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HQ 955273


March 7, 1994
CLA-2 CO:R:C:M 955273 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 8517.82.00

District Director
U.S. Customs Service
Key Tower Building #2200
1000 2nd Avenue
Seattle, Washington 98104-1049

RE: Protest No. 3001-93-100445; M95 Fax Option Kit; stuffed printed circuit board; cable; screws; guide; labels; software; GRI 3(b); set; Note 6, Chapter 85; EN 85.17; apparatus; The Deseret Co., v. United States; NY 842533; 8473.30.40; Additional U.S. Rule of Interpretation 1(c); parts and accessories; 8471.99.60; HRL 951331; HRL 952659

Dear Sir:

This is in response to the Application for Further Review of Protest No. 3001-93-100445, which pertains to the tariff classification of the M95 Fax Option Kit under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The protestant states that the M95 Fax Option Kit (fax option kit) is imported in a condition ready for retail sale and consists of a stuffed printed circuit board, a cable, screws, an installation guide, a fax label and fax logo, and a floppy disk containing software. The fax option kit is used in conjunction with a personal computer (PC), i.e., Apple Macintosh with system 6.05 or higher or a PC with DOS 3.0 or higher, and a NEC Model 95 Silentwriter printer. The stuffed printed circuit board is installed in the NEC Silentwriter printer using the cables and screws included in the kit. The software containing the program instructions is loaded into the PC to control the function of the stuffed printed circuit board installed in the printer.

To use the fax option capability after installation, the document to be faxed must be displayed on the PC monitor screen. With the document thus resident in the operational RAM memory, the menu asks if the user wants the document printed or faxed. If the fax option is chosen, the document is sent from the computer to the printer and then out to the receiving party.

The entries of the fax option kit were liquidated starting on April 2, 1993, under subheading 8517.82.00, HTSUS, as other telegraphic apparatus. In a protest timely filed on June 28, 1993, the protestant contends that the fax option kit is classified under subheading 8473.30.40, HTSUS, as parts and accessories of the machines of heading 8471, not incorporating a cathode ray tube, or alternatively under subheading 8471.99.60, HTSUS, as other units suitable for physical incorporation into automatic data processing machines or units thereof. The protestant contends that the fax option kit is a set classified pursuant to GRI 3(b), HTSUS, with the essential character of the set imparted by the stuffed printed circuit board. Furthermore, the protestant notes that classification of the software is excluded from classification with the set pursuant to Note 6, Chapter 85, HTSUS, and is, therefore, classified under subheading 8524.90.40, HTSUS, as other recorded media.

The competing subheadings are:

8471.99.60 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included...Other...
Other...Other....Units suitable for physical incorporation into automatic data processing machines or units thereof.

8473.30.40 Parts and accessories (other than covers, carrying cases and the like)suitable for use solely or principally with machines of headings 8469 to 8472...Parts and accessories of the machines of heading 8471...Not incorporating a cathode ray tube.

8517.82.00 Electrical apparatus for line telephony or telegraphy, including such apparatus for carrier- current line systems; parts thereof...Other apparatus...Telegraphic....

ISSUE:

Is the M95 Fax Option Kit classified under subheading 8517.82.00, HTSUS, as other telegraphic apparatus or under subheading 8473.30.40, HTSUS, as parts and accessories of the machines of heading 8471, not incorporating a cathode ray tube, or under subheading 8471.99.60, HTSUS, as other units suitable for physical incorporation into automatic data processing machines or units thereof?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes...."

As the protestant has noted, classification of the software is excluded from classification with the fax option kit pursuant to Note 6, Chapter 85, HTSUS, and is, therefore, classified under subheading 8524.90.40, HTSUS, as other recorded media. The principal component of the fax option kit is the stuffed printed circuit board. The additional components, cable, screws, installation guide, label, and logo are components necessary for the installation and functioning of the stuffed printed circuit board. Therefore, they are classified with the stuffed printed circuit board pursuant to GRI 1, HTSUS.

We are of the opinion that the stuffed printed circuit board is classified under subheading 8517.82.00, HTSUS, as other telegraphic apparatus. In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System ENs may be utilized. The ENs, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989). EN 85.17 (pgs. 1360-1363), states that:

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 fibres, combination cable, etc.) circuit connecting the transmitting station to the receiving station.

EN 85.17 (II) TELEGRAPHIC APPARATUS states that telegraphic apparatus:

...is essentially designed for converting texts or images into appropriate electrical impulses, for transmitting those impulses, and at the receiving end, receiving these impulses and converting them either into conventional symbols or indications representing the text, or into the text or image itself.

The principal function of the stuffed printed circuit board is the transmission of data between two points. The protestant contends that subheading 8517.82.00, HTSUS, provides for complete apparatus, not parts which are incomplete and inoperative in and of themselves. This is incorrect. 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, 10 CIT 609, (1986). The stuffed printed circuit board is an apparatus; it is an article that is intended, adapted and necessary for the accomplishment of sending documents from one party to another. Moreover, similar merchandise, i.e., modem boards which are add- on boards for PCs, is classified under subheading 8517.40.10, HTSUS, as modems, of a kind used with data processing machines of heading 8471. See, New York Ruling (NY) 842533 dated June 23, 1989.

The protestant contends that the stuffed printed circuit board is classified under subheading 8473.30.40, HTSUS, as parts and accessories of the machines of heading 8471, not incorporating a cathode ray tube. A provision for "parts" or "parts and accessories" shall not prevail over a specific provision for such part or accessory. See, Additional U.S. Rule of Interpretation 1(c), HTSUS. Therefore, as the stuffed printed circuit board is specifically provided for under subheading 8517.82.00, HTSUS, it is not classifiable under subheading 8473.30.40, HTSUS, as parts and accessories of the machines of heading 8471, not incorporating a cathode ray tube.

Alternatively, the protestant argues that the stuffed printed circuit board is classified under subheading 8471.99.60, HTSUS, as other units suitable for physical incorporation into automatic data processing machines or units thereof. The protestant cites Headquarters Ruling Letter (HRL) 951331 dated September 18, 1992, as evidence of the classification of the stuffed printed circuit boards under subheading 8471.99.60, HTSUS. HRL 951331 classified Local Area Network (LAN) Interface Boards under subheading 8471.99.60, HTSUS. The LAN boards performed two major functions, data transmission (heading 8517, HTSUS) and data processing (heading 8471, HTSUS). HRL 951331 held that the data processing function imparted the essential character to the LAN boards and not the data transmission function. Therefore, HRL 951331 revoked numerous rulings which classified the LAN boards pursuant to their data transmission function under subheading 8517.82.00, HTSUS. It should be noted that HRL 952659 modified the classification of HRL 951331 to subheading 8471.99.15, HTSUS.

The stuffed printed circuit board under consideration is not similar to the LAN boards because they do not have data processing capabilities. The stuffed printed circuit board's function is that of data transmission. Therefore, it is properly classified under subheading 8517.82.00, HTSUS, as other telegraphic apparatus.

HOLDING:

The M95 Fax Option Kit, excluding the software, is classified under subheading 8517.82.00, HTSUS, as other telegraphic apparatus. The software is classified under subheading 8524.90.40, HTSUS, as other recorded media.

This protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision, together with the Customs Form 19, should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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