CLA-2 OT:RR:CTF:TCM H097674 TNA
Ms. Penelope Perkins
John S. James, Co. 4119-F Rose Lake Drive
Charlotte, NC 28217
RE: Modification of NY N022500; Classification of printer cartridges containing thermal transfer ribbon
Dear Ms. Perkins:
This letter is in reference to New York Ruling Letter (“NY”) N022500, issued to you on behalf of DNP IMS America on February 11, 2008, concerning the tariff classification of printer cartridges for dye sublimation printers. In NY N022500, U.S. Customs and Border Protection (“CBP”) classified these cartridges in heading 8443, Harmonized Tariff Schedule of the United States (“HTSUS”), as a part of a printer. We have reviewed NY N022500, and found the description of the merchandise to be incorrect. For the reasons set forth below, we hereby modify NY N022500.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke NY N022500 was published in the Customs Bulletin, Vol. 47, No. 52, on January 2, 2014. One comment was received in response to this notice, which is addressed in the ruling.
FACTS:
The subject merchandise consists of printer cartridges that are designed to be used solely with dye sublimation printers. These printers are capable of being connected to an automated data processor (“ADP”) or network. Dye sublimation printers function by way of a printing process that uses heat to transfer dye onto medium materials such as a plastic card, paper, or fabric. By way of example, they are typically used to transfer bar codes onto removable paper labels. It is called “sublimation” because the dye transitions between the solid and gas states without going through a liquid stage.
The subject cartridges are manufactured from imported polyethylene terephthalate (“PET”) film. The film consists of a core, a trailer, the thermal transfer ribbon, a leader, and an adhesive tab. The core is typically made of fiber or plastic. The trailer communicates with the printer so that the printer knows when the ribbon is finished. The leader protects the ribbon during shipping and facilitates the loading of the ribbon into the printer. The adhesive tab secures the leader around the ribbon so that it will not unravel.
The film, which is of Japanese origin, is admitted into a Free Trade Zone (“FTZ”), where it is combined with a plastic feed spool, a plastic take-up spool, two geared flanges, and two non-geared flanges. There is no indication that any of the components of the printer cartridges are admitted into the FTZ in Privileged Foreign Status. The feed spool and take-up spools are custom molded plastic shapes that are specifically designed for the printer in which they are used. One of the flanges contains a radio-frequency identification (“RFID”) chip, which communicates information to the printer, such as image count, tension, and torque. Without these printer cartridges, the printers with which they are used cannot function. The merchandise withdrawn from the FTZ is a completed printer cartridge.
In NY N022500, CBP classified the subject merchandise in subheading 8443.99.25, HTSUS, as “Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; other printers, copying machines and facsimile machines, whether or not combined; parts and accessories thereof: Parts and accessories: Other: Parts and accessories of printers: Other.”
ISSUE:
Whether printer cartridges are classified in heading 3702, HTSUS, as “Photographic film in rolls” or in heading 8443, HTSUS, as parts and accessories of “Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442”?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRI). 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 HTSUS provisions under consideration are as follows:
3702 Photographic film in rolls, sensitized, unexposed, of any material other than paper, paperboard or textiles; instant print film in rolls, sensitized, unexposed:
8443 Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; other printers, copying machines and facsimile machines, whether or not combined; parts and accessories thereof:
Note 2 to Chapter 37, HTSUS, provides that:
In this chapter the word “photographic” relates to the process by which visible images are formed, directly or indirectly, by the action of light or other forms of radiation on photosensitive surfaces.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not 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, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The EN to heading 3702, HTSUS, provides, in pertinent part:
This heading covers:
(A) Photographic film in rolls, of any material other than paper, paperboard or textiles.
Photographic film in rolls (i.e., other than flat), sensitised, unexposed is usually of poly(ethylene terephthalate), cellulose acetate or similar flexible materials and normally provides for a number of exposures. The heading does not cover such film of paper (e.g., paper “films” used to make negatives), paperboard or textiles (heading 37.03).
