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HQ 966172




June 4, 2003

CLA-2 RR:CR:GC 966172 DBS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8525.30.90

Port Director
U.S. Bureau of Customs and Border Protection 4341 International Pkwy, Suite 600
Atlanta, GA 30354

RE: Protest 1704-01-100311; personal computer video cameras

Dear Port Director:

This is our decision on Protest 1704-01-100311 filed against your classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of 3 types of personal computer video cameras. The entries were liquidated on June 1, June 8 and June 22, 2001, and the protest was timely filed on August 30, 2001. Although the Customs Form (CF) 6445 and CF 19 denoted the protest was filed on August 31, 2001, which would not have been timely, the protestant sufficiently proved the port’s receipt on August 30, 2001. Consideration was given to additional factual and legal arguments made during a teleconference on May 9, 2003, with counsel for the protestant and a representative of the protesting party and the additional submissions that followed.

FACTS:

The instant protest covers three models of Phillips brand personal computer video cameras (PC cameras), the “PCVC 720K ToUcam XS,” the “PCVC 740K ToUcam Pro” and the “PCVC 690K Vesta Pro Scan,” which are designed to be connected to an automatic data processing (ADP) machine and used on a desktop. The first two are digital web cameras that can take still images. The third is a digital web camera that can take still images and scan documents. The cameras utilize either CCD (charge-coupled device) sensors or CMOS (complementary metal oxide semiconductor) sensors, which convert light into electrons that are then converted into digital signals, compressed and transmitted to the ADP machine. The resulting images may be processed by a variety of software programs. The PC cameras do not have viewfinders or LCDs (liquid crystal displays). All models come with software to enable the user to utilize the different functions, such as creating videomails, sending still images via e-mail, Internet conferencing, video and still image editing, etc. However, we believe that most, if not all devices attached to an ADP machine require the installation of software that will allow the device to be recognized by and to function with the ADP machine.

The “PCVC 720K ToUcam XS” comes in, as Philips denotes in advertising literature, “bird-shaped housing,” which is, essentially, an ovoid shape, sitting vertically. It measures 69 x 48 x 48 mm ((H x W x D) and weighs 90 g. Components include a camera lens, positioned in the middle of the ovoid, a push-button for taking still-frame pictures and an USB port. The 720K utilizes a ¼-inch CMOS image sensor, captures streaming video at a maximum rate of 30 fps (frames per second), a maximum video capture resolution of 352 x 288 pixels (CIF resolution), and a maximum still image capture resolution of 640 x 480 pixels (VGA resolution). Product literature advertises the product as a PC camera with which you can use video to communicate with family and friends via the Internet. The 720K is sold with a detachable swivel-type base, installation guide and installation CD-ROM.

The “PCVC 740K ToUcam Pro” is the same shape as the 720K, measuring 69 x 48 x 48 mm ((H x W x D) and weighing 110 g. Components include a ¼-inch CCD image sensor, an integrated microphone with remote voice control capability for taking still images. This PC camera captures video at a maximum of 60 fps and VGA resolution. Still images are captured at a maximum resolution of 1280 x 960 pixels (Megapixel resolution). The 740K is sold with a travel pouch designed to protect that camera during transport, an installation guide, installation CD-ROM and attachment base.

The “PCVC 690K Vesta Pro Scan” is a PC camera and off-the-desk scanner. It is also in the shape of an ovoid, but this one sits horizontally with attached “feet.” It measures 72 x 60 x 100 mm (W x H x D) (weight unknown). Components include a camera lens positioned in the middle of the wider side, a push-button for still frames, an integrated microphone, and an USB port. It utilizes a ¼-inch CCD image sensor and captures video at 30 fps at a VGA resolution. Still images are captured at 800 x 600 resolution. Product literature describes the use of the product as follows: “Experience the excitement of video e-mail, video chatting and video conferencing with Philips PC cameras.” The camera is sold with a telescoping tripod, which can elevate the camera 5-10 inches, installation software including TWAIN compatible interface. TWAIN is the “common language” spoken by all scanners. A TWAIN driver is the interpreter between the application and the scanner.

Though in the original submission accompanying the protest counsel for the protestant stated that cameras operate independently from an ADP machine, counsel repudiated that statement during the teleconference on May 9, 2003. The cameras have no internal memory for retrieval of images subsequent to the time they are captured. According to counsel’s submission on April 9, 2003, all three models contain a memory “buffer.” Buffers briefly store still images in sequential order to transmit them from the camera to the ADP machine. Buffers ensure that a sequence of images, e.g. a video clip, is transmitted smoothly, as in real time. During the teleconference, counsel informed Customs that the cameras have read-only memory (ROM).

