HQ 0086526 - Luma VM-500 video module under TSUS - United States International Trade Commision Rulings

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HQ 086526

June 28, 1990

CLA-2 CO:R:C:G 086526 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 684.58

Ms. Kathleen M. Murphy
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60606-3693

RE: Luma VM-500 video module under TSUS

Dear Ms. Murphy:

This is in reply to your letter of February 7, 1990, on behalf of Luma Telecom, Inc., requesting classification of the Luma VM- 500 video module, under the Tariff Schedules of the United States (TSUS).

FACTS:

The finished product, known commercially as the "Visitel," is designed to connect to a telephone and act as an enhancement to a telephonic transmission by providing an image of the caller. The Visitel transmits and receives freeze frame, black and white visual images over standard telephone lines. The Luma VM-500 video module (hereafter "video module") has a molded plastic housing that is 7 1/2" by 7 1/2" by 8." The housing contains; a monochrome cathode ray tube with a 4 1/2" black and white display screen, a video camera and a video control board. The visual image is encoded and transmitted as audio data. This process is similar to the manner by which computer data is transmitted, using a modem, over telephone lines. During the transmission of the visual image, the user can neither transmit nor receive voice communication until the visual image transmission has been completed. The last three images transmitted are preserved in memory for future retrieval and viewing. Once imported, the video module must be fitted with a metal chassis, a systems board, wired, tested and packaged.

ISSUE:

What is the classification of the Luma VM-500 video module under the Tariff Schedules of the United States (TSUS)?

LAW AND ANALYSIS

The TSUS provides for; "[e]lectrical telegraph (including printing and typewriting) and telephone apparatus and instruments, and parts thereof." The term "apparatus" has been defined by the Court of International Trade as a combination of articles and materials which are intended, adapted and necessary for the accomplishment of some purpose. The Deseret Co., v. United States, ___CIT___, Slip. Op. 86-93 (1983). The video module is a combination of articles and materials which are intended, adapted and necessary for transmitting a freeze frame image in conjunction with telephonic communication. The video module is used only in conjunction with the telephone. It is an enhancement to the telephonic conversation. Therefore, it is Customs position that the video module is telephonic apparatus classifiable under this heading.

You argue that the video module should be classified similarly to facsimile machines. In HQ 081424, October 31, 1988, Customs ruled that facsimile machines, even when combined with telephones, were classifiable under 684.66, TSUS, which provides for electrical telegraph apparatus and instruments: other: terminal apparatus. However, this ruling also stated that when telephones are combined with facsimile machines, "the telephone serves a function which is incidental and subordinate to that of the facsimile machine....The telephone can be viewed as an added feature which improves the capability of the facsimile machine in an auxiliary manner." (HQ 081424, page 3).

In the instant case, the facts are reversed. Here, the video module serves a function which is incidental and subordinate to that of the telephone. The video module is only used in conjunction with the telephone communication to enhance the call by transmitting a 4 1/2", black and white, freeze frame image of the caller. The video module need not be used for the telephonic communication, and in fact, can only be used if the other party also has a video module as well. Thus, whereas the facsimile machine's subordinate use telephone was classifiable under the provision for facsimile machines, here, the subordinate use video module is classifiable under the provision for telephone sets and other terminal equipment.

Webster's New World Dictionary, Third College Edition, page 1381, in pertinent part, defines "terminal" as: "1) of, at, or forming the end, extremity, or terminus of something." The video module is of, at, or forming the end, extremity, or terminus of the telephone line, coextensively with the telephone set. Therefore, the video module is terminal equipment as are telephone sets.

You argue that the video module is classifiable under 688.41, TSUS. However, this heading provides for electrical articles and electrical parts of articles, not specifically provided for. The video module is specifically provided for under 684.58 and thus, cannot be classified under 688.41, TSUS.

You argue that the video module is not a complete article as imported because it is later fitted with a chassis, a systems board, wired, tested and packaged. However, General Interpretive Rule 10(h) states: "unless the context requires otherwise, a tariff description for an article covers such article, whether assembled or not assembled, and whether finished or not finished. It is Customs position that the video module, as imported, constitutes an unfinished video module.

Therefore, it is Customs position that the video module is properly classifiable under 684.58, TSUS, which provides for; "[t]elephone sets and other terminal equipment and parts thereof."

HOLDING:

The video module is properly classifiable under 684.58, TSUS, which provides for "[t]elephone sets and other terminal equipment and parts thereof." The rate of duty is 8.5% ad valorem.

Sincerely,

John Durant, Director

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