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HQ 954249


August 9, 1993

CLA-2 CO:R:C:M 954249 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.99.15

Mr. Mark Jones
Import/Export Specialist
Hitachi America, Ltd.
50 Prospect Avenue
Tarrytown, New York 10591-4698

RE: Hitachi Telecom (USA), Inc.; Asynchronous Transfer Mode Switch/Multiplexor; Model AMS5000; ATM; LAN; WAN; Automatic Data Processing Machine; ADP; Control or Adapter Units; Telegraphic Switch; HQ 952628; HQ 954093; HQ 954059; HQ 952659

Dear Mr. Jones:

This is in response to your letter of May 6, 1993, to the Regional Commissioner of Customs, New York, requesting classification of the Hitachi Telecom (USA), Inc., Asynchronous Transfer Mode Switch/Multiplexor model AMS5000, under the Harmonized Tariff Schedule of the United States ("HTSUS"). Your letter was forwarded to this office for reply.

FACTS:

The Hitachi Asynchronous Transfer Mode Switch/Multiplexor ("ATM") model AMS5000 is designed for and marketed to network service providers for the interconnection and communication of local area networks ("LANs"). The ATM functions as a switching device, routing data packets of information. The ATM closely resembles a packet switching device. In addition to general LAN automatic data processing ("ADP") information, the ATM is capable of transmitting digital video, and multimedia, such as medical imaging and high definition television ("HDTV").

ISSUE:

Is the Hitachi ATM classifiable under subheading 8517.30.50, HTSUS, which provides for telegraphic switching apparatus, or under subheading 8471.99.15, HTSUS, which provides for ADP "control or adapter units"?

LAW AND ANALYSIS:

The importer states that the ATM is designed for and marketed to network service providers for the interconnection of LANs.

Legal note 5(B) to chapter 84, HTSUS, provides guidance regarding the scope of the provisions for "units" of automatic data processing machines. It states as follows:

Automatic data processing machines may be in the form of systems consisting of a variable number of separately housed units. A unit is to be regarded as being a part of the complete system if it meets all of the following conditions:

(a) It is connectable to the central processing unit either directly or through one or more other units; and

(b) It is specifically designed as part of such a system (it must, in particular, unless it is a power supply unit, be able to accept or deliver data in a form (code or signals) which can be used by the system).

The ATMs are connectable numerous CPUs through the LAN systems. Furthermore, the instant ATMs are designed for, and essential to, the ADP systems with which they are integrated because they process and format the data of the computers they serve.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), pages 1299-1300, describe separately presented ADP units as follows:

This heading also covers separately presented constituent units of data processing systems. Constituent units are those defined in Parts (A) and (B) above as being parts of a complete system.

Apart from central processing units and input and output units, examples of such units include:

(4) Control and adaptor units such as those to effect interconnection of the central processing unit to other digital data processing machines, or to groups of input or output units which may comprise visual display units, remote terminals, etc.

Since the issuance of HQ 952659, dated October 7, 1992, Customs has consistently held that LAN units are classifiable as ADP control or adapter units in subheading 8471.99.15, HTSUS, because they meet the chapter 84, legal note 5(B) definition.

Furthermore, they meet the ENs, pages 1299-1300, which describe separately presented ADP units. The instant ATM performs LAN functions by, in fact, creating larger LAN networks.

Therefore, although the ATM is capable of transmitting other digital signals, such as video images and medical imaging, it is principally used for ADP LAN interconnection.

The current legal precedent for this merchandise is HQ 952628, dated October 13, 1992, which held that a Packet Assembler /Disassembler was classifiable in subheading 8471.99.15, HTSUS, which provides for ADP control or adapter units. In HQ 952628 we stated:

It is now our conclusion that the data processing features of control and adaption do in fact represent the principal function of the PAD unit, directing classification in subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [o]ther: [c]ontrol or adapter units."

Additionally, the ATM is similar to the merchandise ruled upon in HQ 954093, dated July 22, 1993, and HQ 954059, dated July 16, 1993, which held that LAN packet switching merchandise was properly classifiable under subheading 8471.99.15, HTSUS.

HOLDING:

The Hitachi model AMS5000 Asynchronous Transfer Mode Switch/ Multiplexor, which is designed for the interconnection of LANs, is properly classifiable under subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [o]ther: [c]ontrol or adapter units." The rate of duty is Free.

Sincerely,


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