CLA-2 RR:CR:GC 965004 GOB
Port Director
U.S. Customs Service
Los Angeles/Long Beach Seaport Area
301 E. Ocean Blvd., 14th Floor
Long Beach, CA 90802
RE: Protest 2704-01-100641; Engravers; Milling Machines; Sign Makers
Dear Port Director:
This is our decision regarding Protest 2704-01-100641, filed by counsel on behalf of Roland DGA Corporation (“protestant”) concerning the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of certain merchandise described below. In addition to the protest document, we have considered the claims made in the protestant’s submission of February 28, 2002 and those made in a conference at Customs Headquarters on February 20, 2002.
FACTS:
The file reflects the following. The entry at issue was filed on December 16, 1999 and was liquidated on December 1, 2000. The protest was filed on February 27, 2001.
This protest involves the following merchandise: PNC-2300A desktop engravers (“2300A engravers”); PC-60 color sign maker pros (“PC-60 sign makers”); PNC 3200 desktop CNC (computer numerically controlled) milling machines (“3200 CNC milling machines”); and CS 20 computerized desktop engravers (“CS 20 engravers”).
The protestant describes the 2300A engravers as follows:
The PNC-2300A is a desktop computerized engraving device that works with and is connected to a personal computer. The PNC-2300A is imported with easy-to-use design and output software that uses a Windows 95/98/NT application. Such applications give the user the ability to import a scanned image or graphic design which can then be printed by the engraving device. In addition, the unit also comes with “Doctor Engrave Software,” which allows a user to import various fonts and clip art, and features an automatic layout function that may be used to import databases from Microsoft Excel. The PNC-2300A comes with a standard one megabyte data buffer which enables its plotting capabilities and is able to engrave a range of media, including plastics, acrylics, and some light metals.
Roland product information provided at the conference on February 20, 2002 states that the 2300A engraver is a “mid-level engraving device” which is “best suited for engraving on mid-light duty materials, i.e., light metals, plastics and acrylics.”
In its submission of February 28, 2002, the protestant provided additional information, including statements from two of its customers concerning its engravers, including the 2300A engravers. One Roland customer states in pertinent part as follows:
We have sold over 100 Roland desktop engraving machines from Jan. 1998 to present. Most of these units were installed in businesses and schools utilizing plastic as an engraving media. Only about 15% of these installations were engraving or etching on metal plates.
The primary application was for plastic engraved signage. Some other applications include metal trophy plates, plastic electrical control panel identification tags and ADA braille signage.
A second Roland customer states in pertinent part as follows:
The above referenced machines [the 2300A engraver and a second Roland engraver] are utilized for engraving both metal and plastic materials. Most customers who purchase Roland engravers from us are engraving shops that specialize in metal awards and trophy plates as well as plastic nameplates, legend plates and labels. In terms of our engraving business, approximately 55% of our engraving orders involve plastic engraving stock and 45% involve either brass, aluminum or stainless steel.
The protestant describes the 3200 CNC milling machines as follows:
The PNC-3200 is used to model designs and create an actual shape from a conceptual image from the design as formulated. It enables the direct output of a three-dimensional design in-house. Its processing dimensions support the engraving of nameplates and relief sculpture[s]. It handles a wide range of materials, such as plastic, acrylic, wax, and light metals. The PNC-3200 works with a connected computer and output software that uses a Windows 95/98/NT application. The unit’s control command provides the commands to import format files and generates the necessary machine tool path needed for production.
The 3200 CNC milling machines are used to produce 3-D models, jewelry casting molds, nameplates, relief sculptures, seal engravings and prototypes. They have a 180w spindle motor and a tool chuck collet system.
The protestant describes the CS 20 engravers as follows:
The CS-20 is a desktop computerized engraving device that works with and is connected to a personal computer. The CS-20 is imported with easy-to-use design and output software that uses a Windows 95/98/NT application. Such applications give the user the ability to import a scanned image or graphic design which can then be printed by the engraving device. In addition, the unit also comes with “Doctor Engrave Software,” which allows a user to import various fonts and clip art, and features an automatic layout function that may be used to import databases from Microsoft Excel. The CS-20 comes with a 2KB data buffer which enables its plotting capabilities and its ability to engrave a range of media, including plastics, acrylics, and other soft materials.
The CS 20 engravers are two axis engraving machines. They use industry standard one-eighth inch diameter tools for engraving plastic and other soft materials as well as scribing coated brass. The CS 20 engravers can produce badges, nameplates, trophy plaques, etc.