Film in rolls falls in this heading with or without perforations; it must be protected from the light by paper backing or other suitable packing…
Like the photographic plates of heading 37.01, this film may be used for amateur, professional photomechanical, scientific, radiographic, etc., purposes. X-ray film in rolls is generally sensitised on both sides.
The EN to heading 8443, HTSUS, provides, in pertinent part:
This heading covers (1) all machines used for printing by means of the plates or cylinders of the previous heading, and (2) other printers, copying machines and facsimile machines, whether or not combined.
The heading includes machines for printing a repetitive design, repetitive wording or overall colour on textiles, wallpaper, wrapping paper, rubber, plastics sheeting, linoleum, leather, etc….
(II) OTHER PRINTERS, COPYING MACHINES
AND FACSIMILE MACHINES,
WHETHER OR NOT COMBINED
This group covers:
(A) Printers.
This group includes apparatus for the printing of text, characters or images on print media, other than those that are described in Part (I) above.
These apparatus accept data from various sources (e.g., automatic data processing machines, flatbed desktop scanners, networks). Most incorporate memory to store that data.
The products of this heading may create the characters or images by means such as laser, ink-jet, dot matrix or thermal print processes….
PARTS AND ACCESSORIES
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), the heading also covers parts and accessories of the machines of this heading.
In QMS, Inc., v. United States, 19 C.I.T. 551; 17 Int'l Trade Rep. (BNA) 1510; 1995 Ct. Intl. Trade LEXIS 104; SLIP OP. 95-65 (Ct. Int’l Trade 1995), the court examined the classification of color ink sheet rolls (“ISRs”), also known as thermal transfer ribbons in the trade. See QMS, Inc., v. United States, 19 C.I.T. 551, 552 (“QMS”). These ISRs were specially designed for use solely in color thermal transfer printers, which were used to print graphics with automatic data processing equipment. The printers could not function as intended without color ISRs. Id. at 551. In their condition as imported, the ISRs consisted of a thin polymer (i.e., plastic) film to which had been applied paraffin wax pigments (or “inks”) in varying color configurations (i.e., yellow, magenta, cyan, and black). Id. at 551. The ISRs, which were tightly wound around a reinforced cardboard core, varied in size, depending on the color thermal transfer printers for which they were specially designed. Id. at 551-552.
The QMS court first considered classification in heading 9612, HTSUS, as typewriters or similar ribbons, and found that the subject ISRs were not typewriter or similar ribbons. Id. at 556. The court reasoned that the thermal transfer ribbon at issue was not similar to typewriter ribbons because of the differences in physical characteristics and purposes of the two sets of merchandise. Id. at 559-560. As a result, the court found that the subject ISRs could not be classified in heading 9612, HTSUS. Id. at 560.
Next, the court considered classification in heading 8473, HTSUS, as parts and accessories suitable for use solely or principally with machines of headings 8469 to 8472, HTSUS. The court did not determine whether the subject ISRs fit the established definitions of parts or accessories. Id. at 561. Rather, the court reasoned that, even assuming the subject ISRs fit these definitions, the GRIs required that, where goods were, prima facie, classifiable under two or more headings, the heading which provides the most specific description shall be preferred to headings providing a more general description. Thus, under the authority of GRI 3(a), the court found that the ISRs were more specifically provided for in heading 3702, HTSUS, and specifically in subheading 3702.44, HTSUS, as “Photographic film in rolls, sensitized, unexposed, of any material other than paper, paperboard or textiles; instant print film in rolls, sensitized, unexposed: Other film, without sprocket holes, of a width exceeding 105 mm: Of a width exceeding 105 mm but not exceeding 610 mm.” Id. at 561.
The merchandise at issue in QMS consisted of rolls of thermal transfer ribbon. It is not in dispute that merchandise imported in this form is classified in heading 3702, HTSUS. In the present case, NY N022500 describes its merchandise as “thermal transfer ribbons” more than once. This description led CBP to conclude that the merchandise was imported as rolls of thermal transfer ribbon. Our analysis in the proposed revocation of NY N022500 reflected this conclusion; there, we classified the subject merchandise as thermal transfer ribbons of heading 3702, HTSUS, in accordance with QMS.
