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 > 2000 HQ Rulings > HQ 962429 - HQ 962648 > HQ 962528

Previous Ruling Next Ruling
HQ 962528




February 18, 2000

CLA-2 RR:CR:GC 962528 AML

CATEGORY: CLASSIFICATION

TARIFF NO.: 8513.10.20

Port Director
U.S. Customs Service
4477 Woodson Road
St. Louis, MO 63134-3716

RE: Protest # 4503-98-100028; Coleman rechargeable power failure light; Generalized System of Preferences.

Dear Port Director:

The following is our decision regarding protest 4503-98-100028, against your classification of a rechargeable power failure light pursuant to the Harmonized Tariff Schedule of the United States (HTSUS) and the duty-free treatment under the Generalized System of Preferences (GSP). Photocopies were provided for our examination.

FACTS:

The subject article, the “Coleman Power Failure Light,” is a rechargeable light that measures approximately 4" in height, 2.5" in width and 1.5" in depth. A single plastic casing houses a filament bulb, a reflector, an LED light, a control switch and a built-in plug. The casing also houses a rechargeable nickel cadmium battery. There is a retractable plug on the back of the article which facilitates the continuous recharging of the battery and folds into a prefabricated space in the casing when the product is in use. In the event of a power outage, circuitry within the article automatically activates the light to provide illumination. The article is suited for use as a flashlight by being hand held or by being placed on a flat surface. The protestant declares that the light will function for up to 5 1/2 hours on a fully charged battery.

The protestant states that the power failure light is assembled from a large number of discrete components in Thailand. These components include resistors, diodes, capacitors, a printed circuit board, coated wires, plastic housing, a variety of plastic molded parts, bezel, lens, bulb, metal contacts, plug, springs, switches, screws, and rechargeable batteries. The first step in the manufacturing process is stated to be the creation of a printed circuit board (PCB) assembly. Next, it is stated that the bulb holder assembly, which consists of the bulb, molded plastic parts and metal contacts, is created. The PCB is then affixed to the bulb holder assembly. The plug blade assembly, which consists of the plug and molded plastic parts, is also created. It and other components are then assembled with the lower housing assembly. The upper housing assembly is inserted to the lower housing assembly, the batteries are inserted, and the unit is tested. The protestant states that the bezel/lens assembly is created and affixed to the flashlight, and is then packed for shipment.

The articles were entered between April 1997, and June 1998, and the entries were liquidated on August 7, 21 and October 9, 1998, with classification in subheading 8513.10.20, HTSUS, as flashlights. This protest was filed on November 5, 1998.

ISSUES:

Whether the rechargeable power failure light is classifiable as a flashlight under subheading 8513.10.20, HTSUS; or as other electric lamps and lighting fittings, other, under subheading 9405.40.80, HTSUS?

Whether the power failure light qualifies for duty-free treatment under the Generalized System of Preferences (GSP)?

LAW and ANALYSIS:

Initially we note that the protest was timely filed (i.e., within 90 days after but not before the notice of liquidation; see 19 U.S.C. 1514 (c)(3)(A)) and the matter is protestable (see 19 U.S.C. 1514 (a)(2) and (5)).

CLASSIFICATION

Classification of imported merchandise is accomplished pursuant to the Harmonized Tariff Schedule of the United States (HTSUS). The General Rules of Interpretation of the Harmonized System (GRIs) guides classification under the HTSUS. GRI 1, HTSUS, states in part that “for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes[.]”

The 1997 and 1998 HTSUS subheadings under consideration are as follows:

8513 Portable electric lamps designed to function by their own source of energy (for example, dry batteries, storage batteries, magnetos), other than lighting equipment of heading 8512; parts thereof:
8513.10 Lamps:
8513.10.20 Flashlights.
9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illumi nated nameplates and the like, having a perma nently fixed light source, and parts thereof not elsewhere specified or included:
9405.40 Other electric lamps and lighting fittings: 9405.40.80 Other.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 8980, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

We first consider classification within heading 8513, HTSUS, because classification within heading 9405 is precluded if the article is classifiable within chapter 85. Legal Note 1(f) to Chapter 94 provides, in pertinent part, as follows:

1. - This Chapter does not cover:
(f) Lamps or lighting fittings of Chapter 85[.]

The EN to heading 8513, HTSUS, provides, in pertinent part:

1. - This heading covers portable electric lamps designed to function by means of a selfcontained source of electricity (e.g., dry cell, accumulator or magneto).

They comprise two elements (i.e., the lamp proper and the source of electricity) which are usually mounted and directly connected together, often in a single case. In some types, however, these elements are separate and are connected by wires.

The term “portable lamps” refers only to those lamps (i.e., both the lamp and its electricity supply) which are designed for use when carried in the hand or on the person. They usually have a handle or a fastening device and may be recognised by their particular shapes and their light weight. The term therefore excludes lighting equipment for motor vehicles or cycles (heading 85.12), and inspection lamps and the like which are connected to a fixed installation (heading 94.05).

