CLA-2 RR:CTF:TCM 968124 HkP
Mr. Marc Armstrong
Tax Manager
Lexicon Marketing (USA), Inc.
640 South San Vicente Blvd.
Los Angeles, CA 90048
RE: Reconsideration of NY L88607; English language DVDs and videocassettes
Dear Mr. Armstrong:
This is in response to your letter of January 11, 2006, requesting reconsideration of New York Ruling Letter (“NY”) L88607, issued to you on November 29, 2005, as it relates to the classification of digital versatile discs (“DVDs”) containing the English language learning courses, “Inglés sin Barreras” (ISB) and “Video Teacher”. NY L88607 classified ISB and Video Teacher in subheading 8524.39.8000, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for: “Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37: Discs for laser reading systems: Other: Other.”
FACTS:
The articles under consideration are described in NY L88607 as follows:
2) The Inglés sin Barreras (ISB) course is stated to be comprised of twelve volumes, noting each is encased in a separate plastic binder. Each binder includes a DVD, a CD, a manual, and an exercise workbook. In addition, the course includes a small book entitled Practical Summary of English Grammar intended to be a supplemental tool for the principal texts; a large desktop reference dictionary, a compact dictionary, and a pocket concise dictionary incorporating a key chain (with sample sentences and grammar resources that are incorporated within the other course materials); a DVD that serves as an interactive guide for pronunciation of the dictionaries; a work agenda with the presentation of new vocabulary words and examples of grammar usage; instructive flashcards that build on the vocabulary presented in the course materials; a bookmark, with the International Phonetic Alphabet symbols, for use with the compact dictionary; and a product referral card.
3) The Video Teacher (VT) course is indicated to be comprised of corresponding DVD’s, CD’s, and study manuals.
* * *
With respect to the ISB course, it is noted that the manuals (containing the transcription of each segment of the DVD’s as well as instruction for the usage of the DVD’s) and the workbooks should be used as guides for understanding and remembering the lessons of the DVD’s, which are capable of use on set-top players, computers with DVD players, and portable DVD players. This point emphasizes that the ISB is principally a course on DVD with the subject books and manuals supporting the DVD’s and CD’s by contributing to the successful learning of colloquial English.
Further, the Video Teacher (VT) is similar to the ISB course since the VT is principally a course on DVD (the DVD’s being capable of use on set-top players, computers with DVD players, and portable DVD players) with the manuals used as a guide for understanding and recalling the videos; the CD’s are designed to augment the students’ listening comprehension and understanding of sentence structure in exposing the students to new conversations, which are built on the same concepts presented in the DVD’s.
The above merchandise, which is imported in a manner suitable for sale directly to users without repacking, is considered to be sets for tariff classification purposes. … the essential character of the ISB and VT courses is imparted by the DVD’s.
You contend that the merchandise is provided for in subheading 8524.39.4000, HTSUS, which provides for, inter alia, discs for laser reading systems, for reproducing representations of instructions, data, sound, and image, recorded in a machine readable binary form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing (“ADP”) machine.
ISSUE:
Whether the subject merchandise is classified in subheading 8524.39.4000, HTSUS, which provides for: “Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37: Discs for laser reading systems: Other: For reproducing representations of instructions, data, sound, and image, recorded in a machine readable binary form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine”, or, in subheading 8524.39.8000, HTSUS, which provides for: “Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37: Discs for laser reading systems: Other: Other.”
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
8524 Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37:
Discs for laser reading systems:
8524.39 Other:
8524.39.4000 For reproducing representations of instructions, data, sound, and image, recorded in a machine readable binary form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine; proprietary format recorded discs …..
8524.39.8000 Other …..
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the HTSUS. While not legally binding nor dispositive, the ENs 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. Explanatory Note 85.24(9) indicates that heading 8524, HTSUS, covers discs for sound image and other data reproduction with an optical reading system (compact discs, digital versatile discs, etc.). Accordingly, the subject merchandise is properly classified in heading 8524, HTSUS.
Classification must therefore take place at the subheading level. GRI 6 provides that the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to GRIs 1 through 5, on the understanding that only subheadings at the same level are comparable.
You argue that the subject merchandise is properly classified in subheading 8524.39.4000, HTSUS, which provides for discs for laser reading systems (DVDs) that reproduce representations of instructions, data, sound and image that are capable of being manipulated or providing interactivity to a user by means of an ADP machine. In support of this position, you cite Headquarters Ruling Letter (“HQ”) 967184, dated October 19, 2004, which you say, “lays the foundation for determining the distinction between HTSUS provision 8524.39.4000 and provision 8524.39.8000”. HQ 967184 revoked NY K80348 (dated November 4, 2003), which had classified karaoke DVDs in subheading 8524.39.4000, HTSUS, because the DVDs did not fulfill all the criteria of subheading 8524.39.4000, namely, the ability to reproduce images. Consequently, the DVDs were classified in subheading 8524.39.8000, HTSUS.
You state that:
Unlike other DVD’s[,] which may contain more limited content, instruction, data, sound, and image all play a role in these language courses.
The courses also meet this requirement of the provision that the
media must be able to be manipulated by means of an automatic data processing machine. The DVDs “feature a new, user friendly navigation system accessible through a personal computer … The DVD version of the course allows our clients to navigate freely from any one point to another and return to exactly where they left off.” [Citation omitted.]
The American Heritage Dictionary of the English Language, Fourth Edition defines the act to “manipulate” as “1. To move, arrange, operate, or control by the hands or by mechanical means, especially in a skillful manner” … The control and operability that can be applied to these DVDs clearly reflects their ability to be manipulated.
CBP interprets subheading 8524.39.4000, HTSUS, to mean that the representations of instructions, data, sound and image recorded on the discs, and not the discs themselves, must be capable of being manipulated by means of an ADP machine. Our interpretation is bolstered by the definition of “manipulate” you have provided to us from the American Heritage® Dictionary of the English Language, Fourth Edition, that is, “to move, arrange, operate, or control by the hands or mechanical means, especially in a skillful manner”. Webster’s Ninth New College Dictionary defines “skill’ as, inter alia, “a learned power of doing something competently; a developed aptitude or ability”, and “skillful” as “possessed of or displaying skill: expert”. Operation of the DVDs’ navigation systems, whether or not they allow one to “navigate freely from any one point to another and return to exactly where they left off” does not requires any degree of skill, and is not the same as manipulation of data and other representations recorded on the DVDs. Further, based on the information you have provided to us, we find that the representations recorded on the subject DVDs are not capable of being manipulated.
Consequently, we find that the language courses DVDs are not provided for in subheading 8524.39.4000, HTSUS, because, similar to the merchandise in NY 967184, they do not meet all the requirements of that subheading. The DVDs must therefore be classified in subheading 8524.39.8000, HTSUS. We note that the classification decision in HQ 967184 was based on a GRI 3(a) relative specificity analysis. However, in this instance, because the DVDs are classified at the GRI 1 level through GRI 6, there is no need to classify at the GRI 3 level. Furthermore, because the DVDs are not capable of being “manipulated”, we need not consider whether they may be used in devices that are not ADP machines.
HOLDING:
By application of GRI 1 and GRI 6, the ISB and Video Teacher English language courses DVDs are classified in subheading 8524.39.8000, HTSUS, which provides for: “Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37: Discs for laser reading systems: Other: Other.”
EFFECT ON OTHER RULINGS:
NY L88607, dated November 29, 2005, is affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division