You classified the PC cameras as other television cameras of subheading 8525.30.90, HTSUS. Protestant claims the PC cameras are classifiable in subheading 8525.40.40 as digital still image video cameras, or, in the alternative, that they are classifiable as input units of ADP machines, specifically optical scanners, in subheading 8471.60.80, HTSUS.

ISSUE:

Whether the principal function of any or all of three multifunctional PC-cameras is that of a video conferencing camera, classifiable as a television camera of subheading 8525.30.90, HTSUS, or a still image digital camera, classifiable in subheading 8525.40.40, HTSUS, or input units of ADP machines of subheading 8471.60.80, HTSUS.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The 2001 HTSUS provisions under consideration are as follows:

8525 Transmission apparatus, for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras or other video recorders:

8525.30 Television cameras:

8525.30.90 Other

8525.40 Still image video cameras and other video camera recorders:

8525.40.40 Digital still image video cameras

8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in the coded form and machines for processing such data, not elsewhere specified or included:

8471.60 Input or output units, whether or not containing storage units in the same housing:

Other:

8471.60.80 Optical scanners and magnetic ink recognition devices

The classification of PC cameras designed to be connected to ADP machines, used for videoconferencing, and for the capture of still images and moving images is not new. In HQ 964973, dated July 17, 2002, we classified similar PC-cameras as television cameras of subheading 8525.30.90, HTSUS. The issue in that ruling was whether the cameras were classifiable as input units of ADP machines. The cameras there, as the cameras here, fulfill the criteria set forth in Note 5(B) to Chapter 84, HTSUS, which defines units of ADP machines. However, units that satisfy Note 5(B) are subject to Note 5(E) to Chapter 84, HTSUS, which provides, in pertinent part, that “machines performing a specific function other than data processing and working in conjunction with an [ADP] machine are to be classified in the heading appropriate to their respective functions.” As with the cameras in HQ 964973, the function of these cameras is to transmit video images captured by the CCD or CMOS. They perform specific functions other than data processing and, as with the cameras in HQ 964973, are not classifiable as input units of ADP machines pursuant to Note 5(E).

In addition, in HSC 24 in October, 1999 (Annex G/19 to Doc. NC0160E2), the Harmonized System Committee (HSC) of the World Customs Organization (WCO) determined that a similar camera, which captured both video and still images, for use with an ADP machine was classified in heading 85.25 by virtue of Note 5(E) to Section XVI. Classification opinions of the HSC may provide assistance in the understanding of the international agreement, the Harmonized System, on which the HTSUS is based. The HSC decision is consistent with our decision here.

In order to address counsel’s claim that the cameras should have been classified in subheading 8525.40.40, HTSUS, we employ GRI 6, which permits the comparison of same-level subheadings within a heading, in part by application of Rules 1 through 5, applied by the appropriate substitution of terms. As only subheadings at the same level are comparable, we must first address the 6-digit level: subheading 8525.30, HTSUS, “television cameras,” and subheading 8525.40, HTSUS, “still image video cameras and other video camera recorders.”

The legal text to subheading 8525.40, HTSUS, describes the cameras of the subheading as "recorders." EN 85.25(D) (2nd Edition, 1996), Effective January 10, 2002, the United States implemented the 2002 Harmonized System. Among several changes, the term “digital cameras” was added to the heading text of heading 8525. There is no indication that the scope of subheadings 8525.30 and 8525.40 changed in any way. See HQ 964973. However, as the instant entries were made in 2001, and governed by the tariff schedule and ENs in effect at that time, the change is not addressed further in this ruling. indicates that the cameras of this category "record the images taken by the camera." Cameras of subheading 8525.40, HTSUS, are cameras which have the ability to record and store still images or video on permanent or removable media within the camera (e.g., random access memory (RAM), flash memory cards, memory sticks or magnetic tape, as with certain camcorders), such that the images can be retrieved and viewed at a time subsequent to the time they are captured.

The instant PC cameras capture images with a buffer memory which transmits the images to a receiver unit for processing (i.e. converts digital information to analog information for viewing on a monitor). Buffer memory is temporary storage; it does not “record.” That is, it does not hold onto the image or video so that it can be retrieved at a later time. The instant cameras do not incorporate their own storage media or use removable storage media so the captured images or video cannot be retrieve at a subsequent time. Accordingly, the cameras do not record. Rather, the captured images or video are stored by the ADP machine to which the cameras are attached in the ADP machine’s internal memory (e.g., hard drive) or on removable media of heading 8523, HTSUS (e.g. floppy disk). The images can be retrieved from the ADP machine, not the camera’s memory.

