HQ 0951715 - Crystal oscillators; Heading 8542; Chapter 85, note 5(b)(ii); GRI 1; EN 85.42(I)(2); H. Conf. Rep. No. 576; Chapter 85, note 5(b)(iii); EN 85.42 (II); NY 841311; Section XVI, note 2(a); Section XVI, note 2(b). - United States International Trade Commision Rulings

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HQ 951715

July 27, 1992

CLA-2 CO:R:C:M 951715 AJS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8473.30.40

Mr. Dennis Heck
Director, Trade Services
Tower Group International, Inc.
5420 West 104th Street
Los Angeles, CA 90045

RE: Crystal oscillators; Heading 8542; Chapter 85, note 5(b)(ii); GRI 1; EN 85.42(I)(2); H. Conf. Rep. No. 576; Chapter 85, note 5(b)(iii); EN 85.42 (II); NY 841311; Section XVI, note 2(a); Section XVI, note 2(b).

Dear Mr. Heck:

This is in reply to your letter of April 24, 1992, requesting the tariff classification of the "SG Series Crystal Oscillators" (COs) from Japan under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The subject COs consist of a mounted piezo-electric quartz crystal and a CMOS (i.e., complementary metal oxide semi- conductor) IC (i.e., integrated circuit) oscillation circuit which are mounted on a solder-plated metal lead frame substrate prior to plastic encapsulation. The SG-51 and SG-531 COs are "thru hole" mounted devices while the SG-615 and SG-636 are "surface mounted" devices.

ISSUE:

Whether the COs are properly classifiable within heading 8542, HTSUS, which provides for electronic integrated circuits and microassemblies; or within heading 8473, HTSUS, which provides for parts and accessories of the machines of heading 8471 (i.e., automatic data processing (ADP) machines and units thereof).

LAW AND ANALYSIS:

Heading 8542, HTSUS, provides for electronic integrated circuits and microassemblies. Hybrid ICs, a type of electronic IC, are described as "circuits in which passive elements (resistors, capacitors, interconnections, etc.) obtained by thin or thick-film technology and active elements (diodes, transis- tors, monolithic 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;". Chapter 85, note 5(b)(ii). The subject COs do not satisfy this description. They do not contain passive elements, but an IC and discrete quartz crystal. In addition, these elements are not combined indivisibly on a single insulating substrate, but mounted separately on a lead frame. In the HTSUS, classification is determined according to the terms of the headings and any relative section or chapter notes. General Rule of Interpretation (GRI) 1. Accordingly, the subject COs do not satisfy the terms of this heading, as it relates to electronic ICs, pursuant to the above chapter note.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) state that hybrid ICs are micro- circuits built up on an insulating substrate on which thin or thick film circuit has been formed. EN 85.42 (I)(2), p. 1400 (1992). Furthermore, this process allows certain passive elements (resistors, capacitors, interconnections, etc.) to be produced at the same time. EN 85.42 (I)(2). The subject COs also do not satisfy these descriptions. They consist of an IC and quartz crystal which are produced individually and then mounted onto a lead frame. As mentioned previously, the COs also do not contain any passive elements but only an IC and quartz crystal which are both active elements. While the ENs are not dispositive, they provide a commentary on the scope of each heading and offer guidance for interpretation of the HTSUS. H. Conf. Rep. No. 576, 100th Cong., 2d Sess., p. 550, reprinted in 1988 U.S. CODE CONG. & ADMIN. NEWS p. 1582. Therefore, we find the above ENs instructive for determining that the subject COs do not satisfy the description of an electronic IC.

Heading 8542, HTSUS, also provides for electronic microassemblies. These devices consist of a molded module, micromodule or similar type, consisting of discrete, active or both active and passive, components which are combined and interconnected. Chapter 85, note 5(b)(iii), See also EN 85.42 (II), p. 1401. The subject COs do not satisfy this
description. They do not consist of discrete components. Discrete components are indivisible and are the basic electronic construction components in a system. EN 85.42 (II). They may have a single active electrical function (semiconductor devices defined by Note 5(A) to Chapter 85) or a single passive electrical function (resistors, capacitors, interconnections, etc.). EN 85.42 (II). However, components consisting of several electric circuit elements and having multiple electrical functions, such as integrated circuits, are not considered as discrete components. EN 85.42 (II). As stated previously, the subject COs consist of an IC. Therefore, we find the above ENs instructive for determining that the subject COs do not satisfy the description of an electronic microassembly within the meaning of heading 8542, HTSUS.

In NY 841311 (June 1, 1989), Customs addressed the classification of a hybrid clock oscillator. You cite this ruling in support of your suggested classification based on the claim that the COs are a functionally equivalent product but manufactured differently. However, as stated in the chapter notes and ENs for heading 8542, HTSUS, the manufacturing process used for this type of merchandise is important for classification within heading 8542. As discussed previously, the COs are not manufactured by one of the processes required for classification within heading 8542, HTSUS. However, the hybrid clock oscillator is manufactured by a process described within the legal notes to heading 8542, HTSUS. Therefore, we do not find NY 841311 instructive for the classification of the subject COs.

Heading 8473, HTSUS, provides for parts and accessories of the machines of heading 8471. You claim that the subject COs are principally used as microprocessor timing references in computer applications. Parts which are goods included in any of the headings of chapters 84 and 85 are in all cases to be classified in their respective headings. Section XVI, note 2(a). The COs are not a good provided for within a respective heading of either of these chapters. Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading are to be classified with the machines of that kind. Section XVI, note 2(b). The COs satisfy this description. They are used principally with the machines of heading 8471. Accordingly, they satisfy the terms of this heading. More specifically, they are described within subheading 8473.30.40, HTSUS, which provides for "[p]arts and accessories of the machines of heading 8471: not incorporating a cathode ray tube (CRT)."

HOLDING:

The subject crystal oscillators are classifiable within subheading 8473.30.40, HTSUS, which provides for parts and accessories of the machines of heading 8471, HTSUS, not incorporating a CRT. Merchandise classifiable within this subheading is currently duty-free under General Column 1.

Sincerely,

John Durant, Director
Commercial Rulings Division?

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