HQ 0953047 - Step-and-Repeat Machine; Imposition Plate Making Machine; Computer-Based Graphic Arts Machine, Machine for Composing and Producing Printing Plates; Printing Plate Imaging Machine, Heading 8442; Machine for Producing Images on Light-Sensitive Plates, Photographic Apparatus, Heading 9010; Section XVI, Note 1(m); HQ 088649, HQ 950665, HQ 951228; Internal Advice 75/92 - United States International Trade Commision Rulings

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HQ 953047

NOVEMBER 9 1993

CLA-2:CO:R:C:M 953047 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9010.20.60

District Director of Customs
610 South Canal Street
Chicago, Il 60607

RE: Step-and-Repeat Machine; Imposition Plate Making Machine; Computer-Based Graphic Arts Machine, Machine for Composing and Producing Printing Plates; Printing Plate Imaging Machine, Heading 8442; Machine for Producing Images on Light-Sensitive Plates, Photographic Apparatus, Heading 9010; Section XVI, Note 1(m); HQ 088649, HQ 950665, HQ 951228; Internal Advice 75/92

Dear Sir:

Your memorandum of October 7, 1992 (MAN-1-02-CO:CH CT 309 ML), forwarded a submission, dated September 30, 1992, from counsel constituting a request for internal advice on behalf of Misomex North America Inc. The issue is the proper classification of step-and-repeat machines from Sweden. In a letter dated July 8, 1993, summarizing a meeting held in our office on June 22, counsel withdrew from consideration the issue of parts of these machines.

FACTS:

The machines in issue here are the Misomex models 405, 500, 601, 602, 603, 726, 800, 803 and SR-70. These machines compose images of text and pictorial material and impose them onto light- sensitive printing plates. These are steps in the process of photoimposition that occur prior to running the plates on a printing press.

In operation, these machines place a piece of film containing textual and/or pictorial images previously produced in a photocomposing process, i.e., by a photographic camera, into a chase or frame. In accordance with instructions from a computer program the machines expose specific portions of an ultraviolet light-sensitive printing plate to the film. By exposing the film - 2 -
to the light source a chemical reaction occurs with the light- sensitive emulsion on the plate to impose the film's images onto one or more precise locations on the plate. These machines can horizontally or vertically position or "step" individual or combinations of film images, and "repeat" the image or images on different parts of the plate. Step-and-repeat technology enables the entire surface of a plate to be utilized. The resulting exposed plates are then developed, washed, gummed, and dried in a separate machine called a plate processor. This readies the plates for use in a printing press to mass-produce letterheads, cards, labels, books, advertisements, newspaper inserts, etc.

The step and repeat machines were entered under the provision for phototypesetting and composing machines, in subheading 8442.10.00, Harmonized Tariff Schedules of the United States (HTSUS). You rejected this classification on the basis that the described process of transferring previously set copy from a transparency to a photosensitized plate is not one of "setting" or "composing" type. On the belief that this is essentially a photographic process, you propose to liquidate the entries under subheading 9010.20.60, HTSUS, as other apparatus and equipment for photographic laboratories.

The provisions under consideration are as follows:

8442.10.00 Phototypesetting and composing machines ...Free

9010.20.10 Other apparatus and equipment for photographic laboratories: Contact printers...2.2 percent

9010.20.60 Other apparatus and equipment for photographic laboratories: Other...
3.7 percent

ISSUE:

Whether step-and-repeat machines, as described, are apparatus and equipment of heading 9010.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section - 3 -
or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the Customs Cooperation Council's official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the notes should always be consulted. See T.D. 89-80.

In its original submission to you, dated September 30, 1992, counsel has advanced a number of arguments in support of the heading 8442 classification and against the heading 9010 classification. Further discussions and additional arguments made at a meeting held in our office on June 22, 1993, were summarized in a later submission to us, dated July 8, 1993.

