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HQ 964941




June 18, 2002

CLA-2 RR:CR:GC 964941 TPB

CATEGORY: CLASSIFICATION

TARIFF NO.: 8543.89.9695

Port Director
U.S. Customs Service
Los Angeles-Long Beach Seaport
301 East Ocean Blvd.,
Long Beach, California 90802

RE: Protest 2704-01-100573; Pioneer Electronics; Audio Processors.

Dear Port Director:

This is our decision on Protest 2704-01-100573, filed on behalf of Pioneer Electronics (USA), Inc. (“Pioneer”; “Protestant”) against your classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of certain audio processors.

FACTS:

The merchandise at issue are Pioneer brand Digital Signal Processors, Model Nos. DEQ-7600 and DEQ-9200. The entries were filed on January 3, 2000 and liquidated November 17, 2000, under subheading 8543.89.9695, HTSUS, which provides for electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: other: other. The protest was filed on February 6, 2001.

The Protestant describes the merchandise as digital sound processors, which are used in conjunction with car audio systems. The processors decode sound from an audio source and transmit the sound to an audio receiver through wires. The processors do not incorporate reception apparatus.

The Protestant claims that the processors are properly classified under heading 8525, HTS, as transmission apparatus for radio broadcasting. Protestant claims that NY C85943, dated April 27, 1998, which classified a digital sound processor for a home theater system under heading 8525, HTS, is equally applicable to the merchandise at issue here, since both sets of merchandise decode sound from an audio source.

ISSUE:

Are the Pioneer digital sound processors, models DEQ-7600 and DEQ-9200 properly classified under heading 8525, HTS, as transmission apparatus for radio broadcasting, or under heading 8543, HTS, as other electrical machines, having individual functions, not provided for elsewhere in that chapter?

LAW AND ANALYSIS:

We note initially that the protest was timely filed under the statutory and regulatory provisions for protests, 19 U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1).

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 or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) states in part that incomplete or unfinished articles are to be classified as complete or finished if, as imported, they have the essential character of the complete or finished article. GRI 6 permits the comparison of same-level subheadings within the same heading, in part by application of Rules 1 through 5, applied by appropriate substitution of terms.

The HTSUS headings under consideration are as follows:

8525 Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras.

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof.

Protestants argues that the digital sound processors at issue have as their sole function the decoding of audio signals from a sound source and transmitting those signals through wires to an audio receiver (emphasis added). Protestant indicates that this clearly falls within the description of transmission apparatus for radio broadcasting, rather than the 8543, HTSUS, basket provision for electrical appliances and apparatus not specified or included elsewhere in chapter 85, HTSUS.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, 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 HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The ENs to subheading 85.25, HTSUS, state, in pertinent part, as follows:

Transmission apparatus for radio-broadcasting or television

The apparatus for radio-broadcasting falling in this group must be for the transmission of signals by means of electro-magnetic waves transmitted through the ether without any line connection. On the other hand television apparatus falls here whether the transmission is by electro-magnetic waves or by line. Emphasis added.

The Protestant’s submission clearly indicates that the sound processors transmit audio signals through wires to an audio receiver. Thus, clearly, heading 8525, HTSUS, is disqualified from consideration because of the exclusionary terms of EN 85.25US, HTS.

Protestant cites NY C85943 as precedence for classifying the sound processors under heading 8525, HTSUS. In NY C85943, Customs classified a digital sound processor for a home theater system as a transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television under heading 8525, HTSUS. The digital sound processor in that ruling decoded the sound from either a DVD player or satellite, and passed it via a wire to a home theater receiver. As the digital signal sound processor in NY C85943 decoded television audio signals, it was considered a television apparatus. This clearly falls within the exception stated in EN 85.25(B) to the requirement that a device of this heading transmit through the ether. Thus, the digital sound processor in NY C85943 can be distinguished from the merchandise at issue, which are clearly meant to operate as automobile audio processors.

The Protestant’s sales literature indicates that the sound processors are marketed as “equalizers and crossovers.” See www.pioneerelectronics.com. Equalizers for car audio systems have, in the past, been classified by Customs under subheading 8543.89.9695, HTSUS (formerly 8543.80.9080, HTSUS). See NY 842537, dated June 29, 1989; NY G84386, dated December 12, 2000). Therefore, we find classification of the Pioneer DEQ-7600 and DEQ-9200 digital sound processors under subheading 8543.86.9695, HTSUS, to be the correct classification and consistent with prior Customs rulings.

HOLDING:

For the above stated reasons, we find classification of the Pioneer DEQ-7600 and DEQ-9200 digital sound processors under subheading 8543.86.9695, HTSUS, to be the correct classification. Consequently, the protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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