Bestwood Smart Home System

HQ 087361 January 17, 1991 CLA-2 CO:R:C:G 087361 MBR CATEGORY: Classification TARIFF NO.: 8537.10.00 Mr. Dale G. Vander Yacht Border Brokerage Company P.O. Box B Blaine, Washington 98230 RE: Bestwood Smart Home System Dear Mr. Vander Yacht: This is in reply to your letter of May 11, 1990, on behalf of Bestwood Electronics Corp., requesting classification of the Bestwood Smart Home System, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). FACTS: The Bestwood Smart Home System ("System") is comprised of a SH-1102 "Command Center" module, SH-1121 3 pin Appliance Controller module (plug in type), SH-1122 Appliance Controller module (wall set type), SH-1123 Wall Switch Controller module (for lights or appliances controlled by switches), SH-1151 Keypad Controller module. The "Command Center" module controls up to a maximum of 8 plug in or wall set modules, which provides the capability to electrically control: lights, fans, air conditioners, audio systems, garage door openers, water sprayers, washers, dryers, water flow, dehumidifiers, electric pans, ovens, teapots, etc. The System may also control a door telephone, emergency alarm, recorder, monitoring system, emergency lights, burglar alarm and fire safety system. Four home/office zones may be monitored by use of magnetic switches, crack sensors, etc. The System also enables control via a remote telephone. The System uses the home/office wiring that is already in place at the desired location. ISSUE: What is the classification of the Bestwood Smart Home System under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)? -2- LAW AND ANALYSIS: The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part: ...classification shall be determined according to the terms of the headings and any relative section or chapter notes... You argue that this System is properly classifiable under heading 8543, HTSUSA, which provides for: "[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter...." However, Legal Note 4., Section XVI, states: Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function. Clearly, this System is a machine that consists of individual components interconnected through electric cables (home/office wiring system), intended to contribute to the clearly defined function of electric control or the distribution of electricity. Therefore, this System is properly classifiable under heading 8537, HTSUSA, which provides for: "[b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity...." See HQ 067473, dated July 16, 1982, for a similar holding regarding similar merchandise. This System is therefore not classifiable under heading 8543, HTSUSA, because it is "specified or included elsewhere in this chapter" (8537, HTSUSA). HOLDING: The Bestwood Smart Home System is classifiable under subheading 8537.10.00, HTSUSA, which provides for: "[b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, other than switching apparatus of -3- heading 8517: [f]or a voltage not exceeding 1,000 v." The rate of duty is 5.3% ad valorem. Sincerely, John Durant, Director Commercial Rulings Division