HQ 960384

April 1, 1999

CLA-2 RR:CR:GC 960384 HMC

CATEGORY: Classification

TARIFF NO.: 8525.40.00

Port Director of Customs

610 S. Canal St.

Chicago, IL 60607-4523

RE: Protest 3901-96-101654; QV-10 Digital Camera; Still Image Video
Camera.

Dear Port Director:

This is our decision on Protest 3901-96-101654, filed against your
classification of the Casio QV-10 digital camera. The entries under
protest were liquidated on May 10, 1996, and this protest timely filed
on July 3, 1996. In preparing this decision, consideration was given to
supplemental submissions by counsel on behalf of the protestant, dated
November 24, 1997, March 30, 1998, May 20, 1998, and March 5, 1999, as
well as arguments presented at our meeting on November 30, 1998.

FACTS:

The merchandise under protest is a hand-held digital still ("point and
shoot") camera manufactured by Casio, identified as the "LCD Digital
Camera QV-10." The QV-10 has a compact design that resembles a small
automatic 35 mm camera. It is based on camcorder technology and uses a
charge coupled device (CCD) to record, process and store images in
digital format. Company literature states that the QV-10 captures images
with a fixed focus and auto exposure. It contains a built-in storage
capacity of 2 MB Flash RAM that is able to retain up to 96 images. The
camera's back features a 1.8\" color LCD, used as a viewfinder for
shooting images and a zoom that enlarges stored images and permits one
to focus on a specific area of an image. The LCD lets the user view
previously recorded images for examination and editing.

The QV-10 has built-in connection ports for video and computer cables.
The QV-10 is capable of sending and receiving images and text to and
from a personal computer ("PC") to create business presentations. This
feature is possible due to accessory software included with the QV-10
that allows a PC to design, arrange and edit recorded images and to add
data, such as charts, to the images. The stored images may be deleted,
edited or re-recorded countless times without loss of image quality. The
newly edited images may be downloaded back to the QV-10 and taken
anywhere by the user. The camera also connects to any television through
its "video-in" port connector for taping such presentations to a VCR.

The merchandise was entered under a provision for other television
cameras in subheading 8525.30.90 of the Harmonized Tariff Schedule of
the United States (HTSUS). However, the entries were liquidated under
subheading 8525.40.00, HTSUS, as still image video cameras (SVC) and
other video camera recorders. However, protestant claims that the
merchandise is classifiable as other video recording or reproducing
apparatus under subheading 8521.90.00, HTSUS, or, in the alternative, as
other machinery, apparatus and equipment (other than the machine tools
of headings 8456 to 8465), for type-founding or typesetting of
subheading 8442.30.00, HTSUS.

The 1996 HTSUS provisions under consideration are as follows:

> 8442 Machinery, apparatus and equipment (other than the machine tools
> of headings 8456 to 8465), for type-founding or typesetting, for
> preparing or making printing blocks, plates, cylinders or other
> printing components; printing type, blocks, plates cylinders and other
> printing components; blocks, plates, cylinders and lithographic
> stones, prepared for printing purposes (for example, planed, grained
> or polished); parts thereof:
>
> 8442.30.00 Other machinery, apparatus and equipment\...Free

\* \* \* \*

> 8521 Video recording or reproducing apparatus, whether or not
> incorporating a video tuner:
>
> 8521.90.00 Other\....2.2%

\* \* \* \*

> 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 or other video camera
> recorders:
>
> 8525.40.00 Still image video cameras and other video camera
> recorders\...3.4%

ISSUE:

Whether the QV-10 digital camera is classifiable as a still image video
camera under subheading 8525.40.00, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part that for
legal purposes, classification shall be determined according to the
terms of the headings and any relative section or chapter notes, and
provided the headings or notes do not require otherwise, according to
GRIs 2 through 6.

The text of heading 8525, HTSUS, 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.

