CLA-2 RR:CR:GC 964419 GOB
Paul Hegland
White & Case
601 Thirteenth Street, N.W.
Suite 600 South
Washington, D.C. 20005-3807
RE: Satellite radio receiver
Dear Mr. Hegland:
This is in response to your letter of July 11, 2000, on behalf of Pioneer Corporation (“Pioneer”), requesting a ruling as to the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of a satellite radio receiver. In preparing this ruling, consideration was given to arguments presented in our meeting on October 30, 2000, as well as in your additional submission of November 27, 2000.
FACTS:
You describe certain of the pertinent facts as follows:
The product consists of a satellite radio receiver (the “trunk” unit or XM receiver), to be placed in the trunk, under the seat, or in another location in an automobile. The “trunk” unit may be imported by itself or in combination with a “head” unit, consisting of an AM/FM tuner, CD player and amplifier, to be installed in the dashboard of the automobile.
Both units are exclusively for automobile use. The “head” unit is configured to fit into the dashboard of an automobile and is of the kind regularly used in automobiles. The “trunk” unit operates on a voltage of 14.4 units (direct current), and is equipped to be connected to the power supply of an automobile. Both units will usually be sold to automobile suppliers through Pioneer’s sales subsidiary in the U.S.; some units may also be distributed through department or retail stores.
The trunk unit will receive signals from a new radio service, the “XM” frequency of 2.3 GHz (as opposed to the AM band of 530 to 1710 KHz and the FM band of 88 to 108 MHz) …
…
The “trunk” unit will receive only XM signals. Text data, such as the title of songs, will be included in the XM signals. The signals from the satellite will be scrambled for 99 out of the approximately 100 programs received. The “trunk” unit will receive digital signals from the satellite, demodulate and unscramble them, and convert them to analog signals which it will relay to the “head” unit (in the case of the “trunk” unit for use with a non-Pioneer “head” unit, the signals are remodulated to FM signals before being sent to the “head” unit because the non-Pioneer “head” unit can receive signals only from the antenna terminal). The “trunk” unit will not have an amplifier; the signals received by the “trunk” unit will be amplified by the “head” unit.
The “trunk” unit will receive only the 2.3 GHz frequency, and will not have a “tuner” to adjust frequencies. Through the use of digital technology, the “trunk’ unit will simultaneously receive approximately 100 programs on a single frequency. The unit stores the audio data from one program and the text data (e.g., song or program title) for all 100 programs in its built-in memory (semiconductor memory chips). The data on the built-in memory is constantly “rewritten” as new data is received. Audio and text data are always read from the memory chip …
As indicated above, the “head” unit will consist of an FM/AM tuner, amplifier, and CD player. The “head” unit is currently offered for sale separately. The “trunk” unit will be offered both separately and in combination with the “head” unit.
ISSUES:
What are the tariff classifications of: the “trunk” unit when imported separately; and the “trunk” unit when imported with the “head” unit in a common package?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). 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 Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.
The HTSUS provisions under consideration are as follows:
8527 Reception apparatus for radiotelephony, radiotelegraphy or radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock:
Radiobroadcast receivers not capable of operating without an external source of power, of a kind used in motor vehicles, including apparatus capable of receiving also radiotelephony or radiotelegraphy:
8527.21 Combined with sound recording or reproducing apparatus:
8527.21.40 Other
* * * * * *
8527.90 Other apparatus:
Other:
Other:
8527.90.95 Other
* * * * * *
8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Other machines and apparatus:
8543.89 Other:
Other:
Other:
8543.89.96 Other
* * * * * *
You claim that the “trunk” unit is classified in subheading 8543.89.96, HTSUS, when imported separately. You assert that when the “trunk” unit is imported with a “head” unit, the imported article is classified in subheading 8527.21.40, HTSUS. This latter claim is based on two different analyses, GRI 1 and GRI 3(b).
The “Trunk” Unit
We first consider the “trunk” unit imported by itself, i.e., without the “head” unit but with an “IP-BUS” cable or antenna cable.
You assert that the “trunk” unit is not a radio receiver. You state that: “the ‘trunk’ units have no amplifiers, they are unable to produce sound upon connection to a speaker. That is, ... the ‘trunk’ units do not perform one of the three basic functions ‘all’ radio receivers must perform.”
In Channel Master v. United States, 648 F. Supp. 10, 12, 10 CIT 684, 686 (1986), aff’d 856 F. 2d 177 (Fed. Cir. 1988), the court stated:
A radio receiver, as that term is used in the tariff schedules, is an eo nomine designation for an article which has been lexicographically and judicially defined as capable of performing three basic functions: selectivity, amplification, and detection. See NEC America, Inc. v. United States, 8 CIT 184, 187, 596 F. Supp. 466, 470 (1984), aff’d 760 F.2d 1295 (Fed. Cir. 1985); General Electric Co. v. United States, 2 CIT 84, 90, 525 F. Supp. 1244, 1248 (1981), aff’d 69 CCPA 166, 681 F.2d 785 (1982).
Based upon the information provided, we agree that, for classification purposes, the “trunk” unit is not a radio receiver or a radiobroadcast receiver. The facts indicate that the “trunk” unit is not capable of the amplification function.
