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HQ 958718




August 28, 1996

CLA-2 RR:TC:TE 958718 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.32.4000; 8518.30.2000

Ms. Barbara Klausman
James J. Boyle & Co.
7505 Northeast Ambassador Pl., #B
Portland, Oregon 97220

RE: Reconsideration of NYRL 813200; Stereo Earphones with Denim Wrist Pouch; Not Composite Good or Set; Not GRI 5(a) Container

Dear Ms. Klausman:

This letter is in response to your request of November 21, 1995, on behalf of your client, Labtec Enterprises, Inc., for reconsideration of New York Ruling Letter (NYRL) 813200, issued August 18, 1995, concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a denim wrist pouch and stereo earphones, imported in a blister package from China. A sample was submitted with the request.

FACTS:

In NYRL 813200, Customs individually classified the wrist pouch in subheading 4202.32.4000, HTSUSA, textile category 369, the provision for "Articles of a kind normally carried in the pocket or in the handbag: With outer surface of sheeting of plastic or of textile materials: With outer surface of textile materials: Of vegetable fibers and not of pile or tufted construction: Of cotton," with an applicable duty rate of 7.1 (now 7) percent ad valorem.

The sample, identified by item no. LT-225, is a retail package containing 1 pair of stereo earphones and a cotton denim, zippered, wrist pouch. The pouch is of a generic type, -2-
measuring approximately 4-1/2 inches in length by 2 inches in width. Two strips of hook and loop fastening material extend from the ends of the pouch and, when joined, form a strap which attaches the pouch to the wrist. The pouch is similar in design to wrist pouches used by joggers, cyclists, etc., to hold money and/or other small items normally carried in the pockets. The complete article is imported suitable for direct retail sale without repacking.

ISSUE:

Whether the merchandise is properly classified as a composite article, as a set, or as individual, separately classified components.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined 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 GRI may then be applied. The Explanatory Notes (EN) 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 GRI.

The complete article cannot be classified by reference to GRI 1 because it consists of two individual components that are classifiable in different headings, i.e., 4202 and 8518, HTSUS.

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 of the separate headings refers to part only of the materials contained in composite goods or of the items in -3-
a set put up for retail sale. Whether the separate headings in this case are regarded as equally specific depends upon whether the pouch and earphones constitute a composite good or a set put up for retail sale.

We look to GRI 3(b), which states in part that:
goods...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.

As with GRI 3(a) above, the applicability of GRI 3(b) is dependent upon whether the pouch and earphones are deemed to comprise a composite good or a set. In pertinent part, Explanatory Note IX to GRI 3(b) indicates that:

[f]or purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.

In this case, the earphones and pouch are separable but not mutually complementary nor adapted to be used together. The pouch is designed to carry, protect, and/or store any of a variety of small items. The earphones are designed to produce sound when used with equipment such as a radio receiver, CD or cassette player, etc. Each component is also of a kind normally offered for sale separately. Thus the pouch and earphones do not make up a composite good.

With respect to whether the article may be classified as a set, Explanatory Note X(b) to GRI 3(b) provides, in part, the following guidance:

For the purposes of this Rule, the term "goods put up in sets for retail sale" shall be taken to mean goods which:
consist of products or articles put up together to meet a particular need or carry out a specific activity.... (emphasis added) -4-

As noted above, the earphones are designed to produce sound when used in conjunction with another device. The wrist pouch is designed to carry, protect, and/or store small items. In light of these divergent designs and uses, we find that the individual components are not put up to meet a particular need or carry out a specific activity. Thus, the goods do not comprise a set.

We next note that certain cases or containers may be classified with the articles they are designed to hold if the requirements of GRI 5(a) are met. In pertinent part, GRI 5(a) states that:

Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and entered with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith.

Although in this instance, a denim wrist pouch is imported to be sold at retail with an article it is able to contain, it is not specially shaped or fitted to contain earphones, nor are such pouches normally sold with earphones. Therefore, GRI 5(a) does not operate to render the wrist pouch classifiable with the earphones.

You cite to Headquarters Ruling Letter (HRL) 956661, issued October 7, 1994, as support for your contention that the pouch should be classified under heading 8518, HTSUS, asserting that the earphones provide the essential character of a composite article. In HRL 956661, this office held that a mirror and a drawstring pouch comprised a composite article that was classified in a glass mirror provision. Unlike the earphones, which are useless without additional equipment not included in the retail package, the mirror was a functional component in its own right, designed to reflect a clear image. The pouch component served to enhance and prolong the usefulness of the mirror by providing needed protection from scratches and breakage during transportation and storage of the glass. Thus, although pouches and mirrors may be offered for sale in separate parts, those components were found to be adapted one to the other and to comprise a composite good. For the reasons stated above, the earphones and the wrist pouch must be classified separately. -5-

HOLDING:

The individual components packaged together for retail sale and identified by item no. LT-225, are separately classified as follows:

The cotton denim wrist pouch is classified in subheading 4202.32.4000, HTSUSA, textile category 369, the provision for "Trunks, suitcases, vanity cases...wallets, purses...: Articles of a kind normally carried in the pocket or in the handbag: With outer surface of sheeting of plastic or of textile materials: With outer surface of textile materials: Of vegetable fibers and not of pile or tufted construction: Of cotton." The applicable duty rate is 7 percent ad valorem (7.1 percent ad valorem in 1995).

The stereo earphones are classified in subheading 8518.30.2000, HTSUSA, the provision for "Microphones... headphones, earphones and...parts thereof: Headphones, earphones and combined microphone/speaker sets: Other." The applicable duty rate is 4.9 percent ad valorem.

NYRL 813200, issued August 18, 1995, is hereby affirmed.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories applicable to textile merchandise, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director
Tariff Classification
Appeals Division

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