CLA-2 CO:R:C:M 955279 DWS
Ms. Deborah A. Gross
North American Philips Corporation
100 East 42nd Street
New York, NY 10017-5699
RE: Observation Systems; Section XVI, Note 4; Functional Units;
GRI's 3(b) and 3(c); Explanatory Note 3(b)(VIII); 8525.30.00
Dear Ms. Gross:
This is in response to your letter of October 12, 1993, on
behalf of Philips Consumer Electronics Company, to the Area
Director of Customs, New York Seaport, concerning the
classification of observation systems under the Harmonized Tariff
Schedule of the United States (HTSUS). Your letter has been
referred to this office for a response.
FACTS:
The merchandise consists of observation systems (model nos.
22MS405T, VS22415R, VS22475R, and VS32405R). Each system is
comprised of a CCD camera with an integrated 4mm fixed focus lens,
33 feet of coaxial cable, camera mounting brackets with all of the
necessary hardware, spare plugs for adjusting cable length, and a
monochrome video monitor. The systems are used for the observation
of both indoor and outdoor locations for security purposes.
The subheadings under consideration are as follows:
8525.30.00: [t]elevision cameras.
The general, column one rate of duty for goods classifiable
under this provision is 4.2 percent ad valorem.
8528.20.00: [t]elevision receivers (including video monitors
and video projectors), whether or not
incorporating radiobroadcast receivers or sound
or video recording or reproducing apparatus:
[b]lack and white or other monochrome.
The general, column one rate of duty for goods classifiable
under this provision is 5 percent ad valorem.
ISSUE:
Whether the observation systems are classifiable under
subheading 8525.30.00, HTSUS, as television cameras, or under
subheading 8528.20.00, HTSUS, as monochrome television receivers.
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 is determined according to the
terms of the headings and any relative section or chapter notes.
Section XVI, note 4, HTSUS, states that:
[w]here a machine (including a combination of machines)
consists of individual components (whether separate or
interconnected by piping, by transmission devices, by electric
cables or by other devices) intended to contribute together to
a clearly defined function covered by one of the headings in
chapter 84 or chapter 85, then the whole falls to be
classified in the heading appropriate to that function.
It is our position that, under section XVI, note 4, HTSUS, the
components which make up the observation systems constitute
functional units which are intended to contribute together to a
clearly defined function, which is to observe the activity
occurring in an indoor or outdoor location. We must now determine
which heading in the HTSUS best describes that function.
Because the observation systems are composite goods, we must
consult GRI 3(b). It states that:
[m]ixtures, composite goods consisting of different
materials or made up of different components, and goods
put up in sets for retail sale, which cannot be classified
by reference to 3(a), shall be classified as if they
consisted of the material or component which gives them
their essential character, insofar as this criterion is
applicable.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS. 54
Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Note
3(b)(VIII) (p. 4) states 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 a
constituent material in relation to the use of the goods.
The two components within the observation systems which may
impart the essential character of those systems are the CCD camera
and the video monitor. Both components play a major role in
relation to the use of the observation systems, in that without
either the camera or the monitor, the systems would be useless.
Consequently, we cannot determine one component which singularly
imparts the essential character of the observation systems.
GRI 3(c) states that:
[w]hen goods cannot be classified by reference to 3(a) or
3(b), they shall be classified under the heading which
occurs last in numerical order among those which equally
merit consideration.
Under GRI 3(c), the observation systems are classifiable under
subheading 8528.20.00, HTSUS, as that provision occurs last in the
HTSUS between it and subheading 8525.30.00, HTSUS.
HOLDING:
The observation systems are classifiable under subheading
8528.20.00, HTSUS, as monochrome television receivers.
Sincerely,
John Durant, Director
Commercial Rulings Division