CLA-2 OT:RR:CTF:TCM H058781 TNA
Port Director
Port of San Francisco
U.S. Customs and Border Protection
555 Battery Street, Room 319 San Francisco, CA 94111
RE: Application for Further Review of Protest No. 2809-08-100201; Digital Money Jar
Dear Port Director:
The following is our decision on the Application for Further Review of Protest No. 2809-08-100201, filed on behalf of E&B Giftware, LLC (“Protestant”), regarding the classification of the Digital Coin Counting Money Jar (“Digital Money Jar”) under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject merchandise is the Digital Money Jar which consists of two components: (1) a plastic jar 4.5 inches in diameter and 1.75 feet tall, which stores the coins that are put into the product; (2) a top that screws onto the plastic container. In the center of the top is a slot into which coins are deposited. Within the top is a battery-operated mechanism that automatically adds up the coins as they are deposited into the jar but does not count the number of coins deposited into the jar. The top also consists of an LCD display screen that is located directly above the slot where the coins are deposited. This screen keeps a running tally of the amount of money that is deposited into the jar and displays the amount. The cost of the jar’s top significantly outweighs the cost of the plastic jar. The Digital Money Jar does not sort or wrap coins.
On November 13, 2007, the merchandise was entered at the San Francisco port under heading 8472, HTSUS, as an other currency and coin handling office machine. On January 4, 2008, CBP liquidated the merchandise in heading 3924, HTSUS, which provides for other household articles of plastics. The importer timely filed its protest and AFR on April 1, 2008.
ISSUE:
Is the Digital Money Jar classifiable under heading 3924, HTSUS, as “tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics”, under heading 8470, HTSUS, as an “other calculating machine”, or under heading 8472, HTSUS, as an “other office machine (for example, … coin-sorting machines, coin-counting or wrapping machines)”?
LAW AND ANALYSIS:
The matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification and duty rate. The protest was timely filed, within 180 days of liquidation of the entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 2809-08-100201 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because while the decision against which the protest was filed is alleged to involve matters previously ruled upon by CBP, it is alleged to address specific factual and legal questions that have not yet been considered by CBP Headquarters. Specifically, the Protestant argues that the classification of the Digital Coin Counting Money Jar, which does not roll, count, or wrap coins as do the subjects of previous rulings, has not been the subject of a Headquarters ruling.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order.
The HTSUS headings under consideration are the following:
3924 Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics:
8470 Calculating machines and pocket-size data recording, reproducing and displaying machines with calculating functions; accounting machines, postage-franking machines, ticket-issuing machines and similar machines, incorporating a calculating device; cash registers:
8472 Other office machines (for example, hectograph or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling machines):
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading at the international level, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
General EN (I) to Section XVI, HTSUS, states, in pertinent part, the following:
(B) In general, the goods of this Section may be of any material. In the great majority of cases they are of base metal, but the Section also covers certain machinery of other materials (e.g., pumps wholly of plastics) and parts of plastics, of wood, precious metals, etc.
The EN for heading 8470, HTSUS, states, in pertinent part, the following:
All machines of this heading, except for certain cash registers, have one common characteristic in that they include a calculating device enabling them to add together at least two figures each comprising several digits. It should be noted that devices which merely count or add one by one are not regarded as calculating devices (e.g., devices incorporated in certain stamp affixing machines, revolution counters, production counters). The machines of this heading may be manually or electrically operated. The calculation operations are performed mechanically or by electro magnetic, electronic or fluidic devices.
(D) OTHER MACHINES INCORPORATING A CALCULATING DEVICE
These include:
(1) Postage franking machines; these print on the envelope a design in place of the postage stamp. The machine has a non reversible totalling device which adds up the total value of the postages printed. In addition the machine can often be used for other printing on the envelope (e.g., advertising slogans).
(2) Ticket issuing machines used to issue tickets (e.g., cinema or railway tickets) at the same time recording and totalling the amounts involved; certain of these also print the ticket.
(3) Totalisator machines for racecourses. These issue the tickets, record and total the amounts staked, and in certain complex machines also calculate the odds.
