CLA-2 RR:CR:GC 962939 JAS
Mark Neville
KPMG Peat Marwick LLP
345 Park Avenue
New York, NY 10154
RE: Laser Transfer Machine, Laser Beam Recorder; Encoder for Imparting Digital Information onto Metal Coated Glass Discs; Digital Video Disc (DVD) Production Equipment;
HQ 961210
Dear Mr. Neville:
In HQ 961210, dated April 2, 1999, issued to you on behalf of Panasonic Disc Services Corporation, we addressed the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of numerous machines for producing digital video discs (DVDs). Among those was a laser transfer machine or encoder which, together with other machines, comprised an in-line mastering system that produces encoded nickel discs called stampers, as an intermediate step in DVD production.
As required by section 177.2(b)(2)(ii) of the Customs Regulations, requests for classification rulings under the Harmonized Tariff Schedule of the United States should include, among other things, a full and complete description of the article. Section 177.8(a)(3) of the Customs Regulations states that ruling letters shall be based on the information set forth in the ruling request, and section 177.9(b)(1) states, in part, that ruling letters are issued on the assumption that all of the information furnished and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect.
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As expressed in HQ 961210, the classification of the laser transfer machine in subheading 8479.89.97, HTSUS, as a machine or mechanical appliance, not specified or included elsewhere in Chapter 84, is correct on the facts presented. However, we have since received additional information about laser transfer machines which indicates that though some mechanical operation may be involved, the machine does not possess significant mechanical features. Our review of laser transfer machines or encoders in general compels us to consider provisions of Chapter 90. For this reason, the classification expressed in HQ 961210 for the laser transfer machine no longer represents Customs position in the matter.
FACTS:
The laser transfer machine, also referred to as a laser beam recorder or laser encoder, is one component of an in-line mastering system, a subgrouping of machines in the mastering line which produce glass discs called “masters.” In operation, a glass disc is brush-cleaned, spray rinsed, and dried, coated with light-sensitive photoresist material, and oven baked. The glass disc is then converted into a recorded “master” utilizing the machine in issue here, the laser transfer machine. As described in HQ 961210, the components of the in-line mastering system were
within a glass or hard plastic enclosure. While operating with these components, the laser transfer machine is not within this enclosure and, therefore, must be separately classified.
Laser transfer machines, sometimes referred to in the industry as code “cutters,” consist of a laser, a signal processor, an optical modulator, recording optics, and a turning
and sledding mechanism. The ion-type laser uses argon or krypton gas on a 413 nm wavelength to encode data in digital format onto the photoresist coating of the glass substrate. The signal processor converts the digital source data to the appropriate compact disc format and sends this data to the Acoustic-Optic Modulator (AOM). The AOM transforms the laser’s continuous wave into a pulsed beam which exposes a pattern in the photoresist-coated glass that represents the digitally-formatted information. The recording optics direct the beam through a series of optical lenses that reduce the laser beam’s diameter to the appropriate size to make the pits. Finally, the turning and sledding mechanism moves the glass disc into and out of position under the laser and spins the disc during the pit forming operation.
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The provisions under consideration are as follows:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in [chapter 84]; parts thereof:
8479.89 Other:
8479.89.85 ...machines for the manufacturing of video laser discs
8479.89.97 Other
* * * *
9013 ...lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in [chapter 90]...:
9013.20.00 Lasers, other than laser diodes
9013.80 Other devices, appliances and instruments:
9013.80.90 Other
ISSUE:
Whether the laser transfer machine or encoder is provided for in heading 9013.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.
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Chapter 90, Additional U.S. Rule of Interpretation 3, HTSUS, states in part that for purposes of Chapter 90 the terms “optical appliances” and “optical instruments” refer only to those appliances and instruments which incorporate one or more optical elements, but do not include any appliances or instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose. In
HQ 956839, dated March 28, 1996, in considering the classification of an ADP input/output unit, imported with an optical scanner, we stated that devices incorporating one or more optical elements and significant electrical or mechanical features were not intended to be classified as optical instruments or appliances within Chapter 90. Cited were a number of other rulings classifying devices containing optical components in provisions outside Chapter 90. The optics in those devices were considered “subsidiary” for tariff classification purposes.
The laser transfer machine in issue consists of the laser, recording optics which, in the main, are optical lenses and prisms, and the AOM which alters the laser’s beam optically. The signal processor, which adapts the digital source data in order to adapt it for further use, is an electrical static converter, while the turning and sledding mechanism is a mechanical positioning device. The argon or krypton gas laser is the component which exposes grooves into the photoresist on the glass discs which represent the actual digital information the finished DVD will play. This digital information is the DVD’s raison d’etre. The very name of the machine, laser transfer machine, highlights the significance of the laser. The other optical components augment or facilitate the function of the laser.
In concert with HQ 956839, it is our opinion that the laser transfer machine in issue is an optical appliance or instrument which does not contain significant electrical or mechanical features, and in which the optics clearly are not subsidiary. In reaching this decision, we recognize that numerous apparatus that incorporate lasers and/or other optical elements are not classified as optical instruments or appliances in Chapter 90 because they possess “significant electrical or mechanical features.” Therefore, this decision relates only to the classification of laser transfer machines, as described. It is not authority for classifying other instruments and appliances that contain optical components.
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HOLDING:
Under the authority of GRI 1, HTSUS, the laser transfer machine, laser beam recorder, or encoder is provided for in heading 9013. It is classifiable in subheading 9013.80.90, HTSUS.
Under the authority of section 177.8(a)(2) of the Customs Regulations, Panasonic Disc Services Corporation, or its representative, shall ascertain that copies of HQ 961210 and
HQ 962939 are attached to the documents filed with the appropriate Customs Service office in connection with any Customs transaction to which they apply.
Sincerely,
John Durant, Director
Commercial Rulings Division