CLA-2 OT:RR:CTF:TCM H029859 JPJ
David Montoya
Senior Analyst, Import Compliance
Tyco International Management Company
One Town Center Road, 6th Floor
Boca Raton, FL 33486
RE: Reconsideration of NY C89058; Classification of multiplexers, a video processor, and a video recorder from Taiwan; Ruling Correct on Face; New Ruling Based on New Merchandise described as “Intellex” system, “Digital Video Management System” or “DVMS”
Dear Mr. Montoya:
This is in reply to your letter dated May 23, 2008, on behalf of Tyco International Management Company, in which you requested reconsideration (modification) of NY C89058, which was issued to Sensormatic Electronics Corporation, Video Products Division (a Tyco International Corporation effective 2007) on July 2, 1998.
FACTS:
In NY C89058, the merchandise at issue was described as follows:
A 4-camera color multiplexer (MV94e Multivision Plus). The multiplexer functions by taking image inputs from up to 4 color video security cameras, then digitalizes the incoming pictures and encodes them by camera number for a full field multiplexed recording on a single VCR. The Multiplexer also has outputs for monitors.
A 16-camera color duplex multiplexer with video alarm detection (MV96p Multivision Pro). The multiplexer functions by taking image inputs from up to 16 color video security cameras, then digitalizes the incoming pictures and encodes them by camera number for a full field multiplexed recording on a single VCR while processing and replaying video from a second VCR. The Multiplexer also has outputs for monitors. In addition to other features the multiplexer has integrated alarm detection and reporting which provides video motion detection in response to alarm related motion.
A 4-camera black and white digital picture processor (Multivision MV45) allows images from four cameras to be viewed, recorded or transmitted at one time. The images are processed so that they occupy a quarter of the full field image. Therefore all the images are viewed, recorded, transmitted at the same time.
An Intellex Digital Video Recorder with Smart Search displays multiple camera to one monitor while also recording all cameras to its internal hard drive for regular playback reviews, and to its optional internal DAT drive to create tapes for archives.
In that ruling, the MV94e Multivision Plus multiplexer, the MV96p Multivision Pro Multiplexer, and the Multivision MV45 Processor were found to be classifiable in subheading 8525.10.3040, Harmonized Tariff Schedule of the United States (HTSUS) (1998), which provides for “Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting, or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras or other video camera recorders: Television: Other.” The Intellex Digital Recorder was found to be classifiable in subheading 8521.90.0000, HTSUS, which provides for “Video recording or reproducing apparatus, whether or not incorporating a video tuner: Other.”
You state that since the issuance of NY C89058, the “Intellex Digital Video Recorder”, now called the “Intellex” system, also called a “Digital Video Management System” or DVMS (“DVMS”), has evolved with multiple upgrades and enhancements, including the integration of technologies that, in the past were part of different, though interconnectable devices.
In your request for reconsideration, you describe the DVMS as a complete microprocessor-based Closed Circuit Television (CCTV) System that offers the most demanding functions of today’s video surveillance applications. You explain that the DVMS system’s multiple functions and features are combined in a common housing, and you describe them as follows:
Multiplexer for transmission of live video CCTV signal;
Live CCTV video transmission over the Internet;
3. Video decoding, video encoding, video/sound recording, video camera controls (pan, tilt, zoom); and
4. Events with alarm-triggered dome positioning recordings, among many other features and functions.
The Intellex DVMS Architect and Engineer Specification information indicates that:
The Digital Video Management System shall provide for simultaneous recording, playback, transmitting, database searching and archiving. . .Live audio shall be available for listening while viewing live video (Premier edition only). Up to 15 cameras shall be configurable as visible or covert by the authorized user.
. . .
The Digital Video Management System shall, at a minimum, combine multiplexing, alarm detection, event detection, video, audio (Premier Edition only), and text (Premier Edition only) recording.
. . .
The unit must simultaneously record, play back and archive video, text (Premier Edition only) and audio (Premier edition only) while using sophisticated search functions to define and find only those important events that meet certain criteria. The system must also have the ability to host multiple remote users, archive data, and search for data, all while recording multiple video and text streams.
. . .
The Digital Video Management System’s live video display must provide real-time motion in any screen format (full, 2x2, 3x3, and 4x4). The operator shall have the ability to expand any view to full screen with a single click of the mouse.
. . .
A browser-based viewer (Browser Client) must also be available free of charge, enabling users to host and customize their own website to provide live viewing of the Digital Video Management System through a standard browser interface. Multiple viewers shall have the ability to access video and control domes remotely.
. . .
Unlike the DVMS at issue herein, the “Intellex Digital Video Recorder” at issue in NY C89058 was not a composite machine. Also, unlike the DVMS, the “Intellex Digital Video Recorder” was only capable of recording. Consequently, we will address your request for reconsideration as a request for a prospective ruling pursuant to 19 CFR 177.1.
ISSUE:
Whether the merchandise is classified under heading 8521, HTSUS, as video recording or reproducing apparatus, whether or not incorporating a video tuner, or under heading 8525, HTSUS, as transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders.
LAW AND ANALYSIS:
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 GRIs may then be applied.
The 2009 HTSUS provisions under consideration are as follows:
8521 Video recording or reproducing apparatus, whether or not incorporating a video tuner:
* * * * * *
8525 Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders:
* * * * * *
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 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 principal function.
Additional U.S. Rules of Interpretation (AUSRI) 1(a) states:
1. In the absence of special language or context which otherwise requires—
(a) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the U.S. at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.
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, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
The General ENs to Section XVI, HTSUS, provide, in relevant part:
(VI) MULTI-FUNCTION MACHINES
AND COMPOSITE MACHINES
(Section Note 3)
* * *
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);. . .”.
* * *
You argue that the DVMS has multiple functions and features all combined in a single device, and that the DVMS’s two principal functions are video transmission and video recording. Therefore, you argue that because the DVMS is a composite machine, it is not classifiable pursuant to GRI 1. Specifically, you argue, that these functions are separate and independent in that the transmitted images can be viewed without recording the images, and the recording can be completed without the images being transmitted. However, in order to view the images in live time, they must be transmitted to a monitor and/or a computer (Internet). Otherwise, the images may be recorded onto media for future viewing.
Initially we note that there is no dispute that the transmission of video to a monitor and/or a computer (Internet) for viewing is described by heading 8525, HTSUS, or that the video recording function is described by heading 8521, HTSUS. Based on the descriptions and importance of the video transmission and video recording functions described in the DVMS Architect and Engeneer Specification sheet, and described above, we agree that the DVMS’s principal functions are video transmission and video recording. Because we are unable to determine the principal function of the DVMS, it is necessary to apply GRI 3(c). See General Explanatory Notes to Section XVI, note 3.
GRI 3(c), provides, in relevant part:
3. 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:
* * *
(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.
In accordance with GRI 3(c), the merchandise is classified in heading 8525, HTSUS, specifically subheading 8525.50.3040, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Transmission apparatus: Television: Other. Other” as it is the tariff provision that occurs last in numerical order among those that equally merit consideration.
HOLDING:
Pursuant to GRI 3(c) and legal Note 3 to Section XVI, the DVMS is classified under heading 8525, HTSUS, specifically subheading 8525.50.3040, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Transmission apparatus: Television: Other. Other.” The general, column one rate of duty is 1.8 percent ad valorem.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division