HQ 0084990 - Composite machine; facsimile machine with telephone and answering device - United States International Trade Commision Rulings

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HQ 084990

October 3, 1989

CLA-2 CO:R:CV:G: 084990 JLV; 842359 NY

CATEGORY: CLASSIFICATION

TARIFF NO.: 8517.82.0040

Madeline B. Kuflik, Esq.
Matsushita Electric
Corporation of America
One Panasonic Way
Secaucus, New Jersey 07094

RE: Composite machine; facsimile machine with telephone and answering device

Dear Ms. Kuflik:

In a letter of June 5, 1989, on behalf of Panasonic Company, a division of Matsushita Electric Corporation of America, you requested a ruling on the classification, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), of certain facsimile machines, of which some are currently imported and others will soon be imported. This classification decision applies to transactions which were prospective at the time of your request.

FACTS:

The Panasonic models are the KX-F80, KX-F100, KX-F120, KX-F3500, KX-F220, and KX-F320. The KX-F80 is a portable facsimile (fax) machine; the others are desk-top fax machines. All the machines have telephone functions. The KX-F80 does not have a handset but has a hands-free speaker phone function. Concerning the fax function, all models feature two transmission modes: normal mode for regular documents and fine mode for detailed documents. The KX-F220 and KX-F320 also have a super fine transmission mode which gives a resolution that is four times that of normal Group 3 models.

Depending on the specific model, a fax machine may have one or more of these enhancements: programmable facsimile destinations (numbers), pre-set facsimile numbers, 16-step
half tones for detection of different shades of gray, polling function, reverse polling function, sequential broadcast capability, confidential transmission capability, memory reception, and others.

Each machine also has a telephone voice function with features such as automatic dialer, speakerphone, automatic redial, pause, mute and answer-back. Furthermore, each machine also has an answering device which records incoming messages and provides for an outgoing message.

The machines are designed to be connected to telephone lines and to transmit and receive through these lines.

ISSUE:

What is the principal function of a machine which is an electrical apparatus for line telephone or telegraphy and which can function as a facsimile machine, telephone, and answering machine?

LAW AND ANALYSIS:

The machines are described in heading 8517, which provides in pertinent part for "[e]lectrical apparatus for line telephony or telegraphy." This term is defined in the Explanatory Notes (EN) to heading 8517:

The term "electrical apparatus for line telephony or line telegraphy" means apparatus for the transmission between two points of speech or other sounds (or of symbols representing written messages, images or other data), by variation of an electric current or of an optical wave flowing in a metallic or dielectric
(copper, optical fibres, combination cable, etc.) circuit connecting the transmitting station to the receiving station.

The competing levels of indentation within 8517 are subheading 8517.10 for telephone sets and subheading 8517.82 for other apparatus: telegraphic. Because the competing provisions are subheadings at the same level of indentation within the same heading, General Rule of Interpretation (GRI) 6 directs classification according to the terms of the subheadings, any related subheading notes, and, mutatis mutandis, GRI 1 through 5 and the relative section and chapter notes, unless the context requires otherwise.

In this case, as directed by GRI 1, note 3 of section XVI is a relative section note which, if a principal function can be determined, controls classification for composite machines. Each model in issue is a composite machine: a telephone handset, a telephone answering device and a facsimile machine, all of which are joined together to form a whole which performs separate functions, either consecutively or simultaneously. These separate functions are complementary.

The Explanatory Notes (EN) to heading 8517 indicate that the answering device, when combined with a telephone set into an integrated unit, is classified with the telephone as a telephone set (subheading 8517.10). Facsimile machines, however, are described in these EN as telegraphic apparatus: machines designed for converting texts or images into appropriate electrical impulses and for transmitting those impulses, and for receiving these impulses and converting them into symbols, representations, or the text or image itself. Therefore, it appears that the functions to be compared are those of a telephone set incorporating an answering device, and a facsimile machine.

When comparing the functions, percentage of use in this case does not control. The retail price of a telephone set with answering device that is comparable in features to the telephone and answering device in the KX-F120 is approximately $130.00. The retail price of the KX-F120 is approximately $959.00. Advertising literature indicates that a composite machine, such as those in issue, are advertised as facsimile machines with the answering device as a built-in feature. The telephone (voice communication) function appears to be a standard feature on machines advertised as "fax" machines.

The North American Facsimile Guide, No. 5, January, 1989 (Info-Market, Inc.), a publication "intended to help those considering the purchase, lease or rental of a facsimile machine," lists the current Panasonic models KX-F100 and KX- F120. In The Guide, summary descriptions of the fax machines are in terms related to the fax function: resolution, document input and output, transmission speed, gray scale, and memory. Voice answering devices have become a more common function built into fax machines.

In view of this information, we conclude that the principal function of the composite machines is the facsimile function. Therefore, classification of the machines is in subheading 8517.82.0040, HTSUSA, as other telegraphic apparatus.

HOLDING:

The Panasonic KX-F80, KX-F100, KX-F120, KX-F3500, KX- F220, and KX-F320 are composite machines, the principal function being the facsimile function, and are classified in subheading 8517.82.0040, HTSUSA.

Sincerely,

John Durant, Director

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