CLA-2 OT:RR:CTF:TCM H042579 EG
Edward B. Ackerman, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Kledstadt, LLP
399 Park Avenue, 25th Floor
New York City, New York 10022-4877
RE: Tariff classification of Fuji FinePix Digital Camera Display Model
Dear Mr. Ackerman:
This is in reply to your letter dated September 5, 2008, in which you requested a tariff classification ruling for the Fuji FinePix Z20 digital camera display model (display model) from China under the Harmonized Tariff Schedule of the United States (HTSUS). You requested this ruling on behalf of Fuji Photo Film U.S.A., Inc. (Fuji). A display model was submitted to our office.
FACTS:
Fuji proposes to import a non-functional display model of the Fuji FinePix Z20 digital camera. The display model has the exact same plastic exterior and is the same size as the functional digital camera. It does not contain internal electronics, but it does contain a weight which mimics the actual weight of the functional digital camera. The manufacturer has sealed the openings and buttons on the display model so that they cannot function. The display model is manufactured in China.
The display model is distributed to U.S. retail stores for showing consumers the appearance and feel of an operational version of the camera. Since the display model lacks internal electronics, consumers cannot use the display model to illuminate the digital camera screen, take pictures or scroll through any menu options. The display model has a value of $20 to $30.
ISSUES:
Is the FinePix camera sample classified under subheading 9023.00.00, HTSUS, which provides for “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof,” or subheading 3926.90.99, HTSUS, as “Other articles of plastics and articles of other materials of headings 3901 to 3914”?
Is the FinePix camera entitled to duty free treatment under subheading 9811.00.60, HTSUS?
LAW AND ANALYSIS:
Classification
In your request for a ruling, you take the position that the display model is properly classified in subheading 9023.00.00, HTSUS, which covers in pertinent part “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses…” Your letter distinguishes the display model from products which U.S. Customs and Border Protection (CBP) has classified in subheading 3926.90.98, HTSUS (the predecessor tariff number to 3926.90.99, HTSUS), which covers “Other articles of plastics and articles of other materials of heading 3901 to 3914: Other: Other.”
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 2 through 6 may then be applied in order.
The 2010 HTSUS provisions under consideration are:
3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:
3926.90 Other:
3926.90.99 Other . . .
* * *
9023.00.00 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof . . .
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) though not dispositive or legally binding, are the official interpretation of the Harmonized System at the international level and may provide commentary on the scope of each heading of the HTSUS. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Heading 9023, HTSUS, covers instruments, apparatus and models which are “designed for demonstrational purposes (for example, in education and exhibitions)” and are “unsuitable for other uses.” The tariff term “demonstrational purposes” is not defined by the HTSUS. Relying on the common meaning of the term, CBP has previously defined the term “demonstration” as “a description or explanation, as of a process, given with the help of specimens or by experiment." See Headquarters Ruling Letter (HQ) 957097, dated January 12, 2005 (citing The American College Dictionary (1970)). For use in sales, the Oxford English Dictionary defines “demonstrate” as “to display and explain the operation or use of (a product), esp. to a prospective buyer.” See www.oed.com.
These definitions of “demonstrate” and “demonstration” indicate that a good designed for demonstrational purposes in sales is a good which can be used to explain the use or operation of the good. In this case, the display model does not contain any internal electronics, which severely limits the demonstrational abilities of the display model. A salesperson cannot use the display model to explain the use or operation of the digital camera to a consumer. Thus, the display model cameras are not “designed for demonstrational purposes” as required under heading 9023, HTSUS. Indeed, CBP has declined to classify similar merchandise under heading 9023, HTSUS. See NY F88597, dated June 30, 2000 (CBP classified non-functional clocks used to teach time under heading 9503, HTSUS); NY H88767 (CBP classified non-functional display model cellular telephones under heading 3926, HTSUS).
You utilize the ENs to make your argument for classification under heading 9023, HTSUS. EN 90.23(9) states that the heading includes “a wide range of instruments apparatus and models designed for demonstrational purposes . . . [which includes] small scale demonstrational models (of aircraft, ships, machines, etc.) generally of metal or wood (e.g., for advertising purposes, etc.).” You assert that the display model is designed for both demonstrational and advertising purposes. Thus, you contend that the display model fits under heading 9023, HTSUS, because of the inclusions set forth in EN 90.23.
While EN 90.23 contains the term “advertising purposes”, heading 9023, HTSUS, does not contain this term. Under GRI 1, “classification shall be determined according to the terms of the headings and any relative section or chapter notes.” The headings are legally binding while the ENs are informative. As such, an EN cannot broaden the terms of a heading in the HTSUS. The display model at issue is not designed for demonstrational purposes, as explained above, and therefore it cannot be classified under heading 9023, HTSUS.
