CLA-2 RR:CR:GC 964467 GOB
Port Director
U.S. Customs Service
555 Battery Street
San Francisco, CA 94111
RE: Protest 2809-00-100438; Bill acceptors
Dear Madam:
This is our decision with respect to Protest 2809-00-100438 filed on behalf of Wirecom Corporation (“protestant”) concerning the classification of certain bill acceptors under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The file indicates the following. The subject entry was filed on January 11, 2000. The entry was liquidated on May 26, 2000. The protest was filed on June 28, 2000.
The protestant states in pertinent part as follows with respect to the bill acceptors:
... their major function is to scan, accept and reject bills. After the bills are accepted, the vending machine will drop out the products. This Bill Acceptor use[s] patented design [and] incorporate[s] multiple optical and magnetic sensors to verify and accept bills. They are not measuring components, they are actually for bill exchange vending machine[s] ... Chapter 84 clearly indicates that automatic goods vending machines and money-changing machines & parts are included ...
The information submitted by the protestant indicates that the bill acceptors check one dollar and five dollar bills of the United States. The bill acceptor “excludes” bills which are extremely dirty, wetted, broken, wrinkled, or folded at a corner or side. The information submitted states the following specifications for the bill acceptors: “Patented Non-Contact magnetic sensings ... Patented design incorporates multiple optical and magnetic sensor. Scans both sides of the bill simultaneously, maximizing detection of counterfeit bills. Maintains magnetic sensor recognition system in ‘non-magnetic’ currency validators for maximum security.”
ISSUE:
Are the bill acceptors provided for in heading 8476, HTSUS, as automatic goods – vending machines or in heading 9031, HTSUS, as measuring or checking instruments, other optical instruments?
LAW AND ANALYSIS:
We note initially that the protest was timely filed under the statutory and regulatory provisions for protests, 19 U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1).
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’s 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:
8476 Automatic goods-vending machines ... including money-changing machines; parts thereof:
Other machines:
8476.89.00 Other
8476.90.00 Parts
* * * * * *
9031 Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; ... parts and accessories thereof ... :
Other optical instruments and appliances:
9031.49 Other:
9031.49.90 Other
Legal Note 1(m) to Section XVI, HTSUS, (Section XVI covers Chapters 84 and 85) provides that Section XVI does not cover articles of Chapter 90, HTSUS. Accordingly, if we find that the bill acceptors are described in Chapter 90, their classification in Chapter 84 is eliminated. Legal Note 5 to Chapter 90 provides: “Measuring or checking optical instruments, appliances or machines which, but for this note, could be classified both in heading 9013 and in heading 9031 are to be classified in heading 9031.”
EN 90.31 provides that “[t]his heading also covers optical type measuring and checking appliances and instruments ...” [Emphasis in original.] The Subheading Explanatory Note for subheading 9031.49 provides that “[t]his subheading covers ... other instruments and apparatus which function through the use of optical elements or processes.”
After a consideration of this matter, we determine that the bill acceptors are described in heading 9031, HTSUS. They are checking instruments for dollar bills. They employ multiple optical and magnetic sensors to verify currency. Therefore, the bill acceptors are optical checking instruments within the scope of heading 9031, HTSUS. They are classified in subheading 9013.49.90, HTSUS, as: “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter ... : ... Other optical instruments and appliances: ... Other: ... Other.” In HQ 961210 dated April 2, 1999, we held an optical laser scanner which checked digital video discs for defects to be classified in the same subheading.
The bill acceptors were entered under subheading 8476.89.00, HTSUS. The protestant continues to assert that classification. We find that subheading 8476.89.00, HTSUS, does not describe the bill acceptors because the bill acceptors are not complete machines of heading 8476 and subheading 8476.89.00, HTSUS, i.e., parts of machines of heading 8476 are not described within subheading 8476.89.00, HTSUS.
Further, we are unable to find that the bill acceptors are parts of machines of heading 8476, HTSUS, such that they would be classified in subheading 8476.90.00, HTSUS. No satisfactory evidence of principal use of the machines has been submitted. See Legal Note 2(b) to Section XVI, which covers Chapters 84 and 85, HTSUS. The specifications for the subject article refer to it as a bill acceptor without limitation as to what type of machine it may be used with. EN 84.76 indicates that not all coin-operated machines are within the scope of heading 8476, HTSUS.
As stated above, the bill acceptors are described in heading 9031, HTSUS, and subheading 9031.49.90, HTSUS. Legal Note 1(m), described above, controls the classification, which is in Chapter 90, HTSUS.
HOLDING:
The bill acceptors are classified in heading 9031.49.90, HTSUS, as: “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter ... : ... Other optical instruments and appliances: ... Other: ... Other.”
You are instructed to DENY the protest.
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 in accordance with the decision must be accomplished prior to mailing of 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.treas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division