CLA-2 RR:CR:GC 966742 DBS
Mr. Sidney N. Weiss
675 Third Avenue
New York, NY 10017
RE: Digital Satellite Receiver High Definition Set Top Box; Information Technology Agreement
Dear Mr. Weiss:
This is in response to your letter of August 25, 2003, to the Director, National Commodity Specialist Division, New York, on behalf of your client, Toshiba America Consumer Products, Inc. (“Toshiba”), requesting the classification of the DST-3100 DirecTV® High Definition Set Top Box, under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for reply.
Toshiba's DST-3100 DirecTV® High Definition Set Top Box is a digital satellite receiver designed to receive digital satellite television and video signals, and on and off air High Definition (HD) signals from the digital satellite service provider DirecTV®. The specifications submitted with your request show that the box incorporates three tuners: a NTSC receiver for television broadcast and cable reception, an ATSC digital off-air receiver for broadcast channels via antenna, and a DirecTV® receiver for standard and HD signals from the satellite provider. The box also incorporates a Digital Video Interface (DVI) and High-bandwith Digital Copy Protection (HDCP) output, various output resolution modes, RF output jack, S-video output, HD component video output and digital optical output jack and RJ11 telephone jack. In a separate submission, you informed us that the box incorporates a microprocessor and a modem through which it exchanges information.
Whether the DST-3100 DirecTV® High Definition Set Top Box is classified in subheading 8528.12.92, HTSUS, as a set top box which has a communications function.
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.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
8528 Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors:
Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus:
8528.12.92 Set top boxes which have a communications function
* * *
In your request you claim that the DST-3100 DirecTV® High Definition Set Top Box should be classified in subheading 8528.12.92, HTSUS, as a set top box which has a communications function. In applying the GRIs, we must first determine classification at the heading level before we determine in which subheading a product falls to be classified. The product at issue is a set top box that incorporates, among other things, a tuner that receives NTSC television broadcasts via satellite. The ENs to heading 8528, HTSUS, describe, in pertinent part, satellite television receivers:
(4) Receivers of satellite television broadcasts. These apparatus, which do not include a display device (cathode-ray tube, LCD, etc.) are similar to video tuners in that they serve to receive amplified signals whose frequency has been lowered by a down converter, to select a single signal (channel) and to convert it to a signal suitable for display on a video monitor. They may incorporate a modulator capable of producing a standard television broadcast signal for outputting to the aerial connection of a television receiver. They may also incorporate a device for receiving remote signals to change the channel selection or to rotate the aerial and polarizer.
As the instant product receives satellite television broadcasts and has no mechanism for display, it is included in heading 8528, HTSUS, at GRI 1. We need not consider any other heading.
Once the heading is no longer at issue, we turn to GRI 6, which provides:
For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
In the event that merchandise is not found to be classifiable under a specific subheading, it is then classified as "other." The "other," or "basket," provision of a subheading should be used only if there is no tariff category that more specifically covers the merchandise. See Rollerblade, Inc. v. United States, 116 F. Supp. 2d 1247, 1251 (C.I.T. 2000) (citing EM Industries, Inc. v. United States, 999 F. Supp. 1473, 1480 (C.I.T. 1998)); see also GRI 3(a) ("The heading which provides the most specific description shall be preferred to headings providing a more general description.").
As stated above, you claim that the product at issue is a "set top box which has a communications function." When the Information Technology Agreement (ITA) went into effect on July 1, 1997, pursuant to Presidential Proclamation No. 7011 (62 FR 35909 (July 2, 1997)), the U.S. created various new provisions to implement the agreement. The amendments set forth in Presidential Proclamation No. 7011 are based on the framework established in the Declaration on Trade in Information Technology Products, which, together with its Annex, constitute the ITA. See 62 FR 35909, para. 1. The Annex is comprised of two attachments. Attachment A, Section 1 lists the Harmonized System (HS) headings and subheadings covered by the ITA. (The HS is the international agreement on which the HTSUS is based.) Attachment A, Section 2 lists certain semiconductor manufacturing and testing equipment and parts thereof to be covered by the ITA. Attachment B is a positive list of specific products to be covered by the ITA wherever they are classified in the HS (emphasis added). See Attachment A and Attachment B, Annex of the ITA.
Among the amendments adopted by the U.S. were two new subheadings for "set top boxes which have a communications function." One is found under heading 8525, HTSUS, which provides in relevant part for transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television. The other is under heading 8528, HTSUS, enumerated above. The tariff term "set top boxes which have a communication function" is found in the positive list of specific products set forth in Attachment B. The type of product intended to be covered by the ITA is described as "a microprocessor-based device incorporating a modem for gaining access to the Internet, and having a function of interactive information exchange." Presidential Proclamation No. 7011. Therefore, Customs considers this description to provide the minimum requirements for a set top box to be classified as "set top boxes which have a communications function."
The ITA requires that these set top boxes be microprocessor-based devices. That is, they must contain a microprocessor. In addition to a microprocessor, the ITA requires that these set top boxes incorporate a modem for gaining access to the Internet. Modems are devices that transmit digital data by modulating and demodulating a signal. A modem alone does not gain access to the Internet. In simple terms, to gain access to the Internet, a modem is used to connect to an Internet Service Provider (ISP), and the ISP connects the user to the Internet. Hence, the ITA requires that these microprocessor-based set top boxes must be able to gain access to the Internet, not simply incorporate a modem.
The ITA also requires that this class of set top boxes has a function of interactive information exchange. As the Internet provides a user with the ability to have interactive information exchange, Customs considers the existence of a modem for gaining access to the Internet to indicate that a set top box has a function of interactive information exchange. Moreover, the existence of an RJ11 telephone jack provides the user with interactive information exchange because the user may communicate with the cable television or other service provider via phone line to, for example, order movies. However, the mere presence of a RJ11 jack alone is not indicative of a modem for gaining access to the Internet.
Examining the specifications listed in the FACTS section of this ruling, we find a microprocessor, a modem and a RJ11 jack. We note that DirecTV® serves as an ISP, providing access to the Internet and interactive information exchange. Thus, we conclude that the incorporated modem provides access to the Internet. Therefore, the DST-3100 DirecTV® High Definition Set Top Box satisfies the description of a set top box which has a communications function in Attachment B of the ITA. This determination is consistent with, for example, NY G80471, dated August 8, 2000, NY F80216, dated December 14, 1999 and NY D82241, dated September 28, 1998. Accordingly, it is classified in subheading 8528.12.92, HTSUS.
The DST-3100 DirecTV® High Definition Set Top Box is classified in subheading 8528.12.92, HTSUS, which provides for, "Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus: Color: Other: Other: Other: Set top boxes which have a communications function."
Myles B. Harmon, Director
Commercial Rulings Division