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HQ 959686




March 31, 1998

CLA-2 RR:CR:GC 959686 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9503.70.0030

Port Director, U.S. Customs
300 South Ferry Street
Terminal Island, CA 90731

RE: Fun With Electronics

Dear Port Director:

On July 9, 1996, All Nations Forwarding, on behalf of Philips Interactive Media of America, submitted a request for a ruling letter to the National Commodity Specialist Division in New York. The request concerned the classification of an article known as "Fun With Electronics" under the Harmonized Tariff Schedule of the United States (HTSUS). On August 15, 1996, that letter together with a sample was forwarded to this office for reply. Subsequently it was brought to our attention that an unliquidated entry of this article is pending at your port. As there is a pending unliquidated entry, we have determined to treat this request for a ruling as an internal advice request pursuant to ?177.1 and 177.11, Customs Regulations (19 CFR ? 177.1 and 177.11).

FACTS:

"Fun With Electronics" consists of a CD-ROM in a plastic case, a printed instruction manual covering the use of the CD-ROM and how to set up the cardboard workbench, a plastic toolbox, and 100 electronic components (ceramic, electrolytic and variable capacitors, wires of various lengths as well as a coil of copper wire, resistors, transistors, regular and light-emitting diodes, photocells, transformers, piezo transducers, metal rods, earphones, a battery holder and springs). All of the components are packaged together for retail sale.

The CD-ROM contains a "menu" which offers many activities. The primary activity is the "pick projects", which allows the user to choose one of many electronic projects to build, such as a burglar alarm, radio, or other devices or circuits. Once the project is chosen, the necessary steps to complete it appear on the user's computer screen. One can follow along and build the project on the workbench. Once the project is completed, the CD-ROM explains how the electric current is running through the circuit. The user can then take that particular project apart and build another.

Other menu items include, "Overview" which is essentially a manual with sound, "Trivia" which provide fun facts about electricity, "Basics" which teaches the basics of electricity, "Behind the Scenes" which shows how 11 different electrical gadgets work and "Meet the Stars" and "Electro Quiz Meet the Stars" which are two ways to learn about the different included components.

ISSUE:

Whether "Fun With Electronics" is classifiable as a toy set?

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). 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 and 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's may then be applied. The relevant headings and subheadings considered when classifying "Fun With Electronics" were as follows:

4202 Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper

4823 Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers

8524 Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37

9503 Other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof

9503.70 Other toys, put up in sets or outfits, and parts and accessories thereof

The term "toy" is not defined in the HTSUS. However, in understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See, T.D. 89-90, 54 FR 35127, 35128 (August 23, 1989).

The ENs to Chapter 95 state, in pertinent part, that "[t]his Chapter covers toys of all kinds whether designed for the amusement of children or adults." Although not set forth as a definition of "toys," we have interpreted the just-quoted passage from the ENs as equating "toys" with articles "designed for the amusement of children or adults," although we believe such design must be corroborated by evidence of the articles' principal use.

When the classification of an article is determined with reference to its principal use, Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that, in the absence of special language or context which otherwise requires, such use is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use. In other words, the article's principal use at the time of importation determines whether it is classifiable within a particular class or kind.

While Additional U.S. Rule of Interpretation 1(a), HTSUS, provides general criteria for discerning the principal use of an article, it does not provide specific criteria for individual tariff provisions. However, the U.S. Court of International Trade (CIT) has provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979.

The ENs for heading 95.03 provide, in pertinent part, that:

This heading covers:

(A) [a]ll toys not included in headings 95.01 and 95.02.

[t]hese include:

(17) [e]ducational toys (e.g., toy chemistry, printing, sewing and knitting sets).

[c]ertain toys (e.g., electric irons, sewing machines, musical instruments, etc.) may be capable of a limited "use"; but they are generally distinguishable by their size and limited capacity from real sewing machines, etc.

[c]ollections of articles, the individual items of which if presented separately would be classified in other headings in the Nomenclature, are classified in this Chapter when they are put up in a form clearly indicating their use as toys (e.g., instructional toys such as chemistry, sewing, etc., sets).

[c]ertain of the above articles (toy arms, tools, gardening sets, tin soldiers, etc.) are often put up in sets.

