Protest and Application for Further Review No 2506-2017-100064; Classification of a Multiple Integrated Laser Engagement System

HQ H298418 January 17, 2023 CLA-2 OT:RR:CTF:EMAIN H298418 PF CATEGORY: Classification TARIFF NO.: 9013.80.90 Director, Service Port – Otay MesaU.S. Customs and Border Protection9777 Via De La AmistadSan Diego, CA 92154 Attn: Helene Mikes, Supervisory Import Specialist Re: Protest and Application for Further Review No: 2506-2017-100064; Classification of a Multiple Integrated Laser Engagement System Dear Port Director: The following is our decision as to Protest and Application for Further Review (“AFR”) No. 2506-2017-100064, which was filed on January 25, 2017, on behalf of Cubic Defense Applications (“Cubic” or “protestant”). The protest pertains to the classification of a Multiple Integrated Laser Engagement System (“MILES”) under the Harmonized Tariff Schedule of the United States (“HTSUS”). The subject merchandise was entered by protestant on September 17, 2015. On July 29, 2016, CBP at the Port of Otay liquidated the entry under subheading 9013.80.90, HTSUS, which provides for “Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: Other devices, appliances and instruments: Other.” On January 25, 2017, protestant filed a protest and AFR regarding the tariff classification of the subject merchandise and claiming that the correct classification of the subject merchandise should be in subheading 9023.00.00, HTSUS, which provides for “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof.” FACTS: The MILES kit is imported in its Individual Weapons System (“IWS”) configuration. The MILES IWS is described as an enhanced laser engagement system intended for use by military forces in infantry combat training exercises. The MILES operates as an advanced networked laser tag, where soldiers equipped with MILES gear can train in realistic battlefield conditions while accurately recording kills and casualties in a non-lethal manner. Each MILES kit contains a textile harness and headpiece, which incorporate twelve laser detector modules, and a Small Arms Transmitter (“SAT”). The harness contains a Harness Control Unit (“HCU”) which is an electronic device that provides decoding, hit outcome determination, data storage, user interface, and control mode for maintenance purposes. The HCU contributes to the system’s ability to record hit data (i.e., when a soldier wearing the harness is hit by someone else’s laser) and records other relevant data. The SAT contains an optical window and is attached to the barrel of a soldier’s rifle and emits a color-coded laser beam when a soldier “fires” their rifle (for training purposes, the rifle would be loaded with blank ammunition, and the SAT’s laser will emit a pulse when it detects the flash and noise of a blank round being discharged). The target’s harness records the time and date of the shot, the data coder in the laser beam, and the outcome of the casualty event. The MILES is imported with the harness, headpiece, and the SAT. Protestant describes the MILES IWS on its website as follows: I-MILES IWS uses laser transmitters attached to military weapons and body sensors to detect hits and perform real-time casualty assessments to replicate combat and record data for later review. The user friendly system features small, lightweight components for individual soldiers and requires less time to attach the [SAT] and align to the weapon than previous versions. It also maintains alignment during an entire exercise. A training presentation of the MILES IWS describes the system as having a “pulsed infrared laser beam to simulate bullets. The SAT is described as using a visible laser activated by a controller gun or HCU to align the SAT on a weapon via the “iron sights or optics.” The presentation further specifies that: When the SAT fires the laser, it sends MILES coded laser containing information such as small arms or heavy machine gun, near miss codes, and Player Identification (of the attacker harness). The harness laser detection system, which receives the laser shot, decodes and displays the outcome as kill, hit, or near miss. ISSUE: Whether the MILES is classified in heading 9013, HTSUS, as an optical device and instrument or in heading 9023, HTSUS, as an instrument or apparatus designed for demonstrational purposes. LAW AND ANALYSIS: Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a) (2) as decisions on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (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 of Protests No. 2506-2017-100064 is properly accorded to Protestant 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 Customs or his designee, or by the courts.  Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes. GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. GRI 2(b) states, in pertinent part, that “[a]ny reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance” and that “classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.” GRI 3(b) provides that "composite goods consisting of different materials or made up of different components” are to be classified, where possible, “as if they consisted of the material or component which gives them their essential character.” The 2015 HTSUS headings under consideration are as follows: 9013 Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof 9023 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof Note 4 to Section XVI, HTSUS, states: Where 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. Note 3 to Chapter 90, HTSUS, provides that: The provisions of notes 3 and 4 to section XVI apply also to this chapter. Additional U.S. Note to 3 to Chapter 90, HTSUS, provides: For the purposes of this chapter, the terms "optical appliances" and "optical instruments" refer only to those appliances and instruments which incorporate one or more optical elements, but do not include any appliances or instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor 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 Fed. Reg. 35127, 35128 (August 23, 1989). With regard to Note 4 to Section XVI, the EN to Section XVI provides, in pertinent part, as follows: (VII) FUNCTIONAL UNITS (Section Note 4) This Note applies when a machine (including a combination of machines) consists of separate components which are intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or, more frequently, Chapter 85. The whole then falls to be classified in the heading appropriate to that function, whether the various components (for convenience or other reasons) remain separate or are interconnected by piping (carrying air, compressed gas, oil, etc.), by devices used to transmit power, by electric cables or by other devices. For the purposes of this Note, the expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole. The following are examples of functional units of this type within the meaning of Note 4 to this Section: *** Brewhouse machinery comprising, inter alia, sprouting or germination machines, malt crushing machines, mashing vats, straining vats (heading 84.38). Auxiliary appliances (e.g., bottling machines, label-printing machines), are however not included and should be classified in their own appropriate heading. Letter sorting systems consisting essentially of coding desks, pre-sorting channel systems, intermediate sorters and final sorters, the whole being controlled by an automatic data processing machine (heading 84.72). *** Welding equipment consisting of the welding head or tongs, with a transformer, generator or rectifier to supply the current (heading 85.15). EN (IX) to GRI 3(b) states the following:Composite goods [which] are made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts. Heading 9023 describes “instruments, apparatus and models” which are “designed for demonstrational purposes” and are “unsuitable for other uses.” EN 90.23 states, in relevant part, as follows: This heading covers a wide range of instruments, apparatus and models designed for demonstrational purposes (e.g., in schools, lecture rooms, exhibitions) and unsuitable for other uses. Subject to this proviso, the heading includes: Special demonstrational machines or appliances such as the Wimshurst machine (for experiments with electricity), the Atwood machine (for demonstrating the law of gravity), Magdeburg hemispheres (for demonstrating the effects of atmospheric pressure), the Gravesande ring (for demonstrating thermal expansion), Newton’s disc (for demonstrating the colour composition of white light). Models of human or animal anatomies (whether or not articulated or fitted with electric lighting); models of stereometric bodies, of crystals, etc. Models of this kind are usually made of plastics or of compositions based on plaster. Training dummies, constituting an inflatable life-size model of the human body with artificial respiratory parts reproducing those of a human being; used for training in the “kiss-of-life” revival method. Cross-sectional models of ships, locomotives, engines, etc., cut to show their internal operation or the functioning of an important part; panels showing, in relief, for example, the assembly of a radio (for radiotelegraphists’ schools), or the oil circulation in an engine, etc., whether or not fitted with an electric lighting system. Show-cases and exhibit panels, etc., displaying samples of raw materials (textile fibres, woods, etc.), or showing the various stages of manufacture or processing of a product (for instruction in technical schools). Models, etc., for artillery training, used in training courses held indoors. Prepared slides for microscopic study. Models of towns, public monuments, houses, etc. (of plaster, paperboard, wood, etc.). Small scale demonstrational models (of aircraft, ships, machines, etc.) generally of metal or wood (e.g., for advertising purposes, etc.). It should, however, be noted that models suitable solely for ornamental purposes are classified in their respective headings.  Relief maps (of provinces, towns, mountain ranges, etc.), relief plans of towns, and terrestrial or celestial globes in relief, whether or not printed. Military tank simulators which are used for the training (including advanced training) of tank drivers. These consist essentially of the following components: a driving cabin mounted on a moveable platform a viewing system consisting of a scale model of terrain and a television camera mounted on a traveling gantry an instructor’s console, a computer unit, a hydraulic power unit, and an electrical supply cabinet.   