March 8, 2006 CBP Bulletin Notice on Machines Used in CD/DVD Production
In the March 8, 2006 issue of the U.S. Customs and Border Protection Bulletin (CBP Bulletin) (Vol. 40, No. 11), CBP issued a notice proposing to revoke three classification rulings on machines for producing metal-coated glass discs containing digitally-encoded data. CBP states that it is also proposing to revoke any treatment it has previously accorded to substantially identical transactions.
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CBP states that any party who has received an interpretive ruling or decision on merchandise subject to this notice, and/or any person involved in substantially identical transactions should advise CBP by April 7, 2006, the date that written comments on the proposed rulings are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in this notice.
CBP also states that this notice covers any rulings on the subject merchandise that may exist but have not been specifically identified.
Proposed Revocation of Three Classification Rulings
Machines used in CD/DVD production. At issue are three machines: the AM 100 Automatic Mastering System (AM 100), the Sony Lean Integrated Mastering System-High Density (SLIM-HD), and a laser beam recorder. These machines utilize a laser transfer process to produce metal-coated discs encoded with data. The discs are then further processed into master discs that will then be used to mass produce digital video discs (DVDs) or compact discs (CDs). (See CBP's notice for further description of the individual items at issue.)
CBP is proposing to issue HQ 967965, HQ 967966, and HQ 967967 in order to revoke HQ 963997, HQ 962354, and HQ 962939, respectively, and reclassify the subject merchandise under HTS 9010.50.6000 as other apparatus and equipment for photographic laboratories; rather than under 9013.80.9000 as other optical appliances and instruments, not specified or included elsewhere [in Chapter 90].
(CBP notes that HQ 963997 and HQ 962354 were both protest review decisions; as a result, the proposed revocations would affect the legal principles in those decisions, but the liquidation or reliquidation of the underlying entries would remain undisturbed.)
CBP states that both protest reviews were denied; for court decision, see San Francisco Newspaper Printing Co., v. United States, 620 F Supp. 738 (Court of International Trade, decided October 1985).
It is now CBP's position that laser transfer machines, laser beam recorders or code cutters are classified in HTS 9010.50.6000, as other apparatus and equipment for photographic laboratories. CBP states that this classification will apply only to mastering equipment incorporating laser beam recorders which encode digitally-formatted data onto the photoresist coating of the glass substrates.
CBP explains that by its terms, HTS heading 9013 does not include optical appliances and instruments that are specified or included elsewhere in HTS chapter 90.
In addition, the Explanatory Notes (ENs) for HTS heading 9010, under (N), describe apparatus used to manufacture electronic integrated circuits, those used to expose circuit patterns onto a sensitized layer which has been applied to the surface of the semiconductor wafer, etc. The EN ends with "all these apparatus produce the same end result. That is, an exposure pattern which matches the desired circuit pattern and which is produced on a sensitized material which can be developed much as a photographic film is developed."
For all three machines, CBP finds that the evidence indicates that focusing the laser's beam on the photoresist layer develops the digitally encoded data in the photoresist in a process that exposes the pattern as a latent image. As such, the subject machines are considered to be performing a "photographic" process for HTS heading 9010 purposes; such a conclusion eliminates HTS heading 9013 from consideration.
proposed: HTS 9010.50.6000, duty-free; current: 9013.80.9000, 4.5%.
March 8, 2006 CBP Bulletin (Vol. 40, No. 11) available athttp://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2006/vol40_03082006_no11/