However, the comment CBP received in opposition to the revocation came from the importer whose merchandise was at issue in NY N022500. In its comment, the importer noted that the spools of thermal transfer ribbon are admitted into an FTZ, where they are assembled into a cartridge consisting of two feed spools, geared and non-geared flanges and an RFID chip which communicates information to the printer. The commenter argues that when the subject merchandise is withdrawn from the FTZ, it is not simply the long rolls of thermal transfer ribbon, but rather is a completed printer component containing significant mechanical components. The commenter argues that these mechanical components make the subject merchandise specifically designed for certain printers, and therefore classified in heading 8443, HTSUS, as parts of a printer.
The classification of articles entered from an FTZ is, in part, dependent upon whether the articles have Privileged Foreign Status (PF) or Non-Privileged Foreign Status (NPF). There is no indication that the subject merchandise is entered under PF status. Under Section 146.65(a)(2) of the CBP Regulations (19 CFR 146.65(a)(2)), NPF status merchandise is “[s]ubject to tariff classification in accordance with its character, condition and quantity as constructively transferred to customs territory at the time of entry or when an entry summary is filed with [CBP].” NPF status is a residual status which applies to foreign merchandise which does not have the status of privileged foreign merchandise or zone-restricted merchandise. See 19 C.F.R. §146.42 (a). For NPF status merchandise, classification is based on the product that is withdrawn from the FTZ, not based on the form in which it is admitted to the FTZ. See, e.g., HQ H103166, dated July 26, 2010. Provided that the PET film and components are in NPF status, upon withdrawal from the FTZ, they are classified as finished printer cartridges, we agree with the commenter that the subject merchandise is classified in heading 8443, HTSUS, as parts for printing machinery.
In Mita Copystar America v. United States, 160 F.3d 710; 1998 U.S. App. Lexis 28195; 20 Int’l Trade Rep. (BNA) 1707 (CAFC 1998), the court classified toner cartridges that were shaped to fit into specific electrostatic photocopiers. Mita Copystar America v. United States, 160 F.3d 710. These cartridges had been liquidated in heading 3707, HTSUS, as chemical preparations for photographic use. Id. at 711. The court found that the toner cartridges were parts of the printers because the cartridges were sold with toner inside, they remained with the toner throughout its use by the photocopier, they were the standard device for providing toner to the photocopier, and they were not designed for reuse. Id. at 712-713. See also Brother International Corp. v. United States, 26 C.I.T. 867; 248 F.Supp. 2d 1224; 24 Int’l Trade Rep (BNA) 1817; 2002 Ct. Intl. Trade Lexis 74; Clip Op. 2002-80 (2002). The merchandise at issue in Mita Copystar is similar to the subject merchandise in that the thermal transfer ribbon remains in the cartridges, are the standard device for providing dye to the printer, and are not designed for reuse. Furthermore, they are designed exclusively for use with thermal printers and are sold for use only with these printers, which could not function without these cartridges. Hence, they are classified in heading 8443, HTSUS, as a part of printing machinery.
Given the discrepancy between the description of the merchandise in NY N022500, and the actual description of the subject merchandise as withdrawn from the FTZ, we hereby modify NY N022500 to clarify that the subject merchandise is withdrawn as finished printer cartridges, not as rolls of thermal transfer ribbon.
HOLDING:
Under the authority of GRI 1, the subject printer cartridges are classified in heading 8443, HTSUS. Specifically, if imported in a width not exceeding 105 mm, they are classified in subheading 8443.99.25, HTSUS, which provides for “Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; other printers, copying machines and facsimile machines, whether or not combined; parts and accessories thereof: Parts and accessories: Other: Parts and accessories of printers: Other.” The column one general rate of duty is free.
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/.
EFFECT ON OTHER RULINGS:
NY N022500, dated February 11, 2008, is MODIFIED with respect to the description of its merchandise.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division