Application for Further Review of Protest No. 3001-10-100028; classification of “Playskool Dance Cam”

HQ H097656 August 12, 2010 CLA-2: OT:RR:CTF:TCM H097656 CATEGORY: Classification TARFIFF NO.: 9503.00.0080 Port Director U.S. Customs and Border Protection Port of Seattle 1000 Second Avenue, Suite 2100 Seattle, WA 98104 Re: Application for Further Review of Protest No. 3001-10-100028; classification of “Playskool Dance Cam” Dear Port Director: This is in response to Protest and Application for Further Review (“AFR”) No. 3001-10-100028 filed by counsel on behalf of Target Stores (“Protestant”) and forwarded by your memorandum of March 6, 2010. The protest concerns the classification and liquidation of three entries of merchandise referred to as the “Playskool Dance Cam.” The merchandise was entered on September 14, 2008, and October 9, 2008. U.S. Customs and Border Protection (CBP) liquidated the entries on July 31, 2009, and August 21, 2009, under heading 8543.70.9650 of the Harmonized Tariff Schedule of the United States (HTSUS), as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in [Chapter 85]; …” The CBP Import Specialist assigned to this case believes that the merchandise should be classified under heading 8543, HTSUS, or under heading 8525, HTSUS, which provides for other television cameras. Protestant claims that the merchandise’s principal use is that of a toy and, as such, is correctly classified under heading 9503, HTSUS, which covers, in part, “other toys.” FACTS: The merchandise consists of a console containing a video camera, and video and sound reproducing apparatus. The merchandise is marketed and sold as a toy for children ages three to six years old. It has three modes of operation and connects to any television with an audio/video input jack, although the manufacturer advises that it works best on a television with a screen 27” or smaller. In its “Dance Along” mode, children watch themselves on television dancing along with animated characters to over twenty popular preschool-age songs that are pre-loaded on the device. In its “Cool Moves” mode, using one of four pre-programmed tunes, children are taught new dance moves by an animated on-screen character. Finally, its “Freestyle Mode” allows children to connect an MP3 or CD player (not included) and dance along to their own music without the animated characters or backgrounds. ISSUE: Whether the subject merchandise is classified under heading 8525, HTSUS, as a television camera; under heading 8543, HTSUS, as an electrical machine or apparatus, not elsewhere specified or included; or under heading 9503, HTSUS, as a toy. LAW AND ANALYSIS: Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification.  The protest was timely filed on January 13, 2010, which was within 180 days of liquidation of the entries.  See Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further review is properly accorded to the protest pursuant to 19 C.F.R. 174.24(b), because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of CBP or his designee, or by the customs courts. Specifically, the question of the classification of the merchandise was an issue of first impression at the time the protest was filed. 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 based on 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. In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized.  The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 8980, 54 Fed. Reg. 35127 (August 23, 1989). The HTSUS (2008) provisions under consideration in this case 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: * * * 8525.80 Television cameras, digital cameras and video camera recorders: Television cameras: * * * 8525.80.30 Other: 8525.80.3010 Color. * * * * 8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: * * * 8543.70 Other machines and apparatus: * * * Other: * * * Other: * * * 8543.70.96 Other: * * * 8543.70.9650 Other. * * * * 9503.00.00 Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: * * * 9503.00.0080 Other. * * * * Section XVI of the HTS includes Chapter 85, and General Note 1(p) to Section XVI excludes articles of Chapter 95 from classification in Chapter 85. Thus, if the instant merchandise is classifiable as a “toy,” it cannot fall under heading 8525, HTSUS, or heading 8543, HTSUS. In Minnetonka Brands, Inc. v. United States, 110 F.Supp. 2d 1020, 1026 (Ct. Int’l Trade 2000), the court held that heading 9503, HTSUS, is a “principal use” provision within the meaning of Additional U.S. Rule of Interpretation 1(a), HTSUS, and an object is classified as a “toy” under that heading if it is designed and used for amusement, diversion or play, rather than for practicality. Therefore, classification under the heading is controlled by the principal use of the goods of that class or kind to which the imported goods belong in the United States at or immediately prior to the date of importation. In determining the principal use of a product, CBP considers a variety of factors including the product’s general physical characteristics, the expectations of the ultimate purchaser, channels of trade, environment of sale, use, and recognition in trade. See United States v. Carborundum Co., 536 F.2d 373 (Fed. Cir. 1976) Here, the Playskool Dance Cam is marketed and sold by a well-known toy manufacturer as a device to amuse young children by allowing them to sing along with children’s songs and/or imitate the dance moves of on-screen cartoon characters. It is typically sold in toy stores or toy departments of mass merchandisers. The camera on the device produces low-quality graphics that are best viewed on relatively small televisions, thus illustrating its limited functionality as a video camera. These factors support a finding that the principal use of the Playskool Dance Cam is that of a toy, and the item is therefore classified under heading 9503, HTSUS. Accordingly, you are advised to ALLOW the protest in full. HOLDING: By application of GRI 1, the Playskool Dance Cam is classified under subheading 9503.00.0080, HTSUS (2008), which provides for “Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: Other.” The column one, general rate of duty at the time of entry was “Free.” You are advised to ALLOW the protest in full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public, on the CBP website located at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. It has also come to our attention that a published ruling is in effect in which CBP classified a product similar in use to the instant product under heading 8525, HTSUS. See NY R02760, dated November 14, 2005 (the “Fisher-Price Star Station Entertainment System,” which allows children to imitate karaoke singing or entertainment “stars” and have their images be projected onto a television, was classified as a sound recording or reproducing apparatus). We intend to initiate a reconsideration in accordance with 19 U.S.C. 1625(c) so that we do not have rulings in effect that are inconsistent with our opinion. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division