CLA-2 RR:CTF:TCM H068675 IOR
TARIFF NO: 8525.50.30, HTSUS
Mr. Joseph M. Spraragen, Esq.
Grunfeld, Desiderio, Lebowitz,
Silverman & Klestadt LLP
399 Park Avenue – 25th Floor
New York, NY 10022-4877
RE: Classification and country of origin of CATV Filters/Traps
Dear Mr. Spraragen:
This is in response to your letters of April 8, and June 11, 2009, to the U.S. Customs and Border Protection (CBP) National Commodity Specialist Division (NCSD), on behalf of your client John Mezzalingua Associates, Inc., dba PPC (“PPC”), requesting a classification and country of origin (for purposes of marking) ruling for traps and filters used for cable television (CATV), under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for response. The samples of five filters were also forwarded for our consideration. This decision follows a September 14, 2009 teleconference between you and Ieva O’Rourke of this office.
FACTS:
PPC intends to import traps and filters (referred to collectively as “filters”) from St. Kitts and China. The filters are used exclusively in the CATV industry. CATV providers install a filter in the transmission line shortly before the line reaches the individual cable subscriber’s receiving device, e.g. cable box. The function of the filter is to filter out services, such as premium channels, that the
subscriber has not subscribed to. Some filters are dedicated to excluding premium channels, while others are designed to accommodate subscribers who subscribe to cable data services, such as Internet or digital phone access, without subscribing to cable video services. This latter type of filter functions to filter out television channels.
The ruling request pertains to five representative filter models: UBR-15/40; QBR-29/58-8; MCH5; SHP3-50; and AK-CBR-2/78DF18. The filters differ only with respect to their specific filtering applications. Their structure and material function is essentially the same. Model AK-CBR-2/78DF18 differs from the others in that the filter is pre-assembled with a shield to prevent tampering with the filter, a short jumper cable to facilitate installation in the cable line in situations entailing space constraints, and a connector.
The filters’ ability to alter the CATV transmission is determined by a printed circuit board (PCB) housed within the filter. The population of the PCB during its manufacture determines what services will be filtered from reaching the end subscriber. The filters attenuate (i.e. decrease the amplitude of) the targeted signal or signals such that the receiving device (set top box, TV, modem, etc.) cannot use the signal due to its weak strength. The signals, including the attenuated signals and the non-attenuated signals (such as non-premium cable channels), are transmitted further, and are either displayed, or not displayed, depending on whether they were attenuated.
With a multitude of resistors, capacitors and inductors of varying values, the circuits within the filter are designed to attenuate over a certain frequency range, dependent upon where the particular CATV provider has located its services in the total frequency band. No electrical or other power source is employed by or connected to the filter to enable it to perform its role in the transmission of services. Visually, each filter appears to be a 1.5 inch to 3 inch metal tube with a connector at each end.
You take the position that the filters are not “apparatus” but are parts of apparatus and as such are classified under heading 8529, HTSUS as “parts suitable for use solely or principally with the apparatus of headings 8525 to 8528”. You assert that the filter “is a ‘part,’ since it is dedicated solely for use in CATV transmission apparatus.”
Model SHP3-50 is manufactured in China from components of Chinese origin. The remaining four models are manufactured in St. Kitts from components sourced from the U.S., Taiwan, and China. In the manufacture, whether in St. Kitts or China, the printed circuit boards are populated, after which they are trimmed and soldered and then are joined with additional components to form the finished filter. Exhibit B to your submission of April 8, 2009, identifies a
list of component parts, including various capacitors, insulators, headers and inner shell and outer sleeve. It is asserted that the “complex manufacturing in St. Kitts requires skilled input by technicians who perform tasks such as populating the circuit boards” and “[t]he manufacturing also entails precision cutting operations and highly sophisticated assembly procedures.”
ISSUES:
Whether the CATV filters are classified under heading 8525, HTSUS as television transmission apparatus, or heading 8529, HTSUS as parts for use solely or principally with the apparatus of headings 8525 to 8528.
What is the country of origin of the CATV filters?
LAW AND ANALYSIS:
Classification:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 2009 HTSUS provisions under consideration are as follows:
8525 Transmission apparatus for radio-broadcasting or television;
whether or not incorporating reception apparatus or sound
recording or reproducing apparatus; television cameras, digital
cameras and video camera recorders:
Parts suitable for use solely or principally with the apparatus of
headings 8525 to 8528:
Note 2 to Section XVI (which includes Chapter 85), HTSUS, provides, in relevant part, that :
Subject to note 1 to this section, note 1 to Chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546, or 8547) are to be classified according to the following rules:
Parts which are goods included in any of the headings
of chapter 84 or 85 (other than headings 8409, 8431,
8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and
8548) are in all cases to be classified in their respective headings;
CBP has a long standing line of decisions which have determined that components of television transmission systems which lie in the transmission path, receive a signal and the output of which is relayed or fed further in the transmission system for eventual final reception and display, are classified in heading 8525 as transmission apparatus. See, e.g., HQ 955309, dated December 21, 1993, HQ 958422, dated February 1, 1996; and HQ H005123, dated December 29, 2008. Parts, of such transmission components, which themselves cannot further transmit a signal have been classified in heading 8529, as parts suitable for use solely or principally with the apparatus of headings 8525 to 8528. See HQ 950866, dated March 18, 1992 (an assembly incorporating a receiver, which was to be incorporated into an integrated receiver/decoder, classifiable in heading 8525, HTSUS, was classified in heading 8529, HTSUS); and HQ H005123, supra (printed circuit assemblies, to be incorporated in to encoders classified in heading 8525, HTSUS, were classified in heading 8529, HTSUS.)
In this case, the filters lie in the transmission path, receive a signal, and relay or feed the attenuated signal, as well as non-attenuated signals further in the transmission system for eventual final reception and, in the case of the non-attenuated signals, display. As such, we find that they are classifiable as transmission apparatus for television under heading 8525, HTSUS. As they are articles covered in heading 8525, HTSUS, in accordance with Note 2 (a) to Section XVI, they must be classified in heading 8525, HTSUS, and not as parts in another heading.
You take the position that the filters are not “apparatus” in accordance with the definition of “apparatus” set forth in Whirlpool Corp. v. United States, 505 F. Supp. 2d 1358, 1362 (Ct. Int’l Trade 2007) (citing ITT Thompson Industries v. United States, 3 CIT 36, 44, 537 F. Supp. 1272, 1277-78 (1982), aff’d., 703 F.2d 585 (Fed. Cir. 1982), as “[a] group of devices, or a collection or set of materials,
instruments or appliances to be used for a particular purpose or a given end.” You assert that, as each filter is comprised of only one item, it therefore does not meet the definition of an “apparatus.” First, we note that the filters consist of the outer metal tube, and a PCB within that is populated with resistors, capacitors and inductors. Also, each filter has a specific filtering application. Therefore we find that each filter is in fact “a group of devices or set of materials, instruments or appliances to be used for a particular purpose or a given end.”
Moreover, the Court in The Deseret Co. v. United States, 10 CIT 609, at 611 (1986), citing to ITT Thompson Industries, supra, determined that “parts” and “apparatus” are not mutually exclusive, and “an article may be apparatus and at the same time may be a part or another article.” Therefore, the fact that the filters may be considered parts of a transmission system, does not preclude them from being classified as apparatus under the HTSUS. We find they are correctly classified under heading 8525, HTSUS, specifically under subheading 8525.50.30, HTSUS as “[t]ransmission apparatus for radio-broadcasting or television; whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Transmission apparatus: Television: Other.”
Country of Origin:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. §1304 was that:
[T]he ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.
United States v. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, U.S. Customs and Border Protection (CBP) Regulations (19 C.F.R. §134) implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. Section 134.1(b), CBP Regulations (19 C.F.R. §134.1(b)), defines “country of origin” as:
[T]he country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of [the marking regulations]…
A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (CCPA 1982).
Applying these principles to the present case, we first note that the component parts of the CATV filters have undergone a change in name. The original parts which were components such as capacitors, insulators, inner shell and outer sleeve, have now all been manufactured into a single CATV filter. They are no longer their individual parts instead they are referred to as a completed CATV filter. Moreover, the population of blank boards, and placement of them into a larger system changes the name, character and use of the boards. Likewise the assembly changes the name, character and use of the separate components. See, e.g., HQ 733690, dated February 22, 1991, and HQ 556924, dated January 12, 1993. We find that for purposes of the marking statute, the country of origin for the CATV filters assembled in China is China, and those assembled in St. Kitts, is St. Kitts.
HOLDING:
1) By application of GRI 1, and Section XVI, Note 2(a), the filters, model nos. UBR-15/40; QBR-29/58-8; MCH5; SHP3-50; and AK-CBR-2/78DF18 LD2060, are classified in subheading 8525.50.3040, HTSUSA (annotated) as “[t]ransmission apparatus for radio-broadcasting or television; whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Transmission apparatus: Television: Other…. Other: Other”, with a column one, general duty rate of 1.8% ad valorem.
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 internet at www.usits.gov/tata/hts/.
2) The country of origin of the CATV filters is China and St. Kitts, depending on their place of assembly. Therefore, the markings required by 19 U.S.C. §1304 and 19 C.F.R. §134 must indicate that the products are products of China or St. Kitts, as applicable. Finally, we would remind you that the samples reviewed by this office were not marked and were not in any packaging, and therefore we do not make a determination as to the acceptability of the final marking. We are only indicating the proper countries of origin for marking purposes. For specific instructions on appropriate marking and typeface required, please see 19 U.S.C. §1304 and 19 C.F.R.§134.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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