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HQ 952992

December 11, 1992

CLA-2 CO:R:C:M 952992 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9013.80.60

Mr. Scott A. Cohn
Grunfeld, Desiderio, Lebowitz & Silverman 12 East 49th Street
New York, NY 10017

RE: Optical Barcode Reader; Optical I.D. Unit; Functional Unit; Chapter 90, Additional U.S. Note 3; Chapter 90, Note 3; Section XVI, Note 4

Dear Mr. Cohn:

This is in response to your letter of October 8, 1992, on behalf of KAO Infosystems Company, concerning the classification of optical barcode readers and optical I.D. units under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of optical barcode readers and optical I.D. units. The barcode reader, used in packaging, reads information from barcode graphs on storage totes in order to determine color and density characteristics of the flexible diskettes contained within the totes. The reader has plastic lenses and operates under the same principle as the barcode scanner used in supermarket check out lines. A laser diode light is focused on barcode lines, and the light reflects from the white spaces in the code to a receiver that converts the signals into unique ASCII codes. The information obtained from the barcode is a unique seven digit number. This number is transmitted to the host computer, and the computer searches for the number in a data base file, thereby locating all of the attributes of the diskettes contained within a particular tote. This information is needed to route totes containing disks to the proper manufacturing area for processing.

The primary difference between the optical I.D. unit and the optical barcode reader is that the optical I.D. unit can store and retrieve data from its own memory, whereas the optical barcode reader can only transmit scanned data back to a host computer. The optical I.D. unit emits an infra-red LED invisible light beam which permits the unit to read information from, or write information onto, data carrier I.D. plates located on the plastic storage totes which transport shutters and shells within the flexible diskette assembly areas. The data carrier, which is imported with the optical I.D. unit, is a rectangular printed circuit board, featuring memory chips and photo sensors equipped to receive and send information to the optical I.D. unit by means of the light beam. The optical element in the photo terminal containing infra- red LED beams consists of a glass lens.

ISSUE:

What is the proper classification of the optical barcode reader and the optical I.D. unit under the HTSUS?

LAW AND ANALYSIS:

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 is determined according to the terms of the headings and any relative section or chapter notes.

Chapter 90, additional U.S. note 3, HTSUS, states that:

[f]or the purposes of this chapter, the terms "optical appliances" and "optical instruments" refer only to those appliances and instruments which incorporate one or more optical elements, but do not include any appliances or instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose.

As both the optical barcode reader and the optical I.D. unit are optical instruments (both incorporate optical lenses), and because they are not elsewhere described under the HTSUS, we find that they are classifiable under subheading 9013.80.60, HTSUS, which provides for: "[l]iquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: [o]ther devices, appliances and instruments:

The question as to whether the optical I.D. unit and the corresponding data carrier are classifiable as a unit is answered by chapter 90, note 3, HTSUS. It states that:

[t]he provisions of note 4 to section XVI apply also to this chapter.

Section XVI, note 4, HTSUS, states that:

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

Therefore, for classification purposes, under chapter 90, note 3, HTSUS, and section XVI, note 4, HTSUS, the optical I.D. unit with the printed circuit board is a functional unit.

HOLDING:

The optical barcode reader and the optical I.D. unit are classifiable under subheading 9013.80.60, HTSUS. The general, column one rate of duty is 9 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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