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HQ 952557




October 26, 1992

CLA-2 CO:R:C:M 952557 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8524.90.30

Mr. Sal Della Ventura
Sony Corporation of America
1 Sony Drive
Park Ridge, NJ 07656-8003

RE: 3 inch compact disc; electronic book; software; HQ 950243; HQ 950879; HQ 950675; HQ 087547; HQ 950879 modified

Dear Mr. Della Ventura:

This is in response to your letter of July 27, 1992, concerning the classification of a 3 inch compact disc used with a "Data Discman Player" under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise, labeled as an electronic book, is a 3 inch compact disc which uses laser technology for reproduction of video text images onto a "Data Discman Player" (DDP). As described, all electronic books which are software for the DDP, will contain some combination of text, graphics and sound.

ISSUE:

What is the proper classification under the HTSUS for the DDP's software, a 3 inch compact disc known as an electronic book?

LAW AND ANALYSIS:

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 shall be determined according to the terms of the headings and any relative section or chapter notes.

In your letter, you indicate that electronic books are software to be used with the DDP. In HQ 950243 (October 18, 1991), we advised you that the DDP is classifiable under subheading 8521.90.00, HTSUS, which provides for: "[v]ideo recording or reproducing apparatus: [o]ther." The DDP's main purpose is information retrieval. As we stated in HQ 950243, "[i]mages and data are stored on CD-ROM discs and are picked up by an optical reading system. The data is reproduced onto the LCD screen or on a larger television or projection screen."

You argue that the electronic books should be classified under subheading 8524.90.40, HTSUS, which provides for "[r]ecords, tapes and other recorded media for sound or other similarly recorded phenomena. . .[o]ther. . .[o]ther. You state that the electronic books are not video discs because they utilize still pictures as opposed to moving background pictures. In support of your contention, you cite HQ 950879 (January 30, 1992), which dealt with 120mm diameter graphic compact discs for a Karaoke music system. In HQ 950879, we made a distinction between animated and non-animated background scenes with graphically depicted lyrics superimposed over the scenes. This distinction was based upon our erroneous use of the definition of "television" as the definition of "video".

In HQ 087547 (October 10, 1990), we recognized that there is a difference between television and video. In that ruling, we held that a screen which displays images whether they be text, pictures or graphics is a video display screen. While all television images are video, not all video images are television. We believe that television is a form of video and that video encompasses any visual or graphic display whether or not the image is moving. Based upon this distinction, we now believe that the proper classification for the 120mm graphic compact discs which were the subject of HQ 950879 is under subheading 8524.90.30, HTSUS, as video discs.

Like the video display screen in HQ 087547, the DDP displays text and graphic information from the electronic book. Because the electronic books are the CD-ROM discs intended for use with the DDP, a video player, we believe that the proper classification of the electronic books is as video discs under subheading 8524.90.30, HTSUS.

You also cite HQ 950675, dated January 7, 1992, in support of your argument that the electronic books should be classified under subheading 8524.90.40, HTSUS. In HQ 950675, we held that software (recorded media) in the form of a floppy diskette or hard disk drive was classified under subheading 8524.90.40, HTSUS. That software is used to program an automatic data processing machine (ADP) in an "EP Lab System" which was used to perform the functions of an electrocardiograph, i.e., measuring, displaying, and recording the electrical currents generated by a patient's heart. Unlike the software classified in HQ 950675, the electronic books are not discs intended to program an ADP. The DDP can only retrieve information from the electronic books and display text and graphics. Therefore, the classification in HQ 950675 is not relevant in the present situation. As stated above, the proper classification of the electronic books is video discs because the DDP is a video player.

HOLDING:

The electronic book, a 3 inch compact disc, is classifiable under subheading 8524.90.30, HTSUS, which provides for: [r]ecords, tapes and other recorded media. . .[o]ther: [v]ideo discs. The general, column one rate of duty is 5.3 percent ad valorem.

EFFECT ON OTHER RULINGS:

HQ 950879, dated January 30, 1992, no longer reflects the position of Customs Service and will be modified pursuant to section 177.9(d) of the Customs Regulations [19 CFR 177.9(d)].

Sincerely

John Durant, Director
Commercial Rulings Division

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