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HQ 956712




March 23, 1995

CLA-2 CO:R:C:F 956712 RC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9503.80.0010

Mr. Andrew G. Halpern
Strasburger & Price, L.L.P.
901 Main Street, Suite 4300
Dallas, Texas 75202

RE: Request for Reconsideration HRL 955897; "Radio Control Apache;" Radio Remote
Control Toy Vehicle with Battery, Battery Pack, and Battery Charger; GRI 3(b) Set

Dear Mr. Halpern:

This letter is in response to your letter of July 5, 1994, on behalf of your client, Nikko America, Inc., requesting reconsideration of Headquarters Ruling Letter (HRL) 955897. A meeting with headquarters personnel was held, at your request, on November 22, 1994, to discuss this case. You submitted a sample radio remote control toy vehicle..

FACTS:

Item no. RDC-16845 consists of a toy vehicle with a hand-held, radio remote control transmitter; a 4.8 volt, rechargeable, nickel-cadmium battery pack (for insertion in the toy vehicle); a 9 volt battery (for insertion in the remote control); and a battery charger, all packaged together for retail sale. The toy vehicle and remote transmitter are made in Malaysia. The battery pack is a product of Japan. The charger is a product of Thailand. The 9 volt battery is of U.S. origin.

ISSUE:

Whether the article should be classified as a set, or as individual, separately classifiable components.

LAW AND ANALYSIS:

Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the harmonized system is such that virtually all 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 may then be applied. The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs.

As noted above, the article consists of five individual components. The article cannot be classified by reference to GRI 1 because several of the components are classifiable in different headings. The toy vehicle is classifiable in heading 9503, HTSUS, as an other toy. The remote control transmitter is classifiable in heading 8526, HTSUS, as a radio remote control apparatus. The battery pack and battery are classifiable in heading 8507, HTSUS, as electric storage batteries. The battery charger is classifiable in heading 8504, HTSUS, as an electrical transformer.

In pertinent part, GRI 2(b) states that:

[t]he classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.

GRI 3(a) directs that the headings are regarded as equally specific when each heading refers to part only of the items in a set put up for retail sale. Therefore, to determine under which provision the article will be classified, we look to GRI 3(b), which states in pertinent part that:
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.

With respect, initially, to whether the "Radio Control Apache" article comprises goods put up in sets, we look to Explanatory Note X to GRI 3(b), which indicates that for purposes of the rule, the term "goods put up in sets for retail sale" means goods which:

(a) consist of at least two different articles which are prima facie, classifiable in different headings;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).

As previously noted, the subject goods meet criteria (a) and (c). With regard to criterion (b), we must determine whether the products are put up together to carry out a specific activity, i.e., the providing of amusement. Of the five components, all but the battery charger play a direct part in the operation of the toy. However, since the toy vehicle is designed to operate only on the power of a rechargeable battery pack, the toy is inoperable once the charge is depleted.

It is your position that the items comprising the toy car package do not constitute a set. You state that the articles included in the toy car package are not put together to meet a particular need or carry out a specific activity. Instead, the articles in the package carry out two separate and distinct activities: (1) operation of the toy, and (2) recharging of the battery pack. You also emphasize that the car cannot operate while the battery pack is being charged and vice-versa.

We do not agree. Although the car cannot operate while the battery pack is being charged, we find that the battery pack is included to meet a particular need or carry out a specific activity. We view these separate acts of battery charging and operating of the car as elements of a larger specific activity. Charging the battery is indeed necessary to partake in the specific activity of operating the toy car. The amusement of an operating car can only be achieved by periodically recharging the battery pack attendant to the retail package. Furthermore, even though the battery charger is capable of charging AA batteries for use in other electronic devices, we find that the battery pack is, here, put up for retail sale and for tariff purposes constitutes part of a set.

In order to determine the essential character of the set, we next view Explanatory Note VIII to GRI 3(b), which provides the following guidance:

The 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.

Having found that each of the components plays a role in the toy vehicle's operation, it is clear that the vehicle is the component which provides the set with its essential character. Therefore, the "Radio Control Apache" is classified in heading 9503. The proper subheading for the article was 9503.80.20, HTSUS during 1994. It has been renumbered as 9503.80.0010.

HOLDING:

We affirm our previous decision in HRL 955897. The "Radio Control Apache, "article, identified by item no. RDC-16845, is classified in subheading 9503.80.0010, HTSUS, the provision for "Other toys...and accessories thereof: Other toys and models, incorporating a motor, and parts and accessories thereof: Toys (except models): Incorporating an electric motor." The applicable column one duty rate was 6.8 percent ad valorem. before January 1, 1995, and is currently free.

Sincerely,

John Durant, Director
Commercial Rulings Division

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