The lamps of this heading include:

(1) Pocket lamps. Some (“dynamo lamps”) are operated by a magneto, hand driven by means of a springloaded lever. (2) Other hand lamps (including those with an adjustable beam). Hand lamps are often fitted with a simple device for hanging them temporarily on a wall, etc., while others are designed so that they can be placed on the ground.

Customs has long held that “portability” is an essential characteristic of “flashlights.” The term “flashlight” has been judicially determined to encompass small, batteryoperated, portable electric lights. Sanyo Electric Inc. v. United States, 496 F.Supp. 1311, aff’d., 642 F.2d 435 (1981). Flashlights have been defined as small, battery operated, portable electric lights normally held in the hand by the housing. The primary function of a flashlight is to project a beam of light. See, Headquarters Ruling Letter (HQ) 951855, dated July 24, 1993; HQ 084852, dated March 28, 1990; HQ 953262, dated July 26, 1993. The EN to heading 8513, HTSUS (above), lists portability as a required characteristic of articles classified as flashlights.

The rechargeable power failure lamps at issue are designed to have a single use and function: to provide light. The article accomplishes this function in two ways: as a flashlight and as a security light (i.e., a light that illuminates automatically during a power outage). The article is portable (capable of being carried by hand), lightweight, battery powered (with a feature that automatically recharges the battery when the article is not in use), and the lighting element is housed in a single case with the power source - the rechargeable battery. Thus, the article meets every criterion required for classification as a flashlight.

The Coleman light is distinguishable from the Sanyo Power Failure Light which was classified in Headquarters Ruling Letter (HQ) 950761, dated February 25, 1992, under subheading 9405.40.80, HTSUS, as other electric lamps and lighting fittings, other. The Sanyo Light was described in HQ 950671 as follows:
the sample submitted is the Sanyo rechargeable security light, model no. FL-4026 which measures 2 7/16" x 3 1/4" x 1 3/8" and weighs 5 ounces. It uses a 2.5 [volt] 0.3 [amp] bulb, which emits light over a small, unfocused area. It has a plastic housing and a metal plug that cannot be retracted into the housing when the light is held in the hand. This security light is capable of use as a “flashlight,” night light [when the room is dark the night light automatically turns on when plugged into a wall outlet], or a light that can be used when a power failure occurs. It contains a built-in charging unit to recharge its battery. It can be left plugged into any 120-volt outlet and it will charge the battery when the light is not in use. The storage battery powers the light and the electronic circuitry will automatically activate the light when the circuit experiences a power outage.

Unlike the Sanyo Light in HQ 950671, the Coleman Light cannot be considered to be a multi-function light, or to be a “new article of commerce known as a power failure light.” Sanyo, supra, at 1316. The Coleman light has no night light feature; only a small, non-illuminating indicator light. The Sanyo light had a night light function. The main bulb in the Coleman light remains unlit until the plug is retracted and the “auto/on” switch activated, or the power fails. The retractable plug makes the light easily portable in the palm of the hand. The plug in the Sanyo light did not retract. Once the plug is retracted, the Coleman light emits a beam of light, rather than emitting light “over a small, unfocused area” like the Sanyo light. (Cf. Sanyo, 496 F. Supp. at 1314, “the aim of a flashlight is to light up something in the distance, so that the light is focused as much as possible.”) The dim beam of light which is emitted upon power failure only draws attention to the Coleman light; the article cannot attain optimum function, i.e., emit a beam of light, until it is detached from the outlet and the plug retracted. The optimum function of the Coleman light can be attained only while the article is held in the hand. Noteworthy is the fact that the back of the Coleman article bears the raised inscription “rechargeable power failure flashlight.”

Several considerations reveal that the Coleman light is designed for primary use as a flashlight, at times during power outages. The article has no use during daylight hours, except in a darkened area of a home or office, in such instances most likely held in the hand as a flashlight. Further, most electrical sockets in homes and offices are situated at ankle or calf level. It is reasonable to conclude that one would, in the event of a power outage, follow the emanating light to its source and remove the light from the wall socket in order to maneuver through the darkened home, carrying the light as one would a flashlight. The dim light emitted upon power failure is insufficient to illuminate a substantial area, a fact that reinforces the conclusion that the article is intended to be used primarily as a flashlight. The fact that it is manufactured to function during a power outage is an added feature; the article is readily available year round for use as a flashlight. We find that the principal function of the Coleman light is that of a hand-held, battery-powered, portable source of light – a flashlight. The article is classifiable within heading 8513. Therefore, classification within heading 9405 is precluded.

This determination is consistent with several prior rulings: HQ 088993, dated July 29, 1991, in which a battery operated, portable filament lamp was classified in subheading 8513.10.20, HTSUS; HQ 084852, dated March 28, 1990, in which rechargeable emergency lights were classified as flashlights; HQ 082594, dated May 3, 1989, in which an emergency power failure light was classified in subheading 8513.10.20, HTSUS.

