through phonics. There are also two extra keys that play songs and sayings that a dog would say.
The “Musical Bubbles Octopus”, “Adventure Bus” and “Alphapup” are examples of educational toys principally designed for the amusement of children. Unlike the Alphabet Apple, these devices offer instruction ancillary to their ability to amuse, and use the child's own natural curiosity to stimulate learning rather than quizzing the child. The “Musical Bubbles Octopus”, “Adventure Bus” and “Alphapup” can also be used for play without any instruction.
HOLDING:
By application of GRI 1, the Alphabet Apple is classified in heading 8543, HTSUS, and is specifically provided for in subheading 8543.70.96, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other.” The 2015, column one, general rate of duty is 2.6%.
EFFECT ON OTHER RULINGS:
NY E84480, dated August 6, 1999, NY F85877, dated May 9, 2000, NY I84192, dated July 22, 2002, NY J84806, dated May 23, 2003, NY L85697, dated June 20, 2005, and NY L86633, dated August 3, 2005, are hereby revoked. NY E86264, dated September 20, 1999, is hereby modified with respect to the "ABC Tutor".
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after publication in the CUSTOMS BULLETIN.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division
cc:
Mr. Andy Hong
Navystar (USA), Inc. 5026 Kendrick Court SE
Grand Rapids, MI 49512-9649
Ms. Lorianne Aldinger
Rite Aid Corporation
P.O. Box 3165
Harrisburg, PA 17105
Ms. Patty Kittel
Target Customs Brokers, Inc. 1000 Nicollet Mall
Minneapolis, MN 55403
Ms. Joanne Harmon
CVS/Pharmacy
One CVS Drive
Woonsocket, RI 02895