Explanatory Note (“EN”) 85.27 provides in pertinent part as follows:
(B) RECEPTION APPARATUS FOR RADIO-BROADCASTING
The sound radio-broadcasting apparatus falling in this heading must be for the reception of signals by means of electro-magnetic waves transmitted through the ether without any line connection.
You cite the McGraw-Hill Encyclopedia of Science and Technology, 7th Ed. (1992) for the proposition that broadcasting at the XM frequency is not “radiobroadcasting.” McGraw-Hill states that radiobroadcasting occurs in four frequency bands – a low frequency band between 150 and 290 kHz in Europe, the AM medium frequency band between 525 and 1700 kHz, the short-wave frequency bands between 5950 and 26,100 kHz, and the FM frequency band between 88 and 108 MHz.
It is our view that the satellite radio function described in your ruling request is radiobroadcasting and that the McGraw-Hill reference does not address satellite radio technology. See EN 85.27, excerpted above. The website www.howstuffworks.com/radio-spectrum states: “A radio wave is an electromagnetic wave propagated by an antenna.” [Emphasis in original.] The website www.howstuffworks.com/satellite-radio provides: “... imagine a radio station that can broadcast its signal from more than 22,000 miles (35,000 km) away and can then come through on your car radio with complete clarity. You could drive from Tacoma, Washington to Washington, D.C., without ever having to change the radio station ... That’s what three companies developing satellite radio are promising – uninterrupted CD-quality music beamed to your radio from space ... Satellite radio is an idea nearly 10 years in the making. In 1992, the Federal Communications Commission (FCC) allocated a spectrum in the “S” band (2.3 GHz) for nationwide broadcasting of satellite-based Digital Audio Radio Service (DARS).” [Emphasis in original.] 2.3 GHz is the frequency for Pioneer’s satellite radio.
We find that HQ 952790 dated March 22, 1993, cited by you, is distinguishable from the issue here in that there was no transmission through the ether in HQ 952790 and in that a television audio receiver was involved.
At GRI 1, we find that the “trunk” unit is specifically and completely described in heading 8527, HTSUS, and by EN 85.27, excerpted above. Therefore, we eliminate from consideration the residual provision, heading 8543, HTSUS.
In view of our determination above that the “trunk” unit is not a radiobroadcast receiver, our consideration of heading 8527, HTSUS, is limited at the “six digit” level to subheading 8527.90, i.e., the other six digit subheadings of heading 8527 include radiobroadcast receivers; at GRI 6, only subheading 8527.90 describes apparatus that are not receivers.
Applying GRI 6 at the “eight digit” subheading level, within 8527.90 only 8527.90.95, HTSUS, applies.
Accordingly, we find that the “trunk” unit, when imported by itself (i.e., without the “head” unit), is classified in subheading 8527.90.95, HTSUS.
The “Trunk” Unit and the “Head” Unit
In addition, the “trunk” unit will be imported with the “head” unit in a common package with an ”IP-BUS” cable capable of use solely with Pioneer automotive sound systems.
You state as follows:
The “head” and “trunk” units together make up a radio receiver with the capability of receiving AM, FM, and XM signals combined with sound recording or reproducing apparatus. Only in combination can the article receive all of these signals. That is, the “head” unit by itself can receive and amplify AM and FM frequencies, but it cannot receive the XM frequency. The “trunk’ unit can receive only the XM frequency. Both units are controlled by the same function switches, those in the control panel of the “head” unit. Both units use the same amplifier, that of the “head” unit. The sound reproducing apparatus is a CD player, but the product does not have a tape player. The product is of a kind used in motor vehicles. The “head” and “trunk” units together make up a motor vehicle radio receiver capable of receiving AM, FM, and XM signals and reproducing sound through a CD player. The product meets all of the terms of subheading 8527.21.40 and is classified in that provision.
At GRI 1, the combination of the “trunk” unit and the “head” unit, imported together, is described in heading 8527, HTSUS. See EN 85.27, excerpted above. See also the language of the heading “... whether or not combined, in the same housing ...” We also find that the combination is within the scope of the language superior to subheading 8527.21, HTSUS (i.e., “Radiobroadcast receivers not capable of operating without an external source of power ...”). The combination of the “trunk” and “head” units is within the scope of heading 8527.21, HTSUS, in that it is combined with sound reproducing apparatus. The combination of the “trunk” unit and “head” units is specifically described in subheading 8527.21.40, HTSUS.
Because of this determination, it is unnecessary to examine your alternative claim with respect to GRI 3(b).
HOLDING:
The “trunk” unit, when imported only with an “IP-BUS” cable or antenna cable is classified in subheading 8527.90.95, HTSUS, as: “Reception apparatus for radiotelephony, radiotelegraphy or radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock: ... Other apparatus: ... Other: ... Other: ... Other.”
When the “trunk” unit and the “head” unit are imported together in a common package, the combined good is classified in subheading 8527.21.40, HTSUS, as: “Reception apparatus for radiotelephony, radiotelegraphy or radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock: ... Radiobroadcast receivers not capable of operating without an external source of power, of a kind used in motor vehicles, including apparatus capable of receiving also radiotelephony or radiotelegraphy: Combined with sound recording or reproducing apparatus: ... Other.”
Sincerely,
John Durant, Director
Commercial Rulings Division