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HQ 955881

September 20, 1994

CLA-2 CO:R:C:M 955881 DWS


TARIFF NO.: 8523.90.00

Mr. Robert P. Schaffer
Livingston Trade Services
The Willard Office Building, Suite 1150
1455 Pennsylvania Avenue, N.W.
Washington, D.C. 20004

RE: Reconsideration of NY 893262; Video Magnetic Tape; Imported in Rolls; Prepared Unrecorded Media; Additional U.S. Rule of Interpretation 1(a); Principal Use; Explanatory Note 85.23(4); HQs 955346, 088125, 084219, 086624, 085367, and 087299; Nestle Refrigerated Food Co. v. U.S.; 8523.20.00; 3926.69.00

Dear Mr. Schaffer:

This is in response to your letters of February 10, August 19, and August 24, 1994, on behalf of Maxell Corporation of America, requesting reconsideration of NY 893262, dated January 7, 1994, concerning the classification of video magnetic tape under the Harmonized Tariff Schedule of the United States (HTSUS).


The merchandise consists of video magnetic tape, imported in rolls. The rolls measure approximately 1 m x 0.019 mm x 10,000 m. Production of the tape in Japan includes the following steps: a magnetic pigment, binder, and additives are mixed with a solvent to form a paste; the paste is homogenized and dispersed; the solid/solvent ratio is adjusted, and the binder, lubricants, and hardener solution is added; the polyester film base is coated with the magnetic material; and the merchandise is calendared.

In the U.S., the rolls are cured in a heated room (149 degrees Fahrenheit) for 35 hours. During the curing process, the high temperature enhances the chemical reaction of crosslinking binders which surround the magnetic particles. This creates a strong, structured magnetic layer. The result of curing slightly reduces the flexibility of the tape.

The purpose of curing the merchandise for the U.S. market is because 30.4 percent of the video magnetic tape is sold for video duplication. This involves the recording of video cassettes for 24 hours per day, without frequent maintenance of the video cassette recorder (VCR). Therefore, the tape must be quite durable.

After the curing process, each individual roll is cut in 78 pieces and then wound onto hubs (pancakes). The hubs are then loaded into cassettes. Each loaded cassette is then packaged.

You note that 69.6 percent of the video magnetic tape is sold to U.S. consumer market. For such usage, the curing process of the tape is not necessary. In fact, the your client exports similar merchandise into the United Kingdom (U.K.) for their consumer market, and no curing process is performed once the tape is imported into that country.

The subheadings under consideration are as follows:

3920.69.00: [o]ther plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials: [o]f polycarbonates, alkyd resins, polyallyl esters or other polyesters: [o]f other polyesters.

The general, column one rate of duty for goods classifiable under this provision is 4.2 percent ad valorem.

8523.90.00: [p]repared unrecorded media for sound recording or similar recording of other phenomena, other than products of chapter 37: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 4.2 percent ad valorem.


Whether the video magnetic tape, imported in rolls, is classifiable under subheading 3920.69.00, HTSUS, as other film of other polyesters, or under subheading 8523.90.00, HTSUS, as other prepared unrecorded media.


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.

In NY 893262, issued by the Area Director of Customs, New York Seaport, the subject merchandise was held to be classifiable under subheading 8523.90.00, HTSUS.

In HQ 955346, dated February 9, 1994, which concerned the classification of coils of stainless steel curved wire designed for the manufacture of piston rings for automobile engines, we stated that:

[u]nder a longstanding Customs principle, goods which are material when entered are not classifiable as a particular article unfinished. See Sandvik Steel, Inc. v. U.S., 321 F.Supp. 1031, 66 Cust. Ct. 12, C.D. 4161 (1971) (shoe die knife steel in coils and cutting rules in lengths, without demarcations for cutting or bending, held to be material rather than unfinished knives or cutting blades); The Harding Co. v. U.S., 23 Cust. Ct. 250 (1936) (rolls of brake lining held to be material because the identity of the brake lining was not fixed with certainty); Naftone, Inc. v. U.S., 67 Cust. Ct. 340, C.D. 4294 (1971) (rolls of plastic film without demarcations for cutting despite having only one use held to be insulating material).

You claim that because the tape, in its condition as imported into the U.S., is in rolls and has not undergone the curing process, it is unfinished and must be classifiable as material under subheading 3920.69.00, HTSUS.