Counsel for the protestant argued in the teleconference that either the read-only memory (ROM) or the charge-coupled device (CCD) provide sufficient memory to classify these cameras as cameras of subheading 8525.40, HTSUS. ROM is a “[m]emory chip that permanently stores instructions and data. Its contents are created at the time of manufacture and cannot be altered(emphasis added).” Alan Freedman, The Computer Glossary (6th edition). A CCD is a type of electronic memory that stores patterns of charges sequentially. See id. CCDs do not store the images for retrieval at a time subsequent to the time of capture; they store the patterns temporarily for processing. Therefore, these cameras do not contain the type of memory that records, and thus do not fall within the scope of subheading 8525.40, HTSUS.

Television cameras, on the other hand, are typically designed and used for the transmission of video images. EN 85.25(C) states, in part, that television cameras of the heading include “television cameras for television studios or for reporting, those used for industrial or scientific purposes or for supervising traffic.” As with the cameras that were the subject of HQ 964973, supra, the instant cameras capture and transmit video images to the ADP machine for processing or for direct transmission over the Internet (videoconferencing). Whether a camera transmits video images to a television, a video monitor for surveillance or to an ADP machine for display or processing, it performs the function of a category of cameras that are within the scope of “television cameras” of subheading 8525.30, HTSUS, because it transmits live images as television cameras do. See HQ 964973; see also HQ 965097 July 19, 2002; HQ 958632, dated January 25, 1996; NY A84032, dated May 31, 1996; NY B81818, dated February 13, 1997; NY A81240 dated March 18, 1996; NY F88315, dated June 29, 2000.

Moreover, the 27th session of the HSC, May 2001, amended the Compendium of Classification Opinions to include the classification of camera apparatus presented in a box for retail sale, which included a camera similar to those at issue, camera stand, a cable to connect to an ADP machine, installation diskette, and instruction manual, in subheading 8525.30, HTSUS. Annex Q/17 to Doc. NC0430B2 and Annex to Doc. NC0381B1 (HSC/27/May 01). The opinion states that “[t]he apparatus is used for capturing video or still images, converting them into digital signals and sending the signals directly to the ADP machine where the data can be recorded, reworked, edited, etc. with appropriate software[O]ne can produce videos and still images, hold video conferences and produce illustrated documents.” It stated the camera had no internal memory. The HSC relied on the application of GRIs 1 and 6, and Note 5(E) to Section XVI (to exclude the provisions of Chapter 84) as we have here. See note 1, supra at 4.

The foregoing reasoning reflects our consideration of the additional arguments presented by the protestant but not specifically addressed herein. See Apple Computer, Inc. v. United States, 14 C.I.T. 719, 724 (1990) (stating that the court need not address testimony that did not contribute to its decision because the opinion clearly revealed that testimony it found persuasive).

With respect to the 690K, which has scanning capabilities, the scanning is a function of the software and TWAIN compatible interface, present upon importation. Note 3 to Section XVI, HTSUS, provides, in relevant part, that “other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.” Because the TWAIN compatible interface adapts the machine to be capable of “reading” documents, Note 3 to Section XVI applies.

A variety of factors are considered when determining the principal function of a composite machine. Given the style of the camera, which is that of a personal computer video camera, also referred to as a webcam, the integrated microphone, which serves no purpose in scanning documents, but is used for videoconferencing and video clips, and the accompanying advertising, we believe scanning documents is a secondary function. Thus, the principal function is that of a PC camera, which is classifiable according to the reasons above in subheading 8525.30, HTSUS.

The three cameras are imported and packaged together for direct sale with their stands, manuals, installation CD-ROM, and travel pouch (for the PCVC 740K). GRI 3(b) provides for “goods put up in sets for retail sale.” EN (X) to GRI 3(b) sets forth the criteria for classification as a set. It states that the merchandise must: (a) consist of at least two different articles which are, prima facie, classifiable in different headings, (b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and, (c) are put up in a manner suitable for sale directly to users without repacking.

All of the components would be individually classified in different headings (e.g. camera is 8525, CD-ROM is 8524). Each component contributes to the use (and protection) of the PC cameras, and they are packaged for direct sale. Thus, the components are classifiable as a set for retail sale. As such, they are classifiable in the heading that provides for the essential character of the set.

EN VIII to GRI 3(b) explains that "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of the constituent material in relation to the use of the goods." All of the components contribute to the use of the PC camera and have no independent uses. Accordingly, the PC cameras represent the essential character of the sets.

HOLDING:

The “PCVC 720K ToUcam XS,” “PCVC 740K ToUcam Pro” and “PCVC 690K Vesta Pro Scan” sets are classified in subheading 8525.30.90, HTSUS, which provides for “Transmission apparatus, for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras or other video recorders: television cameras: other.”

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 Bureau of Customs and Border Protection Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division


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