Counsel's arguments are briefly summarized as follows: (1) heading 8442 is more specific than heading 9010 because the principal function of step-and-repeat machines is to organize various graphics input onto a printing plate, which is a phototypesetting or composing function; (2) the common and commercial meaning of the term "phototypesetting and composing" include step-and-repeat machines; (3) historically, the Customs Court has classified step and repeat machines in the HTSUS' predecessor tariff code, the Tariff Schedules of the United States (TSUS), in provisions for typesetting machines; (4) rulings under the HTSUS classify substantially similar machines and apparatus in heading 8442; (5) relevant Explanatory Notes support classification of step and repeat machines in heading 8442; (6) TSUS/HTSUS cross reference tables refer step and repeat machines classified under the TSUS in provisions for printing machinery and/or typesetting machines to equivalent HTSUS provisions; and, (7) conversion to the HTSUS was intended to be revenue-neutral to the fullest extent possible.

We must emphasize that full and careful consideration has been given to all of counsel's written arguments, as well as to the views expressed in several telephone conversations with my staff. However, we will discuss only those arguments we find to be most relevant to the issues that control classification in this case. Apple Computer, Inc. v. United States, Slip Op. 90- 111 (1990).

The majority of counsel's arguments are in support of the heading 8442 classification. However, articles of chapter 90 are precluded from classification in chapter 84. See Section XVI, Note 1(m), HTSUS. Therefore, if the step-and-repeat machines in issue are apparatus and equipment of heading 9010 or are goods of - 4 -
any other heading in chapter 90, it is clear they cannot be classified in heading 8442.

In its first argument, counsel observes that the provision relating to functional units (note 4 to Section XVI) applies to goods of chapter 90. See Chapter 90, Note 3, HTSUS. He maintains that step-and-repeat machines perform a photographic function of heading 9010 and a phototypesetting and composing function of heading 8442. Counsel further maintains that the Customs Court determined that step-and-repeat machines perform the "function" of setting type by means of photocomposing. Consolidated International Equipment & Supply Co. v. United States, C.D. 3901 (1969). This is evidence of their principal function which, he concludes, requires classification in heading 8442. This makes Section XVI, Note 1(m) inoperative. We believe that counsel's argument confuses "function" with "purpose." The purpose of step-and-repeat machines is to prepare printing plates using a photomechanical process. However, this purpose is achieved by the function of exposing a coated, light-sensitive plate to a negative flat in a vacuum frame. This is clearly a photographic process.

Counsel cites to judicial and administrative decisions on step-and-repeat machines under the TSUS to support the heading 8442 classification. The Congress has acknowledged that such decisions can be instructive in interpreting the HTSUS, provided the nomenclature remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. H. Rep. No. 100-576, 100th. Cong., 2d. Sess. 548 (1988), pp. 549,550. This is a clear indication that the headings, and the section and chapter notes are at all times paramount in classifying goods under the HTSUS.

Counsel cites three (3) rulings classifying typesetting and imaging machinery in heading 8442. The descriptions in HQ 086122, dated January 17, 1991, and HQ 089808, dated October 24, 1991, indicate that while the apparatus in those cases performed a function appropriate to heading 8442, additional or different components from the ones present here may have been included. We are unable to compare the apparatus in HQ 950241, dated November 21, 1991, with the goods here because that decision simply describes phototypesetting "scanners" with "analyze" and "expose" units. Of greater importance, none of the decisions discusses heading 9010 or any of the legal notes that may govern classification here.

The courts have sanctioned the Explanatory Notes as useful guides to understanding and interpreting provisions of the HTSUS. We do not agree that the notes support classification of these machines in heading 8442. Relevant ENs on heading 8442 state, at p. 1237, "The heading covers only phototype-setting or composing machines which actually set type even if the type is photographed - 5 -
after it has been set (Emphasis original). The notes continue by stating the heading excludes photographic contact printers and similar photographic apparatus for preparing printing plates or cylinders. The notes refer these goods to chapter 90. Step- and-repeat machines do not set or compose type as indicated in the notes. The type has already been composed on the transparencies before they reach the step-and-repeat machines. These machines prepare printing plates in a manner described in the notes by arranging film transparencies in the desired order and utilizing a photographic process to transfer the film's images to the plates.

