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HQ 965538




September 23, 2002

CLA-2 RR:CR:GC 965538 GOB

CATEGORY: CLASSIFICATION

TARIFF NO.: 8518.22.00

Dennis Heck
Corporate Import Compliance Manager
Yamaha Corporation of America
6600 Orangethorpe Avenue
P.O. Box 6600
Buena Park, CA 90622-6600

RE: NY H87555 Revoked; Loudspeakers

Dear Mr. Heck:

This is in reply to your letter of March 6, 2002, to the Director, National Commodity Specialist Division, New York, requesting reconsideration of NY H87555 dated February 20, 2002. In NY H87555, certain loudspeakers were determined to be classified under subheading 8518.29.80, HTSUS, Harmonized Tariff Schedule of the United States ("HTSUS“), which provides for other loudspeakers. We have reviewed the classification determinations in that ruling and have determined that they are incorrect. This ruling sets forth the correct classification.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of NY H87555, as described below, was published in the Customs Bulletin on August 21, 2002. No comments were received in response to the notice.

FACTS:

The following goods were at issue in NY H87555: the NS-P60 speaker system; the NS-P220 speaker system; and the NS-P610 speaker system.

The goods were described as follows in NY H87555:

The NS-P60 Home Theater Speaker Set – is designed to be sold as a three piece set to be added to an already existing right and left channel stereo speaker system in order to give surround sound capability. The set consists of two surround (rear) speakers containing one 4” woofer and one 7/8” tweeter; one center channel speaker containing two 5” woofers and one 7/8” tweeter.

The NS-P220 Home Theater Speaker Set – is designed to be sold as a six-piece surround sound speaker system. This set consists of five identical surround speakers containing one 3” woofer and one1/2” tweeter; one powered subwoofer containing one 6.5” woofer.

The NS-P610 Home Theater Speaker Set – is designed and sold as a high end cherry finished six-piece surround sound speaker system. The set consists of four identical surround speakers containing one 3” woofer and one 1” tweeter; one center channel speaker containing two 3” woofers and one 1” tweeter; one powered subwoofer containing one 8” woofer.

In NY H87555, Customs classified all three speaker systems (NS-P60; NS-P220; and NS-P610) in subheading 8518.29.80, HTSUS, as: “Loudspeakers, whether or not mounted in their enclosures: . . . Other: . . . Other.”

In your letter of March 6, 2002, you request reconsideration of the classification of the NS-P60 speaker set. You propose that it is classified in subheading 8518.22.00, HTSUS.

ISSUE:

What is the classification under the HTSUS of the above-described speaker systems?

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 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’s may then be applied. GRI 2 is not applicable here.

GRI 3 provides as follows:

When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

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 materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, 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.

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

GRI 6 provides in pertinent part that “. . . the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable.”

The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

EN (VIII) for GRI 3(b) provides:

The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

EN (X) to GRI 3(b) provides:

For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings ...

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).

The HTSUS provisions under consideration are as follows:

8518 . . . loudspeakers, whether or not mounted in their enclosures . . . :

Loudspeakers, whether or not mounted in their enclosures:

8518.21.00 Single loudspeakers, mounted in their enclosures:

8518.22.00 Multiple loudspeakers, mounted in the same enclosure:

8518.29 Other:

8518.29.80 Other

NS-P60 Speaker System

Each of the speakers in the NS-P60 speaker set is a multiple loudspeaker, mounted in the same enclosure. Therefore, at GRI 1, we find that the NS-P60 speaker system is classified in subheading 8518.22.00, HTSUS, as: “Loudspeakers, whether or not mounted in their enclosures: . . . Multiple loudspeakers, mounted in the same enclosure.”

NS-P220 Speaker System and NS-P610 Speaker System

It is our determination that the NS-P220 and NS-P610 speaker systems constitute “goods put up in sets for retail sale” within the meaning of GRI 3(b) and GRI 6. Each of these systems consists of articles which are prima facie classifiable in two subheadings at the same level of subdivision; they are put up together to carry out a specific activity, i.e., the projection of sound; and they are put up in a manner suitable for sale directly to users without repacking.

The NS-220 and the NS-P610 speaker systems both contain one single loudspeaker and several multiple loudspeakers. If imported separately, the single loudspeakers would be classified in subheading 8518.21.00, HTSUS, and the multiple loudspeakers would be classified in subheading 8518.22.00, HTSUS.

Pursuant to GRI 3(a) and GRI 6, two subheadings each refer to part only of the items in a set put up for retail sale. Therefore, those headings are to be regarded as equally specific in relation to the items.

At GRI 3(b), it is our belief that no one item in the set gives the set its essential character. Accordingly, we are unable to classify the merchandise pursuant to GRI 3(b).

Therefore, we proceed to GRI 3(c), i.e., the goods shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

Pursuant to GRI 3(c), the NS-220 and the NS-P610 speaker systems are classified in subheading 8518.22.00, HTSUS, as: “Loudspeakers, whether or not mounted in their enclosures: . . . Multiple loudspeakers, mounted in the same enclosure.”

HOLDING:

At GRI 1, the NS-P60 speaker system is classified in subheading 8518.22.00, HTSUS, as: “Loudspeakers, whether or not mounted in their enclosures: . . . Multiple loudspeakers, mounted in the same enclosure.”

At GRI 3(c), the NS-220 and the NS-P610 speaker systems are classified in subheading 8518.22.00, HTSUS, as: “Loudspeakers, whether or not mounted in their enclosures: . . . Multiple loudspeakers, mounted in the same enclosure.”

EFFECT ON OTHER RULINGS:

NY H87555 is revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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