CLA-2 OT:RR:CTF:TCM H234514 DSR
Mr. W.J. Polkinhorn
Bill Polkinhorn, Inc.
2401 Portico Blvd.
P.O. Box 712
Calexico, California 92231
RE: Revocation of NY N123038; tariff classification of a 3D Starter Pack Kit for a 3D or 3D-Ready DLP Television from Mexico
Dear Mr. Polkinhorn:
This letter is in reference to New York Ruling Letter (NY) N123038 issued to you on October 5, 2010, regarding the tariff classification under the 2010 Harmonized Tariff Schedule of the United States (HTSUS) of a 3-dimensional (“3D”) Starter Pack Kit for a 3D or 3D-Ready DLP Television from Mexico. The ruling classified the article under subheading 9013.80.90, HTSUS, which provides for “Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: Other devices, appliances and instruments: Other.”
We have reviewed the tariff classification of the article and have determined that the cited ruling is in error. Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. § 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation was published on June 26, 2013, in the Customs Bulletin, Vol. 47, No. 27. No comments were received in response to the notice. Therefore, NY N123038 is revoked for the reasons set forth in this ruling.
FACTS:
In NY N123038, we stated that the kit, identified as the “3DC-1000,” is designed to aid the viewer of a television to achieve a 3D viewing experience. The kit contains two pairs of 3D active LCD shutter glasses, a 3D signal adapter, an infrared (IR) emitter, a Blu-Ray showcase disc, a 3D adapter remote control and one HDMI cable. These items will be imported into the United States packaged in a carton for retail sale.
The 3D active shutter glasses (hereinafter referred to as “3D shutter glasses”) are powered by a lithium battery. Their lenses are LCD shutter lenses made of two pieces of glass with liquid crystal material between the pieces of glass. The liquid crystal material becomes dark when voltage is applied.
The 3D signal adapter is connected to the television receiver by means of the HDMI cable via a 3D Blu-Ray player. The 3D signal adapter converts several different formats of incoming 3D signals to a checkerboard 3D format signal output and transfers it to the IR emitter. The IR emitter sends infrared light infrared light synchronization signals to the infrared light sensor in the 3D shutter glasses. The sensor in the glasses converts these signals into electrical synchronization signals that travel through the electrical control circuits of the glasses. It is these signals that initiate the blocking state (closed) or the viewing state (open) of the liquid crystal material in the glasses. The signal allows the glasses to alternatively darken over one eye and then the other eye in synchronization with the refresh rate of the television screen. The lenses open and close up to 60 times per second or 4080 times per minute. The result of this rapid action is that the viewer perceives the television images as 3-dimensional.
ISSUE:
Whether the article in question is classified under subheading 9004.90.00, HTSUS, as other spectacles, or 9013.80.90, HTSUS, as other optical appliances and instruments.
LAW AND ANALYSIS:
The following HTSUS provisions are under consideration:
9004 Spectacles, goggles and the like, corrective, protective or other:
* * *
9004.90.00 Other.
* * * *
9013 Liquid crystal devices not constituting articles provided for more
specifically in other headings; lasers, other than laser diodes; other optical
appliances and instruments, not specified or included elsewhere in this
chapter; parts and accessories thereof:
* * *
9013.80 Other devices, appliances and instruments:
* * *
9013.80.90 Other.
* * * *
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). 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 based on GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s 2 through 6 may then be applied in order.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89 80, 54 Fed. Reg. 35127 (August 23, 1989).
The main components of the 3D Starter Pack Kit are the 3D signal adapter and the 3D shutter glasses. The 3D signal adapter is described by heading 8525, HTSUS. The 3D shutter glasses are possibly covered by either heading 9004, or heading 9013, HTSUS. Heading 9013, HTSUS, covers, in relevant part “[l]iquid crystal devices not constituting articles provided for more specifically in other headings.” Therefore, before we can consider the applicability of heading 9013, we must consider whether the 3D shutter glasses can instead be classified in heading 9004, HTSUS.
