Friday, January 15, 2016

Ruling of the Week 2016.2: Parts of Clarinets

I realize we are hard on the end of the second week of 2016, so I need to post another ROTW to avoid falling behind so early. So, here goes. Consider this a follow on to the prior ROTW, in which I walked through the classification of a complete ice cream maker. Today, we will discuss the classification of parts.

The ruling in question is NY J85598 (Jun. 19, 2003). In the ruling, Customs and Border Protection was asked to classify three "parts" used in the production of clarinets. The parts are needle springs, flat springs, and hinge screws. All were made of stainless steel.

The most obvious place to classify all three items is in 9209.99.40 as parts of musical instruments, in this case woodwinds. That is a good result, if correct, because the duty rate is zero. But, is it correct?

How else might the parts be described? Two are obviously springs. The hinge screw seems to be a metal pin with a threaded end. It might be a screw or a pin or part of a hinge.

Springs of iron or steel are specifically called out in HTSUS Heading 7320. Looking at the notes to Section XV and to Chapter 73, there is nothing that excludes the springs from classification in Heading 7320. But they are still also properly described as parts of musical instruments. Consequently, we need to look at the legal notes for Heading 9209.

Chapter 92 is in Section XVII of the HTSUS. That Section has no notes limiting its scope. But, Note 1(a) to Chapter 92 makes it clear that "Parts of general use, as defined in note 2 to section XV, of base metal (section XV), or similar goods of plastics (chapter 39)" are excluded from classification in Chapter 92. Note 2 to Section XV reads in part as follows:

Throughout the tariff schedule, the expression "parts of general use" means: 

(a) Articles of heading 7307, 7312, 7315, 7317 or 7318 and similar articles of other base metals;

(b) Springs and leaves for springs, of base metal, other than clock or watch springs (heading 9114); and

(c) Articles of heading 8301, 8302, 8308 or 8310 and frames and mirrors, of base metal, of heading 8306.
This means that if the springs are of base metal, they are "parts of general use" and not parts of clarinets for purposes of tariff classification. Note 3 to Section XV tells us that base metal includes steel, from which these springs are composed. Thus, the springs are precluded from classification in Chapter 92 and are properly classified in Heading 7320. The exact tariff item depends on the nature of the spring. Customs classified these springs in 7320.90.50 as "other" springs with a 2.9% rate of duty.

Note that we did not ask any questions about relative specificity or essential character. Really, all we did was read the HTSUS.

That leaves us with the hinge pin. Although it is threaded, it is does not appear to be a screw because it is not a fastener. That keeps it out of Heading 7318. Similarly, it is not a cotter pin, which is also a kind of fastener. (See NY K88732 (Aug. 25, 2004)). It is also not really part of a hinge, which generally is a two part assembly connected by a pin, although our clarinet pin performs a similar function by providing a pivot point. (See NY N099304 (Apr. 1, 2010). Nevertheless, when in place, the pin does not firm a hinge, it forms the mechanism of a clarinet key.

Nothing in the legal text excludes the pins from Chapter 92. And, there does not appear to be a better, more specific, classification. Consequently, the pins are classifiable in 9209.99.40 as parts of woodwind instruments.

Again, no need to go beyond General Rule of Interpretation 1.

This ruling is a good example for corporate compliance folks to use as an example of why it is not correct to classify all parts as "parts thereof." The rules on classifying parts are some of the most complex in the HTSUS. No matter how expensive, special, or unique your particular nut, bolt, screw, valve, gasket, or other item might be, if it can be classified as something other than a part, it probably should be. In fact, if you want to engage in some internal compliance activity, start by looking at what you have classified as parts. You will likely find errors in that sample.

1 comment:

solomon ogunleye said...

The classification of the Needle & Flat Springs under Chp. 73 is quite thorough but classifying Hinge Screws under Chp 92 may be very contentious - requiring real professional argument/conviction. It can also be explained under usage - what is the function of 'screw' in a machine irrespective of the size thus classifying the Screws under Chp 73.
A very tasking one though appearing simple.