Fun With Electronics' general physical characteristics, mainly its limited electrical use and flimsily constructed "workbench" and the types of electrical articles which can be created ("burglar alarm," "siren," " traffic light," etc.) and their limited use in the typical manner for such articles, indicate that "Fun With Electronics" is intended principally to be used as an educational toy. Its manner of advertisement and display further confirms its use as a toy in such phrases like "Build 25 fun electronic projects...[i]ncludes 25 amazing electronic experiments...[d]emonstrates the principles of electricity...[m]akes learning fun with a cast of cool, animated cyber characters...[r]ecommended [a]ges 8 and up...[k]ids to [a]dults ages 6+...WARNING SMALL PARTS MAY POSE A CHOKING HAZARD TO YOUNG CHILDREN... which appear on the box. Moreover, "Fun With Electronics" appears to be principally used in the same manner as an educational toy, that is, it is principally used to promote trial-and-error and self-learning by spurring natural curiosity, as demonstrated by the inclusion of example instructions or experiments to follow to create an end product or a variety of different products.

With respect to toy sets, the ENs for subheading 9503.70 provide, in pertinent part, that:

"[s]ets" are two or more different types of articles (principally for amusement), put up in the same packing for retail sale without repacking. Simple accessories or objects of minor importance intended to facilitate the use of the articles may also be included.

It is Customs position that "toys put up in sets or outfits" (subheading 9503.70) is an eo nomine provision denoting a clearly identifiable class or kind of goods. Consequently, goods may be classified in subheading 9503.70 pursuant to GRI 1, and recourse to the other GRI's, particularly the provisions of GRI 3 relating to sets, is unnecessary. See, e.g., Headquarters Ruling Letter (HRL) 086407 of March 22, 1990, HRL 086330 of May 14, 1990, and HRL 950700. Such sets typically contain complementary articles intended for use together, rather than individually, to provide amusement. However, there is no requirement that the component of the set only be capable of use together, and the ability of one or more of the components to be used individually does not disqualify classification as a toy set. It is sufficient that the components of the toy set possess a clear nexus which contemplates a use together to amuse.

Because "Fun With Electronics" components combine a variety of complete articles which are intended for use together to occupy the user in a pleasant or enjoyable (i.e., amusing) way, it meets the requirements for classification as a toy set. We note that in prior rulings this office has held that particular articles were not classifiable as toy sets because a single component of the set, usually a carrying case, predominated over the other set components. Further review of the HTSUS and the EN's disclose no basis for imposing such a rule. Inasmuch as any finding of a component's predominance would have no impact on a finding that the components together constitute a collection of articles designed and principally used for amusement, we have determined this rule to be inappropriate. As "fun with electronics" is classifiable as a toy, classification based upon its constituent materials in heading 4202 or heading 4823 is precluded.

Finally, Legal Note 6 to Chapter 85, HTSUS, states that: "[r]ecords, tapes and other media of heading 8523 or 8524, HTSUS, remain classified in those headings, whether or not they are entered with the apparatus for which they are intended." In classifying GRI 3 retail sets containing media of heading 8523 or 8524 Customs has interpreted Legal Note 6 to Chapter 85, as requiring that software must be broken out from a retail set and classified separately. See, HRLs 952154 dated November 17, 1992, and 950925 dated May 12, 1992. In these situations, classifying the media separately did not destroy the GRI 3 retail set.

We are of the opinion that this principle should be extended to GRI 1 toy sets. When an article which contains various components, one of which is media classifiable according to Note 6 to Chapter 85, and it otherwise meets all other requirements for classification as a GRI 1 toy set, that GRI 1 toy set is not destroyed by the presence of the media. Rather, the media will be separately classified in heading 8524, and the remaining components in subheading 9503.70, HTSUS. Therefore, because "Fun With Electronics" meets the requirements to be considered a GRI 1 educational toy set, it is classifiable as such with the media component classified separately.

HOLDING:

"Fun With Electronics" is classifiable under subheading 9503.70.0030, HTSUS, as "Other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: Other toys, put up in sets or outfits, and parts and accessories thereof, Other: Other." The 1997 general column one duty rate is free.

The CD-ROM software component is classifiable under subheading 8524.39.00, HTSUS, which provides for: "Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37: Other." The 1997 general column one duty rate is 3.7 percent ad valorem.

This decision should be mailed by your office to All Nations Forwarding no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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