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HQ 952298

July 30, 1993

CLA-2 CO:R:C:M 952298 RFA


TARIFF NO.: 9031.40.00

District Director of Customs
1 East Bay Street
Savannah, GA 31401

RE: Protest No. 1704-90-000269; Ledascan System; Optical Measuring and Checking System; Optical Reader; Automatic Data Processing (ADP) machines; Section XVI, note 1(m); heading 8471; EN 84.71; EN 90.31; functional unit; Chapter 90, Note 3; Section XVI, Note 4

Dear District Director:

The following is our decision regarding the request for further review of Protest No. 1704-90-000269, which concerns the classification of Ledascan System under the Harmonized Tariff Schedule of the United States (HTSUS). The entries of the subject merchandise were liquidated on August 17, 1990, and September 7, 1990. The protest was timely filed on November 15, 1990.


The merchandise, labeled as the "Ledascan" System, is a high speed number verification system which is used with web-fed presses or document conveyors. According to the literature, "[t]he 'Ledascan' number verification system offers two major benefits: (1) Ledascan is a 100% inspection system which can read and verify numbers at web speeds of up to 600 ft/min. . . .(2) Ledascan provides continuous monitoring which can be used to guarantee high numbering print quality."

The two main components of the Ledascan are: a charged- coupled device (CCD) camera which converts number-shapes into digital images; and a dedicated high speed processing unit which receives data from the camera and recognizes the characters. A single camera is able to scan a "numbering field" up to sixteen character-spaces wide, containing numerals, letters, punctuation, symbols, or blanks. The dedicated processing unit is a purpose- designed computer which has two distinct functions: character recognition by converting digital camera output into characters according to pre-set criteria; and comparison with numbers taken from an external source, or mathematical number verification. The system can store up to 16 sets of instructions for recognition and verification.

The CCD camera requires high intensity, even lighting which is provided through a fiber optic cable to a small optical head. The optical head is mounted close to the CCD camera's lens.

The Ledascan Systems were entered under subheading 8471.99.90, HTSUS, as other optical readers. The entries were liquidated under subheading 9031.40.00, HTSUS, as other optical measuring or checking instruments.

The subheadings under consideration are as follows:

8471.99.90: . . .[m]agnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included (con.): [o]ther (con.):. . . [o]ther: . . . [o]ther:. . . [o]ther. . .

Goods classifiable under this provision have a general, column one rate of duty of 3.7 percent ad valorem.

9031.40.00 [m]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter;. . .
[o]ther optical instruments and appliances

Goods classifiable under this provision have a general, column one rate of duty of 10.0 percent ad valorem.


Whether the Ledascan System is classifiable as other optical readers or as other optical measuring or checking instruments and appliances under the HTSUS?


Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Section XVI, note 1(m) excludes articles provided for in Chapter 90, HTSUS, from being classified in chapters 84 or 85. Therefore, if the Ledascan System is provided for in chapter 90, then consideration of chapter 84 is excluded.

According to the information provided, the Ledascan System verifies or checks numbers and bar codes to determine if they are in the proper sequence and meet print quality standards. The term "checking" is not defined in the HTSUS. A tariff term that is not defined in the HTSUS or in the Harmonized Commodity Description and Coding System Explanatory Notes (EN) is construed in accordance with its common and commercial meaning. Nippon Kogasku (USA) Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).

In United States v. Corning Glass Works, 66 CCPA 25,27, 586 F.2d 822, 825 (1978), the Court of Customs and Patent Appeals, quoting Webster's Third New International Dictionary, 381 (1971), stated:

"Check" is defined as "to inspect and ascertain the condition of especially in order to determine that the condition is satisfactory; *** investigate and insure accuracy, authenticity, reliability, safety, or satisfactory performance of ***; to investigate and make sure about conditions or circumstances ***."

The Ledascan System uses the CCD camera's optical lenses as an input device for the images on the checks and converts the image into electric signals. These electric signals are compared to referenced characters in the memory of the processing unit. The processing unit also compares numbering sequences in production runs with numbering sequences calculated by the Ledascan System. The processing unit can be programmed so that when it discovers a discrepancy between the scanned information and reference characters, it will (i) display a message on its screen, or (ii) sound an alarm, or (iii) shut down the production run. Based upon this description of how the Ledascan System operates, we find that it meets the definition of "checking" apparatus.

The Ledascan System is comprised of two main components: a CCD camera and a dedicated processing unit. Chapter 90, note 3 states that the provisions of note 4 to Section XVI apply to Chapter 90. Section XVI, note 4 states:

Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission device, 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 [or chapter 90], then the whole falls to be classified in the heading appropriate to that function.

The subject merchandise is a functional unit that performs a "checking" function as defined above. Therefore, we find that the Ledascan System is classifiable under heading 9031, HTSUS, as other optical checking and measuring instruments and appliances.

The importer argues that the merchandise should be classified under heading 8471, HTSUS, as an optical reader based upon the definition set forth in the ENs. The ENs constitute the Customs Cooperation Council's official interpretation of the HTSUS. While not legally binding, 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. EN 84.71, page 1300, states in pertinent part:


This group comprises a wide range of machines, many being electro-magnetic or electronic, which usually complement each other and are generally used in systems for compiling statistics or for accounting or other operations.

The group includes magnetic or optic readers, machines for transcribing data onto data media in coded form and machines which process data and which decode the result.

The group includes machines only if they are not elsewhere specified or included. . . .


Magnetic or optical readers read characters, generally in a special form, and convert them into electric signals (impulses) which can be directly used by machines for transcribing or processing coded information. . . .

(2) OPTICAL READERS. These do not require the use of special ink. The characters are read directly by a series of photoelectric cells and translated on the binary code principle.

The readers described above are classified in this heading only if presented separately. When combined with other machines (e.g., machines for transcribing data onto data media in coded form and machines for processing such data in coded form) they are classified with those machines provided they are presented with them.

The importer argues that the optical scanners (CCD cameras) together with the processing unit which makes up the Ledascan System, meets the definition of an optical reader. Webster's II New Riverside University Dictionary, 978-79 (1988), defines "read" as "to examine and grasp the meaning of (written or printed characters, words or sentences; . . . to interpret the meaning or nature of through close examination or observation. . . ."

However, we find that the Ledascan System does not meet the definition of an optical reader because it does not "read" data to be used in compiling statistics or for accounting other such operations. The Ledascan System does not "read" but "checks" or verifies the data against pre-programed standards for number accuracy as well as print quality. The function of the entire unit is specifically provided for in heading 9031, HTSUS, as other optical measuring or checking instruments or appliances. Therefore, classification of the merchandise under heading 8471, HTSUS, is inappropriate.


For the foregoing reasons, we find that the Ledascan System is classifiable under subheading 9031.40.00, HTSUS, as other optical measuring or checking instruments.

Based upon the above reasoning, you should deny the protest in full. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.


John Durant, Director
Commercial Rulings Division

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