HQ 0088229 - Protest and Request for Further Review 1703-90-000122, dated August 8, 1990; video cassette tape guides made of stainless steel; Chapter 85, Note 6; Section XVI, Note 2(b); Section XVI, Note 5; Headquarters Ruling Letter 083673, dated May 19, 1989; Headquarters Ruling Letter 087425, dated August 6, 1990; reliquidation within 90 days of original liquidation - United States International Trade Commision Rulings

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HQ 088229

February 14, 1991

CLA-2 CO:R:C:G 088229 JMH

CATEGORY: CLASSIFICATION

TARIFF NO.: 7326.90.90

District Director
U.S. Customs Service
US Customhouse 1 East Bay St.
Savannah, GA 31401

RE: Protest and Request for Further Review 1703-90-000122, dated August 8, 1990; video cassette tape guides made of stainless steel; Chapter 85, Note 6; Section XVI, Note 2(b); Section XVI, Note 5; Headquarters Ruling Letter 083673, dated May 19, 1989; Headquarters Ruling Letter 087425, dated August 6, 1990; reliquidation within 90 days of original liquidation

Dear Sir:

The following is our decision regarding the Protest and Request for Further Review 1703-90-000122, dated August 8, 1990. At issue is the classification of certain video cassette tape guides imported from Japan.

FACTS:

The articles in question are video cassette tape guides imported from Japan by TNK Precision USA Corp. The tape guides are stainless steel cylinders which measure approximately 1 and 1/4 inches in length. The cylinders are designed and used exclusively in video tape cassettes. The tape guides maintain the video tape in its correct alignment within the cassette so that the tape properly interfaces with the video recording heads contained in the video recording machine. After importation, the cylinders are ground to a precise roundness, polished, cleaned and packaged by the importer.

Upon importation, the importer classified the tape guides in subheading 8522.90.90, Harmonized Tariff Schedule of the United States Annotated ("HTSUSA"), as "Parts and accessories of apparatus of headings 8519 to 8521...Other...Other..." Video recording machines are classified in heading 8521, HTSUSA.

Your office disagreed with this classification. Subsequently, the video guides were reliquidated under subheading 7326.90.90, HTSUSA, as "Other articles of iron or steel...

Other...Other..." It is from this classification that the protest arises. The importer also contends that Entry No. 0934040-1 was untimely reliquidated. The entry was liquidated on February 2, 1990, under subheading 8522.90.90. The importer contends that reliquidation of the entry under subheading 7326.90.90 occurred on May 11, 1990. The Bulletin of Entries Liquidated establishes that Entry No. 815-0934040-2 was reliquidated with an increased duty on April, 20 1990.

ISSUE:

Issue 1: Whether the stainless steel video tape guides are properly classified in subheading 7326.90.90, HTSUSA, as "Other articles of iron or steel...Other...Other...", or in subheading 8522.90.90, as "Parts and accessories of apparatus of headings 8519 to 8521...Other...Other..."

Issue 2: Whether Entry No. 0934040-2 was untimely reliquidated?

LAW AND ANALYSIS:

Issue 1: Whether the stainless steel video tape guides are properly classified in subheading 7326.90.90, HTSUSA, as "Other articles of iron or steel...Other...Other...", or in subheading 8522.90.90, as "Parts and accessories of apparatus of headings 8519 to 8521...Other...Other..."

The classification of merchandise under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUSA, states in part that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes..." The headings in contention are heading 7326 and heading 8522. These headings describe the following:

7326 Other articles of iron or steel...

8522 Parts and accessories of apparatus of headings 8519 to 8521...

Along with the terms of the headings, any applicable section and chapter notes must be considered. Section XVI, Note 2, HTSUSA, Section XVI, Note 5, HTSUSA, and Chapter 85, Note 6, HTSUSA, apply to the products under review. Section XVI, Note 2(a), HTSUSA, requires that parts which are goods in any of the headings of Chapter 84 or 85 must be classified in those headings. Section XVI, Note 2(b), HTSUSA states that other parts
are to be classified with the machines with which they are principally or solely used. Section XVI, Note 5 defines "machine" as "any machine, machinery, plant, equipment, apparatus, or appliance cited in the headings of chapter 84 or 85."

Chapter 85, Note 6 requires that records, tapes and other media remain classified within headings 8523 or 8524, HTSUSA, "whether or not they are entered with the apparatus for which they are intended." Heading 8523 describes "Prepared unrecorded media for sound recording or similar recording of other phenomena, other than products of chapter 37..." Heading 8524 describes "Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37..."

The subject video cassette tape guides are "parts" within the meaning of Section XVI, Note 2. An eo nomine provision does not exist in either Chapter 84 or 85 in which the video cassette tape guides may be classified. Thus, the tape guides cannot be classified according to Section XVI, Note 2(a). However, the video tape guides are solely or principally used with video cassettes. Video cassettes are properly classified in headings 8523 and 8524, HTSUSA. The classification is dependent upon whether the cassette is unrecorded or recorded. Video cassettes are "equipment" or "apparatus" within the meaning of Section XVI, Note 5. In accordance with Section XVI, Note 2(b), the video cassette guides should be classified as parts of video cassettes within heading 8523 or heading 8524.

