HQ 962845

February 27, 2002

**CLA-2 RR:CR:GC** 962845 BJB

**CATEGORY:** Classification

**TARIFF NO.:** 8524.39.40, 8523.90.00

Port Director of Customs

U.S. Customs Service

300 South Ferry Street

San Pedro, CA 90731

**RE:** Protest 2704-99-100551; Personal embroidery design system; Flash
memory card.

Dear Port Director:

The following is our decision regarding Protest 2704-99-100551, filed by
Brother International Corporation ("protestant"), concerning the
classification, under the Harmonized Tariff Schedule of the United
States ("HTSUS"), of its "Personal Embroidery Design System" ("PE-Design
System"), described as a "combined input/output unit" for an automatic
data processing machine.

In preparing this decision, consideration was given to supplemental
submissions of March 5, 1999, and March 28, 2000, provided by
protestant's counsel. A sample of the PE Design System was also
submitted.

**FACTS:**

Protestant describes the PE-Design System, as "an embroidery system,"
"to create embroidery designs which are executed by a sewing machine."
The PE-Design System allows one to create embroidery patterns on a
personal computer, transfer them to a flash memory card, and then to
insert it into a sewing machine. The articles at issue are a card
reader/writer box, three software application diskettes ("diskettes"), a
flash memory card, an interface cable, an AC adapter, and two
instruction manuals. The diskettes contain four applications: design,
layout and editing, a programmable stitch creator, and a file utility
application. The articles are packaged together.

Both protestant's counsel and you believe that the "system" should be
classified as a set at GRI 3(b). You determined that the embroidery card
was classifiable in heading 8543, HTSUS, and imparted the essential
character of the set. Protestant claims that, at GRI 3(b), the R/W box
imparts the essential character of the set, and is classifiable in
heading 8471, HTSUS.

Protestant entered the merchandise on July 5, 1997, under subheading
8471.60.10, HTSUS, which provides for "\[a\]utomatic data processing
machines and units thereof; . . .: input or output units\[:\] combined
input/output units\[.\]" Customs liquidated the entries on February 19,
1999, under subheading 8543.89.96, HTSUS, which provides for
"\[e\]lectrical machines and apparatus, having individual functions, not
specified or included elsewhere in Chapter 85, HTSUS."

**ISSUE:**

Do the card reader/writer box, diskettes, embroidery flash memory card,
interface cable, AC adapter, and two instruction manuals form a set put
up for retail sale at GRI 3(b)?

**LAW AND ANALYSIS:**

We note initially that the protest was timely filed on February 26,
1999, under the statutory and regulatory provisions for protests, 19
U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1).

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 8524, provides, in pertinent part, for other recorded media for
sound or other similarly recorded phenomena. Heading 8523, provides, in
pertinent part, for prepared unrecorded media for sound recording or
similar recording of other phenomena, other than products of chapter 37.
Heading 8471, provides, in pertinent part, for machines for transcribing
data onto data media in coded form and machines for processing such
data. Heading 8544, provides, in pertinent part, for insulated cable,
whether or not fitted with connectors. Heading 4901, HTSUS, provides, in
pertinent part, for printed books . . . and similar printed matter.

GRI 3(a) indicates that when goods are classifiable in more than one
heading, headings which refer to only part of the items put up for
retail sale are to be regarded as equally specific.

In understanding the language of the HTSUS, the Harmonized Commodity
Description and Coding System Explanatory Notes may be utilized. The
Explanatory Notes (ENs), although not dispositive or legally binding,
provide a commentary on the scope of each heading of the HTSUS, and are
generally indicative of the proper interpretation of these headings.
Customs believes the ENs should always be consulted. *See* T.D. 98-80,
54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The EN to GRI 3(b) states that to meet the criteria of a set put up
together for retail sale, articles must:

(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).

Applying the above GRI 3(b) EN criteria, the instant goods are several
different articles classifiable in different headings. The articles work
together to carry out the specific activity of creating personalized
embroidery designs for use in a compatible sewing machine. The goods are
put up in a manner suitable for sale directly to users without repacking
in boxes. This is confirmed by the advertisements for the set provided
on the protestant's Internet website. Under the instant facts, the
articles meet all three criteria of the GRI 3(b) EN, and therefore form
a set put up for retail sale.

To be classified at GRI 3(b), the set must be classifiable as if the set
consisted of the one article that gives the whole its "essential
character," insofar as this criterion is applicable. The ENs indicate
that the characteristic which gives the set its "essential character"
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.

In the instant case, the diskettes (classifiable in heading 8524), the
flash memory card (classifiable in heading 8523), and the R/W box
(classifiable in heading 8471), are all central to producing
personalized embroidery designs useable on a sewing machine.

As no one of these three articles, alone, imparts the essential
character of the set, it is necessary to resort to GRI 3(c), which
requires that goods "be classified under the heading which occurs last
in numerical order among those which equally merit consideration.\"

Accordingly, at GRI 3(c), the set is classifiable under heading 8524,
HTSUS, which is the heading that occurs last in numerical order from
among those headings that equally merit consideration. Specifically, it
is classifiable under subheading 8524.39.40, HTSUS. Pursuant to chapter
85, note 6, the flash memory card remains classified in heading 8523.

**HOLDING:**

At GRI 3(c), the PE-Design System, for use in sewing machines to
embroider personalized patterns, is classifiable in subheading
8524.39.40, HTSUS, which provides for: "\[r\]ecords, tapes and other
recorded media for sound or other similarly recorded phenomena,
including matrices and masters for the production of records, but
excluding products of chapter 37: Other: For reproducing representations
of instructions, data, sound, and image, recorded in a machine readable
binary form, and capable of being manipulated or providing interactivity
to a user, by means of an automatic data processing machine; proprietary
format recorded discs\[.\]" The flash memory card is classified in
subheading 8523.90.00, HTSUS, which provides for: "\[p\]repared
unrecorded media for sound recording or similar recording of other
phenomena, other than products of chapter 37: Other."

Since reclassification of the merchandise as indicated above will result
in a lower rate of duty than claimed, the protest should be **[ALLOWED
IN FULL]{.underline}**. 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 (60)
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](http://www.customs.gov/), by means of the Freedom of
Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director

Commercial Rulings Division