CLA-2 RR:CR:GC 960384 HMC
Port Director of Customs
610 S. Canal St.
Chicago, IL 60607-4523
RE: Protest 3901-96-101654; QV-10 Digital Camera; Still Image Video Camera.
Dear Port Director:
This is our decision on Protest 3901-96-101654, filed against your classification of the Casio QV-10 digital camera. The entries under protest were liquidated on May 10, 1996, and this protest timely filed on July 3, 1996. In preparing this decision, consideration was given to supplemental submissions by counsel on behalf of the protestant, dated November 24, 1997, March 30, 1998, May 20, 1998, and March 5, 1999, as well as arguments presented at our meeting on November 30, 1998.
FACTS:
The merchandise under protest is a hand-held digital still (“point and shoot”) camera manufactured by Casio, identified as the “LCD Digital Camera QV-10.” The QV-10 has a compact design that resembles a small automatic 35 mm camera. It is based on camcorder technology and uses a charge coupled device (CCD) to record, process and store images in digital format. Company literature states that the QV-10 captures images with a fixed focus and auto exposure. It contains a built-in storage capacity of 2 MB Flash RAM that is able to retain up to 96 images. The camera’s back features a 1.8" color LCD, used as a viewfinder for shooting images and a zoom that enlarges stored images and permits one to focus on a specific area of an image. The LCD lets the user view previously recorded images for examination and editing.
The QV-10 has built-in connection ports for video and computer cables. The QV-10 is capable of sending and receiving images and text to and from a personal computer (“PC”) to create business presentations. This feature is possible due to accessory software included with the QV-10 that allows a PC to design, arrange and edit recorded images and to add data, such as charts, to the images. The stored images may be deleted, edited or re-recorded countless times without loss of image quality. The newly edited images may be downloaded back to the QV-10 and taken anywhere by the user. The camera also connects to any television through its “video-in” port connector for taping such presentations to a VCR.
The merchandise was entered under a provision for other television cameras in subheading 8525.30.90 of the Harmonized Tariff Schedule of the United States (HTSUS). However, the entries were liquidated under subheading 8525.40.00, HTSUS, as still image video cameras (SVC) and other video camera recorders. However, protestant claims that the merchandise is classifiable as other video recording or reproducing apparatus under subheading 8521.90.00, HTSUS, or, in the alternative, as other machinery, apparatus and equipment (other than the machine tools of headings 8456 to 8465), for type-founding or typesetting of subheading 8442.30.00, HTSUS.
The 1996 HTSUS provisions under consideration are as follows:
8442 Machinery, apparatus and equipment (other than the machine tools of headings 8456 to 8465), for type-founding or typesetting, for preparing or making printing blocks, plates, cylinders or other printing components; printing type, blocks, plates cylinders and other printing components; blocks, plates, cylinders and lithographic stones, prepared for printing purposes (for example, planed, grained or polished); parts thereof:
8442.30.00 Other machinery, apparatus and equipment...Free
* * * *
8521 Video recording or reproducing apparatus, whether or not incorporating a video tuner:
8521.90.00 Other....2.2%
* * * *
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 camera recorders:
8525.40.00 Still image video cameras and other video camera recorders...3.4%
ISSUE:
Whether the QV-10 digital camera is classifiable as a still image video camera under subheading 8525.40.00, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.
The text of heading 8525, HTSUS, 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 camera recorders.
Counsel for the protestant claims that the QV-10 is more than a SVC because it interacts with a computer to do presentations. To support its claim, counsel relies on HQ 086847, dated April 20, 1990, which provides a definition of SVCs as cameras which use “solid-state image sensors to sense image-forming light and a separate recording medium to record and store the picture.”
We do not agree with the contention that the QV-10 is not a SVC. We note that the McGraw-Hill Encyclopedia of Science and Technology (electronic ed.) states that
[m]ost cameras contain an aperture and shutter for controlling the amount of light reaching the light-sensitive material (exposure). The receiving material, the film, is usually a plastic sheet of flexible strip coated with a photosensitive silver halide emulsion. It can also be an electronic device such as a Newvicon tube or charge-coupled device, or a photosensitive material for a specific purpose.
[Cameras] can be distinguished by function, application, film size, or format. Distinctions are also based on type or viewfinder and body construction. Cameras for still photography include box, point-and-shoot, view-and-press, roll film, 35-mm, instant picture, stereo, underwater, and panoramic. Some categories overlap. Still video cameras use electronic sensors instead of film, and store the image on magnetic media or optical disks.
This is a current definition of SVCs, which does not state that a removable recording medium is essential for SVCs. We find that the main function of the QV-10 is to capture images. The ability to transfer the stored images to a computer is an ancillary function which permits manipulation through the use of computer software to print or arrange the captured images in presentation format. The user may transfer the newly rearranged images back to the QV-10. The QV-10 falls within the description of still video cameras as provided by the terms of heading 8525, HTSUS. This is supported by the Explanatory Notes and the Compendium of Classification Opinions by the Harmonized System Committee.