However, the provisions of heading 8523 and heading 8524 do not include a subheading for parts. Therefore, the video cassette guides, although used solely or principally with video cassettes, cannot be classified under heading 8523. Since the video tape guides cannot be classified as parts of cassettes, they must be classified according to their constituent materials.

The video tape guides are made of stainless steel. Articles of steel which are not more specifically provided for elsewhere are classified in heading 7326, HTSUSA. In accordance with GRI 1, the appropriate classification for the tape guides is in subheading 7326.90.90, HTSUSA, as "Other articles of iron or steel...Other...Other..."

The importer believes that the video cassette guides are classified under heading 8522, HTSUSA, as parts and accessories of video machines. The importer cites Headquarters Ruling Letter 083673 ("HQ 083673"), dated May 19, 1989, as support for their argument. HQ 083673 classified floppy diskette clamshells for
use in automatic data processing machine as "parts and accessories of the machines of heading 8471..." However, HQ 083673 has since been revoked by Headquarters Ruling Letter 087425 ("HQ 0874225"), dated August 6, 1990. HQ 087425 recognized that a HTSUSA legal note had been ignored and that the floppy diskette clamshells were properly classified according the their constituent material, plastic.

Another argument presented by the importer is that Explanatory Note 85.22, Harmonized Commodity Description and Coding System ("HCDCS"), Vol. 4, p. 1370-1371, states that "specialized parts" of recording and reproducing apparatus are to be included as parts and accessories of such apparatus within heading 8522. However, the parts and accessories listed in Explanatory Note 85.22 are those which enable the recording or reproducing apparatus to perform their intended electrical function, to advance their electrical function to a further stage of technology or to operate more efficiently. The only cassettes mentioned in the Explanatory Notes are those which clean the recording or reproducing apparatus, and allow the apparatus to operate efficiently. See Explanatory Note 85.22(10), HCDCS, Vol. 3, p. 1371. This parts and accessories provision does not extend to unrecorded or recorded video cassettes which are to be placed in the machines.

Additionally, the importer contends that the classification of the video cassette tape guides is consistent with the governing principles of the prior Tariff Schedules of the United States ("TSUS") as converted to the HTSUSA. The importer believes that the conversion to the HTSUSA was meant to be "rate neutral", and thus the tariff rate change regarding the video cassette tape guides should not have occurred. Rate neutrality was the intention of Congress to the extent that such neutrality was possible. However, some anomalies have occurred since a new tariff was adopted. The HTSUSA implements new legal guidelines. The legislative history of the Omnibus Trade and Competitiveness Act of 1988 states the following:

In light of the significant number and nature of changes in nomenclature from the TSUS to the HTS, decisions by the Customs Service and the courts interpreting nomenclature under the TSUS are not to be deemed dispositive in interpreting the HTS. House Conference Report 100-576 to Pub. L. 100-418, p. 1582- 1583.

Prior decisions by the Customs Service and the courts are instructive only when the tariff language remains unchanged and there is no dissimilar interpretation by the text of the HTSUSA.

In this instance, the text of the HTSUSA mandates that video cassettes be classified differently than they were classified under the TSUS. The stainless steel tape guides are parts of video cassettes. The guides are not parts of reproducing or recording apparatus. Since Chapter 85, Note 6 requires that video cassettes are to be classified in either heading 8523 of heading 8524, not as parts and accessories of recording and reproducing apparatus, that note must be followed. See also Explanatory Note 85.21(a), HCDCS, Vol. 3, p. 1370. The observance of the chapter and section notes is directed by GRI 1, which has been legislated by Congress. Classification of the tape guides under heading 8522 is not consistent with the governing principles of the HTSUSA.

Issue 2: Whether Entry No. 0934040-2 was untimely reliquidated?

19 U.S.C. 1501 grants to officers of Customs the ability to reliquidate an entry on their own motion. This voluntary reliquidation must occur within 90 days from the date of the original liquidation. It is not disputed that the original liquidation occurred on February 2, 1990. The importer states that reliquidation occurred on May 11, 1990, and that this is over the 90 day time limit. However, the Bulletin of Entries Liquidated from your office indicates that entry No. 815-0934040- 2 was reliquidated on April 20, 1990, for an increase in duty. April 20, 1990, is within the 90 day time frame. Entry No. 0934040-2 was reliquidated in a timely manner.

HOLDING:

By virtue of GRI 1 and Chapter 85, Note 6 video cassettes are properly classified in heading 8523 or heading 8524. The tape guides in question are parts of video cassettes. Section XVI, Note 2(b) and Section XVI, Note 5 require that parts are to be classified with the apparatus in which they will be incorporated. Since headings 8523 and 8524 do not incorporate a "parts" subheading the guides cannot be classified as parts of video cassettes. Parts of video cassettes, in this instance the tape guides, must be classified according to their constituent materials.

The video cassette tape guides are made of stainless steel. Heading 7326 describes articles of steel which are not provided for elsewhere. Thus, in accordance with GRI 1, the appropriate classification for the tape guides is in subheading 7326.90.90, HTSUSA, as "Other articles of iron or steel...Other...Other..."

Entry No. 815-0934040-2 was reliquidated on April 20, 1990. This date is within 90 days from the original date of liquidation. Therefore, the reliquidated occurred in a timely manner.

The protest should be denied in full. A copy of this decision should be attached to the Form 19 Notice of Action for the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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