You cite Harmonized Commodity Description and Coding System (HCDCS) Explanatory Note 85.23 as a basis for classification of the merchandise under chapter 39, HTSUS. In understanding the language of the HTSUS, the HCDCS Explanatory Notes may be utilized. The Explanatory Notes, 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. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 85.23 (p. 1372) states that:

[t]he heading excludes:

(a) Articles intended for use as media for recording sound or other phenomena but not yet prepared as such; these are classified in their respective headings (for example, in Chapter 39 or 48, or Section XVI).

Additional U.S. Rule of Interpretation 1(a), HTSUS, states that:

a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.

With regard to the subject merchandise, 69.6 percent of the video magnetic tape sold in the U.S market is sold to consumers. Only 30.4 percent of the merchandise is sold to duplicators, whose needs require that the tape undergoes the curing process. Therefore, based upon information provided to us, the tape is principally used for a purpose not requiring a curing process. You have noted that in the U.K., similar merchandise is sold for consumer use, not requiring a curing process. You have stated that such tape imported into the U.K. is classifiable under heading 8523, HTSUS.

In part, Explanatory Note 85.23(4) (p. 1372) states that:

(4) Media for magnetic recording, e.g., discs or cards (of plastics or paper), tapes, strips or films (of plastics or metal) or metal wire, either capable of being magnetised or so rendered by coating with a lacquer containing dispersions of magnetic powder or by electrolytic deposit of a ferromagnetic coating (e.g., for magnetic wire).

These media may also be used for recording phenomena other than sound, previously converted into electric impulses, such as the light intensity of an image (television signals, facsimile transmission) . . .

In HQ 088125, dated February 12, 1991, we held that sputtered (magnetic plated) cast aluminum platters, for automatic data processing (ADP) hard disc drives, was classifiable under subheading 8523.20.00, HTSUS, as prepared unrecorded magnetic disks. The issue in that ruling was whether the platters were "prepared". In stating that they were "prepared", we stated that:

[i]n HQ 084219, dated July 7, 1989, Customs held that the term "prepared" as used in this heading "requires that the discs classified in heading 8523 be physically finished with a magnetic surface." There is no requirement that the disc be mounted or housed in order to be considered "prepared". Therefore, since the discs at issue are finished and magnetically coated, they are specifically provided for under heading 8523. See HQ 086624 (May 4, 1990), HQ 085367 (December 19, 1989), HQ 087299 (August 3, 1990), for similar holdings on similar merchandise.

Although, for the purpose of being manufactured into video cassettes, the merchandise enters the U.S. in an unfinished state, it is our position that the rolls of video magnetic tape are finished articles of prepared unrecorded media. Because the merchandise is finished for the purposes of classification under heading 8523, HTSUS, our long-held view with regard to unfinished articles imported in material lengths does not apply. Because the tape is magnetically coated prior to importation into the U.S., and because it will be principally used in the consumer market not requiring the curing process, we find that the tape is prepared unrecorded media and is classifiable under subheading 8523.90.00, HTSUS. As was stated in HQ 088125, the video magnetic tape does not have to be mounted or housed to be considered "prepared".

You have cited Nestle Refrigerated Food Co. v. U.S., Slip Op. 94-118 (1994), to demonstrate that because the merchandise has not undergone the curing process prior to importation into the U.S., it cannot be "prepared". The issue in that case was whether the imported tomato product was a sauce or a preparation for a sauce. You have cited the following language from that case:

. . . Whether a product is fit for use as a sauce depends upon more than the mere possibility of use, rather, substantial use as a sauce must be demonstrated.

It is our position that the Nestle case is irrelevant to the classification of the subject merchandise under the HTSUS. Nestle does not involve similar merchandise nor similar legal issues. A "substantial use" test is not the proper test; you have demonstrated that the merchandise, once imported into the U.S., will be principally used in the consumer market. As stated above, the "principal use" test is the one to be applied. We have cited precedential rulings which involve the classification of merchandise under heading 8523, HTSUS, and those rulings lend credence to classification of the video magnetic tape under heading 8523, HTSUS.


The rolls of video magnetic tape are classifiable under subheading 8523.90.00, HTSUS, as other prepared unrecorded media.


NY 893262 is affirmed.


John Durant, Director
Commercial Rulings Division

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