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HQ 965543




August 13, 2002

CLA-2 RR:CR:GC 965543 HEF

CATEGORY: CLASSIFICATION

TARIFF NO.: 8505.19.00

Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island, California 90731

RE: Protest 2704-02-100282; magnetic race car figurines

Dear Port Director:

This is our decision on Protest 2704-02-100282 filed by counsel on behalf of BIX, Inc. against your classification under the Harmonized Tariff Schedule of the United States (HTSUS), of merchandise, commercially known as Magnetic Racers. The entries were liquidated on December 14 and December 21, 2001, and the protest timely filed on February 1, 2002. In preparing this ruling, consideration was given to protestant’s supplemental submission of August 2, 2002.

FACTS:

The sample submitted is a 3 ¼ inch plastic replica of Dale Earnhardt, Jr.’s General Motors Chevrolet Monte Carlo NASCAR race car with a concave area on its bottom where a magnet is affixed. The Ford Taurus NASCAR race car design is also used in this product line. The magnet is composed of anisotropic ferrite. The replica is not freewheeling.

According to the protestant, the merchandise is classifiable under subheading, 9503.90.00, HTSUS, as a toy. You classified the merchandise in subheading 8505.19.00, HTSUS, as a permanent magnet. The protestant maintains that the subject merchandise is classified as a toy. However, if the item is classified in Chapter 85, the protestant claims that it should be classified in subheading 8505.11.00, HTSUS, as a metal magnet.

ISSUE:

Whether the subject merchandise is classifiable as a toy under subheading 9503.90.00, HTSUS, or whether it is classifiable as a magnet under heading 8505, HTSUS.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that articles are to be classified by the terms of the headings and relative Section and Chapter Notes. For an article to be classified in a particular heading, the heading must describe the article, and not be excluded therefrom by any legal note. In the event that goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The HTSUS provisions under consideration are as follows:

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

9503.90.00 Other.

Electromagnets; permanent magnets and articles intended to become permanent magnets after magnetization; electromagnetic or permanent magnet chucks, clamps and similar holding devices; electromagnetic couplings, clutches and brakes; electromagnetic lifting heads; parts thereof: Permanent magnets and articles intended to become permanent magnets after magnetisation:

8505.11.00 Of metal

8505.19.00 Other.

Protestant argues that this product is classifiable according to GRI 1, in Chapter 95 as a model. The article is a model in part only. It is also in part a magnet. There is no specific heading for a good consisting of these two items attached together. Thus, for tariff purposes, the product constitutes a good consisting of two or more substances or materials. Accordingly, it may not be classified solely on the basis of GRI 1. Further GRI 2(a) is inapplicable because it applies to incomplete or unfinished articles, and the product is imported in a finished condition. According to GRI 2(b), the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3.

GRI 3(a) states that when, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, 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. As the subject product is a composite good, we must apply GRI 3(b), which provides that composite goods are to be classified according to the component that gives the good its essential character. Protestant argues that children play with this article and it is used for amusement. However, the permanent magnet gives the article a utilitarian purpose. Thus, we must determine whether the plastic covering or the magnet imparts the essential character to these articles.

EN VIII to GRI 3(b) explains that “[t]he factor which determines the 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 the constituent material in relation to the use of the goods.” Recent court decisions on the essential character for 3(b) purposes have looked primarily to the role of the constituent material in relation to the use of the goods. See Better Home Plastics Corp. v. United States, 915 F. Supp. 1265 (CIT 1996), aff’d 119 F. 3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), rehear’g denied, 944 F. Supp. 393 (1998); Vista Int’l Packing Co. v. United States, 890 F. Supp. 1095 (CIT 1995). See also Pillowtex Corp. v. United States, 893 F. Supp. 188 (CIT), aff’d 171 F. 3d 1370 (CAFC 1999).

“When amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utility purpose incidental to the amusement.” Ideal Toy Corp. v. United States, 78 Cust. Ct. 28, 33, C.D.4688 (1977). Protestant concludes that although the subject merchandise has a dual use, it should be classified as a toy under Chapter 95, regardless of the fact that it functions as a magnet. In Globe Watch Strap Corp. v. United States, 30 Cust. Ct. 440 (1953), a leather cowboy belt was determined by the court to be a plaything, exclusively used by children for their amusement. The belt’s purpose was found not to be an item of clothing or as an accessory thereof, but as a toy which ultimately enabled children to hold a toy gun and wooden bullets and play out the role of cowboys. The court in Globe stated, “In construing the language of the toy paragraph, supra, however, its full import is not determined in the ascertainment of by whom an article is chiefly used; it is necessary also to consider for what purpose it is used.” The court’s finding similarly holds true for the subject article. Though we do not argue with the statement that this item will be amusing to children, that does not detract from the fact that the article was also designed to carry out a functional purpose, i.e., to be used as a magnet by adults and children alike, and thus holds papers, notes, and pictures to ferrous metal objects or furniture such as refrigerators, file cabinets, etc. Furthermore, the article has a flattened bottom and the wheels have been flattened in order to allow this article to attach to other flat metal surfaces. Hence, this item has been designed to act and function as a magnet.