The Harmonized Commodity Description And Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the EN’s should always be consulted. Also, the Compendium of Classification Opinions represent decisions by the HSC on the classification of various products at the international level that were presented to the Harmonized System Committee (HSC) of the World Customs Organization for consideration. The HSC administers the international Convention on the Commodity Description and Coding System and amends the HTS. When a decision of the HSC is published in the Compendium it should receive the same weight as the ENs. See T.D. 89 80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
EN 8525, at page 1487, states:
(D) STILL IMAGE VIDEO CAMERAS
AND OTHER VIDEO CAMERA RECORDERS
This group covers still image video cameras and other video camera recorders consisting of a combination of a video camera and a video recording or reproducing apparatus. These apparatus record the images taken by the camera. Certain video camera recorders may also record programmes from a television receiver (using an external video tuner). The images thus recorded can be reproduced by means of an external television receiver. ...
The HSC recently amended the Compendium of Classification Opinions, listing a decision on the classification of the subject QV-10 as an article of heading 8525. Annex K/21 to Doc. 42.750E (HSC/22/Nov.98). The decision states as follows:
8525.40 1. Digital still camera fitted with a Charge Coupled Device (CCD) and based on video camera recorder technology. It records, processes and stores images in digital format. It features a built-in high-resolution 1.8" colour LCD screen that is used as a viewfinder when shooting images and as a monitor when viewing recorded or uploaded images. The semiconductor memory of the apparatus holds up to 96 colour still images. The images can be transferred to an automatic data processing machine by means of an optional accessory package for viewing and storing on an automatic data processing machine. For this purpose it has been designed with built-in digital input and output connection ports. It is also designed with a connection port for video cables so that the images can be transferred directly to a TV or VCR. It can also deliver its stored images to labels by connecting to a label printer specifically designed for use with the digital camera.
As indicated above, the digital camera QV-10 was the digital camera under consideration by the HSC when it made this decision. This Opinion specifically classifies the subject merchandise in subheading 8525.40, HTSUS. It is Customs view that this is indeed the correct classification for the QV-10.
We note that the classification of digital cameras in heading 8525, HTSUS, by Customs dates back to 1993, when it issued a series of rulings classifying these types of cameras under subheading 8525.30.00, HTSUS. See HQ 954725, HQ 954726, and HQ 954727, all dated August 17, 1993, modifying previous rulings which classified digital cameras under subheading 9013.80.60, HTSUS. In 1996, subheading 8525.40.00, HTSUS, was created, which specifically provided for still image video cameras. Since then Customs has classified SVCs under this subheading. See NY 817941, dated January 14, 1996. Therefore, we conclude that the QV-10 is classifiable under subheading 8525.40.00, HTSUS.
Counsel further claims that the merchandise is described by heading 8521, HTSUS, citing HQ 956012, dated March 30, 1994. HQ 956012 classified the Kodak EktaPro HS Motion Analyzer (EktaPro), model 4540, an ultra high-speed video recording system with the ability to record up to 4,500 full frames per second and up to 40,500 pictures per second for immediate playback. The EktaPro permitted analysis and image storage of extremely rapid events such as air bag deployment and ballistics studies. No evidence was provided that the QV-10 captures images of extremely rapid events for analysis. The evidence provided suggests that the subject merchandise functions as a point-and-shoot digital camera. Thus the QV-10 is significantly different from the EktaPro.
In addition, EN 8521, at page 1483, states
(A) RECORDING AND COMBINED RECORDING
AND REPRODUCING APPARATUS
In television image and sound recording apparatus electric impulses (signals) which correspond to the images and the sound are recorded on media, generally consisting of magnetic tape. Generally the sound accompanying the image is recorded simultaneously on the same media, on one or several different tracks from that carrying the video recording. The signals can be obtained by connecting the recorder either to a television camera or to a television receiver.
When used for reproduction, the apparatus convert the recording (e.g. the magnetic patterns on the tape) into video signals. These signals are passed on either to a transmitting station or to a television receiver.
(B) REPRODUCING APPARATUS
These apparatus are designed only to reproduce images and sound directly on a television receiver. The media to be used in these instruments are prerecorded mechanically, magnetically or optically on special recording equipment. The following are examples of such apparatus:
(1) Apparatus using videodiscs in which the image and sound data are stored on the disc by various methods and picked up by a laser optical reading system, capacitive sensor, pressure sensor or magnetic head.
(2) Apparatus that decodes and converts into a video signal image data recorded on a light sensitive film (the sound being recorded by a magnetic process on the same film).
The QV-10, in this instance, does not function to record images or sound from electrical signals on media like a magnetic tape. The merchandise is a device that captures images of objects by light received through its lens and uses a charge coupled device (CCD) to record, process and store images in digital format. The QV-10 is therefore not classifiable in heading 8521, HTSUS.
In addition, it is Customs view that heading 8442, HTSUS, does not include the QV-10 because it describes machinery for type-founding or typesetting, for preparing or making printing blocks, plates, cylinders or other printing components. The subject merchandise does not perform any of these functions and, therefore, heading 8442 is inapplicable.
HOLDING:
Under the authority of GRI 1, the QV-10 is classifiable under subheading 8525.40.00, HTSUS, as still image video cameras and other video camera recorders. The 1996 rate of duty is 3.4%.
This 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 Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division