Color Television Receivers from Taiwan; Notice of Final Scope Ruling Coach Master International Corporation

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-009]

Color Television Receivers from Taiwan; Notice of Final Scope

Ruling Coach Master International Corporation

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final affirmative scope ruling--antidumping duty

order on color television receivers from Taiwan.

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SUMMARY: On July 7, 1997, Coach Master International Corporation (CMI)

requested that the Department of Commerce (the Department) issue a

scope ruling excluding the ``Kitchen Coach Unit'' (KCU) from the scope

of the antidumping duty order on color televisions from Taiwan. On

August 22, 1997 we initiated a formal scope inquiry pursuant to 19 CFR

353.225 and requested that interested parties submit comments and/or

factual information addressing the scope issue. In addition, we

requested that interested parties address the criteria for scope

determinations which are listed at 19 CFR 351.225(k)(2). We have

analyzed the record in this case, including comments of interested

parties submitted during this scope inquiry. For the reasons outlined

below, we recommend that the Department determine that CMI's KCU is

covered by the scope of the antidumping duty order.

Background

In its July 7, 1997 request for a scope ruling, CMI maintains that

its Kitchen Coach Unit meets the established criteria for exclusion

from the scope of the order covering color television receivers (CTVs)

from Taiwan. CMI argues that the primary purpose of the KCU is to

provide in-home, learn-while-doing cooking instruction. The KCU is in

the category of combination CTV units, which include products that

function as of color televisions as well as have characteristics not

mentioned in the scope of the order. Many of the features of the KCU

have received design and utility patents, which CMI claims distinguish

the Kitchen Coach from other combination CTV units already included in

the order.

On July 25, 1997, the International Brotherhood of Electrical

Workers, the International Union of Electronic, Electrical, Salaried,

Machine & Furniture Workers, and the Industrial Union Department (AFL-

CIO) (the petitioners in this case), submitted comments in support of

their contention that the Kitchen Coach Unit falls within the scope of

the order. They contend that ``[the product's] surface physical

resemblance to a color television receiver is reinforced by its

internal componentry (such as its color picture tube, deflection yoke,

tuner, and so on) that results in the KCU's ability to receive and

display color television broadcast signals.'' The petitioners base

their position on the physical characteristics of the KCU and prior

cases whereby the Department found combination color televisions to be

within the scope of the order. See Scope Inquiry in Color Television

Receivers from Korea, A-580-008, Concerning Gold Star Combination TV/

VCR Model KMV-9002, (Gold Star) and Combination TV/Radio Model RCV-0615

(April 5, 1991).

Analysis

19 CFR 351.225 of the Department's regulations govern scope

proceedings. On matters concerning the scope of an order, our primary

basis for determining whether a product is covered are the descriptions

of the product contained in the petition, the initial investigation,

and the International Trade Commission, Treasury, or Department

determinations. When these criteria are not dispositive we further

consider additional criteria: (1) The physical characteristics of the

product; (2) the expectations of the ultimate purchasers; (3) the

ultimate use of the product; (4) the channels of trade, and (5) the

manner in which the product is advertised or displayed. See 19 CFR

351.225(k)(2). In this case, the descriptions of the product contained

in the petition, the investigation and relevant agency determinations

are not dispositive of the scope issue. Accordingly, we have analyzed

the record with respect to the five additional criteria listed in 19

CFR 353.225(k)(2).

To determine whether this model was within the scope of the order,

we reviewed the descriptions of the merchandise in the petition, the

ITC determination, and the antidumping duty order.

The petition defined the scope of the investigation as the

following:

The class or kind of merchandise embraced by this petition

(``color television receiver'') includes devices which are capable

of receiving and processing both broadcast and nonbroadcast

electronic signals and converting those signals into a visual and

audio practice. This class or kind of merchandise includes all CTVs

that (1) have the same or similar general physical characteristics;

(2) are considered CTVs in the expectations of ultimate purchasers;

(3) move through the same or similar channels of trade; (4) are

advertised and displayed in the same or similar manner; and (5) are

capable of use as TVs.

(See Petition for Relief Under the U.S. Antidumping Law with

Respect to Color Television Receivers Imported from Taiwan, May 2,

1983).

The ITC Report states that an industry in the United States is

materially injured by reason of imports from Taiwan * * * of color

television receivers, provided for an item 685.11 and 685.14 of the

Tariff Schedules of the United States (TSUS). Additionally, the report

states:

The imported products subject to these investigations are

complete and incomplete color television receivers, including color

television receiver kits. Complete receivers are fully assembled and

ready to function when purchased by the consumer * * * Also included

are projection television receivers. Consumers use these television

receivers for watching broadcasts directly off the air or from a

cable source. Television receivers may also be used as display units

for video games, video tape recorders, or computers.

