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HQ 967280




November 19, 2004

CLA-2 RR: CR: GC 967280 TPB

CATEGORY: CLASSIFICATION

TARIFF NO.: 8527.31.40

J. Kevin Horgan
Pillsbury, Madison & Sutro
Suite 1100
1667 K Street, N.W.
Washington, D.C. 20001

RE: Alternating Current Combination Stereos Incorporating a Radio, a Dual Cassette Deck Tape Player/Recorder, a Record Player, and a Graphic Equalizer

Dear Mr. Horgan:

This is in regard to HQ 950522, issued to you on August 24, 1992, pertaining to the classification of alternating current (“AC”) combination stereos under the Harmonized Tariff Schedule of the United States (“HTSUS”). That ruling classified the merchandise under subheading 8527.31.50, HTSUS, as reception apparatus for radiobroadcasting, combined in the same housing, with sound recording or reproducing apparatus, other radiobroadcast receivers, combined with sound recording or reproducing apparatus, other, other combinations incorporating tape recorders.

We have recently had an opportunity to review HQ 950522 in light of other rulings issued by Customs and Border Protection (“CBP”) and for the reasons set forth below find that it is in error and the proper classification of the merchandise is under subheading 8527.31.40, HTSUS, which provides for reception apparatus for radiobroadcasting, combined in the same housing, with sound recording or reproducing apparatus, other radiobroadcast receivers, combined with sound recording or reproducing apparatus, other, combinations incorporating tape players which are incapable of recording.

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 was published on October 6, 2004, in Volume 38, Number 41 the Customs Bulletin. No comments were received in response to this notice.

FACTS:

The merchandise is described in HQ 950522 as follows:

The merchandise in question is combination stereos incorporating an AM/FM radio, a dual cassette deck (with one play only tape well and one play/record tape well), a record player, and a graphic equalizer. This stereo system is incapable of operating without an external source of power (i.e., it is "nonportable").

The dual cassette deck contains two tape wells. One well has tape heads for recording and playing, and the other well has a tape head for playing only. The dual cassette deck features the ability to record from one tape to another, to record from the tuner, turntable or other source, and to play.

The dual cassette deck wells are driven by the same motor, which is incorporated in the cassette deck assembly mounted behind the tape deck section of the main system housing. The dual cassette deck wells share the same output and many common parts, such as a chassis assembly, gears, roller assemblies and numerous rods, levers and springs. The dual cassette deck wells also share certain controls such as switches for dubbing speed and headphones.

ISSUE:

Are the combination AC stereos properly classified under subheading 8527.31.40, HTSUS, which provides for combination stereos incorporating tape players which are incapable of recording, or under subheading 8527.31.50, HTSUS, which provides for other combinations incorporating tape recorders?

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). 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 GRIs may then be applied.

Heading 8527, HTSUS, in pertinent part, describes reception apparatus for radiobroadcasting, whether or not combined in the same housing with sound recording or reproducing apparatus. There is no dispute that the stereo combinations under consideration are described by this heading.

GRI 6 governs the classification of goods in the subheadings of a heading. GRI 6 provides, in pertinent part, that the classification of goods in the subheadings of a heading is determined according to the terms of the subheadings. In the instant case, the competing subheadings are as follows:

Combinations incorporating tape players which are incapable of recording

Other combinations incorporating tape recorders

HQ 90522 held that the goods at issue were classified under subheading 8527.31.50, HTSUS, which provides for reception apparatus for radiobroadcasting, combined in the same housing, with sound recording or reproducing apparatus, other radiobroadcast receivers, combined with sound recording or reproducing apparatus, other, other combinations incorporating tape recorders. That ruling relied upon HQ 087179, dated May 31, 1991, which held that certain audio systems incorporating dual cassette decks were properly classified under subheading 8527.31.50, HTSUS, and not 8527.31.40, HTSUS, because the dual cassette decks shared many of the same components and were required to be considered as one single unit. In reaching its conclusion, HQ 087179 stated that “[u]nlike subheading 8527.31.40, which restricts the tape players described to those which are incapable of recording, subheading 8527.31.50 does not restrict the tape recorders described to those which are incapable of playing.”

However, HQ 087179 was revoked by HQ 952271 on August 24, 1992. HQ 952271 held that based upon further analysis and research, the audio systems incorporating dual cassette decks were properly classified under subheading 8527.31.40, which provides for combinations incorporating tape players which are incapable of recording. The reasoning for this shift in position was reflected in HQ 950882, dated August 7, 1992, which indicated that 8527.31.40, HTSUS, contemplates that we consider the respective functions of the tape player and recorder separately. This reasoning was mirrored in a number of CBP rulings. See HQ 952416, HQ 952417, HQ 951932, HQ 952229, all dated August 24, 1992; HQ 952098, dated October 15, 1992; HQ 952501, dated December 1, 1992.

For the reasons set forth in 950882, et. al., we find that the stereos presently at issue are properly classified under subheading 8527.31.40, HTSUS. For that reason, CBP is revoking HQ 950522.

HOLDING:

For the reasons set forth above, the Thompson Consumer Electronics, Inc., "General Electric," combination stereos are classified under subheading 8527.31.4080, HTSUSA, as reception apparatus for radiobroadcasting, combined in the same housing, with sound recording or reproducing apparatus, other radiobroadcast receivers, combined with sound recording or reproducing apparatus, other, combinations incorporating tape players which are incapable of recording. The 2004 column one, general rate of duty is 1%. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov.

EFFECT ON OTHER RULINGS

HQ 950522, dated August 24, 1992, is revoked.

Sincerely,

Myles B. Harmon, Director

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