CLA-2 RR:CR:GC 962919 RFA
Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island, CA 90731
RE: Protest 2720-1999-100148; ATSC Encoder; Digital Television Transmission Apparatus; Functional Unit; Legal Note 4 to Section XVI; EN 85.25; HQ 088746
Dear Port Director:
The following is our decision regarding Protest 2720-1999-100148, which concerns the classification of an ATSC Encoder under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject merchandise is described as the 1080I ATSC Encoder which consists of 6 MPEG2, 2U Encoders, 1 MPEG2 Multiplexer, 1 HDTV Pre & Post Processor (which is one unit), and 1 Streamserver H/W (hardware) platform. According to the information provided, the 1080I ATSC Encoder is located at either a local television station or at a transmitter up-link station. An analog NTSC television (TV) from a local television station is sent to the Pre-Processor which formats the signals for the 6 MPEG2 encoders. The encoders compress the signals and send the 6 signals to the multiplexer. The Streamserver acts as the “brains” of the 1080I ATSC Encoder. It inserts relevant systems information such as PSIP (Program Specific Information Parameters). This information is also sent to the multiplexer which combines the information from the Streamserver with the signals from the encoders and transmits the signal to the Post-Processor. The Post-Processor formats the signal into an ASI or SMPTE 310 digital format signal for transmitting over a terrestrial transmitter.
The merchandise was entered in 1998 under subheading 8525.10.30, HTSUS, as other television transmission apparatus. The entry was liquidated on January 22, 1999, under subheading 8543.89.96, HTSUS, as other electrical machines and apparatus, having individual functions, not specified or included elsewhere. The protest was timely filed on February 22, 1999.
The subheadings under consideration are as follows:
8525.10.30: Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating
reception apparatus or sound recording or reproducing apparatus; . . . : [t]ransmission apparatus: [t]elevision: [o]ther. . . .
Goods classifiable under this provision have a general, column one rate of duty of 2.2 percent ad valorem.
8543.89.96: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; . . .: [o]ther: [o]ther: [o]ther: [o]ther. . . .
Goods classifiable under this provision have a general, column one rate of duty of 2.9 percent ad valorem.
ISSUE:
Whether the 1080I ATSC Encoder is classifiable as other transmission apparatus for television, or as electrical machines and apparatus, having individual functions, not specified or included elsewhere, under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
Legal Note 4 to Section XVI, HTSUS, provides that: “[w]here a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.” The 1080I ATSC Encoder consists of several components working together to convert an analog TV signal into a digital TV signal that is sent over a terrestrial transmitter.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding or 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 FR 35127, 35128 (August 23, 1989). EN 85.25, page 1487, states that heading 8525 provides for transmission apparatus for television . . .
. . . whether the transmission is by electro-magnetic waves or by line.
This group includes :
(1) Transmitters of all kinds.
(2) Relay apparatus used to pick up a broadcast and retransmit it and so increase the range (including television relay apparatus for mounting in aircraft).
Relay television transmitters for transmission, by means
of an aerial and parabolic reflector, from the studio or site of an outside broadcast to the main transmitter.
We find that the 1080I ATSC Encoder is a combination of machines, interconnected by cables, intended to contribute together to a clearly defined function of transmission apparatus for television. See also HQ 088746 (May 13, 1991). Because the subject merchandise meets the terms of heading 8525, classification under heading 8543, as electrical machines, not specified or included elsewhere in the chapter, is precluded.
HOLDING:
The 1080I ATSC Encoder is classifiable under subheading 8525.10.30, HTSUS, which provides for: “[t]ransmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; . . . : [t]ransmission apparatus: [t]elevision: [o]ther. . . .” Goods classifiable under this provision have a general, column one rate of duty of 2.2 percent ad valorem.
The protest should be GRANTED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and
Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division