HQ 960118

July 28, 1997

CLA-2 RR:TC:MM 960118 HMC

CATEGORY: Classification

TARIFF NO.: 7326.90.85

Port Director of Customs

c/o Chief, Residual Liquidation

and Protest Branch

6 World Trade Center

Room 761

New York, NY 10048-0945

RE: PRD 1001-96-105627; \"Final Word\" Key Chain; Subheadings

7326.90.85, 9503.90.00 and 9505.90.20; GRI 3(b); Explanatory Note

VIII to GRI 3(b); Explanatory Note 73.26; Other Articles of Iron

or Steel; Other Toys; Practical Joke Articles; HQ 087831; HQ

950636; HQ 958452.

Dear Port Director:

This is our decision on Protest 1001-96-105627, filed

against your classification of the \"Final Word\" Key Chain. The

entries under protest were liquidated on May 31, 1996, and this

protest timely filed on July 18, 1996.

FACTS:

The merchandise under protest is the \"Final Word\" key chain

comprised of a metal key ring attached to a battery operated,

novelty article, incorporating a pre-programed electronic voice

synthesizer. This electronic synthesizer is stored within a

plastic housing unit that resembles a keyless automobile door

opener. When one of the corners located on the front of the

novelty item is depressed, a synthesized voice emits one of four

pre-programed messages.

The merchandise was entered as a practical joke article

under subheading 9505.90.60 of the Harmonized Tariff Schedule of

the United States (HTSUS). However, the entries were liquidated

under subheading 7326.90.85, HTSUS, as an other article of steel.

The provisions under consideration are as follows:

7326 Other articles of iron or steel:

Forged or stamped, but not further

worked:

7326.90 Other:

Other:

Other:

7326.90.85 Other\...4%

\* \* \* \*

9503 Other toys; reduced-size (\"scale\") models and

similar recreational models, working or not;

puzzles of all kinds; and accessories

thereof:

9503.90.00 Other\...Free

\* \* \* \*

9505 Festive, carnival or other entertainment

articles, including magic tricks and

practical joke articles; parts and

accessories thereof:

9505.90 Other:

9505.90.20 Magic tricks and practical joke

articles; parts and accessories

thereof\...Free

ISSUE:

Whether the \"Final Word\" key chain is classifiable as an

article of iron or steel under subheading 7326.90.85, HTSUS, as a

practical joke article under subheading 9505.90.20, HTSUS, or as

a toy of subheading 9503.90.00, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance

with the General Rules of Interpretation (GRIs). GRI 1 states in

part that for legal purposes, classification shall be determined

according to the terms of the headings and any relative section

or chapter notes, and provided the headings or notes do not

require otherwise, according to GRIs 2 through 6.

The subject key chain consisting of a metal key ring

attached to a novelty item is not specifically provided in any

one heading of the HTSUS. Protestant claims that the item is

described in heading 9505, HTSUS, as a practical joke article

and, in the alternative, as a toy of heading 9503, HTSUS. We

note that the article is also described in heading 7326, HTSUS,

as an article of iron or steel and in heading 8542, HTSUS, as an

electronic microassembly.

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. We

agree with protestant\'s assertion that the key chain is a

composite good. The key chain is made up of two different

components which are mutually complementary and form a whole that

would not normally be sold separately. Since the key chain is a

composite good, described in part by two or more headings, we

must apply rule 3(b), which provides that composite goods are to

be classified according to the component that gives the good its

essential character.

The Harmonized Commodity Description And Coding System

Explanatory Notes (ENs) constitute the official interpretation of

the Harmonized system. While not legally binding on the

contracting parties, and therefore not dispositive, the ENs

provide a commentary on the scope of each heading of the

Harmonized System and are thus useful in ascertaining the

classification of merchandise under the System. Customs believes

the Notes should always be consulted. See T.D. 89-80, 54 Fed.

Reg. 35127, 35128 (Aug. 23, 1989).

Explanatory Note (VIII) to GRI 3(b), at page 4, states that

the factor which determines 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 a constituent

material in relation to the use of the goods.

Protestant claims that the essential character of the

article is imparted by the electronic voice synthesizer component

because it comprises the substantial majority of the weight,

value and bulk of the product. Protestant further claims that

this novelty part meets the definition of a practical joke

article of heading 9505, HTSUS, and that, in the alternative, it

is a toy of heading 9503, HTSUS, because it is intended to amuse

an unsuspecting listener. We disagree with protestant\'s

contentions. We believe that, in this instance, these factors do

not resolve the issue of essential character. It is the role of

the constituent materials in relation to the use of the goods

that imparts the essential character.

Customs has consistently held that, as between the plastic

and steel components in key chains, it is the steel element which

provides the essential character of the item. The steel

component is what makes up the utilitarian portion of the key

ring, whereas the plastic component is present primarily for

decorative purposes. See HQ 087831, dated November 27, 1990, HQ

950636, dated January 16, 1992, and HQ 958452, dated July 3,

1996\. In these rulings Customs found that the novelty items

attached to the key chains did not possess any utilitarian

purpose. Similarly, in this instance, we find that the voice

synthesizer does not fulfill any utilitarian function. The

device does not perform any advantageous function other than

simply emitting a variety of pre-programed messages. Moreover,

we believe that the key chain will be used predominantly to hold

keys. It is the part that keeps keys that provides the primary

function on this item. We therefore find that it is the metal

key ring that imparts the essential character in the \"Final Word\"

key chain.

Chapter 73, HTSUS, provides for articles of iron or steel.

EN 73.26 states that heading 7326 covers all iron or steel

articles. We believe the key chain meets the definition of the

ENs. Accordingly, we find that the \"Final Word\" key chain is

classifiable under subheading 7326.90.85, HTSUS.

HOLDING:

Under the authority of GRI 3(b), the \"Final Word\" key chain

is provided for in heading 7326, HTSUS. It is classifiable in

subheading 7326.90.85, HTSUS, as other articles of iron or steel,

other, other, other, other. The 1995 rate of duty is 5.1%.

This 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 should 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 take steps to make the decision

available to Customs personnel via the Customs Rulings Module in

ACS and to the public via the Diskette Subscription Service, the

Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

Tariff Classification Appeals Division