Moreover, EN 85.05 (2) specifically provides for items like the article at issue. It states, in part: (2) Permanent magnets and articles intended to become permanent magnets after magnetisation.

Permanent magnets consist of pieces of hard steel, special alloys or other materials (e.g., barium ferrite agglomerated with plastics or synthetic rubber) which have been rendered permanently magnetic. Their shape varies according to the use for which they are designed. To reduce the tendency to de-magnetise, horseshoe-shaped magnets are often furnished with a bar of iron (the keeper) adhering to the two poles. Permanent magnets remained classified here whatever their use, including small magnets used, inter alia, as toys. Thus, although the Magnetic Racer can be a toy, the fact remains that it is still a magnet.

Furthermore, we have consistently held that where a composite good contains both functional and non-functional components, the functional component gives the item its essential character. See HQ 087831, dated November 27, 1990 (holding that under a GRI 3(b) analysis, the essential character of a split key ring with a non-utilitarian vinyl attachment was the steel element); HQ 950636, dated January 16, 1992 (following HQ 087831 to conclude that the essential character of a key ring with a plastic ornament in which a logo or photo could be placed was the steel element, and revoking numerous rulings that did not follow that analysis). In HQ 087831, we stated, in pertinent part, that “the steel component is what makes up the utilitarian portion of the key ring, whereas the plastic component is present primarily for decorative purposes.”

Moreover, since 1994, Customs has consistently classified decorative non-metal magnets as magnets. See HQ 955507, dated March 30, 1994, (holding that under a GRI 3(b) analysis, the essential character of barium ferrite magnets with decorative plastic fronts in the design of various kitchen appliances was the magnet); HQ 952915, dated April 14, 1994, (holding that under a GRI 3(b) analysis, the essential character of magnets with doughcraft figurines attached was the magnet); HQ 960004, dated January 30, 1997, (holding that under a GRI 3(b) analysis, the essential character of a plastic key holder with a magnetic back was the magnet).

Protestant argues that the article is a model, despite the fact that the product has flattened wheels. Presented as primary proof that the product accurately represents the actual NASCAR race car is the fact that the automobile companies and NASCAR gave the importer permission to use the names of the automobiles and the overall design of the vehicles. Also, the protestant argues that the product is a 1/64 scale replica of Dale Earnhardt, Jr.’s race vehicle. Protestant cites Mattel, Inc. v. United States, 950 F. Supp. 353 (CIT 1997) (holding that Barbie Doll cars were classified as models and not as other toys, not having a springing mechanism), to argue that the subject article meets the court’s definition of a model. However, as the court’s opinion states, the question before the Mattel court was “whether or not any alteration has taken place in the tariff law that would undo the principle that models need not be exact and can be either used for toy purposes or non-toy purposes.” Id. at 356.

This case is distinguishable from the issue at present, because the Barbie doll cars were not composite goods like the product at issue. This straightforward classification distinction is less complex because it does not involve the essential character determinations required of a composite good, as in the subject case of the Magnetic Racer. The primary function of the cars in Mattel was to amuse children; the primary function of the Magnetic Racer is to hold papers, notes, and clips to a ferrous metal surface like that of a refrigerator.

This decorative magnet is not presented with any other article, nor is it designed to form part of another article. Instead, when viewed in its entirety, it is presented alone and functions distinctly as a permanent magnet. The fact that the article includes a decorative front or may be amusing to children and adults does not preclude it from classification in heading 8505, HTSUS, as a permanent magnet.

The article is distinguished by the magnet component, which allows the article to function as a magnet. Accordingly, the magnet imparts the essential character, and the entire article is classifiable in heading 8505, HTSUS.

The appropriate subheading is 8505.19.00, HTSUS, which provides for permanent magnets made of materials other than metal. Protestant argues that if the subject merchandise is classified under heading 8505, HTSUS, that the appropriate subheading is 8505.11.00, HTSUS, which provides for permanent magnets composed of metal. However, according to protestant’s submission, the subject article’s magnet is composed of anisotropic ferrite. Webster’s II New College Dictionary (Houghton Mifflin Company, 1999), defines ferrite as “[a]ny of a group of nonmetallic, ceramiclike, usu. ferromagnetic compounds of ferric oxide with other oxides, esp. such a compound with spinel crystalline structure, marked by high electrical resistivity and used in computer memory elements, permanent magnets, and solid-state devices.” Thus, the magnet’s ferrite composition excludes the merchandise from classification under subheading 8505.11.00, HTSUS. The articles are properly classified under subheading 8505.19.00, HTSUS, as permanent magnets and articles intended to become permanent magnets after magnetisation: other.

HOLDING:

Under GRI 3(b), the subject merchandise is classified in subheading 8505.19.00, HTSUS, as permanent magnets and articles intended to become magnets after magnetisation: other.

The protest should be DENIED. 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.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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