HQ 955416 - High Frequency Crystal Oscillators; Hybrid Integrated Circuits; EN 85.42; Legal Note 5 to Chapter 85 - United States International Trade Commision Rulings

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HQ 955416

August 31, 1994

CLA-2 CO:R:C:M 955416 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8542.20.00

Mr. Richard Ormsby
Ormsby International Customs House Brokers 765 Route 83
Suite 120
Bensenville, IL 60106

RE: High Frequency Crystal Oscillators; Hybrid Integrated Circuits; EN 85.42; Legal Note 5 to Chapter 85

Dear Mr. Ormsby:

In a letter dated October 28, 1993, to the Regional Commissioner of Customs in New York, you inquired on behalf of Toyocom USA, Inc., as to the tariff classification of certain crystal oscillators under the Harmonized Tariff Schedule of the United States (HTSUS). As stated in our letter to you on March 15, 1994, your letter was referred to this office for a response. Further, because there are open entries and protests involving this merchandise pending with Customs in Chicago, we are treating your letter as a request for internal advice.

FACTS:

The merchandise is described as TCO-series high frequency crystal oscillators [model series: 312, 730, 205, 919, 512, 519, 909, 612, 613, 615, 635, 627, 632, 101, 103, 109, 930, 940, and 970] which are used in various kinds of communication equipment, test equipment, measurement equipment, and other electronic equipment as a precision frequency reference source. The crystal oscillators consist of capacitors, resistors, a crystal resonator, and integrated circuits bonded to a single alumina/ ceramic substrate using solder or conductive epoxy. The crystal oscillators are hermetically sealed in a metal package. Each device is made using a thin or thick film process.

Samples of the following TCO models were provided to Customs in Chicago, in August 1994, for examination: 512, 629, 635, 205, 101, 612, 312, 109, 103, 919, 519, 909, and 627.

ISSUE:

Are the TCO-series high frequency crystal oscillators classifiable as hybrid integrated circuits under the HTSUS?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the Customs Cooperation Council's official interpretation of the HTSUS. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See 54 Fed.Reg. 35127, 35128 (August 23, 1989). EN 85.42(I)(2), page 1400-1401, defines hybrid integrated circuits as follows:

These are microcircuits built upon an insulating substrate on which a thin or thick film circuit has been formed. This process allows certain passive elements (resistors, capacitors, interconnections, etc.) to be produced at the same time. However, to become a hybrid integrated circuit of this heading, semiconductors must be incorporated and mounted on the surface, either in the form of chips, whether or not encased, or as encased semiconductors (e.g., in specially designed miniature casings). Hybrid integrated circuits may also contain separately produced passive elements which are incorporated into the basic film circuit in the same way as the semiconductors. Usually these passive elements are components such as capacitors, resistors or inductors in the form of chips.

The components forming a hybrid integrated circuit must be combined to all intents and purposes indivisibly, i.e., though some of the elements could theoretically be removed and replaced, this would be a long and delicate task which would be uneconomic under normal manufacturing conditions.

According to the information submitted, the TCO-series crystal oscillators contain passive elements such as capacitors and resistors, as well as active elements, such as integrated circuits, which are bonded to a single alumina/ceramic substrate. Each device is made using a thin or thick film process.

The submitted samples were sent to the Customs Laboratory in Chicago for examination. Customs Laboratory Report Number 3-94-31395-012, dated August 8, 1994, states that: there are passive and active elements on the boards; the semiconductors are incorporated and mounted on the surface; and the components cannot be easily removed and replaced. Based upon this information and examination of the submitted samples, we find that the TCO-series crystal oscillators 512, 629, 635, 205, 101, 612, 312, 109, 103, 919, 519, 909, and 627, meet the definition of a hybrid integrated circuit as set out by EN 85.42(I)(2). See also Legal Note 5(b)(ii) to chapter 85, HTSUS, which provides as follows:

For the purposes of headings 8541 and 8542:

(b) "Electronic integrated circuits and microassemblies" are:

(ii) Hybrid integrated circuits in which passive elements (resistors, capacitors, interconnections, etc.) obtained by thin- or thick- film technology and active elements (diodes, transistors, 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;

For the classification of the articles defined in this note, headings 8541 and 8542 shall take precedence over any other heading in the tariff schedule which might cover them by reference to, in particular, their function.

According to available information, we believe the model series which were not submitted for examination are also hybrid integrated circuits. Therefore, the TCO-series crystal oscillators are classifiable under subheading 8542.20.00, HTSUS, which provides for: "[e]lectronic integrated circuits and microassemblies. . . : [h]ybrid integrated circuits."

HOLDING:

The TCO-series crystal oscillators are classifiable under subheading 8542.20.00, HTSUS, which provides for: hybrid integrated circuits. The general, column one rate of duty is free.

Sincerely,

John Durant, Director
Commercial Rulings Division

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