The protestant describes the PC-60 sign makers as follows:
The PC series of printers are four and six color, thermal transfer printers with a cutting mechanism. The PC printers are designed to print high resolution (600 to 1200 dpi) reproductions. The PC-60 includes drivers for Windows 95/98/NT applications that allow the PC-60 to interface with other commercial software packages . . . The PC-60 is able to print on paper, vinyl or other fabric media of up to 24 inches in width. The PC-60 also includes a blade cutter unit that features curve-smoothing functions up to 8 inches per second and accuracy to 0.025 millimeters.
. . .
. . . ideal for the production of displays, decals, labels, signs, POP displays, heat transfers, and a variety of other short-run full color graphics.
Customs classified the merchandise as follows: 2300A engravers in subheading 8459.69.00, HTSUS; PC-60 sign makers in subheading 8477.80.00, HTSUS; 3200 CNC milling machines in subheading 8459.69.00, HTSUS; and CS 20 engravers in subheading 8459.69.00, HTSUS. The entry was liquidated accordingly. The protestant claims that all of the subject goods are classified in subheading 8471.60.90, HTSUS. Alternatively, it claims that the 2300A engravers, the CS 20 engravers, and the 3200 CNC milling machines are classified in subheading 8479.89.97, HTSUS; and the PC-60 sign makers are classified in subheading 8443.59.50, HTSUS.
ISSUE:
What is the tariff classification of the 2300A engravers, CS 20 engravers, 3200 CNC milling machines and PC-60 sign makers?
LAW AND ANALYSIS:
We note initially that the protest was timely filed under the statutory and regulatory provisions for protests, 19 U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1).
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 on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s 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.
The HTSUS headings under consideration are as follows:
8443 Printing machinery, including ink-jet printing machines, other than those of heading 8471; machines for uses ancillary to printing . . . :
8459 Machine tools . . . for drilling, boring, milling, threading or tapping by removing metal, other than lathes . . . of heading 8458:
8465 Machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials:
8471 Automatic data processing machines and units thereof . . . :
8477 Machinery for working rubber or plastics or for the manufacture of products from these materials, not specified or included elsewhere in this chapter; parts thereof:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Protestant’s Claim that All of the Goods Are Described in Heading 8471
We first examine the protestant’s claim that the goods are classified in subheading 8471.60.90, HTSUS. Heading 8471, HTSUS, is governed by the terms of Legal Note 5 to Chapter 84, HTSUS, which provides, in relevant part:
(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:
(a) It is of a kind solely or principally used in an automatic data processing system;
(b) It is connectable to the central processing unit either directly or through one or more other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.
* * * * *
(D) Printers, keyboards, X Y coordinate input devices and disk storage units which satisfy the conditions of paragraphs (B)(b) and (B)(c) above, are in all cases to be classified as units of heading 8471.
(E) Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
The General EN to Chapter 84, HTSUS, provides in pertinent part ((E) (1)) as follows:
A machine incorporating an automatic data processing machine and performing a specific function other than data
processing is classifiable in the heading corresponding to the function of that machine or, in the absence of a specific heading, in a residual heading, and not in heading 84.71.
Note 5(D) to Chapter 84, HTSUS, is subject to Note 5(E). Accordingly, if a machine performs a specific function other than data processing and incorporates or works in conjunction with an automatic data processing machine, it is to be classified in the heading
corresponding to the function of the machine, and not in heading 8471, HTSUS. See HQ 963280 dated September 26, 2001.
We find that the 2300A engravers, the CS 20 engravers, the 3200 CNC milling machines, and the PC-60 sign makers are not classified in heading 8471, HTSUS, because they perform a specific function other than data processing.
Protestant’s Alternative Claims re 2300A Engravers, CS 20 Engravers and 3200 CNC Milling Machines and our Classification Determinations
The protestant asserts alternatively that the 2300A engravers, the CS 20 engravers, and the 3200 CNC milling machines are classified in subheading 8479.89.97, HTSUS, pursuant to Note 7 to Chapter 84, HTSUS, which provides in pertinent part as follows:
A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose.
Subject to note 2 to this chapter and note 3 to section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in heading 8479.
The General Explanatory Notes to Section XVI, HTSUS, provide in pertinent part (p. 1388) as follows:
It should be noted that multi-purpose machines (e.g., machine tools capable of working metals and other materials . . .) are to be classified according to the provisions of Note 7 to Chapter 84.
We find that the 2300A engravers, the CS 20 engravers, and the 3200 CNC milling machines are multi-purpose machines in that they work on both plastics and metal.
In addition to the information referenced in the Facts section of this ruling, this office reviewed the user’s manuals for the 2300A engravers and the CS 20 engravers. These sources indicate that the 2300A engravers and the CS 20 engravers are primarily designed to work on hard plastics. This indication is consistent with certain of the other information submitted by the protestant. Additionally with respect to the CS 20 engravers, we note that one of the optional tools is a diamond scraper for scribing on brass and aluminum. We view this as a further indication that the CS 20 engravers are primarily designed to work on hard plastics, i.e., if the CS 20 engravers were intended to be used mainly on metals, the diamond scraper would be the standard engraving tool, rather than an optional tool.
After a thorough consideration of all of the information submitted, we conclude that the principal purpose of the 2300A engravers and the CS 20 engravers is for working with hard plastics. Accordingly, we find that they are described in heading 8465, HTSUS, and are classified in subheading 8465.92.00, HTSUS, as: “Machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: . . . Other: . . . Planing, milling or molding (by cutting) machines.” Because there is a principal purpose of these goods and because that purpose is described in heading 8465, HTSUS, the goods are not described in heading 8479, HTSUS. See note 7 to Chapter 84, HTSUS, excerpted above.
The 3200 CNC milling machines have a much higher horsepower motor than the CS 20 engravers or the 2300A engravers. The Roland Internet site states that the 3200 modeling machine “easily handles [a] wide range of materials, including aluminum, brass and copper.” [Emphasis supplied.] Based on all of the information available, we conclude that the 3200 CNC milling machines are used primarily for milling metals. Accordingly, we find that the 3200 CNC milling machines are described in heading 8459, HTSUS, and are classified in subheading 8459.61.00, HTSUS, as: “Machine tools . . . for drilling, boring, milling, threading or tapping by removing metal, other than lathes . . . of heading 8458: . . .other milling machines: Numerically controlled.”
The Protestant’s Alternative Claim re PC-60 Sign Makers and Our Classification Determination
The protestant claims alternatively that the PC-60 sign makers are classified in subheading 8443.59.50, HTSUS, as printing machinery. EN 84.43 provides in pertinent part: “This heading covers all machines used for printing by means of the type, printing blocks, plates or cylinders of the previous heading . . .” The PC-60 sign makers employ a thermal printing process. Thermal printing uses heat to transfer an impression onto paper. The thermal printing process is not described in EN 84.43 as excerpted above nor is it within the other descriptions of printing machinery stated in EN 84.43. We find, therefore, that the PC-60 sign makers are not described in heading 8443, HTSUS.
The PC-60 sign makers perform both a printing and cutting function. They are described as “printer/cutters” in information submitted by the protestant. With the exclusion of headings 8471 and 8443 (see above), we find that the printing function is described in heading 8479, HTSUS. We find that the cutting function is described in heading 8477, HTSUS. In this regard, we note that in HQ 951366 dated April 9, 1992, we found a cutter/plotter described as a tangential knife cutting system compatible with sign making to be described in heading 8477, HTSUS.
Legal Note 3 to Section XVI, HTSUS, provides:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted 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 principal function.
The EN to Legal Note 3 to Section XVI, HTSUS (EN (VI)), provides in pertinent part:
Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretive Rule 3 (c) …
GRI 3(c) provides in pertinent part that goods “shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
Because we are unable to determine the principal function of the PC-60 sign makers as between printing and cutting, we employ GRI 3(c) to find that they are described in heading 8479, HTSUS. The PC-60 sign makers are classified in subheading 8479.89.97, HTSUS, as: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter . . .: . . . Other machines and mechanical appliances: . . . Other: . . . Other: . . . Other.”
While our determinations herein are not those asserted by the protestant in its protest, the rates of duty for the provisions in which we have classified the 2300A engravers, the CS 20 engravers, and the PC-60 sign makers (subheadings 8465.92.00, 8465.92.00 and 8479.89.97, respectively) are less than the rates of duty for the provisions in which the subject entry was liquidated.
See HQ 965000 of this date for a related ruling.
HOLDING:
The 2300A engravers and the CS 20 engravers are classified in subheading 8465.92.00, HTSUS, as: “Machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: . . . Other: . . . Planing, milling or molding (by cutting) machines.”
The 3200 CNC milling machines are classified in subheading 8459.61.00, HTSUS, as: “Machine tools . . . for drilling, boring, milling, threading or tapping by removing metal, other than lathes . . . of heading 8458: . . .other milling machines: Numerically controlled.”
The PC-60 sign makers are classified in subheading 8479.89.97, HTSUS, as: “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter . . .: . . . Other machines and mechanical appliances: . . . Other: . . . Other: . . . Other.”
You are instructed to deny the protest except to the extent reclassification of the merchandise as indicated above results in a partial allowance.
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 in accordance with the decision must be accomplished prior to mailing of 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.treas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division