You have also asserted that CBP should revoke two rulings which pertain to heading 9023, HTSUS. First, you claim that NY H88767, dated March 8, 2002, should be revoked because it erroneously states that display model cellular telephones are precluded from heading 9023, HTSUS, because they are “not a reduced or enlarged version of the product.” We agree that the size of the model should not preclude the model from consideration under heading 9023, HTSUS. However, CBP did not reach its decision in NY H88767 based solely on the model’s size. In that ruling, CBP also noted that the display cellular telephone was “not used to explain or teach any principles, [r]ather, it is designed to show consumers their purchase options.” Since the display model cellular telephones were not functional, they could not be used to show the consumer how to use the functional cellular telephone. The limited demonstrational abilities of the display cellular telephones precluded their classification under heading 9023, HTSUS.
You also assert that CBP must revoke NY 897561 dated June 24, 1994, wherein CBP classified three fanciful “yeast beasts.” The yeast beasts were small plastic figures of monsters, designed as marketing for yeast infection medications. The analysis in NY 897561 included the statement that heading 9023, HTSUS, “does not cover advertising or promotional materials.” You correctly claim that this statement directly contradicts EN 90.23(9), which states that the heading includes “…small scale demonstrational models (of aircraft, ships, machines, etc.) generally of metal or wood (e.g., for advertising purposes, etc.)” (emphasis added). However, CBP did not reach its decision in NY 897561 based solely upon the advertising purposes of the yeast beasts. Rather, CBP determined that the yeast beasts were not “demonstrational or educational” as exhibited in retail displays. CBP correctly rejected the importer’s request to classify the yeast beasts under heading 9023, HTSUS. Based on the foregoing, we find that we do not need to revoke NY 897561 or NY H88767 in order to issue a ruling on the display model cameras.
The final provision to consider is heading 3926, HTSUS, which is a basket provision for articles of plastic which are not classified elsewhere in the HTSUS. The FinePix camera is mostly comprised of plastic. As a result, the applicable heading for the display non-working FinePix camera will be 3926, HTSUS. The FinePix camera is specifically provided for in subheading 3926.90.99, HTSUS, which covers “other articles of plastics …: other: other.” This classification is consistent with NY H88767, which classified display non-working cellular telephones in heading 3926, HTSUS.
II. Eligibility for Duty Free Treatment
Subheading 9811.00.60, HTSUS, provides for the duty-free treatment of “any
sample … valued not over $1 each, or marked, torn, perforated, or otherwise treated so that it is unsuitable for sale or for use otherwise than as a sample, to be used in the U.S. only for soliciting orders for products of foreign countries.” The controlling factor is whether the importer uses the samples for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders. If the items at issue are valued at more than $1 each, they may not be entered free of duty under this tariff provision unless they are marked as samples or treated in some way to render them unsuitable for commercial sale or any use other than as samples for obtaining orders for similar articles.
CBP rulings support classification of the display model cameras under subheading 9811.00.60, HTSUS. See HQ 957226, dated February 27, 1995 (CBP held that cordless telephone display units qualified for duty free treatment under subheading 9811.00.60, HTSUS); NY R00981, dated November 18, 2004 (CBP classified sample telephones without circuitry from China under subheading 9811.00.60, HTSUS); NY N096099, dated March 23, 2010 (CBP classified a floor lamp display without wiring from China under subheading 9811.00.60, HTSUS).
In this case, we find that subheading 9811.00.60, HTSUS, covers the display models because they are samples treated so that they are only suitable for soliciting orders for products of foreign countries. Specifically, the display models contain weights instead of internal electronics and so they cannot be used as functional cameras. Moreover, the display models are used to solicit orders of functioning digital cameras from China. However, the FinePix display cameras must be marked to indicate that they are samples and not for sale in order to receive duty free treatment under subheading 9811.00.60, HTSUS. See HQ 957226.
Pursuant to the request in your letter dated September 5, 2008, we are returning the display model sample to you.
HOLDING:
By application of GRI 1, the subject display model cameras are classifiable in Heading 3926, HTSUS. They are specifically provided for in subheading 3926.90.99, HTSUS, which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other.” The column one, general rate of duty is 5.3% ad valorem.
If the display units are marked "sample - not for sale", they will be entitled to duty-free treatment pursuant to subheading 9811.00.60, HTSUS.
Duty rates are provided for your convenience and 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 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,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch