HQ 953767

April 19, 1993

CLA-2 CO:R:C:M 953767 DWS

CATEGORY: Classification

TARIFF NO.: 8507.30.00; 8504.40.00; 4202.91.00; 9801.00.10

Ms. Elva Arzate

Account Manager

Rudolph Miles & Sons, Inc.

P.O. Box 11057

El Paso, TX 79983-1057

RE: Starter Kits for Cellular Telephones; Cellular Phone Battery;

Battery Eliminator; Leather Cellular Phone Case; Set; GRI 3(b);

Explanatory Note 3(b)(X)

Dear Ms. Arzate:

This is in response to your letter of February 26, 1993, on

behalf of Gates Energy Product, Inc., concerning the classification

of starter kits for cellular telephones under the Harmonized Tariff

Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of a starter kit for cellular

telephones. The kit is comprised of a cellular telephone battery

(Mexico country of origin), a battery eliminator (China country of

origin), and a leather cellular telephone case (U.S. country of

origin). It is imported from Mexico.

The purpose of the kit is to provide a cellular telephone user

uninterrupted power to the cellular telephone, to save charged

battery energy, and to provide the user with easier handling of the

cellular telephone by including a carrying strap or a belt clip.

The cellular telephone battery offers a back-up portable power

source when the original telephone battery is being recharged.

The battery eliminator offers the option to draw operating

power from the telephone user\'s automobile electrical system

through the cigarette lighter, thereby increasing the operating

range for the telephone and extending the life expectancy of the

battery.

The specially fitted leather case allows the telephone user

to easily remove and replace the telephone battery or battery

eliminator without having to remove the case. The leather case

includes a zipper or a velcro strap to allow the cord of the

battery eliminator to extend from the power source directly to the

telephone through the leather case. The leather case also allows

for easier handling of the telephone by including a carrying strap

or a belt clip.

ISSUE:

Whether the merchandise constitutes a set put up for retail

sale? What is the proper classification of the items within the

kit under the HTSUS?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance

with the General Rules of Interpretation (GRI\'s), taken in order.

GRI 1 provides that classification is determined according to the

terms of the headings and any relative section or chapter notes.

GRI 3 must be considered in the classification of merchandise

put up in sets for retail sale. GRI 3(b) provides that:

\[m\]ixtures, 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.

Explanatory Note 3(b)(X) (p. 4), HTSUS, provides that \"\[f\]or

the purpose 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).\"

It is our position that the kit does not constitute a set put

up for retail sale. The kit does satisfy the requirements of (a)

and (c) under Explanatory Note 3(b)(X). However, it does not

satisfy the requirements in (b). The kit does not \"consist of

products or articles put up together to meet a particular need or

carry out a specific activity\".

Both the telephone battery and the battery eliminator can

operate as the power source of a cellular telephone. However, the

leather case can be used regardless of whether the operator is

using either of the above articles. Although the case is specially

fitted to remove and replace the telephone battery and the battery

eliminator, it also functions to allow easier handling of the

telephone. This function is independent of the use of either the

telephone battery or the battery eliminator.

Consequently, because the kit does not constitute a set, the

three articles must be classified separately under the HTSUS.

The cellular telephone battery is classifiable under

subheading 8507.30.00, HTSUS, which provides for: \"\[n\]ickel-

cadmium storage batteries.\"

The battery eliminator is classifiable under subheading

8504.40.00, HTSUS, which provides for: \"\[s\]tatic converters.\"

The leather cellular telephone case is classifiable under

subheading 4202.91.00, HTSUS, which, in part, provides for:

\"\[t\]runks, suitcases, vanity cases, attache cases, briefcases,

school satchels, spectacle cases, binocular cases, camera cases,

musical instrument cases, gun cases, holsters and similar

containers; traveling bags, toiletry bags, knapsacks and backpacks,

handbags, shopping bags, wallets, purses, map cases, cigarette

cases, tobacco pouches, tool bags, sports bags, bottle cases,

jewelry boxes, powder cases, cutlery cases and similar containers,

of leather . . .: \[o\]ther: \[w\]ith outer surface of leather . . .\"

However, because the leather case is of U.S. origin,

subheading 9801.00.10, HTSUS, is applicable. It provides for:

\"\[p\]roducts of the United States when returned after having been

exported, without having been advanced in value or improved in

condition by any process of manufacture or other means while

abroad.\"

HOLDING:

The kit does not constitute a set put up for retail sale.

Therefore, the three articles must be classified separately under

the HTSUS.

The cellular telephone battery is classifiable under

subheading 8507.30.00, HTSUS. The general, column one rate of duty

is 5.1 percent ad valorem.

The battery eliminator is classifiable under subheading

8504.40.00, HTSUS. The general, column one rate of duty is 3

percent ad valorem.

The leather cellular telephone case is classifiable under

subheading 4202.91.00, HTSUS. The general, column one rate of duty

is 6.8 percent ad valorem. However, because the leather case is

of U.S. origin, subheading 9801.00.10, HTSUS, is applicable. Goods

classifiable under this provision receive duty free treatment.

Sincerely,

John Durant, Director