See ITC Investigation No. 731-TA-134 (Final), Color Television

Receivers from the Republic of Korea and Taiwan, 49 FR 17824 (April 25,

1984).

Subsequently, the antidumping duty order on color television

receivers from Taiwan defined the scope of the investigation as ``color

television

[[Page 806]]

receivers, complete or incomplete, other than video monitors,'' and

stated that it was ``intended to cover all color television receivers

regardless of tariff classification except the monitor component of

component video systems.'' (See Color Television Receivers, Other than

Video Monitors, from Taiwan, 49 FR 18337 (April 30, 1984). Following

this order was the Gold Star scope decision in which the Department

determined that combination color televisions were within the scope of

the order. See Scope Inquiry in Color Television Receivers from Korea,

A-580-008, Concerning Gold Star Combination TV/VCR Model KMV-9002,

(Gold Star) and Combination TV/Radio Model RCV-0615 (April 5, 1991).

A plain reading of the petition, ITC determination and the order

demonstrates that combination units, such as the KCU, were neither

specifically included in, nor excluded from these prior scope

descriptions. (See Color Television Receivers, Except for Video

Monitors, from Taiwan, 51 FR 46895, concluding prior descriptions are

ambiguous with respect to combination units and that Diversified

Products analysis is warranted.) Because these prior scope descriptions

are ambiguous as to whether a unit consisting of several items,

including a television, is covered by the scope of the order, we

applied the five criteria for making scope determinations, which are

set forth in our regulations at 19 CFR 353.252(k)(2).

Documents and parts thereof from the underlying investigation

deemed relevant by the Department to the scope of the outstanding order

were made part of the record of this determination and are referenced

herein.

Physical Characteristics

CMI argues that KCU has many specific features and design patents

that distinguish it from other color television receivers from Taiwan.

According to CMI, the product includes an instructional CD component,

9'' color television tuner and screen, stereo sound, and dual

processors. The unit is controlled by a patented multi-directional

waterproof, kitchen-proof remote control. The consumer package consists

of six interactive CDs, recipe card set, cooking index, and hardware

unit. The major components of the hardware unit include: data storage

device, integrated unit (or module), and a remote control. The

integrated unit includes a television set with a screen and a video

compact disc player, both housed in the same cabinet. (See CMI's

submission of Sept. 10, 1997, at 12.) CMI emphasizes that, although

``the product includes a functioning television receiver, it was

conceived of, and designed, specifically for the learn-while-doing

application, specifically in the kitchen.'' The product literature

provided by CMI describes the Kitchen Coach Unit as a unique

integration of a ``micro-processor'' (a dedicated computer with

embedded software), video CD player, and high quality television. CMI

argues that the multiple patents employed in the KCU, including the

``embedded menuing system, single finger operation, auto pause

functionality, and multi-directional remote control,'' distinguish it

from other combination CTVs. (See Exhibit B-1 to CMI's submission of

Sept. 10, 1997)

Petitioners argue that the KCU has the physical characteristics of

a color television, notably the ability to receive and process video

and audio presentation. Petitioners note that ``the KCU's features and

components are prominently those of a color television receiver such

that the KCU receives and displays on its screen color television

broadcast signals.'' The petitioners also note that in the promotional

brochure the KCU is described as ``three great products in one--(1) a

top of the line, 128 cable-channel color TV (with 69 broadcast

channels); (2) a high quality stereo audio CD player; and most

importantly (3) a video CD player with interactive software providing

your own personal cooking coach.'' (See petitioners' comments of

September 26, 1997 at 3, citing Exhibit B-2 of CMI's July 2, 1997

submission.)

The Department determines that the KCU possesses the primary

physical characteristics of a color television receiver as defined in

the antidumping duty order on color television receivers from Taiwan.

Specifically, the KCU has the design features and physical

characteristics ``for receiving a broadcast signal and reproducing it

in video and audio form.'' See Color Television Receivers, Except for

Video Monitors, from Taiwan, 51 FR 46,895, 406,902 (Dec. 29, 1986). The

fact that the KCU has several proprietary patents does not render the

unit incapable of performing as a color television receiver. Because

KCU has the physical characteristics to receive and process both

broadcast and non-broadcast electronic signals, and convert those

signals into a visual and audio presentation, we conclude that the KCU

possesses the physical characteristics of a color television receiver.

Ultimate Use

CMI claims that the disc mode operation of the KCU renders the

product different from other CTV combination units. Stored on the

preferred video compact disc is an introductory message which describes

the operation and capabilities of the unit. The system has the ability

to display retrieved information from the disc either statically on the

screen of the integrated unit, or as video with audible reception. CMI

asserts that this feature, combined with the consumer package

containing six interactive CDs, recipe card set, cooking index,

hardware unit, and remote control, suggest that the ultimate use of the

product is primarily for cooking instruction, not simply viewing

television.