Counsel for the protestant claims that the QV-10 is more than a SVC
because it interacts with a computer to do presentations. To support its
claim, counsel relies on HQ 086847, dated April 20, 1990, which provides
a definition of SVCs as cameras which use "solid-state image sensors to
sense image-forming light and a *[separate recording medium to record
and store the picture]{.underline}*."

We do not agree with the contention that the QV-10 is not a SVC. We note
that the *McGraw-Hill Encyclopedia of Science and Technology*
(electronic ed.) states that

> \[m\]ost cameras contain an aperture and shutter for controlling the
> amount of light reaching the light-sensitive material (exposure). The
> receiving material, the film, is usually a plastic sheet of flexible
> strip coated with a photosensitive silver halide emulsion. It can also
> be an electronic device such as a Newvicon tube or charge-coupled
> device, or a photosensitive material for a specific purpose.
>
> \[Cameras\] can be distinguished by function, application, film size,
> or format. Distinctions are also based on type or viewfinder and body
> construction. Cameras for still photography include box,
> point-and-shoot, view-and-press, roll film, 35-mm, instant picture,
> stereo, underwater, and panoramic. Some categories overlap. Still
> video cameras use electronic sensors instead of film, and store the
> image on magnetic media or optical disks.

This is a current definition of SVCs, which does not state that a
removable recording medium is essential for SVCs. We find that the main
function of the QV-10 is to capture images. The ability to transfer the
stored images to a computer is an ancillary function which permits
manipulation through the use of computer software to print or arrange
the captured images in presentation format. The user may transfer the
newly rearranged images back to the QV-10. The QV-10 falls within the
description of still video cameras as provided by the terms of heading
8525, HTSUS. This is supported by the Explanatory Notes and the
Compendium of Classification Opinions by the Harmonized System
Committee.

The Harmonized Commodity Description And Coding System Explanatory Notes
(EN's) constitute the official interpretation of the Harmonized System.
While not legally binding on the contracting parties, and therefore not
dispositive, the EN's provide a commentary on the scope of each heading
of the Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes the
EN's should always be consulted. Also, the Compendium of Classification
Opinions represent decisions by the HSC on the classification of various
products at the international level that were presented to the
Harmonized System Committee (HSC) of the World Customs Organization for
consideration. The HSC administers the international Convention on the
Commodity Description and Coding System and amends the HTS. When a
decision of the HSC is published in the Compendium it should receive the
same weight as the ENs. *See* T.D. 89‑80, 54 Fed. Reg. 35127, 35128
(Aug. 23, 1989).

EN 8525, at page 1487, states:

\(D\) **STILL IMAGE VIDEO CAMERAS**

**AND OTHER VIDEO CAMERA RECORDERS**

> This group covers still image video cameras and other video camera
> recorders consisting of a combination of a video camera and a video
> recording or reproducing apparatus. These apparatus record the images
> taken by the camera. Certain video camera recorders may also record
> programmes from a television receiver (using an external video tuner).
> The images thus recorded can be reproduced by means of an external
> television receiver. \...

The HSC recently amended the Compendium of Classification Opinions,
listing a decision on the classification of the subject QV-10 as an
article of heading 8525. Annex K/21 to Doc. 42.750E (HSC/22/Nov.98). The
decision states as follows:

> 8525.40 1. **Digital still camera** fitted with a Charge Coupled
> Device (CCD) and based on video camera recorder technology. It
> records, processes and stores images in digital format. It features a
> built-in high-resolution 1.8\" colour LCD screen that is used as a
> viewfinder when shooting images and as a monitor when viewing recorded
> or uploaded images. The semiconductor memory of the apparatus holds up
> to 96 colour still images. The images can be transferred to an
> automatic data processing machine by means of an optional accessory
> package for viewing and storing on an automatic data processing
> machine. For this purpose it has been designed with built-in digital
> input and output connection ports. It is also designed with a
> connection port for video cables so that the images can be transferred
> directly to a TV or VCR. It can also deliver its stored images to
> labels by connecting to a label printer specifically designed for use
> with the digital camera.

