Question

Sears imported tuners, amplifiers, turntables, and dual cassette decks from japan and sold them at retail as a stereo rack system, CBP classified the articles as parts and assessed duties at the following ad valorem rates: tuner (7.7 percent), amplifier (5.9 percent), turntable (4.5 percent), and dual cassette deck (4.2 percent). Sears protested the classification, contending that the imported merchandise constituted an “entirety” that should be assessed at the rate of 4.2 percent ad valorem. Should the stereo equipment be classified as an entirety rather than as separate parts? Explain.

Answer 1

The question Presented is whether the imported mechandise has been properly classified by customs as seperate components as given or Whether it should be classified as "Entirety".

According to Sears Testimony on court:

• According to Mr. Frank Hendrix who is a regular customer of Sears for 40 years. He testified that 4 units of stereo rack system were advertised together, as a system and were sold as a system. Mr. Hendrix also testified that the four contested componenets, "as far as electronics are concerned they are married to each other.
• According to Mr. Francis McCann who is an employee of sears stated that "He ordered the complete system from the manufacturer. He aslo added that model 9291 was designed as a complete system and was advertised and sold as complete system.
• According to Mr. Harry Ruther who is a senior Product engineer in Sears. He argued that these 4 contested articles were not interchangeable with other stereo components. He testified that 4 contested components were supplied power by a connector on the back of the amplifier to which a flat wire cable connector is connected which feeds the DC voltage to all of the other section of the system.

According to United States Government Testimony on court:

• Mr. Leonard Felman was the sole individual witnessing on behalf of government. He was an electronic engineer and was specialist in audio sytem for 30 years.
• He defined rack system that must include atleast an audio amplifier; at least one programme source; certainely a rack, by defination; two loudspeaker at minimum. Which does not constitute the given 4 articles as entirety but as separete components.
• He also contradicted the assertion made by Frank Hendrix who said "as far as electronics are concerned they are married to each other. Mr. Felman testified that the "amplifier" article, for example, has a standard input jack that could be connected to ninety nine percent of the turntables in existence.

Conclusion:

In view of the foregoing, it is the holding of the court that Sears has failed to rebut the presumption of correctness that attaches to the classifiaction of the merchandise by the custom service. Since the imported merchandize was properly classified as individual components, rather than an Entirerty. Hence, Sears action was dismissed.