GSP ELIGIBILITY

Under the GSP, eligible articles the growth, product or manufacture of a beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive dutyfree treatment if the sum of (1) the cost or value of materials produced in the BDC, plus (2) the direct costs of the processing operations in the BDC, is equivalent to at least 35% of the appraised value of the article at the time of entry into the U.S. See, 19 U.S.C. § 2463(a).

General Note 3(a)(iii), HTSUS, states that special rates of duty under one or more of the special tariff treatment programs (including GSP) apply to those products which are classified under a provision for which a special rate is indicated in the “Special” subcolumn and for which all of the legal requirements for such program(s) have been met. Therefore, if the “Special” subcolumn opposite the subheading under which the Coleman Power Failure Light is classified contains a special duty rate for a particular tariff preference program, then the article would be entitled to that special rate, assuming compliance with the program's requirements.

As stated in General Note 4(a), HTSUS, Thailand is a designated BDC. The Coleman Power Failure Light is classifiable under subheading 8513.10.20, HTSUS. Articles provided for in this provision are eligible for dutyfree treatment under the GSP provided that they are a “product of” a BDC, they are imported directly from a GSP country, and the 35% valuecontent requirement is met.

The “product of” requirement means that, in order to receive dutyfree treatment, an article either must be made entirely of materials originating in the BDC (or an association of countries, such as ASEAN, treated as one BDC), or if made of materials imported into the BDC, those materials must be substantially transformed in the BDC into a new or different article of commerce.

The cost or value of materials that are imported into the BDC may be included in the 35 percent value-content computation only if they undergo a double substantial transformation in the BDC. That is, the non-Thailand components must be substantially transformed in Thailand into a new and different intermediate article of commerce, which is then used in Thailand in the production of the final imported article, the power failure light. See 19 CFR 10.177(a).

Your office denied GSP treatment pursuant to T.D. 91-7 (January 8, 1991), which states that sets, mixtures and composite goods are eligible for GSP preference only if all of the items or components in the collection are considered “products of” the BDC. In this case, the rechargeable flashlight is not a set, mixture or composite good. Therefore, T.D. 91-7 does not apply and we must determine whether the flashlight is a product of the BDC.

The protestant states that the power failure light is assembled in Thailand and the nickel cadmium battery is made in either France or Singapore. The protestant also states that the power failure light contains a PCB that is assembled in Thailand.

In Headquarters Ruling Letter (HQ) 559634, dated August 8, 1996, Customs addressed the eligibility of telephone/answering machines, which also included removable, rechargeable battery packs in the handsets of the telephone/answering machines. Citing HQ 557208, dated July 24, 1983, Customs determined that the assembly of the printed circuit boards and various other electronic components, including a removable rechargeable battery pack, into a cordless handset resulted in a substantial transformation of the components, and, therefore, the handset was considered a “product of” Malaysia. Therefore, the nonBDC origin, removable, rechargeable battery pack with a number of other components did not disqualify the cordless telephone from dutyfree treatment under the GSP. We note that this is contrasted with a situation in which batteries are merely packaged in a set or if they are separately put up for retail sale as separate articles. See HQ 559032, dated October 25, 1995 and HQ 955897 dated April 15, 1994.

Similarly, the finished power failure lights emerge as new and different articles in comparison to the imported components from which they are made. During the process, components such as a printed circuit board (“PCB”) assembly and numerous other electronic parts are permanently assembled to produce the finished article. Therefore, the power failure lights are considered “products of” Thailand and the insertion of the nickelcadmium batteries into the power failure light at issue does substantially transform the batteries into products of Thailand.

The next issue to be resolved is whether, during the manufacture of the power failure lights, the imported components are substantially transformed into separate and distinct intermediate articles of commerce which are then used in the production of the finished power failure lights. In C.S.D. 85-25, it was determined that the PCB subassembly constituted an intermediate article within the meaning of 19 CFR 10.177(a), and was a substantially transformed constituent material of the imported computer. Therefore, the cost or value of the components imported into the BDC and used to produce the PCB subassembly could be used in determining the 35 percent value-content requirement.

Similarly, in the instant case, the process of assembling the various components into a PCB results in a substantial transformation of the imported components. Furthermore, the assembly of the PCB with the bulb holder assembly, plug blade assembly, and upper and lower housing assembly to make a finished power failure light, substantially transforms the PCB. Therefore, the imported components used to make the PCB may be used in determining the 35 percent value-content requirement. Therefore, the power failure lights are “products of” Thailand, and will be entitled to duty-free treatment under the GSP, provided your office verifies that the 35 percent value-content requirement was satisfied.

HOLDING:

The rechargeable power failure light is classified in subheading 8513.10.20, HTSUS, which provides for flashlights, and the article is entitled to duty free treatment under the GSP.

The protest should be DENIED as it pertains to classification and GRANTED as it pertains to duty-free treatment under the GSP. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel and to the public on the Customs Home Page on the World Wide Web at www.customs.treas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,


Previous Ruling Next Ruling

See also: