Hybrid digital camera

HQ H002853 August 31, 2007 CLA-2 OT:RR:CTF:TCM H002853 IOR CATEGORY: Classification Tariff No.: 8525.80.40 Area Port Director Customs and Border Protection 605 W. 4th Ave., Rm 205 Anchorage, AK 99501 Attn: Karen Beaudin, IS RE: Hybrid digital camera Dear Port Director: This is in response to the internal advice request (IA 06/030) received from your office by CIE Form 6 dated September 20, 2006, regarding the classification by Customs and Border Protection (CBP) of a hybrid digital camera, under the Harmonized Tariff Schedule of the United States (HTSUS). Your request was forwarded to this office for a response. FACTS: The article at issue is the Casio EX-P505 digital camera (“EX-P505”), entered in June 2006. The EX-P505 is advertised as “a digital movie camera and a digital still image camera in one.” It can record 220 photos per battery charge and two hours of movie shooting on a single battery charge at VGA size (640 x 480) pixels, 30 frames/sec, with MPEG-4 format. The EX-P505 has the appearance of a traditional single lens reflex camera, with a large protruding lens barrel, but also has a 2 inch color rotating LCD panel. The EX-P505 is described as small enough to fit into a coat pocket. The basic components of the EX-P505 are a CCD (charge-coupled device) image sensor, optical 5x zoom lens, and auto pop-up flash. The EX-P505 is high-speed USB 2.0 compatible for high-speed image transfer. Both the still images and video images can be viewed on a television or monitor. ISSUE: Whether the EX-P505 is classified in subheading 8525.40.40 HTSUS as a digital still image video camera, or in 8525.40.80, as “other.” LAW AND ANALYSIS: Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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. For purposes of this internal advice, the 2006 HTSUS is the applicable law, as it was in force at the time the merchandise was entered. The 2006 HTSUS provisions under consideration are as follows: 8525 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 and other video camera recorders; digital cameras: Still image video cameras and other video camera recorders; digital cameras: Digital still image video cameras……………………….. Other………………………………………………………. In the 2007 HTSUS, effective February 3, 2007, the provisions for digital cameras and video camera recorders are as follows: 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: Television cameras, digital cameras and video camera recorders: Digital still image video cameras………………….. 8525.80.50 Other…………………………………………………. The classification issue of the EX-P505, is at the subheading level. To determine in which subheading the EX-P505 is classified, we must employ GRI 6, which permits the comparison of same-level subheadings within a heading, in part by application of Rules 1 through 5, applied by the appropriate substitution of terms. There is no issue as to the applicable 6-digit subheading, the applicable one is subheading 8525.40. The issue is at the 8-digit subheading level. Subheading 8525.40.40, HTSUS, provides for those articles commonly and commercially referred to as digital cameras, which perform still image capture. See, e.g., HQ 966072, dated September 4, 2003. Video camera recorders, commonly and commercially known as “camcorders”, which perform sequential image capture, are classified in subheading 8525.40.80, HTSUS. The EX-P505 performs the functions of both a digital camera and a video camera. Under Note 3 to Section XVI, HTSUS, the EX-P505 is considered to be a composite machine that has the functions of both a digital camera and video camera. Note 3 to Section XVI, HTSUS, 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 principal function. In HQ 966270, dated June 3, 2003, in footnote 4, it was stated that a principal use analysis could be helpful to establishing the principal function of composite machines. To determine the principal use, Additional U.S. Rule of Interpretation (AUSRI) 1 dictates how the tariff classification should be construed. See, e.g., Primal Lite, Inc. v. United States, 182 F.3d 1362 (Fed. Cir. 1999). AUSRI 1 provides that: 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 United States 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. It is the principal use of the class or kind of goods to which the imports belong, at or immediately prior to the time of importation, and not the principal use of the specific import that is controlling under the General Rules of Importation. See Group Italglass U.S.A., Inc. v. United States, 17 CIT 1177, 1177, 839 F. Supp. 866, 867 (1993). The class or kind of goods is limited to those with which the imported goods are “commercially fungible.” Primal Lite, Inc. v. United States, supra. The courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. These factors include: 1) general physical characteristics; 2) expectation of the ultimate purchaser; 3) channels of trade; 4) environment of sale (accompanying accessories, manner of advertisement and display); 5) usage of the merchandise; 6) economic practicality of so using the import; and 7) recognition in trade of this use. See Essex Manufacturing, Inc. v. United States, No. 2006-1, slip op. at 14 (Ct. Int’l Trade Jan. 3, 2006). See also Lenox Collections v. United States, 20 CIT 194, 196 (1996). See also United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976); G. Heileman Brewing Co. v. United States, 14 CIT 614, 620 (1990); and Kraft, Inc. v. United States., 16 CIT 483, 489 (1992). In the Internal Advice request we are not provided with information that addresses each of the above factors. However, we will apply the facts we have to the factors to the extent possible. General Physical Characteristics The physical characteristics of the EX-P505 are that of a digital camera in that it has the appearance of a traditional still image camera with the large protruding lens barrel, as well as an LCD panel. The ability to shoot two hours of video is typical of a standard video camera. However, it should be understood that the amount of video that can be recorded also depends on the free space on the memory card being used. The information provided does not indicate the available memory for the video. The shooting time for video cameras generally ranges from 60 minutes to 6 hours. The ability to take 220 photos per battery charge is also typical for a digital camera. The number of photos taken depends on the mode being used and the type of photo, however the number of photos recorded generally ranges from 100 to 1,000, but may also depend on the memory card being used. Based on the fact that the EX-P505 has the appearance of a digital camera and can take a typical number of still photos, we find that the general physical characteristics of the EX-P505 indicate that it is a digital camera as opposed to a video camera. Expectation of the Ultimate Purchaser In a February 1, 2005, PCMAG.com review of the EX-P505, the camera is referred to as a “full-fledged digital still camera” and a “digital camcorder”. In that review it is stated that compared to prior still cameras that can shoot video, the EX-P505 is intended to be a dual-function device to a “much greater extent.” It is further stated that despite the video camera capabilities, one may not want to “get rid of” their camcorder just yet. The review implies that the EX-P505 is a still camera with video capability, as opposed to being either a full-fledged video camera, or a video camera with still capability. Based on this criterion, we find the expectation of the ultimate purchaser to be that they are purchasing a still image camera, with video capability. Channels of Trade We do not have any information with respect to channels of trade. Therefore, this factor does not help us determine the principal function of the subject camera. Environment of Sale Next, we consider the environment in which the merchandise is advertised and displayed. The only information we have with respect to this criterion is the Casio web page describing the EX-P505, included with the internal advice request. From our own review of the Casio website, we found that “cameras” are a single product category and that there is no separate category for video cameras or camcorders. The web page for the EX-P505 refers to the product in the “at a glance” description as a “digital movie camera and a digital still image camera in one,” however highlights the camera’s still image camera capabilities by a reference to the “extremely high resolution with a 5.0 megapixel CCD.” Based on this criterion, we find that the EX-P505 is sold as a still image camera with video capability. Usage of the Merchandise We do not have any information with respect to usage of the merchandise. Therefore, this factor does not help us determine the principal function of the subject camera. Economic Practicality of So Using the Product The EX-P505 appears to be in the mid-price range of both still image cameras and video cameras. Therefore, while we do not have evidence of the usage of the EX-P505, given the price range, it would be economically practical to use it as either a still image video camera or a video camera. Based on this criterion, we find that the EX-P505 has the characteristics of both a still image camera and a video camera. Recognition in Trade of this Use The PCMAG.com review described above indicates that the camera is recognized as a “full-fledged digital still camera” with video capability. In a website that provides reviews of digital cameras, dcviews.com, the EX-P505 is described as a hybrid camera that can record still photographs “and (longer) video clips with stereo sound.” In another PCMAG.com review, dated May 12, 2006, the EX-P505 was described as among “the best still cameras for shooting video.” All three reviews indicate that the EX-P505 is a still image video camera that has video capability. Based on this criterion, we find that the EX-P505 has the characteristics of a still image video camera. Based on the above factors, we must determine the principal function of the subject camera and whether such a determination can be made. We conclude that there are sufficient factors, in particular the general physical characteristics, and the recognition in trade, that support the conclusion that the EX-P505 has the principal function of a still image camera. Therefore on the basis of GRIs 1 and 6, and Note 3 to Section XVI, HTSUS, we find the EX-P505 is classified in subheading 8525.40.40 (now 8525.80.40), HTSUS, as: 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 and other video camera recorders; digital cameras: Still image video cameras and other video camera recorders; digital cameras: Digital still image video cameras.” HOLDING: By application of GRIs 1 and 6, and Note 3 to Section XVI, HTSUS, the Casio EX-P505 digital camera is classified in subheading 8525.40.40 (now 8525.80.40), HTSUS, as: 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 and other video camera recorders; digital cameras: Still image video cameras and other video camera recorders; digital cameras: Digital still image video cameras”, with a column one, general duty rate of “free.” Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division