Petitioners argue that CMI could have achieved its professed goals

with a video monitor alone. It opted instead for a color television

receiver because a video monitor is incapable of receiving and

displaying color television broadcast signals. As in the Gold Star

determination, the combination features of the KCU do not substantially

alter the in-scope function of the product. Similar to Gold Star's CTV/

VCR combination unit, the KCU's CTV can be used without the video

compact disc (VCD) component, whereas the VCD component cannot be used

without the CTV. Accordingly, the petitioners conclude, ``the CD

facility distinguishes the KCU from a CTV that does not have a

combination CD, just as a VCR facility distinguishes a CTV/VCR

combination unit from a CTV that does not have a combination VCR, but

this facility is subsidiary to the KCU functioning as a color

television receiver.'' (See petitioners' comments of July 25, 1997 at

5.) We agree with petitioners. The fact that the KCU may be used for

cooking instruction purposes in addition to clearly in-scope purposes

does not remove the KCU from the broader class of TVs. Because the KCU

is capable of operating as a television while not in operation as a

VCD, we determine that the ultimate use of the KCU is as a television

receiver.

Channels of Trade

CMI claims that the KCU travels in channels of trade different from

those typical of consumer electronics. (See respondent's declaration of

September 9, 1997 at 16). They note that the KCU is marketed to

potential retailers through housewares and food trade shows, and is

sold primarily in kitchen stores, and housewares departments.

Respondent also states that CMI markets and sells the KCU in locations

where

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other kitchen appliances, kitchen equipment and food are sold.

Specifically, the KCU is sold in ``upscale specialty kitchen stores

(Home Place, Dorothy Lane Markets, and Sur la Table) and housewares

departments of department stores: Bon Marche Housewares, Macy's Cellar

(a department of the store devoted primarily to cooking); and Marshall

Field's Housewares department.'' (See respondent's submission of

September 9, 1997 at 24).

Petitioners claim that because the KCU is a consumer electronics

product, it could be marketed in the same channels of trade as other

combination CTV units. The fact that it is sold in the housewares

department of retail stores, as opposed to the consumer electronics

department, does not sufficiently establish a separate channel of

trade. Petitioners argue that CMI's statement that ``* * * the product

is not typically sold at retail alongside televisions'' (See

respondent's submission of September 9, 1997 at 23) implies that it is,

on occasion, sold alongside televisions; and thus should be considered

to move in the same channels of trade. (See petitioners' comments of

September 26, 1997 at 12).

The Department notes that although many of the components of the

KCU are designed for instructional purposes, it is functionally a

consumer electronics product. In prior scope determinations, where

combination CTV/VCR and CTV/radio combination units were classified as

consumer electronics goods, we considered them to travel in the same

channels of trade as other color television receivers. (See Goldstar at

20). In this case however, the record indicates that the KCU is

marketed through different channels of trade than most in-scope

products. Respondent claims that the KCU is not typically sold in the

same kinds of retail outlets as are televisions, and petitioner does

not provide sufficient information contradicting this claim. (See

respondent's submission of September 9, 1997 at 24). If the Department

accepts KCU's contention that the noted consumers represent a different

channel of trade from consumer electronics, then the KCU travels in

different channels of trade than other products subject to the order.

Expectations of Ultimate User

CMI contends that the primary purpose of the KCU is to provide in-

home, learn-while-doing cooking instruction. While acknowledging that

the product is portrayed as a television with added features, CMI

contends that it is the additional components (such as the ``kitchen

proof'' remote control, interactive compact discs, recipe card set, and

cooking index) that prompt consumers to purchase the KCU rather than

other television receivers. CMI therefore argues that the purchasers

expect the KCU to offer cooking techniques, and that this additional

feature distinguishes the KCU from color televisions included in the

scope of the order.

Petitioners cite CMI's promotional brochure, which advertises the

KCU as a product that allows purchasers to, ``jump back and forth

instantly between TV and the coach learning mode * * * It's so flexible

and easy that you can prepare gourmet dishes just during the

commercials of your favorite TV program.'' Specifically, petitioners

note that the KCU ``will function as a top of the line, 128 cable-

channel color TV (with 69 more broadcast channels).'' (See petitioners'

comments of July 25, 1997 at 5).

Because the promotional literature emphasizes the KCU's ability to

receive television signals, the Department determines that the ultimate

purchaser would expect the product to function as a color TV in

addition to functioning as a cooking instruction device. The fact that

the ultimate purchaser would expect the KCU to function as a television

supports the position that the product be considered in-scope.