Machines which only count the tickets, etc., issued, without totalising the amounts, are excluded (heading 84.72 or, if coin operated, heading 84.76).
The EN for heading 8472, HTSUS, states, in relevant part, the following:
This heading covers all office machines not covered by the preceding three headings or more specifically by any other heading of the Nomenclature.
The term “office machines” is to be taken in a wide general sense to include all machines used in offices, shops, factories, workshops, schools, railway stations, hotels, etc., for doing " office work " (i.e., work concerning the writing, recording, sorting, filing, etc., of correspondence, documents, forms, records, accounts, etc.).
Office machines are classified here only if they have a base for fixing or for placing on a table, desk, etc.
The heading includes, inter alia:
(4) Coin sorting or coin counting machines (including banknote counting and paying out machines). This heading covers such machines whether or not they are fitted with a device for wrapping the coins or banknotes, or in some cases for printing the amount on the wrapping.
Counsel for Protestant argues that at GRI 1, the subject merchandise is provided for, eo nomine, in heading 8472, as a coin counting machine. In the alternative, counsel argues that the subject merchandise is classified under heading 8472, HTSUS, pursuant to GRI 3(b) because it is a composite good whose coin-counting function imparts its essential character. In support of his position, counsel cites CBP rulings in which coin-counting machines were classified in heading 8472, HTSUS. See, e.g., NY N023264, dated February 27, 2008 (Sort-N-Save Bank, designed to automatically sort and wrap coins, classified in subheading 8472.90.9060); NY K81441, dated December 3, 2003 (a machine designed to automatically sort and direct up to 20 coins at a time to paper wrappers, classified in subheading 8472.90.9060); and NY 834211, dated December 6, 1988 (coin counting and wrapping machine, classified in subheading 8472.90, HTSUS).
Heading 8472, HTSUS, provides for office machines such as coin counting and wrapping machines but does not provide for office machines that can be classified under the three headings that precede it (headings 8469-8471, HTSUS) or elsewhere in the nomenclature. See EN 84.72. Before we can consider classification in this heading, we have to decide if the Digital Money Jar can be classified elsewhere.
Heading 8470, HTSUS, provides for machines incorporating a calculating device that enables them to add together at least two figures, each comprised of several digits. See EN 84.70. These machines include accounting machines, postage-franking machines, ticket-issuing machines and similar machines that incorporate calculating devices. Moreover, machines of the heading and their parts may be of any material, including plastic. See General EN (B), Section XVI. The variety of calculating machines provided for in heading 8470, HTSUS, leads us to conclude that the heading is broad enough to encompass most calculating machines, unless more specifically provided for elsewhere.
The subject merchandise contains a calculating device that totals the amount of money that is put into the jar but that does not account for any amount taken out of the jar. This characteristic makes it similar to the postage-franking machines, in particular, that are listed eo nomine in heading 8470, HTSUS, which contain a “non-reversible totalling device.” See EN to 84.70(D)(1). Based on this similarity, we find that the Digital Coin Counting Money Jar is classified in heading 8470, HTSUS, as an “other calculating machine” at GRI 1. As such, it is precluded from classification in heading 8472, HTSUS. There is no need to consider classification under GRI 3.
Concerning the rulings cited by counsel in support of classification in heading 8472, HTSUS, we find that they are not persuasive because the merchandise they describe is not similar to the instant product. The coin-counting machines in the cited rulings account for the number of coins placed into them and sort them for wrapping. The subject merchandise, in contrast, counts the money deposited into the jar so as to give a total amount, but does not count the amount of coins in the jar or sort them for wrapping.
HOLDING:
By application of GRI 1, the Digital Money Jar is classified in heading 8470, HTSUS, and specifically in subheading 8470.30.00, HTSUS, which provides for: “accounting machines, postage-franking machines, ticket-issuing machines and similar machines, incorporating a calculating device: other calculating machines.” The 2009 column one, general rate of duty is Free.
Since reclassification of the merchandise as indicated above will result in a lower rate of duty than the liquidated rate, you are instructed to allow the protest in full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division