Heading 9004, HTSUS, provides broadly for “[s]pectacles, goggles and the like, corrective, protective or other.” EN 90.04 provides an example of a group of such “other” spectacles, i.e., “spectacles for viewing stereoscopic (three-dimensional) pictures,” and later refines the example by citing to “polarizing spectacles fitted with lenses of plastics for viewing three-dimensional films (whether or not with a paperboard frame).” As a rule, the ENs cannot restrict or limit the scope of the legal texts to which they correspond. Instead, the ENs provide a commentary on the scope of the legal text of each heading. EN 90.04 provides an example of one form of spectacles (polarized, with plastic lenses) that are used to view three-dimensional images and does not use limiting language to do so. Indeed, the purpose of the polarized spectacles with plastic lenses is the same as the purpose of the instant 3D shutter glasses, which is to create the illusion of three-dimensional images by restricting the light that reaches each eye while viewing stereoscopic films. The manner in which the 3D shutter glasses achieve that purpose does not exclude it from heading 9004, HTSUS. Thus, it is now the position of CBP that the proper heading for the shutter glasses is 9004, HTSUS, which provides for other spectacles.
Because no single heading of the HTSUS completely describes the 3D Starter Pack Kit and, as noted above, its components are prima facie classifiable in two or more headings, classification must fall to GRI 3. GRI 3 provides, in pertinent part:
When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail, those heading are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
The Explanatory Notes to GRI 3(b) state the following
(X) For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which:
(a) consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and
(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards) …
The 3D Starter Pack Kit meets the above requirements, and is a “set” for purposes of GRI 3(b). In its discussion of the essential character of composite goods, EN (VIII) to GRI 3(b) states:
The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
There have been several court decisions on "essential character" for purposes of classification under GRI 3(b). See Conair Corp. v. United States, 29 C.I.T. 888 (2005); Structural Industries v. United States, 360 F. Supp. 2d 1330, 1337-1338 (C.I.T. 2005); and Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278, 1295-1356 (C.I.T. 2006), aff’d. by 491 F.3d 1334 (Fed. Cir. 2007) ("[E]ssential character is that which is indispensable to the structure, core or condition of the article, i.e., what it is.") (quoting A.N. Deringer, Inc. v. United States, 66 Cust. Ct. 378, 383 (1971)). In particular, the court stated "[a]n essential character inquiry requires a fact intensive analysis." Id. at 1284. Here, we are unable to determine whether the 3D signal adapter or the 3D shutter glasses provide the essential character of the set. The 3D adapter and the 3D shutter glasses are comparable in value based upon the cost breakdown of the items in the kit. Also, the 3D adapter and the 3D shutter glasses play equally essential roles in achieving the intended function of the 3D Starter Pack Kit. Without the glasses, a viewer cannot view the 3D image as intended, regardless of the presence and functionality of the adapter. Without the adapter, source 3D video is not converted to a format that displays on a television and no signal is provided to the IR emitter (and ultimately to the 3D glasses) that would allow a viewer to view 3D video as intended.
Per GRI 3(c), when a good cannot be classified by reference to GRIs 3(a) or 3(b), it is classified under the heading that occurs last in numerical order among those meriting equal consideration. Here, the 3D signal adapter is classifiable in heading 8525, HTSUS, and the 3D shutter glasses are classifiable in heading 9004, HTSUS. Therefore heading 9004 prevails, and the applicable subheading for the 3D Starter Pack Kit is 9004.90.00, HTSUS, which provides for other spectacles.
HOLDING:
By application of GRI 1 and GRI 3(c), the 3D Starter Pack Kit is classified in heading 9004, HTSUS. Specifically, it is covered by subheading 9004.90.00, HTSUS, which provides for “Spectacles, goggles and the like, corrective, protective or other: Other.” The column one, general rate of duty is 2.5% ad valorem. 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 at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N123038, dated December 13, 2010, is hereby revoked.
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