HQ 0955312 - Protest No. 2704-93-101951; Telco Simplex; Keyboards; Combined Input/Output Units; Chapter 84, Note 5(B); HQ 950679; 8471.92.20; 8471.90.90 - United States International Trade Commision Rulings

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HQ 955312
January 27, 1994

CLA-2 CO:R:C:M 955312 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.92.10

District Director
U.S. Customs Service
300 S. Ferry Street, Rm. 1001
Terminal Island, CA 90731

RE: Protest No. 2704-93-101951; Telco Simplex; Keyboards; Combined Input/Output Units; Chapter 84, Note 5(B); HQ 950679; 8471.92.20; 8471.90.90

Dear District Director:

The following is our decision regarding the request for further review of Protest No. 2704-93-101951 concerning your action in classifying and assessing duty on the 70 ZON 531M M/Telco Simplex and 50 ZON 530 M/Telco Simplex devices under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of the 70 ZON 531M M/Telco Simplex and 50 ZON 530 M/Telco Simplex devices, which are designed for the input, collection, and communication of data for computer integrated manufacturing applications. Among other applications, they support inventory and access control, job tracking and costing, production monitoring, order processing, and labor reporting. Each device includes a 16-key alpha-numeric keyboard, a magnetic strip reader, a 16-character display, and 32K of battery backed RAM for application programming. Each device is capable of supporting two peripheral devices, such as a bar code reader and a printer.

Functionally, the devices are remote data input terminals with an incorporated modem or LAN adapter for communication with a remote host computer. They are not designed to receive and display data from a host computer, and the devices themselves do not process data for display purposes.

The merchandise was entered under subheading 8471.92.20, HTSUS, as keyboards. The entry was liquidated on March 12, 1993, under subheading 8471.92.90, HTSUS, as other input units. The protest was timely filed on June 11, 1993.

The subheadings under consideration are as follows:

8471.92.20: [a]utomatic 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: [o]ther: [i]nput or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: [o]ther: [k]eyboards.

Goods classifiable under this provision receive duty-free treatment.

8471.92.90: [i]nput or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: [o]ther: [o]ther: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 3.7 percent ad valorem.

8471.92.10: [i]nput or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: [c]ombined input/output units.

The general, column one rate of duty for goods classifiable under this provision is 3.7 percent ad valorem.

ISSUE:

Whether the 70 ZON 531M M/Telco Simplex and 50 ZON 530 M/Telco Simplex devices are classifiable under subheading 8471.92.20, HTSUS, as keyboards, under subheading 8471.92.90, HTSUS, as other input units, or under subheading 8471.92.10, HTSUS, as combined input/output units.

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.

It is our position that, for classification purposes, the devices are not classifiable under subheading 8471.92.20, HTSUS. They are not described as keyboards because, based upon our understanding, they are not keyboards for automatic data processing machines. The devices do not possess full function keys and they do not operate in the standard typewriter style format. In fact, counsel for the protestant refers to the devices as "keyboard input devices". The devices possess keypads in addition to many other components to perform a function different from that of a standard keyboard classifiable under subheading 8471.92.20, HTSUS.

We must now determine whether the devices constitute input and output units classifiable under either subheading 8471.92.90, HTSUS, or subheading 8471.92.10, HTSUS. Chapter 84, note 5(B), HTSUS, states that:

[a]utomatic 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 to be 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).

Such units entered separately are also to be classifiable in heading 8471.

The subject devices meet the above definition of a unit. They are connectable to a host computer through the use of modem or LAN adapter, and they are designed to be part of such a system in that they deliver data in a form which can be used by the host computer. Therefore, the devices act as both input and output units. Data is entered into the devices and that data is then converted into signals to be processed by the host computer.

For the claim that the devices are classifiable under subheading 8471.92.90, HTSUS, it has been suggested that the holding in HQ 950679, dated July 1, 1992, is dispositive. In that ruling we held that a "Mountable Trackball" (MT) computer mouse was classifiable under subheading 8471.92.90, HTSUS. The MT is used to generate a cursor on the data or menu selections of a computer screen or at the place where data is to be input through the keyboard. By pushing a selector button on the MT, the data or menu selection is entered into the computer. The MT was designed to be connected directly to a computer.

It is our position that the MT is distinguishable from the subject devices. The output function of the MT was considered minimal because the "mouse", which was connected to a computer, was transferring data input directly to the computer. However, with regard to the subject devices, the output function is important, because without the use of a modem or LAN adapter, a host computer would not be able to receive signals from the devices. The devices are not connected directly to a host computer, a characteristic which makes the devices highly effective. As opposed to the MT, we regard the output functions of the subject devices to be as necessary to the operation of the devices as are their input functions. Consequently, we find that the devices are not classifiable under subheading 8471.92.90, HTSUS, but are specifically classifiable under subheading 8471.92.10, HTSUS.

HOLDING:

The 70 ZON 531M M/Telco Simplex and 50 ZON 530 M/Telco Simplex are classifiable under subheading 8471.92.10, HTSUS. Because the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to deny the protest.

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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