CLA-2 OT:RR:CTF:TCM H036397 GC
U.S. Customs and Border Protection
Cleveland Service Port
Middleburg Heights, Ohio 44130
Attn: Area Port Director
RE: Internal Advice Request; Tariff classification of a multi-function machine
Dear Port Director:
This letter is in reply to your request for internal advice, dated August 21, 2008, pertaining to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a multi-function office device imported by Xerox Corpoation (Xerox).
FACTS:
The merchandise subject to your internal advice request is the Xerox WorkCenter Pro 275. According to Xerox’s submission, the product features printing, copying, scanning and emailing functions. There is also an option to include a one or two line fax machine, although there is no indication that the option will apply to the instant product at the time of importation. The product is also connectable to a Local Area Network (LAN) to enable multiple computer workstations to take advantage of the product’s functions.
The product brochure indicates that the WorkCenter Pro 275 prints and copies as speeds up to 75 pages per minute at a resolution of up to 1200 x 1200 (for printing) or 4800 x 1200 (for copying) interpolated dots per inch (DPI). When copying documents, the first copy is produced as fast as 2.7 seconds after the original document is scanned. A 1.4GHz central processor (CPU) featuring 256 megabytes (MB) of memory and a standard 80 gigabyte (GB) hard drive accepts documents from the office network, concurrently processes jobs received, and keeps the paper path full to avoid delays between jobs. The WorkCenter Pro 275 comes standard with a variety of software that enables it to perform the above referenced functions and allows the user to organize data to his or her preferences. For example, the product can scan documents to email, the user’s desktop, fax, or file server.
ISSUE:
Whether the subject merchandise is classified under heading 8443, HTSUS, which provides for, in pertinent part, “other printers, copying machines and facsimile machines, whether or not combined”, or heading 8471, HTSUS, which covers, in pertinent part, “automatic data processing machines” (ADP machines)?
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 2 through 6 may then be applied in order. The following HTSUS provisions under consideration are:
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:
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8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included:
In its written submission for the instant Internal Advice request, counsel for Xerox first argues that the CPU housed within the WorkCenter Pro 275 constitutes an ADP machine of heading 8471, HTSUS. The argument continues that the CPU’s role as the controller for the WorkCenter Pro 275’s multiple functions constitutes the principal function of the subject merchandise, which is thus classified under heading 8471, HTSUS, by application of Note 3 to Section XVI, HTSUS, which provides that:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principle function.
However, Note 3 to Section XVI, HTSUS, does not govern the classification of the subject merchandise because Note 5 to Chapter 84, HTSUS, constitutes a context that requires otherwise. See BenQ America Corporation v. United States 683 F.Supp. 2d 1335, 1342 (Ct. Intl. Trade 2010) (BenQ). To be classified as an ADP machine of heading 8471, HTSUS, a product must satisfy the terms of Note 5 to Chapter 84, HTSUS, which states, in pertinent part, the following:
(A) For the purposes of heading 8471, the expression “automatic data processing machines” means machines capable of:
Storing the processing program or programs and at least the data immediately necessary for the execution of the program;
Being freely programmed in accordance with the requirements of the user;
Performing arithmetical computations specified by the user; and
Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.
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(E) Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
Assuming arguendo that the CPU housed within the WorkCenter Pro 275 independently satisfies the requirements set forth in Note 5(A) to Chapter 84, HTSUS, for classification as an ADP machine, we note that the subject merchandise is excluded from classification under heading 8471, HTSUS, by application of Note 5(E) to Chapter 84, HTSUS, because it performs specific functions other than data processing, namely printing, copying and scanning. See also Headquarters Ruling Letter 967054, dated June 1, 2004 (where certain high definition digital video recorders incorporating a CPU were excluded from heading 8471, HTSUS, by application of Note 5(E) to Chapter 84, HTSUS, because they performed a function described by heading 8521, HTSUS, which provides for video recording or reproducing apparatus).
Counsel for Xerox argues that the instant merchandise performs only a data processing function that is provided for under subheading 8471.41, HTSUS, which provides for other ADP machines “[c]omprising in the same housing at least a central processing unit and an input and output unit, whether or not combined”. Counsel posits that the scanner and printer functions respectively combine with the CPU to account for the required input and output units for classification under subheading 8471.41, HTSUS.
We note initially that, per GRI 1, products must be classified according to the terms of the headings of the Nomenclature and any relevant chapter or section note. The terms of tariff subheadings do not inform classification at the heading level. Heading 8443, HTSUS, provides for, in pertinent part, “other printers, copying machines and facsimile machines, whether or not combined; parts and accessories thereof”.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. 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).
EN 84.43(II)(D), which describes merchandise of heading 8443, HTSUS, that are combinations of printers, copiers and facsimile machines, states the following:
Machines which perform two or more of the functions of printing, copying or facsimile transmission are generally referred to as multi-functional machines. These machines are capable of connecting to an automatic data processing machine or to a network.
As stated in the text of heading 8443, HTSUS, and EN 84.43 above, the printers, copying machines and facsimile machines of the heading can be combined in one machine. This is precisely the function of the Xerox WorkCenter Pro 275, which is even described in the product literature as a multi-function device. See also New York Ruling Letter N024044, dated March 4, 2008. The role of the CPU housed in the WorkCenter Pro 275 serves to control and coordinate the multiple functions of the product. The overall product, however, is classifiable under heading 8443, HTSUS, as a multi-function machine. Accordingly, we find that the product falls under the scope of Note 5(E) to Chapter 84, HTSUS, and is thus excluded from classification as an ADP machine of heading 8471, HTSUS.
HOLDING:
By application of Note 5(E) to Chapter 84, HTSUS, and GRI 1, the subject Xerox WorkCenter Pro 275 is classified under heading 8443, HTSUS. It is specifically provided for under subheading 8443.31.00, HTSUS, which provides for, in pertinent part: “other printers, copying machines and facsimile machines, whether or not combined; parts and accessories thereof: other printers copy machines or facsimile machines, whether or not combined: Machines which perform two or more of the functions of printing, copying or facsimile transmission, capable of connecting to an automatic data processing machine or to a network”. The column one, general rate of duty is free.
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.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division