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HQ 967723




August 29, 2005

CLA-2 RR:CTF:TCM 967723 KSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 8525.30.90

Port Director
Bureau of Customs and Border Protection
111 W. Huron Street, Room 603
Buffalo, NY 14202

RE: Application for Further Review 0901-04-150002; CCD cameras

Dear Port Director:

This is in reply to your correspondence forwarding Application for Further Review (AFR) of protest no. 0901-04-150002, filed by A.N. Derringer Inc., on behalf of Optikon Company.

The protest is against Customs and Border Protection’s (CBP) classification and liquidation of 47 entries of certain charged couple device (CCD) cameras under subheading 8525.30.9005 of the Harmonized Tariff Schedule of the United States (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 and other video camera recorders; digital cameras: Television cameras: Other, color” with a duty rate of 2.1 percent ad valorem. Protestant entered the merchandise subject to this protest between March 6, 2003 and December 24, 2003 in subheading 8525.40.4000, 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 and other video camera recorders; digital cameras: Still image video cameras and other video camera recorders; digital cameras: Digital still image video cameras”, free of duty. The merchandise was liquidated between December 12, 2003 and February 20, 2004.

Protestant filed the protest with an AFR on March 8, 2004. The importer’s request for AFR was denied. On June 3, 2004, the protestant filed a request to set aside the denial of the protest under 19 U.S.C. 1515(c). On July 22, 2004, the request to set aside the denial of the application for further review was allowed. The denial of the protest was voided. The protest was timely filed pursuant to 19 U.S.C. 1514(c)(3) and 19 C.F.R. 174.12(e)(1).

FACTS:

The merchandise at issue are two CCD camera systems identified as the “Pixelfly High Performance Digital Camera System” and the “SensiCam High Performance Digital Camera System.” The Pixelfly system includes the camera head, a Peripheral Component Interconnect (PCI) control board, high data transfer cable, camware software and manual. The SensiCam system includes a camera head, PCI control board, standard coax cable, camware software, power supply and manual. The Pixelfly has 64Kbytes located on the PCI board to facilitate storage of the digital images and the SensiCam has 16Mbytes of memory located on the PCI board to facilitate storage of the digital images.

The systems are packaged for sale to scientists and researchers in government and industrial research facilities, universities and hospitals to be used to capture, store and analyze extremely rapid events such as air bags, ballistics, fuel spray or long exposures such as cellular, neuroscience or fluroscience.

Both systems capture images in digital form. Protestant argues that these are digital still image video cameras, the principal function of which is to capture single digital images.

ISSUE:

Whether the instant cameras are classifiable as television cameras of heading 8525.30, HTSUS, or as still image video digital cameras of heading 8525.40, HTSUS.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). 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 GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI.

The 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; digital cameras:

8525.30 Television cameras:

8525.30.90 Other

8525.40 Still image video cameras and other video camera recorders; digital cameras:

8525.40.40 Digital still image video cameras

The classification of CCD camera systems designed to be connected to ADP machines, used for videoconferencing, and for the capture of still images and moving images is not new. CBP has classified similar merchandise as television cameras of subheading 8525.30.90, HTSUS. See HQ 966307, dated June 6, 2003; HQ 964973, dated July 17, 2002; HQ 965097, dated 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.

Protestant claims the CCD cameras are classifiable in subheading 8525.40.40, HTSUS. Protestant argues that the CCD cameras are distinguishable from television cameras because only still images are taken not continuous images as with TV cameras, the shutter speeds of the cameras are faster than TV cameras and the CCD cameras offer a 12-bit dynamic range whereas television cameras only offer an 8-bit range.

In order to address the claim, 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; digital cameras.”

Television cameras of subheading 8525.30, HTSUS, are described in EN 85.25(C) (3rd Edition, 2004), which states in relevant part, “This group also includes cameras used with automatic data processing machines (e.g., webcams). These cameras do not have any inbuilt capability of recording images.”

Still image video cameras and other video camera recorders of subheading 8525.40, HTSUS, are described in E.N. 85.25(D) (3rd Edition, 2004), which states in relevant part, “This group covers all types of cameras that record images (still and/or motion picture) by electronic means (for example, on magnetic tape, optical recording media or semiconductor media). The data stored may be in analogue or digital form.”

The critical distinction between subheading 8525.30 and 8525.40, HTSUS, is the cameras ability to record images. The instant merchandise does not have the inbuilt capability to record images necessary for classification within subheading 8525.40, HTSUS. As such, the camera systems precisely fit the terms of subheading 8525.30, HTSUS.

Classification opinions of the Harmonized System Committee (HSC) of the World Customs Organization (WCO) may provide assistance in understanding the international agreement, the Harmonized System, on which the HTSUS is based. At its 27th session in May 2001, the HSC 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).

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

The cameras are imported with their PCI boards, cables, software and manuals. 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, software is 8524). Each component contributes to the use of the 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 components which impart 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 camera, the camera provides both the weight and the greatest value of the components. Accordingly, the camera represents the essential character of the sets.

HOLDING:

The “PixelFly High Performance Digital Camera System” and the “SensiCam High Performance Digital Camera System” are classified in subheading 8525.30.9005, 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 and other video recorders; digital cameras: Television cameras: Other, Color.”

The protest should be DENIED. In accordance with the Protest/Petition Processing Handbook, (CIS HB, June 2002, pp 18 and 21), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. No later than sixty days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World WideWeb at www.cbp.gov, by means of the Freedom of Information Act, and by other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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