HQ 957837RL - Combination Line and Cordless Handset Telephones; NY 867362 modified; heading 8517; EN 85.17; EN 85.25; EN to GRI 3(b) - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 957792 - HQ 957977 > HQ 957837RL

HQ 957837

September 6, 1995

CLA-2 R:C:M 957837 LTO

CATEGORY: CLASSIFICATION

TARIFF NO.: 8525.20.50

Mr. Richard Haroian
Sony Electronics Inc.
1 Sony Drive
Park Ridge, New Jersey 07656

RE: Combination Line and Cordless Handset Telephones; NY 867362 modified; heading 8517; EN 85.17; EN 85.25; EN to GRI 3(b)

Dear Mr. Haroian:

This is in response to your letter of April 13, 1995, requesting reconsideration of NY 867362, dated October 23, 1991, concerning the classification of combination telephone sets under the Harmonized Tariff Schedule of the United States (HTSUS). 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 (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of NY 867362 was published on August 2, 1995, in the Customs Bulletin, Volume 29, Number 31.

FACTS:

The subject articles are the Sony SPP-320, Sony SPP-400 and SPP-405 (incorrectly referred to as the SPP-4000 and SPP-4050) Cordless Telephones, which are combination line and cordless handset telephones. The telephones include the following features: dual battery pack system; 10 channel auto-scan; any key talk; low battery indicator; 10 number speed dialing; 2-way paging/intercom; noise reduction system; out-of-range alert; on-hook dialing; temporary memory; wall-mountable base.

ISSUE:

Whether the combination line and cordless handset telephones are classifiable - 2 -
as electrical apparatus for line telephony under heading 8517, HTSUS, or as transmission apparatus for radiotelephony, whether or not incorporating reception apparatus or sound recording or reproducing apparatus, under heading 8525, HTSUS. LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ."

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System, 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 headings under consideration are as follows:

8517 Electrical apparatus for line telephony or telegraphy, including such apparatus for carrier-current line systems . . .

8525 Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus . . .

In NY 867362, dated October 23, 1991, the Sony SPP-320, a predecessor to the SPP-400 and SPP-405, was held to be classifiable under subheading 8517.10.00, HTSUS, which provides for other telephone sets. You contend that the SPP-320, SPP-400 and SPP-405 are classifiable, according to GRI 3, under subheading 8525.20.50, HTSUS, which provides for cordless handset telephones.

The SPP-320, SPP-400 and SPP-405 are combination line and cordless handset telephones. EN 85.17, pg. 1361, states that heading 8517, HTSUS, covers telephone sets "for making and receiving calls from other apparatus in the network." The note further states that the sets consist of a transmitter, receiver, bell or buzzer, switching device and dialing selector. The SPP-320, SPP-400 and SPP-405 incorporate line telephone sets, and are therefore prima facie classifiable under heading 8517, HTSUS.

EN 85.25, pg. 1374, states that heading 8525, HTSUS, covers transmission apparatus for radiotelephony, which is used "for the transmission of signals (representing speech, messages or still pictures) by means of electro-magnetic waves which are transmitted through the ether without any line connection." The note further states that this group includes "[p]ortable radio-telephones." The SPP-320, SPP-400 and SPP-405 incorporate cordless handset telephones, and are therefore prima facie classifiable under heading 8525, HTSUS.

As the SPP-320, SPP-400 and SPP-405 are prima facie classifiable in more than one heading, it is necessary to resort to GRI 3. GRI 3(a) requires that the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the components contained in a composite good, those headings are to be regarded as equally specific in relation to those goods. Headings 8517 and 8525, HTSUS, each refer to part only of the components of the SPP-320, SPP-400 and SPP-405. Accordingly, no heading provides a specific description of the devices, and it is necessary to resort to GRI

GRI 3(b), HTSUS, provides that "composite goods consisting of different materials or made up of different components, . . . 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." The submitted literature describes the devices as cordless telephones incorporating a "base telephone for added convenience." You note that consumers purchase them because of the cordless feature. Moreover, the vast majority of the value of these devices is attributable to the cordless function (approximately 75 percent). See EN to GRI 3(b), pg.5 (factors which determine essential character). Accordingly, it is our opinion that the cordless handset telephone provides the SPP-320, SPP-400 and SPP-405 with their essential character. They are therefore classifiable under subheading 8525.20.50, HTSUS.

HOLDING:

The Sony SPP-320, SPP-400 and SPP-405 Cordless Telephone is classifiable under subheading 8525.20.50, HTSUS, which provides for cordless handset telephones. The corresponding rate of duty for articles of this subheading is 4.8% ad valorem.

In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

EFFECT ON OTHER RULINGS:

NY 867362, dated October 23, 1991, is modified.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling