CLA-2 RR:CR:GC 967126 GGD
Mr. Rodney Ralston, Customs Consultant
UPS Supply Chain Solutions
One Trans-Border Drive
Champlain, New York 12919
RE: NY J89597 Affirmed; SmartScope®; Integrated Digital Camera
Riflescope
Dear Mr. Ralston:
This is in response to your request dated April 2, 2004, on behalf of your client, Adirondack Optics, for reconsideration of New York Ruling Letter (NY) J89597, dated October 8, 2003, concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a combination riflescope and digital camera made in the Czech Republic.
FACTS:
In NY J89597, merchandise identified as the “Smartscope” was classified in subheading 9013.10.10, HTSUSA, which in pertinent part, provides for “Liquid crystal devices...other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: Telescopic sights for fitting to arms...: Telescopic sights for rifles: Not designed for use with infrared light.” The article was found to be a composite good consisting of a digital camera and a telescopic sight which used only visible light. The camera portion could be operated either manually with a button, or automatically with the recoil from firing the weapon. Although intended primarily for use with rifles, the SmartScope was said to be capable of mounting on different types of weapons. It was available in three different magnifications and was
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designed to enable a hunter to capture digital images of wild game while hunting. The costs of the digital camera’s components were said to comprise approximately 18 percent of the costs of the camera and riflescope components combined.
In your request for reconsideration, essentially the only aspect of the above description that has changed is the relative costs, i.e., the costs of the digital camera parts and labor have increased markedly from those of the article ruled upon, and now comprise approximately 67 percent of the total costs of parts and labor for the camera and riflescope components combined. On this basis, you maintain that the digital camera components clearly impart the SmartScope’s essential character, and that the complete article should be classified as a digital camera, presumably under heading 8525, HTSUSA, which covers, among other goods, “digital cameras.”
ISSUE:
Whether the essential character of the composite good identified as the SmartScope® is imparted by the digital camera component, or by the riflescope component.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). 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 Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI.
The SmartScope cannot be classified by reference to GRI 1 because its individual components are classifiable in different headings, i.e., headings 8525 and 9013, HTSUSA. In pertinent part, GRI 2(b) states:
....The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.
GRI 3(a) states, in pertinent part, that:
....when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods...those headings are to be
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regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
We next look to GRI 3(b), which in pertinent part states:
...composite goods consisting of different materials or made up of different components...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.
The fact that the SmartScope constitutes a composite good is not at issue, only the component which imparts its essential character. Explanatory Note VIII to GRI 3(b) provides guidance which may aid in determining the essential character of a composite good. The EN states the following:
The 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.
Of the guiding factors stated above, your request for reconsideration places significant emphasis on the costs or value of the material and labor dedicated to the digital camera component. You state that the data furnished with your original submission (which led to the issuance of NY J89597) was based on prototype models subsequently found to perform inadequately, particularly with respect to the quality of pictures the camera produced. As a direct result, lenses were extensively reconfigured and a considerably upgraded camera was perfected, allowing the SmartScope to take clear pictures of game animals and birds at distances of up to 500 yards. Due to these changes, the costs of material and labor for the digital camera portion of the SmartScope increased from 18 percent to 67 percent of the total SmartScope costs for labor and parts.
You assert that the lenses of the riflescope serve as the lenses of the camera, that the SmartScope’s essence is its ability to take a picture, and that the digital camera is what provides the SmartScope with its “raison d’etre.” You note that certain potential customers at marketing shows and exhibitions wanted the SmartScope not to aid in shooting game, but to take pictures of game animals encountered while “simulating” hunting. This niche of potential customers has reportedly led to development of a “simulated [nonfiring] rifle” on which the SmartScope will be mounted for use at “game farms” and/or while “hunting” in relatively urban areas. You state that for those in the
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sport of actual hunting, who comprise the vast majority of purchasers, the significant feature which sells the SmartScope is its ability to take long distance photos of game animals or birds.
We recognize that the relative costs of a composite good’s components may be relevant to determining an article’s essential character, and that “value” is one of several factors (in addition to “nature,” “role,” etc.) that Explanatory Note VIII suggests may aid in such determinations. The ENs, however, essentially constitute guidance. The likelihood that the value of the camera components far exceeds that of the telescopic sight components does not alter certain facts, i.e., that the SmartScope’s appearance is not that of a camera but a riflescope (a shape conforming to a weapon and its user), and that it is designed and intended to be used while fitted to a weapon. The SmartScope’s essence, therefore, is its usefulness in hunting, not in taking pictures. We find that the ability of the SmartScope to take crisp photographs of game from up to 500 yards away is a significant secondary purpose, but not the primary reason for its being, or for attaching it to a weapon.
You note that the vast majority of prospective purchasers of the SmartScope are involved in the sport of hunting. Hunting involves the pursuit and targeting of game, primarily to shoot it, and a telescopic sight which complements the weapon of choice greatly enhances a hunter’s success and enjoyment of the sport. It is clear that the ability to also photograph the living, breathing animal prior to firing the weapon is an attractive feature liable to increase sales. If one desires primarily to take photographs of game animals and birds, however, one would more likely purchase and use a camera, not an article designed to be mounted on a rifle, whether “simulated” or capable of firing. Exercising the option to buy and use a camera would also allow one to avoid the added weight and bulk of a weapon not intended to be used. The mere appearance of a “simulated” weapon in relatively urban areas can also lead to unpredictable or unwanted responses from others. In light of the above, we find that the telescopic sight component provides the composite good with its essential character, and that the SmartScope is classified in subheading 9013.10.10, HTSUSA.
HOLDING:
The composite good identified as the SmartScope®, which consists of digital camera and riflescope components, is classified in subheading 9013.10.10, HTSUSA, the provision for “...other optical appliances and instruments, not specified or included
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elsewhere in this chapter; parts and accessories thereof: Telescopic sights for fitting to arms...: Telescopic sights for rifles: Not designed for use with infrared light.” The general column one duty rate is 14.9 percent ad valorem.
EFFECT ON OTHER RULINGS:
NY J89597, dated October 8, 2003, is hereby affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division