Heading 9010 is clearly a provision governed by "use." Counsel argues that step-and-repeats belong to a class or kind of machine principally used in printing facilities and trade shops in connection with printing press operations, and not in photographic laboratories. Where tariff terms are not defined in the statute, the common and commercial meaning of those terms shall prevail where no contrary legislative intent is indicated. Counsel maintains that for purposes of heading 9010, it is improper to examine the common meaning of the terms "photographic" and "laboratory" in the disjunctive; rather, it is the meaning of the expression "photographic laboratories" that must be examined.

We are aware of no lexicographic authority that defines the expression "photographic laboratory." Counsel has presented an array of technical literature purporting to establish that step- and-repeat technology is utilized by lithographers, platemakers, graphic designers, and by other segments of the printing industry, rather than by or in photographic laboratories. Initially, heading 9010 is broader in scope than counsel contends. The heading encompasses, among other things, apparatus for the projection of circuit patterns on sensitized semiconductor materials. This is specialized apparatus unique to the semiconductor industry and is not commonly found in "photographic" laboratories; rather, it is apparatus that ulilizes or is based on "photographic" principles. The two rulings counsel cites do not, as he contends, support a narrow construction of the term. HQ 088024, dated January 3, 1991, and HQ 950062, dated October 30, 1991, simply concluded that the apparatus under consideration was "not utilized by" or "for use in" photographic laboratories. Neither decision examined the common meaning of the expression "photographic laboratories." However, in HQ 088649 and HQ 083123, dated May 28, 1991, and December 18, 1989, respectively, Customs ruled that the terms "photography" and "laboratory" are to be given broad and liberal interpretations.

Where words have both a broad and a narrow common meaning, it is proper to refer to the legislative history, administrative practice, sections related to those in which the terms appear, - 6 -
and other extrinsic aids. F.W. Myers, Inc. v. United States, 12 CIT 566, Slip Op. 88-78 (1988), and related cases. The heading 9010 ENs are not helpful in resolving the issue. While not necessarily constituting a longstanding administrative practice, from May of 1991 through June of 1992 Customs has issued three (3) administrative rulings, HQ 088649, HQ 950665, and HQ 951228, that discuss the competing provisions in issue here as well as the relevant legal notes. They conclude that step-and-repeat machines are classifiable in heading 9010. Moreover, in different tariff provisions where it appears, the term "photographic" has been given a similarly broad interpretation. HQ 088649 and HQ 950301.

We are satisfied that there is sufficient basis to regard step-and-repeat machines as belonging to a class or kind of apparatus principally used in environs that can reasonably be regarded as "photographic laboratories" for tariff purposes.

HOLDING:

Under the authority of GRI 1, the Misomex step-and-repeat machine models 405, 500, 601, 602, 603, 726, 800, 803 and SR-70 in issue here are provided for in heading 9010.

There is some indication that step-and-repeat machines function like or are akin to platemaking apparatus which perform a contact printing function appropriate to goods of subheading 9010.20.10. This is because both utilize a vacuum and light source in which the vacuum exhausts the air pressure under the plate to insure positive contact with the frame. This form of imaging is believed to be simply a form of contact printing, the only major difference being that platemakers image only once while step-and-repeat machines repeat the imaging. We can only conclude that the evidence of record is not sufficient at this time to permit a proper assessment of this argument. For this reason, the Misomex step-and-repeat machine models in issue are classifiable in subheading 9010.20.60, HTSUS, as other apparatus and equipment for photographic laboratories.

You should mail this decision to the internal advice applicant, through counsel, no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, Lexis, the Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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See also:

Tariff No.: 8442.10.00 - Phototypesetting and composing machines