HQ 0089224 - "10 Base T Filters"; Networking Data Communications System Component; Telegraphic Apparatus; Electronic Filter; Hybrid Integrated Circuit - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1991 HQ Rulings > HQ 0089202 - HQ 0089336 > HQ 0089224

HQ 089224

July 26, 1991

CLA-2 CO:R:C:M 089224 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8517.90.80

Mr. Sydney H. Kuflik
Lamb & Lerch
233 Broadway
New York, NY 10279

RE: "10 Base T Filters"; Networking Data Communications System Component; Telegraphic Apparatus; Electronic Filter; Hybrid Integrated Circuit

Dear Mr. Kuflik:

This is in reply to your letter of February 22, 1991, on behalf of Bel Fuse Inc., requesting classification of the "10 Base T Filter" component for the 10 Base T networking data communications system, imported from Hong Kong, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

You state that "the 10 Base T Filters are specifically designed to be affixed to 10 Base T networking boards used to facilitate communications between personal computers (PC's)." You also state that the 10 Base T Filters permit PC to PC electronic signal communications to be maintained within the appropriate FCC frequency range and within the prescribed signal radiation limits.

Four models of the 10 Base T Filters are the subject of the instant ruling request. Models A556-2006-DE and A556-3899-00 10 Base T Filters consist of discrete passive components; capacitors, inductors, and transformers, which are mounted on a printed circuit board and encapsulated. Models 0556-3392-00 and 0556-3392-01 10 Base T Filters also consist of discrete passive components; capacitors, inductors, and transformers, but are mounted on a ceramic based substrate using thick film technology.

ISSUE:

What is the classification of the "10 Base T Filter"
component for the 10 Base T networking data communications system, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Heading 8517, HTSUSA, provides for: "[e]lectrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems." The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to heading 8517 of the HTSUSA, page 1360, state:

The term "electrical apparatus for line telephony or line telegraphy" means apparatus for the transmission between two points of speech or other sounds (or of symbols representing written messages, images or other data), by variation of an electric current or of an optical wave flowing in a metallic or dielectric (copper, optical fibers, combination cable, etc.) circuit connecting the transmitting station to the receiving station. The heading covers all such electrical apparatus designed for this purpose, including the special apparatus used for carrier- current line systems.

The term "apparatus" has been defined by the courts as a combination of articles and materials which are intended, adapted, and necessary for the accomplishment of some purpose. The Deseret Co., v. United States, ___CIT___, Slip Op. 86-93 (1986).

You state that the "10 Base T filters are specifically designed to be attached to and function on 10 Base T networking boards." Customs has consistently held that such networking data communications systems are properly classifiable in heading 8517, HTSUSA. See HQ 086035, dated August 2, 1990, HQ 086478, dated April 9, 1990, HQ 087468, dated January 8, 1991, HQ 086615, dated April 20, 1990, HQ 085661, dated February 15, 1990, and NY 852403, dated May 31, 1990. Certainly, the 10 Base T Filters are a combination of articles and materials (capacitors, inductors, and transformers) intended, adapted and necessary for the accomplishment of a specific purpose, i.e., that of networking data communications.

The Customs Co-Operation Council Harmonized Commodity

Description and Coding System, Summary of Comments and Observations by the Technical Team, Chapter 85, (April 25, 1979) stated:

With regard to packet switching equipment, the Technical Team reproduces below, for information, a text published by the Secretariat for the attention of the Working Party on Customs applications of computers (Doc. 21.926):

The transmission of computer system messages or parts of messages between distant points in the form of discrete packets which are transmitted over an independently operated computer driven network. The routes followed by messages are determined by the network and not by the sending systems. Packet switching is in many ways analogous to the conventional manual postal system in which an independent carrier receives and delivers letter packets for a community of users. Any one transmission line of the network may carry messages from different senders to different addresses. A message to be transmitted across a packet switched network is handled in the following manner: [t]he message is split into a number of packets of fixed maximum size each prefixed by the source and destination addresses, length and sequence number. Each packet is then handled by the network as a discrete message, being passed from one switch or node of the network to the next as soon as possible, depending on the destination address, the traffic density and the routes available. At the destination, the addresses, etc., are stripped off, the packets combined to form the original message and an acknowledgement sent back to the source according to whether or not the message is free from error. By using high speed links for the network, packets, originating from a large number of users transmitting into the network at moderate speeds, may be interleaved within the network, while maintaining full integrity and security. In this manner, network time is shared between users in a similar manner to that of a time sharing computer system.

Although the above text is not binding on us, such information is helpful in that it is demonstrative of the Customs Co-Operation Council's consideration for inclusion of this type of apparatus in Chapter 85.

You argue that the 10 Base T Filters are properly classifiable under subheading 8473.30.00, HTSUSA, which provides for parts of automatic data processing machines, since the 10 Base T networking boards are used in PCs. However, as cited above, networking boards themselves are properly classifiable in
heading 8517, HTSUSA, since the data communication system is apparatus designed for the transmission of data between two points, by variation of an electric current connecting the transmitting station to the receiving station.

In the alternative, you argue that the 10 Base T Filters are classifiable as hybrid integrated circuits, under subheading 8542.20.00, HTSUSA. The Legal Notes to chapter 85 state:

5. For the purposes of headings 8541 and 8542:

(b) "Electronic integrated circuits and microassemblies" are:

(ii) Hybrid integrated circuits in which passive elements (resistors, capacitors, interconnections, etc.) obtained by thin- or thick-film technology and active elements (diodes, transistors, momolithic integrated circuits, etc.) obtained by semiconductor technology, are combined to all intents and purposes indivisibly, on a single insulating substrate (glass, ceramic, etc.). These circuits may also include discrete components.

Pursuant to Legal Note 5.(b)(ii) above, the 10 Base T Filters cannot be considered hybrid integrated circuits due to the fact that they do not contain any active elements, i.e., (diodes, transistors, monolithic integrated circuits, etc.).

Therefore, it is Customs position that the four models of the 10 Base T Filter networking data communications system components, are properly classifiable under subheading 8517.90.80, HTSUSA, which provides for: "[e]lectrical apparatus for line telephony or telegraphy, including such apparatus for carrier-current line systems: [p]arts: [o]f telegraphic apparatus: [o]ther."

HOLDING:

Models A556-2006-DE, A556-3899-00, 0556-3392-00 and 0556- 3392-01, 10 Base T Filter networking data communications system components, which consist of discrete passive components (capacitors, inductors, and transformers) are classifiable under subheading 8517.90.80, HTSUSA, which provides for: "[e]lectrical apparatus for line telephony or telegraphy, including such apparatus for carrier-current line systems: [p]arts: [o]f
telegraphic apparatus: [o]ther." The rate of duty is 4.7% ad valorem.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling