CLA-2 CO:R:C:G 088255 MBR
Mr. Kenneth H. Keefe
Sandler, Travis & Rosenberg, P.A.
5200 Blue Lagoon Drive
Miami, Florida 33126-2022
RE: Scientific-Atlanta B-MAC integrated receiver/decoder for the
transmission of encrypted audio and data communications;
Reception; Revocation of HQ 087247
Dear Mr. Keefe:
This is in reply to your letter of July 18, 1990, (and
supplemental submission on August 21, 1990), on behalf of
Scientific-Atlanta, requesting reconsideration of HQ 087247,
dated June 14, 1990, regarding the B-MAC integrated receiver/
decoder ("IRD").
HQ 086400, dated May 11, 1990, held that the IRD was
properly classifiable under heading 8525, HTSUSA, which provides
for transmission apparatus. Subsequently, HQ 087247, dated June
14, 1990, held that the IRD was properly classifiable under
heading 8528, HTSUSA, which provides for television receivers.
FACTS:
The B-MAC Integrated Receiver/Decoder is a single integrated
unit, combining both a receiver and a decoder. The IRD is used
for scrambled cable and closed circuit video/audio transmissions.
The IRD is designed to receive satellite-delivered, C- or Ku-band
video signals at the L-band frequencies (950-1450 MHz) with a 22
MHz IF filter as the standard. The IRD receives an encoded
signal from a satellite, amplifies it, decodes it and then
transmits the decoded signal in NTSC format to an end point for
reception and viewing. The IRD will only unscramble an encoded
signal assigned to a particular subscriber.
Most importantly, pursuant to this request for
reconsideration, we have learned that the IRD does not convert a
NTSC (standard television broadcast signal) into the end point
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signal intended to be displayed on a television picture tube.
Instead, the IRD decodes a scrambled signal and produces a NTSC
signal for further transmission and reception and subsequent
display.
ISSUE:
What is the classification of the B-MAC Integrated
Receiver/Decoder under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA)? Is the appropriate
classification under heading 8525, HTSUSA, which provides for:
"[t]ransmission apparatus...", or is the IRD more appropriately
classifiable under 8528, HTSUSA, which provides for:
"[t]elevision receivers...?"
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUSA
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
The IRD is prima facie classifiable under the following
headings:
8525 Transmission apparatus for... television, whether or not
incorporating reception apparatus...:
8525.10.20.20 Transmission apparatus: Television: Converters,
decoders,...designed for cable or closed circuit
television applications
* * * * * * * * * * * * *
8528 Television receivers (including video monitors and video
projection television receivers),...:
8528.10.80.55 Color: Other television receivers: Not having a
picture tube
HQ 086400, dated May 11, 1990, held that the IRD was
properly classifiable under heading 8525, HTSUSA, which provides
for transmission apparatus.
Subsequently, HQ 087247, dated June 14, 1990, held that the
IRD was properly classifiable under heading 8528, HTSUSA, which
provides for television receivers (revoking HQ 086400).
Clearly, there has been a certain amount of confusion as to
what this merchandise is and how it functions. Additionally, the
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scope of the two competing provisions is at issue.
Most importantly, pursuant to this request for
reconsideration, we have learned that the IRD does not convert a
NTSC (standard television broadcast signal) into the end point
signal intended to be displayed on a television picture tube.
Instead, the IRD decodes a scrambled signal and produces a NTSC
signal for further transmission and final reception and display.
Heading 8528, HTSUSA, which provides for television
receivers is actually a more narrow heading than it may at first
appear. The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) to heading 8528, page 1378, state in
pertinent part:
This heading covers television receivers (including video
monitors and video projectors), whether or not combined, in
the same housing, with radio-broadcast receivers or sound or
video recording or reproducing apparatus.
The heading includes:
(1) Television receivers of the kind used in the home
(table models, consoles, etc.) including coin-operated
television sets.
(3) Video tuners, intended to be used with or incorporated
in, e.g., video recording or reproducing apparatus or
video monitors. These tuners convert high-frequency
television signals into signals usable by video
recording or reproducing apparatus or video monitors.
However, devices which simply isolate high-frequency
television signals (sometimes called video tuners) are
to be classified as parts in heading 8529.
(4) Television receivers for industrial use (e.g., for
reading instruments at a distance, or for observation
in dangerous localities). With this apparatus the
transmission is often by line.
(5) Video monitors which are receivers connected directly
to the video camera or recorder by means of co-axial
cables, so that all the high frequency circuits are
eliminated. They are used by television companies or
for closed circuit television (airports, railway
stations, steel plants, hospitals, etc.).
(6) Video projectors, which enable the image normally
reproduced on the screen of a video receiver to be
projected on a large screen.
(7) Television apparatus of all types equipped to receive,
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memorize and display texts and messages.
Thus, the EN to Heading 8528, HTSUSA, delineates end point
apparatus where the image is received and displayed, such as:
television receivers used in the home, video tuners intended to
be used with or incorporated in video recording or reproducing
apparatus or video monitors, video projectors, apparatus to
memorize and display texts and messages.
The IRD is in the transmission path, but it is not at the
end of the transmission path where final reception and viewing
takes place. Its function is to receive and decode a scrambled
signal that is subsequently transmitted or relayed, in the form
of a NTSC signal, to be received and displayed at the end of the
transmission path. Therefore, the IRD cannot be considered a
"television receiver," as provided for under heading 8528,
HTSUSA.
You argue that the IRD is "Transmission apparatus...," as
provided for in heading 8525. The Harmonized Commodity
Description and Coding System Explanatory Notes (EN) to heading
8525, page 1374, state:
This group includes:
(1) Transmitters of all kinds.
(2) Relay apparatus used to pick up a broadcast and
retransmit it and so increase the range
(3) Relay television transmitters for transmission, by
means of an aerial and parabolic reflector, from
the studio or site of an outside broadcast to the
main transmitter.
(4) Television transmitters for industrial use (e.g.,
for reading instruments at a distance...)
The function of the IRD is to receive the scrambled signal,
to decode the signal, and then to relay the signal (which has
only been converted to NTSC) to the "television receiver" for
final reception and display. Almost all transmitters and relay
apparatus must, by their very nature, contain a receiver, since
they must receive a signal before they can transmit or relay it.
Heading 8525, HTSUSA, envisioned this and provides for:
"transmission apparatus for... television, whether or not
incorporating reception apparatus."
In light of the new information provided about the purpose
and function of the IRD, it is now Customs position that the IRD
is classifiable under heading 8525, HTSUSA, which provides for
transmission apparatus.
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HOLDING:
The B-MAC Integrated Receiver/Decoder is classifiable under
8525.10.20.20, HTSUSA, which provides for: "[t]ransmission
apparatus for... television, whether or not incorporating
reception apparatus...: [t]ransmission apparatus: [t]elevision:
[c]onverters, decoders,...designed for cable or closed circuit
television applications."
EFFECT ON OTHER RULINGS:
HQ 087247, dated June 14, 1990, is revoked under authority
of Section 177.9(d), Customs Regulations.
Sincerely,
Harvey B. Fox, Director
Office of Regulations and Rulings