CLA-2: OT:RR:CTF:TCM H063875 KSH
Jeffrey W. Paleczny, CEO
Sextant Technology, Inc.
6784 Hansen Drive
Pleasanton, CA 94566
RE: Classification of iRex Digital Reader
Dear Mr. Paleczny:
This letter is in response to your request dated March 30, 2009, and revised request dated April 30, 2009, for a prospective ruling on the classification of an iRex digital reader under the Harmonized Tariff Schedule of the United States (HTSUS). Your request was forwarded by the National Commodity Specialist Division, U.S. Customs and Border Protection (CBP) to this office for direct reply.
FACTS:
The merchandise at issue is identified as the iRex Digital Reader, model number DR1000S-XW-GR. The digital reader measures 217 x 268 x 12 mm, features a 10.2 inch electronic paper display touch screen with 1024 x 1280 pixels and 16-level grey scale resolution. It supports Mobipocket PRC, Adobe® PDF, TXT, HTML, JPEG, PNG, GIF, TIFF and BMP formats. The digital reader is imported and sold with 1GB SD Memory, stylus, Lithium-ion battery, USB cable and Quickstart Guide.
Additional electronic application software may be purchased and downloaded from the Internet. The digital reader stores the downloaded electronic content on the SD card; however, the materials downloaded may only be accessed while using the digital reader. The user will be able to access all the electronic applications selected and purchased at any time.
ISSUE:
Whether the iRex Digital Reader is classified in heading 8471, HTSUS, as an automatic data processing machine or heading 8543, HTSUS, as an electrical machine or apparatus having individual functions not specified or included elsewhere.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 may then be applied.
The headings at issue are as follows:
8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included:
8543 Electrical machines and apparatus, having individual functions, not
specified or included elsewhere in this chapter; parts thereof:
Note 5 to Chapter 84, HTSUS, provides in relevant part:
(E) Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
The digital reader is a machine that principally performs a reading function. Insofar as it performs a specific function other than data processing, it cannot be classified in heading 8471, HTSUS. See Note 5(E) to Chapter 84.
Electronic digital readers are not provided for specifically in any heading of chapter 84, 85, or 90, HTSUS, and are therefore classified in heading 8543, HTSUS, because they have the individual function of enabling documents to be read electronically.
As previously noted, the digital reader is imported and sold with 1GB Memory, stylus, Lithium-ion battery and USB cable. The classification of goods put up in sets for retail sale is governed by GRI 3(b). GRI 3(b) provides, in relevant part, that goods put up for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. According to the ENs for GRI 3(b), "goods put up in sets for retail sale" refers to goods which "consist of at least two different articles which are, prima facie, classifiable in different headings…; consist of products or articles put up together to meet a particular need or carry out a specific activity; and are put up in a manner suitable for sale directly to users without repacking…." See EN (X), Rule 3(b).
The digital reader set meets the GRI 3(b) criteria for "goods put up in sets for retail sale." First, the set consists of articles which if imported alone would be classifiable under different headings. The reader is classified in heading 8543, HTSUS, the cable is classified in heading 8544, HTSUS, and the memory is classified in heading 8523, HTSUS. Second, all of the components in the set permit the user to effectively use and recharge the digital reader. Third, in its imported condition, the digital reader set is packaged in a manner suitable for retail sale to the ultimate purchaser and does not need to be repackaged. Accordingly, pursuant to GRI 3(b), digital reader sets with the memory, stylus, battery and USB cord, are properly classified under heading 8543, HTSUS.
HOLDING:
Pursuant to GRI 1, the iRex Digital Reader is classified in heading 8543, HTSUS. It is provided for in subheading 8543.70.96, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other.” The general, column one rate of duty is 2.6% ad valorem. Under the provisions of subheading 9902.85.43, educational devices of subheading 8543.70.96 are entitled to a temporary duty reduction of 0.55% ad valorem until December 31, 2009.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the world wide web at www.usitc.gov.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without
a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch