CLA-2 RR:CTF:TCM W966951 TPB
Mr. Craig A. Mitchell
Horton, Whitley & Cooper
Koll Center Newport
4590 MacArthur Blvd., Suite 500
Newport Beach, CA 92660-9076
RE: Digidesign Control 24; Reconsideration of NY H80334.
Dear Mr. Mitchell:
This is in response to your letter dated December 30, 2003, on behalf of Digidesign, Inc. (“Digidesign”), to this office, requesting reconsideration of NY H80334, dated May 23, 2001, which classified the Control 24 in heading 8543, Harmonized Tariff Schedule of the United States.
We have had an opportunity to review this ruling and for the reasons set forth below, the classification of the merchandise in NY H80334 is deemed to be correct and is affirmed. In reaching this conclusion, we took into consideration information submitted in your original request for reconsideration, two CD-ROMS with technical information submitted to this office on February 20, 2004, supplemental information provided on September 9, November 8 and December 29, 2004, and July 31, 2005 as well as teleconferences with you on September 10, November 30, 2004 and January 14, 2005. We apologize for the delay in issuing this ruling.
FACTS:
The merchandise under consideration is the Digidesign Control 24, a control surface designed to give tactile control over Pro Tools software for recording, mixing and editing. Although it is designed to mimic the look and feel of a traditional mixing console, there are some fundamental differences. With the Control 24, the user can route and manipulate the audio flow within Pro Tools software, in the same way one would use an analog mixing console and patch bay with a tape machine. In addition to an array of knobs, switches and faders, the Control 24 also includes:
Sixteen premium microphone preamps: plus two DI (direct inject) instrument inputs (to accommodate high impedance signals such as those from electric guitars and bases) – these devices will accept virtually any audio signal. The preamp outputs can feed most professional audio gear – these preamps can be used as stand-alone units regardless of whether or not they are connected to Pro Tools;
A control room monitoring section: routes input from Pro Tools and other sources to multiple sets and configurations of speakers and headphones. This analog section provides monitoring capabilities for multiple sources and destinations. This section includes Talkback and Listenback controls, which are used to communicate between the control room and other rooms or booths. They may also be used as source mic inputs for slate recording;
A Line Submixer: consists of eight additional stereo pairs of analog inputs for auxiliary audio signals such as synchronized MIDI instrument outputs or playback monitor from a video deck. The Line Submixer can also operate as a stand-alone unit, or blend channels for input to Pro Tools or other external destinations.
ISSUE:
Is the Digidesign Control 24 classified under subheading 8471.60.1095, HTSUS, which provides for other input or output units, whether or not containing storage units in the same housing; or subheading 8543.89.9695, HTSUS, which provides for other electrical machines and apparatus, having individual functions, not specified or included elsewhere?
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 may then be applied.
The HTSUSA provisions under consideration 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:
8471.60 Input or output units, whether or not containing storage
units in the same housing:
Combined input/output units,
Other.
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* *
8543 Electrical machines and apparatus, having individual
functions, not specified or included elsewhere in this
chapter; parts thereof:
Other machines and apparatus:
Other:
Other:
Other:
Other,
8543.89.9695 Other.
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* *
You indicate that the Control 24 is properly classified under subheading 8471.60.1095, HTSUS, which provides for other input or output units, whether or not containing storage units in the same housing. You state the reasoning for this is because the Control 24 meets the terms of Note 5 to Chapter 84, HTSUS. That Note reads:
5. (A) For purposes of heading 8471, the expression "automatic data processing machines" means:
(a) Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for
execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing
arithmetical computations specified by the user; and, (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run;
(b) Analog machines capable of simulating mathematical models and comprising at least: analog elements, control elements
and programming elements;
(c) Hybrid machines consisting of either a digital machine with analog elements or an analog machine with digital elements.
(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to
paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:
(a) It is of a kind solely or principally used in an automatic data processing system;
(b) It is connectable to the central processing unit either directly or through one or more other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.
(C) Separately presented units of an automatic data processing machine are to be classified in heading 8471.
(D) Printers, keyboards, X-Y coordinate input devices and disk storage units which satisfy the conditions of paragraphs (B)(b) and
(B)(c) above, are in all cases to be classified as units of heading 8471.
(E) Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic
data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual
headings.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither 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.
You proffer the following reasoning in your letter of December 30, 2003: Heading 8471 covers separately presented constituent units of data processing systems. EN 84.71[(I)](D). These may be in the form of units having a separate housing. To be classified as a “unit,” a device must be used with a machine that is considered, for classification purposes, an automatic data processing (ADP) machine under Legal Note 5(A). You indicate that the Control 24 meets all of the following conditions:
it is of a kind solely or principally used with an ADP system;
it is connectable to the central processing unit either directly or through one or more other units; and
it is able to accept and deliver data in a form (codes or signals) which can be used by the system.
You then go into detail as to how the Control 24, through an Ethernet connection, connects to an ADP machine on to which Pro Tools [software] is installed and interacts with that software. You distinguish the Control 24 from an analog mixing board by virtue of its interface with the Pro Tools software on the ADP machine and that the Control 24 cannot operate as a stand-alone mixing board.
On these factual points we are in agreement. The EN goes on to say that in accordance with Note 5(D) of Chapter 84 input and output units that meet the conditions of items (b) and (c) above are in all cases to be classified as constituent units of data processing systems. You go into detail in your submission on how the Control 24 is an input/output unit. We can also agree on this point as well.
The EN continues, stating that:
The foregoing provision is, however to be considered in the overall context of Note 5 to Chapter 84 and is therefore applicable subject to the provisions of paragraph (E) of that Note, by virtue of the introductory part of paragraph (B) thereof. Thus ink-jet printers working in conjunction with an automatic data processing machine but having, particularly in terms of their size, technical capabilities and particular applications, the characteristics of a printing machine designed to perform a specific function in the printing or graphics industry (production of pre-press colour proofs, for example) are to be regarded as machines having a specific function classifiable in heading 84.43.
Thus, we are instructed that a machine is still subject to Note 5(E), i.e., if it performs a specific function other than data processing and is incorporated or works in conjunction with an ADP machine, it is to be classified in the heading appropriate to its respective function or, failing that, in residual headings.
The Facts indicate that the Control 24 incorporates specific functions other than data processing. There are microphone preamps and instrument inputs; control room monitoring capabilities to communicate, for example, between the control room and other rooms; and a line submixer for auxiliary audio controls. Many of these devices work as independent, stand alone machines. You indicate that these devices are added as convenience features and are not on par with the sophistication of the control surface. Although we have considered this argument and given it its appropriate weight, we still find that we must apply Note 5(E) to Chapter 84 in this case. Each of these devices performs a function that is clearly something other than data processing. For that reason, we apply Note 5(E) to Chapter 84 to the Control 24 and preclude heading 8471, HTSUS, from consideration.
In the alternative, you argue in your letter of November 8, 2004 that the Control 24 could be viewed as a combination of machines and that it must be classified according to its principal function, per Note 3 to Section XVI.
Note 3 to Section XVI reads:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or being that machine which performs the principal function.
Note 5 to Section XVI reads:
For the purposes of these notes, the expression “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 85.
You indicate that the principal function of the Control 24 is that of an input/ output device of heading 8471, HTSUS, and that the other functions are subsidiary. However, as above, we must first determine whether or not the Control 24 is in fact classifiable under heading 8471, HTSUS. We do this because Note 5 to Chapter 84 plays a complementary role to Note 3 to Section XVI. As indicated above, the Control 24 cannot be classified under that heading because Note 5(E) precludes it. Thus, regardless of which analysis is used, heading 8471, HTSUS, is precluded from consideration because of non-data processing functions of the Control 24.
The Digidesign Control 24 allows for the digital mixing, editing and recording of music and vocal. As classification under heading 8471 is precluded and no other heading describes these functions elsewhere in the HTSUS, we find that it is classified in heading 8543, HTSUS, as electrical machines and apparatus not elsewhere specified and affirm NY H80334.
HOLDING:
For the reasons stated above, the Digidesign Control 24 is classified in heading 8543, HTSUS, specifically in subheading 8543.89.9695, HTSUSA, which provides for: which provides for other electrical machines and apparatus, having individual functions, not specified or included elsewhere. The 2006 column one general rate of duty will be 2.6%. 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.usitc.gov/tata/hts.
EFFECTS ON OTHER RULINGS:
NY H80334, dated December 30, 2003, is affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial & Trade Facilitation Division