CLA-2 OT:RR:CTF:EMAIN H283180 ALS

Kenneth R. Paley, Esq.
Peter Jay Baskin, Esq.
Sharretts, Paley, Carter & Blauvelt, P.C.
75 Broad Street
New York, New York 10004

RE: Ruling request regarding the tariff classification of two different models of iHome SmartPlugs

Dear Messrs. Paley and Baskin:

This letter is in reply to your request, on behalf of SDI Technologies, Inc., for a prospective ruling on the proper tariff classification of two different models of iHome SmartPlugs. Our decision is set forth below. FACTS:

The following facts are based on the information you provided. The iHome SmartPlugs models at issue are iSP5 and iSP6. The iSP5 is not capable of being controlled by a remote control device. The iSP6 is capable of being controlled by a remote control device, but is not imported or sold with one. The SmartPlugs are rectangular electronic devices that have a typical 3-prong electric plug on one end and a typical 3-prong electric socket on the opposite end. The devices are encased in a plastic body.

The SmartPlugs plug into an electrical outlet and allows for another electrical device to be plugged into the socket end. They incorporate Wi-Fi capability, an electric power indicator light, a Wi-Fi status indicator light, and a push button that turns the connected device on and off as well as activates a search for a wifi network. Through the installed smart device application, the user can turn the connected device on and off by controlling whether electrical current flow from the wall outlet to the connected device. The user may also set a timed-schedule for automated on and off activity, and monitor the connected device. Typical devices that will be connected to the SmartPlugs are lamps, small appliances, and window air conditioning units.

You assert that the iHome SmartPlugs are properly classified under heading 8517, HTSUS, specifically subheading 8517.62.00, as a machine for the transmission data. Alternatively, you assert that the SmartPlugs are classifiable under subheading 8517.69.00 as other apparatus for communication in a wireless network.

ISSUE:

Are the iHome SmartPlugs, as described above, properly classified under HTSUS heading 8517, HTSUS, which provides for “Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof”, or under heading 8537, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517”?

LAW AND ANALYSIS:

Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order.

The following headings and subheadings of the HTSUS are under consideration in this case:

8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof: 8517.62.00 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus:.. * * *

8517.69.00 Other... * * *

8537 Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517: 8537.10 For a voltage not exceeding 1,000 V: 8537.10.91 Other... * * * * * *

Notes 4 and 5 of Section XVI, HTSUS, under which both heading 8517 and 8537 are provided, provide the following:

4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.

5. For the purposes of these notes, the expression "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 85.

The Explanatory Notes (ENs) 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).

Heading 8517 covers, among other things, apparatus for the transmission or reception of data, including apparatus for communication in a wireless network. Both models of the iHome SmartPlug at issue here are electrical devices that are plugged into a typical household electrical outlet. The only relevant distinction between the two is that the iSP6 is capable of being used with a remote control while the iSP5 is not. The SmartPlugs contain circuitry that enables them to be connected to a wireless network, but the SmartPlugs do not transmit or receive data from the devices to which they are connected. The primary function of the SmartPlugs, therefore, is not the transmission of data, whether it is connected to a wireless network or not. The primary function of the SmartPlugs is to turn the electrical appliance plugged into them on and off by controlling the electrical current to the electrical appliance.

With regard to the iSP5, it controls the electrical current to the appliance either via the installed application on the network-connected smart device or via the button located on the iSP5 itself. With regard to the iSP6, it can control the electrical current to the appliance in the same manner as the iSP5 and additionally control the electrical current to the appliance via an optional handheld remote control. With either SmartPlug, to the extent that data is transmitted from the application to the SmartPlug, it is in service of the primary function of controlling the electrical current to the connected appliance. The transmission of data is not a function of the SmartPlugs. Pursuant to Note 4 to Section XVI, HTSUS, supra, we find that the components of the SmartPlugs that contribute to the transmission of data are intended to contribute to the clearly defined function of electric control, as specifically provided for in heading 8537, HTSUS.

You cite to two CBP rulings in support of your contention that the subject articles are devices for the transmission of data or devices for two-way wireless communication. In CBP Ruling HQ H279898 (April 5, 2017), CBP ruled that a Fitbit wearable fitness tracker is properly classified under heading 8517, HTSUS, as a wireless communication device. You argue that since we found that the Fitbit device’s essential character is the wireless communication function, we should find the essential character of the subject SmartPlugs to be wireless data communication. In CBP Ruling HQ H110422 (October 7, 2010), CBP ruled that certain dimmer switches are properly classified under heading 8533, HTSUS, as electrical resisters. You argue that CBP found that the principal function of the dimmer switches was the dimmer function because consumers would most likely purchase the product for that function, and therefore CBP should find that the subject articles should be wireless data communication devices because it is the function “which will prompt consumers to purchase the SmartPlugs.”

With regard to HQ H279898, the Fitbit device is not similar in function or intended use to the subject SmartPlugs. Thus, we do not find HQ H279898 to be dispositive in this case. With regard to HQ H110422, it does not follow that since CBP found that consumers will most likely purchase the dimmer switches because of their dimming function, CBP should find that consumers will most likely purchase the subject articles because of their “wireless data communication.” As we concluded above, the transmission of data is not a function of the SmartPlugs. Therefore, HQ H110422 is also not dispositive in this case.

In conclusion, we find that the SmartPlugs are not switching apparatus of heading 8517 and therefore are not precluded from classification under heading 8537. Based on the foregoing, we conclude that the subject SmartPlugs are devices that provide electric control of electrical devices connected to them and thus are properly classified under heading 8537, HTSUS. Specifically, the SmartPlugs models iSP5 and iSP6 are properly classified under subheading 8537.10.91, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517: For a voltage not exceeding 1,000 V: Other...”

HOLDING: By application of GRI 1 and Notes 4 and 5 of Section XVI, HTSUS, the SmartPlugs models iSP5 and iSP6 are properly classified under heading 8537, HTSUS. Specifically, the subject SmartPlugs are properly classified under subheading 8537.10.91, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517: For a voltage not exceeding 1,000 V: Other...” The 2019 column one, general rate of duty for merchandise classified in this subheading is 2.7% ad valorem. Duty rates are provided for your convenience and 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.

Pursuant to U.S. Note 20(f) to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8537.10.91, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty.  At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8537.10.91, HTSUS, noted above.   The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.  For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.

Please note that this ruling letter is “issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.” 19 CFR 177.9(b)(1). The application of this ruling letter “is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” See id. CBP therefore reserves the right to verify all facts as noted herein. Furthermore, this ruling letter will be “applied only with respect to transactions involving articles identical to the sample submitted with the ruling request or to articles whose description is identical to the description set forth in the ruling letter.” 19 CFR 177.9(b)(2).

 A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.

Sincerely,

Gregory S. Connor, Chief
Electronics, Machinery, Automotive, and
International Nomenclature Branch