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HQ 089204


November 25, 1991

CLA-2 CO:R:C:M 089204 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8531.10.00

District Director
U.S. Customs Service
111 West Huron St.
Buffalo, NY 14202

RE: Internal Advice 22/91; Fire Alarm Systems; Components Shipped in Bulk Form; GRI 2(a); Incomplete or Unfinished Articles;

Dear Sir:

A.N. Deringer, Inc., on behalf of their client, Edwards, Inc., has requested Internal Advice 22/91, regarding the classification of bulk shipments of home alarm systems and component parts, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The Edwards 8500 alarm control panel is a fully supervised microprocessor based multi-processing system. The hardware and associated software modules may be configured to provide a Fire Alarm Control Panel, an Emergency Communication Panel or a totally Integrated (Fire and Emergency Communication) Control Panel. The associated components or parts are also shipped in bulk quantities.

ISSUE:

Is the merchandise classified in heading 8531, HTSUSA, which provides for: "[e]lectric sound or visual signalling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms)...; parts thereof," or in heading 8537, HTSUSA, which provides for: "[b]oards, panels....for electric control or the distribution of electricity?"

LAW AND ANALYSIS:

The General Rules of Interpretation (GRIs) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

The alarm system components are prima facie classifiable under the following headings/subheadings:

8531 Electric sound or visual signalling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530; parts thereof:

8531.10.00 Burglar or fire alarms and similar apparatus.

8531.20.00 Indicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes

8531.90.00 Parts

8537 Boards, panels (including numerical control 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, other than switching apparatus of heading 8517:

8537.10.00 For a voltage not exceeding 1,000 v

In HQ 086460 (July 18, 1990), we addressed the classification of the instant merchandise under the Tariff Schedules of the United States (TSUS). We stated:

In HQ Ruling 071612 (July 25, 1985), the central components of a burglar alarm system were entered without the remote sensors, bells and sirens. Various indicator light panels were incorporated in the front of each component. The merchandise was found to be "more than" control panels and was classified as burglar alarms and parts thereof in item 685.70. HQ Ruling 071612 found that the articles were more than control panels because they incorporated a substantial proportion of the operating part of the machine controlled,
and in fact were the very essence of the burglar alarm systems.

Like the burglar alarm components in HQ Ruling 071612, the fire alarm components under consideration incorporate a substantial proportion of the operating part of the machine controlled. The articles incorporate the power supply for the remote sensors and alarms controlled. The central cabinets of all three models incorporate indicator light panels. The Basic Integrated System includes an amplifier which provides a speaker source for various alarm messages. The Basic Multiplex System incorporates a Serial Link Controller which interfaces the system's CPU and emergency Satellite communicator (ESAC).

We held that the Edwards 8500 series fire alarm systems, when entered without the remote sensors and sound signalling apparatus, were classified as "[b]ells, sirens, indicator panels, burglar and fire alarms...and parts thereof" in item 685.70, TSUS.

Furthermore, in HQ 088464 (September 11, 1991), we addressed the scope of heading 8537. Heading 8537, HTSUSA, provides for "[b]oards, 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 . . ." In HQ 088464, we held that the "Microselect system" did not satisfy this description. We stated:

It is not used merely for the electric control or the distribution of electricity. As discussed above, the system is used to perform multiple tasks described in heading 8471, HTSUSA. Accordingly, the subject system does not satisfy the terms of this heading and is not properly classifiable therein.

Similarly, like the burglar alarm components in HQ 071612, HQ 086460, and HQ 088595 (September 12, 1991), the Edwards 8500 Alarm System under consideration incorporates a substantial proportion of the operating part of the machine controlled.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to heading 8573, HTSUSA, page 1391, describe: "Programmable controllers" which are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines."

However, as in HQ 088464, HQ 086460, HQ 071612, HQ 088595, and HQ 950407 (November 15, 1991), the instant merchandise is not merely a programmable controller.

Furthermore, GRI 2(a) provides direction here. It states:

2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

The ENs, regarding the Section XVI General Notes, further elaborate when they state the following on page 1132:

(IV) Incomplete Machines

Throughout the section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine). Thus a machine lacking only a flywheel, a bed plate, calendar rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading providing for parts. Similarly a machine or apparatus normally incorporating an electric motor (e.g., electro- mechanical hand tools of heading 85.08) is classified in the same heading as the corresponding complete machine even if presented without that motor.

Thus, it is Customs position that the Edwards 8500 Alarm System, when imported as a system (or having the essential character of a system), meets the terms of subheading 8531.10.00, HTSUSA, which provides for: "[b]urglar or fire alarms and similar apparatus."

However, you state that "Edwards Canada, is a large volume shipper" and that "[t]hey export shipments of complete systems and shipments of various parts." General Rule of Interpretation (GRI) 2(a), HTSUSA, states in part that a heading which provides for a particular article will cover that article incomplete or unfinished provided that, as imported, the unfinished article has the essential character of the complete or finished article. The rule also applies to incomplete or unfinished articles imported unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of GRI

The ENs, although not dispositive, should be looked to for the proper interpretation of the HTSUSA. See 54 Fed. Reg. 35128 (August 23, 1989). The relevant ENs, page 2, provide some guidance
on the application of GRI 2(a) to unassembled goods by stating that "when goods are so presented it is usually for reasons such as requirements or convenience of packing, handling or transport." The ENs provide further that for purposes of Rule 2(a) the expression "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved.

You have made no statements or offered any evidence that these proposed shipments would be anything more than bulk shipments of numerous components and parts. This is not the type of "convenience of packing, handling or transport" that the ENs contemplate. We have previously addressed this issue in Internal Advice 4/91, HQ 088595, and HQ 087888, dated December 3, 1990, and held that these types of shipments are "nothing more than disparate components in bulk form." Therefore, the volume shipments of components and parts are classifiable pursuant to GRI 1, and Section XVI Legal Note 2.

However, see also HQ 088760, dated March 18, 1991, which held that when merchandise is shipped in "blister packs" and referred to as "kits" which require only a "nut-and-bolt assembly operation," they possess the essential character of a complete article.

HOLDING:

The Edwards 8500 Alarm System, when imported as a system (or having the essential character of a system), meets the terms of subheading 8531.10.00, HTSUSA, which provides for: "[b]urglar or fire alarms and similar apparatus."

The volume shipments of components and parts would not be considered to have the essential character of a complete alarm system, because they are apparently nothing more than disparate components shipped in bulk form, and are therefore classifiable pursuant to GRI 1, and Section XVI, Legal Note 2.

Sincerely,

John Durant, Director

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