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HQ 087507




August 8, 1991

CLA-2 CO:R:C:M 087507 CMS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8518.40.20, 8519.21.00
8520.31.00, 8527.39.00

District Director Of Customs
300 South Ferry St., Terminal Is.
San Pedro, CA 90731

RE: Protest No. 2704-89-003106; Audio Stereo System; Radiobroadcast Receiver; Amplifier; Turntable; Dual Cassette Deck; Double; Combined In Same Housing; GRI 3 Set

Dear District Director:

This protest was filed against your liquidation dated July 7, 1989, in which certain audio system components were classified in subheading 8527.39.00, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The merchandise is described by the importer as the "Marantz MS-432 Matched Components,Master Pack" (Master Pack). The Master Pack consists of a large package containing an individually housed tuner, amplifier, turntable and dual cassette deck. The four components are sold at retail in the Master Pack.

After importation, speakers and a wooden "rack" unit are added to and sold with the merchandise. The "rack" unit contains shelves or "racks" onto which the separately housed components are placed. Other components such as a compact disc player and equalizer may also be added to the system by the user.

ISSUE:

Is the merchandise classified as a GRI 3 set in a single housing, or are the components classified separately in their own appropriate headings?

LAW AND ANALYSIS:

The HTSUSA provides that the classification of articles is governed by the General Rules of Interpretation (GRI's). GRI 1
states in pertinent part that ..classification shall be determined according to the terms of the headings and any relative section or chapter notes...".

Heading 8527 in pertinent part describes reception apparatus for radiobroadcasting, whether or not combined, in the same housinq, with sound recording or reproducing apparatus or a clock.

In the importer's submission dated January 22, 1991, it is argued that the merchandise should be classified pursuant to GRI 1 because it is described by the terms of Heading 8527.

Heading 8527 does describe reception apparatus (e.g., tuners) whether or not combined with recording or reproducing apparatus. However, the heading only covers sound recordinq or reproducing apparatus (e.g., cassette decks, turntables) when they are combined "in the same housing" with the reception apparatus. The imported goods are tuners, amplifiers and other components which are already incorporated in their own separate housings. Placing the separately housed cassette decks and turntables on shelves or "racks" with other separately housed components simply does not convert the different components into a Heading 8527 good, combined in the same housing by the mere fact that the separately housed.. components are placed on shelves or "racks" of a shelving structure.

The merchandise is not classified pursuant to GRI 1. The merchandise is also not an incomplete good having the essential character of a complete good described by a heading, and the merchandise is not classified pursuant to GRI 2.

The imported Master Packs are partly described by two or more headings (e.g., tuners, Heading 8527; amplifiers, Heading 8518). The merchandise cannot be classified pursuant to GRI 3(a), according to the most specific heading, because GRI 3(a) provides that headings which partly describe the merchandise are deemed to be equally specific.

The Master Packs, consisting of at least two articles classifiable in different headings, put up together to carry out a specific activity or meet a particular need (audio entertainment), and put up in a manner suitable for sale to users without repacking are GRI 3(b) sets. See Explanatory Notes to GRI 3, and HQ Ruling 085577 (January 10, 1990).

The audio system components within the Master Packs essentially contribute equally to the activity performed or need met (audio entertainment). No single audio system component gives the system its essential character. Accordingly, the set
cannot be classified according to the GRI 3(b) provision which states that the set shall be classified according to the component which gives the set its essential character. For additional discussion, see HQ Ruling 085577 (January 10, 1990).

GRI 3(c) provides that goods which cannot be classified by reference to GRI 3(a) or 3(b), shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

The components of the various systems would separately be classified in Headings 8518 (amplifier), 8519 (turntable), 8520 (dual cassette deck), and 8527 (tuner).

The Master Pack is classified in the Heading for the tuner, in subheading 8527.39.00, HTSUSA.

We note the protestant's argument that the term "in the same housing" does not appear at the subheading level. This does not result, however, in the merchandise being classified in a subheading other than subheading 8527.39.00, HTSUSA. It is elementary that to be classified in a subheading, an article must first satisfy the terms of the headinq. The Master Packs are not described by the terms of Heading 8527. The imported goods are tuners, amplifiers and other components which are already incorporated in their own separate housings. Placing the separately housed cassette decks and turntables on shelves or "racks" with other separately housed components simply does not convert the different components into a Heading 8527 good, combined in the same housing by the mere fact that the separately housed components are placed on shelves or "racks" of a shelving structure.

HOLDING:

The Master Pack is classified in subheading 8527.39.00, HTSUSA. The protest should be denied. A copy of this decision should be attached to the Form 19 Notice of Action.

Sincerely,

John Durant, Director
Commercial Rulings Division


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