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HQ 231334




May 25, 2006

ENT-3-01; ENT-1 RR:CTF:ER 231334 RDC

Sandra Liss Friedman, Esq.

Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016

RE: Entry of labeling machine PT-2600 and accessories

Dear Ms. Friedman:

This is in response to your letter dated 2/24/2006, with which you request a binding ruling regarding whether each article comprising what has already been determined to be goods put up in sets for retail sale under General Rule of Interpretation (GRI), 3(b), Harmonized Tariff System of the United States (HTSUS), is required to be listed and classified separately on the CBP form 7501, entry summary?

FACTS:

The imported article is described as a desk-top labeling machine, model PT-2600. It is imported and sold at retail together with the following: starter tape cassette, address label cassette, CD ROM, USB cable, batteries, tape separator and printed materials. Classification of the PT-2600 labeling machine was the subject of NY L87307, issued 9/19/2005. According to NY L87307:

“Model Number PT-2600 is a desktop, AC adapter or battery powered machine measuring approximately 7 1/2” wide by 9 1/2” deep and 2 1/2” high. This printer features a 10-character, 2-lin[e] LCD, full function keyboard with fourteen additional function keys to navigate through fonts, shadowing, and other various printing features. This model may be connected to a PC through a USB cable to communicate with a Windows-2000 or Macintosh compatible PC. The PT-2600 prints up to seven lines of text up to 3/4” in height for labels and Avery address labels. From the information you provided, the PT-2600 is imported packaged ready for retail sale with the printer, starter tape cartridge, Avery address label cassette with 65 labels, USB cable, 8 AA batteries, CD-ROM software and tape separator.”

NY L87307 concluded that “Under GRI 3(b), the five Brother P-Touch [including PT-2600] labeling machines meet the definition of “goods put up in sets for retail sale.” Further, NY L87307 stated that “The labeling machines clearly provide the essential character of each set” and that the PT-2600 set is classified under subheading 8471.60.65, HTSUS.

On behalf of your client, Brother International Corporation (Brother) you now ask whether the each of the accessories that accompanies the labeling machine when imported must be listed separately on the entry summary, CBP form 7501. You have included the “cost breakdown of the items” that make up the retail ready PT-2600 package. Using your figures, we have calculated the cost of each item as an approximate percentage of the labeling machine which as the highest cost and imparts the essential character of the set: the starter tape cassette’s cost is .03% of the labeling machine’s cost; the address label cassette is .08%: the CD ROM is .01%, the USB cable is .02%: the batteries are .03%; the tape separator is .001%; and the printed materials are .06% of the cost of the labeling machine’s cost.

ISSUE:

Whether the each of the accessories imported with the labeling machine in a retail-ready package must be listed and classified separately on the entry summary, CBP form 7501?

LAW AND ANALYSIS:

Brother contends that the articles of “nominal value” and those that have “no direct role in carrying out the function of the labeling machine,” i.e., printing labels, and therefore do not determine the duty rate of the set, should not be required to be listed separately on the entry summary, provided that the value of these items is included in the declared value of the set. Brother provides no statute or regulation on which its contention relies.

Customs Directive (C.D.) 099-3550-061, 9/18/1992, which you cite in your letter, described how the entry summary was to be prepared for goods determined to be sets per GRI 3(b) and required that each article comprising the set should be set forth on a separate line. C.D. 099-3550-061 has been cancelled and replaced by “CBP Form 7501 Instructions.” Those instructions, available at www.CBP.gov, contain the reporting requirement and state, in pertinent part (with emphasis added):

“For sets, which are classifiable in accordance with GRI 3(b) or 3(c) of the HTS [Harmonized Tariff System], report in column 30 the HTS number from which the rate of duty for the set is derived. Precede this number with an SPI [Special Program Indicator] of “X.” Report with that part of the set so classified the total value, quantity and charges associated with the set, as well as all applicable duties, taxes, and fees, in the appropriate columns. In addition, each article in the set (including the article designated with a prefix of “X”) should be reported on a separate line as if it were separately classified. Precede these HTS numbers with an SPI of “V.” Report the quantity and value attributed to each article associated with the “V” SPI. All other reporting requirements including, but not limited to, quota, visa, licensing, and other government agency requirements, should be reported along with the appropriate HTS number preceded with an SPI of “V.” Both the “X” and “V” should be right justified in column 27, immediately preceding, and on the same line as the HTS number to which it applies.”

These instructions clearly state that each component of a set must be reported on a separate line on the entry summary, “as if it were separately classified.” Further, the instructions, like C.D. 099-3550-061 which preceded them, provide no exception from the requirement to list each item of a set on the entry summary.

Also, we are unaware of a valuation rule that would exempt items comprising a set from being listed separately on the entry summary. We are further persuaded that each component of a set must be listed regardless of value by the instruction for column 32 of the entry summary. The instructions for completing column 32, “entered value,” of the entry summary provide in part:

“Record the U.S. dollar value as defined in 19 U.S.C. § 1401a for all merchandise. Record the value for each line item on the same line as the HTS number. . . . .
Report the value in whole dollars rounded off to the nearest whole dollar (if the total entered value for a line item is less than 50 cents report as “0”). Dollar signs are omitted. Report the total entered value for all line items in block 35.”

Thus, the instruction for column 32, “if the total entered value for a line item is less than 50 cents report as “0”, confirms that an item’s small value does not provide an exception to the rule that each article in a set must be reported on a separate line as if it were separately classified.

HOLDING:

Each of the accessories imported with the labeling machine in a retail-ready package must be listed and classified separately on the entry summary, CBP form 7501.

Sincerely,

William G. Rosoff, Chief,

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