As indicated above, the digital camera QV-10 was the digital camera
under consideration by the HSC when it made this decision. This Opinion
specifically classifies the subject merchandise in subheading 8525.40,
HTSUS. It is Customs view that this is indeed the correct classification
for the QV-10.

We note that the classification of digital cameras in heading 8525,
HTSUS, by Customs dates back to 1993, when it issued a series of rulings
classifying these types of cameras under subheading 8525.30.00, HTSUS.
*See* HQ 954725, HQ 954726, and HQ 954727, all dated August 17, 1993,
modifying previous rulings which classified digital cameras under
subheading 9013.80.60, HTSUS. In 1996, subheading 8525.40.00, HTSUS, was
created, which specifically provided for still image video cameras.
Since then Customs has classified SVCs under this subheading. *See* NY
817941, dated January 14, 1996. Therefore, we conclude that the QV-10 is
classifiable under subheading 8525.40.00, HTSUS.

Counsel further claims that the merchandise is described by heading
8521, HTSUS, citing HQ 956012, dated March 30, 1994. HQ 956012
classified the Kodak EktaPro HS Motion Analyzer (EktaPro), model 4540,
an ultra high-speed video recording system with the ability to record up
to 4,500 full frames per second and up to 40,500 pictures per second for
immediate playback. The EktaPro permitted analysis and image storage of
extremely rapid events such as air bag deployment and ballistics
studies. No evidence was provided that the QV-10 captures images of
extremely rapid events for analysis. The evidence provided suggests that
the subject merchandise functions as a point-and-shoot digital camera.
Thus the QV-10 is significantly different from the EktaPro.

In addition, EN 8521, at page 1483, states

\(A\) **RECORDING AND COMBINED RECORDING**

**AND REPRODUCING APPARATUS**

> In television image and sound recording apparatus electric impulses
> (signals) which correspond to the images and the sound are recorded on
> media, generally consisting of magnetic tape. Generally the sound
> accompanying the image is recorded simultaneously on the same media,
> on one or several different tracks from that carrying the video
> recording. The signals can be obtained by connecting the recorder
> either to a television camera or to a television receiver.
>
> When used for reproduction, the apparatus convert the recording (e.g.
> the magnetic patterns on the tape) into video signals. These signals
> are passed on either to a transmitting station or to a television
> receiver.

\(B\) **REPRODUCING APPARATUS**

> These apparatus are designed only to reproduce images and sound
> directly on a television receiver. The media to be used in these
> instruments are prerecorded mechanically, magnetically or optically on
> special recording equipment. The following are examples of such
> apparatus:
>
> \(1\) Apparatus using videodiscs in which the image and sound data are
> stored on the disc by various methods and picked up by a laser optical
> reading system, capacitive sensor, pressure sensor or magnetic head.
>
> \(2\) Apparatus that decodes and converts into a video signal image
> data recorded on a light sensitive film (the sound being recorded by a
> magnetic process on the same film).

The QV-10, in this instance, does not function to record images or sound
from electrical signals on media like a magnetic tape. The merchandise
is a device that captures images of objects by light received through
its lens and uses a charge coupled device (CCD) to record, process and
store images in digital format. The QV-10 is therefore not classifiable
in heading 8521, HTSUS.

In addition, it is Customs view that heading 8442, HTSUS, does not
include the QV-10 because it describes machinery for type-founding or
typesetting, for preparing or making printing blocks, plates, cylinders
or other printing components. The subject merchandise does not perform
any of these functions and, therefore, heading 8442 is inapplicable.

HOLDING:

Under the authority of GRI 1, the QV-10 is classifiable under subheading
8525.40.00, HTSUS, as still image video cameras and other video camera
recorders. The 1996 rate of duty is 3.4%.

This protest should be DENIED. 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 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 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.ustreas.gov, by means of the Freedom of Information Act, and
other methods of public distribution.

Sincerely,

John Durant, Director

Commercial Rulings Division