The Protestant maintains that the MILES should be classified in heading 9023, HTSUS, and specifically, subheading 9023.00.00, HTSUS, which provides for “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof” by application of Section XVI note 4 and Chapter 90, note 3. Protestant contends that the MILES’ clearly defined function is to demonstrate combat force-on-force training. Heading 9023 and EN 90.23 make clear that articles of heading 9023 are those designed for “demonstrational purposes” to the exclusion of all other uses. The term “demonstrational” is not defined in the HTSUS and must therefore be construed in accordance with its common meaning, which may be ascertained by reference to “standard lexicographic and scientific authorities” and to the pertinent ENs. See GRK Can., Ltd. v. United States, 761 F.3d 1354, 1357 (Fed. Cir. 2014). Dictionary definitions of “demonstrate” and “demonstration” previously cited by CBP for this purpose indicate that, in the context of “education” or “exhibits,” “demonstrational” denotes an inherent capacity to illustrate certain concepts, functions, processes, etc. See, e.g., Headquarters Ruling Letter (“HQ”) H266154, dated February 23, 2016 and HQ H042579, dated October 27, 2010 (both citing Oxford English Dictionary definition of “demonstrate,” as well as the American College Dictionary definition of “demonstration,” to define “demonstrational” as “used to explain the use or operation of [a] good”); see also HQ H050116, dated March 26, 2009 (determining that a humanoid robot designed to “explain and demonstrate the facts and science on robots” was sufficiently “demonstrational,” given the dictionary definition of “demonstrate,” because the robot “is pointing out information about robotics generally”). This understanding of the term is supported by EN 90.23, insofar as the exemplars of items “designed for demonstrational purposes” set forth in the EN all share, as a unifying characteristic, the capacity to convey conceptual or practical knowledge. See LeMans Corp. v. United States, 660 F.3d 1311, 1320-21 (Fed. Cir. 2011) (holding that the use of EN exemplars to define the scope of a tariff term is permissible). Specifically, the exemplars include small-scale models that illustrate the anatomical construction and/or mechanics of their full-scale counterparts (e.g., of human or animal bodies, vehicles, structures), interactive simulators and dummies whose use hones certain operational skills (e.g., life-saving techniques, military vehicular navigation), and dynamic objects that provide visual representations of certain technical concepts (e.g., laws of gravity, effects of atmospheric pressure). Articles which do not share this pedagogical characteristic, or otherwise fall within the definitional scope of “demonstrational”, must be classified outside heading 9023, HTSUS. See HQ H042579, supra (ruling that a “camera display model” was excluded from heading 9023 because the article “does not contain any internal electronics, which severely limits the demonstrational abilities of the display model” and because “[a] salesperson cannot use the display model to explain the use or operation of the digital camera to a consumer”). As explained above, heading 9023, HTSUS, applies to articles that are designed for demonstrational purposes. Accordingly, and without regard to the applicability of Note 4 to Section XVI, the scope of heading 9023, HTSUS, only covers articles that convey conceptual knowledge. The MILES, which is comprised of a harness, headpiece, and SAT, is a training tool that enables military personnel to practice marksmanship in a realistic and non-lethal manner. The MILES, however, does not have a clearly defined function of demonstrating combat-force-on-force training. The MILES does not play a direct role in teaching or illustrating shooting tactics or strategy, nor does it convey practical knowledge on how to shoot a lethal weapon. The MILES also does not provide training on proper weapons handling and maintenance. As such, the MILES cannot be described as “intended to contribute together to a clearly defined function” of heading 9023, HTSUS. Protestant also maintains that since the MILES is designed and used for combat force-on-force training and is of the same “type” and “kind” of system as the military tank simulators in EN 90.23(11), it should be classified in heading 9023, HTSUS. However, the MILES does not bear any resemblance to the eleven examples listed in EN 90.23, including the military tank simulators. The military tank simulators as described in EN 90.23 are intended to serve as a platform and are intended to be combined with a driving cabin, viewing system, an instructor’s console, a computer unit, a hydraulic power unit and an electrical supply cabinet to form a complete military tank simulator. When using the product, a trainee can be familiarized with the operation of a real military tank itself as well as experience what an operator would encounter in a real-world environment. The MILES is not similar in form or function to a military tank simulator. The MILES does not recreate an environment for demonstrational purposes, nor does the MILES demonstrate how a particular machine or device operates or is configured. Instead, the MILES system operates in a manner similar to an advanced, networked laser tag, wherein soldiers equipped with MILES gear can train in realistic battlefield conditions while accurately recording kills and casualties in a non-lethal manner. Unlike the military tank simulator described in EN 90.23(11), which demonstrates the configuration and operations of a tank, the MILES is merely a tool used to teach military tactics. Such a product is not covered by heading 9023, HTSUS. This approach is consistent to HQ 965028, dated July 10, 2001, and HQ 964597, dated July 19, 2001, where CBP (then the U.S. Customs Service) held that certain “manipulative kits” for teaching mathematical concepts fell ou