Additionally, it is evident from the literature that the KCU/CVD

function could be used independently of the TV. As determined in the

Gold Star decision, ``the radio is no more than an added feature which

does not detract from the unit's primary use as a television

receiver.'' See Scope Inquiry in Color Television Receivers from Korea,

A-580-008, Concerning Gold Star Combination TV/VCR Model KMV-9002, and

Combination TV/Radio Model RCV-0615 at 17. In this case, we conclude

that the CVD is an added feature which does not remove the KCU from

within the scope of the order.

Manner in Which Product Is Advertised

CMI contends that the KCU is marketed primarily to aspiring chefs

as an interactive, combination TV/CD unit, for cooking instruction. CMI

notes that the product offers ``convenient features for kitchen use,

including a kitchen-proof remote control.'' However, CMI also

acknowledges that the KCU functions as a television. The literature

states that the KCU is actually, ``Three great products in one--(1) a

top of the line, 128 cable-channel color TV (with 69 more broadcast

channels); (2) a high quality stereo audio CD player; and most

importantly (3) a video CD player with interactive software providing

your own personal cooking coach.'' (See petitioner's comments of

September 26, 1997 at 11, citing Exhibit B-2 of CMI's July 2, 1997

submission). It is advertised as a mini entertainment center for the

kitchen.

The promotional literature and descriptive video identify the KCU

as a color television that allows the viewer to ``switch instantly from

the `coach' mode to a favorite TV program.'' (See Exhibit B-2 of CMI's

July 2, 1997 submission). The literature also defines the product as an

integration of a micro-processor, video CD player, and higher quality

television. In emphasizing its simplicity, the literature states that

the user can ``prepare gourmet dishes just during the commercials of

your TV program.'' (See Exhibit B-1 of CMI's July 2, 1997 submission).

The Department recognizes KCU's dual use as both a tool for cooking

instruction and as a television receiver. It is the function of the

latter that precludes the KCU from exemption in this scope proceeding.

Since the KCU is capable of functioning as a television receiver

without functioning as a cooking aid, and since it is clearly

advertised as a television, we determine that the product is, for scope

purposes, a color television subject to the antidumping duty order on

color television receivers from Taiwan.

Conclusion

KCU's CTV/CD combination unit is similar to other combination units

previously classified by the Department as color television receivers,

notably the combination CTV/VCR model KMV-9002 made by Gold Star which

the Department determined is within the scope of the antidumping duty

order on color television receivers from Korea. Fundamental to the

Department's analysis is the ``in-scope'' function of the KCU. Since it

is capable of receiving and processing broadcast and non-broadcast

signals, it is properly classified as a CTV. This criteria is

consistent with that employed in Gold Star. Moreover, the Department

has reaffirmed in prior scope determinations that various CTV

combination units fall within the scope of the Taiwanese order.\1\ Our

analysis of the physical

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characteristics of the product and prior scope determinations on

combination units strongly supports the conclusion that the KCU is

within the scope of the order.

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\1\ See Color Television Receivers, Except for Video Monitors,

from Taiwan, 51 FR 46,895 (Dec. 29, 1986) in which the Department

found Shin-Shirasuna's Model EEE combination portable CTV/radio,

Emerson's AVC 13 CTV/stereo/radio/cassette player/recorder/digital

clock, Emerson's TC7 CTV/radio/electronic digital clock, and

Emerson's PC5 Portable CTV/radio with built-in battery recharger

circuit to be within the scope of the order because ``the fact that

the unit is in combination with another feature does not alter its

primary function.'' See also, Funai Electric Company, Ltd. v. United

States 713 F. Supp. 422 (CIT 1989) whereby the Court decided that

``[i]n physical terms the television portion of the importation is

prominent.''

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The physical characteristics of CMI's Kitchen Coach Unit are

predominantly those of a color television receiver. The KCU is referred

to as a color television in both the promotional literature and CMI's

submittal of September 10, 1997. As in the case of Gold Star

Combination TV/VCR and TV/Radio units from Korea, it can be used solely

as a television, while its other function--the compact disk portion--

cannot be used without the television portion of this combination unit.

Thus, the ultimate purchasers of the KCU would expect it to function as

a color television. Furthermore, the fact that the KCU includes other

features does not necessarily remove it from the color television

category. Although we recognize that the KCU may be marketed through

different channels of trade, the totality of our findings yields

substantial record evidence in support of our conclusion.

Recommendation

For the above reasons, we recommend that the KCU be included within

the scope of the order on color television receivers from Taiwan.

Dated: December 22, 1997.

Richard Weible,

Acting Deputy Assistant Secretary, Group III.

[FR Doc. 98-281 Filed 1-6-98; 8:45 am]

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