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HQ 958419




April 22, 1996

CLA-2 RR:TC:MM 958419 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8517.50.50

Mr. Jerry Killion
Manager, Operations Support
Sanyo Manufacturing Corporation
2001 Sanyo Avenue
San Diego, CA 92173

RE: Voice Interface Unit (VIU); Telecommunication Apparatus for Carrier-Current Line Systems or for Digital Line Systems; Electrical Machines and Apparatus Not Specified Elsewhere; Headings 8517 and 8543; EN 85.17(III); NY 810627, revoked

Dear Mr. Killion:

This is in response to your letter dated July 24, 1995, requesting reconsideration of NY 810627, issued by the Area Director of Customs, New York Seaport, on May 22, 1995, to Porter International, Inc., on behalf of Sanyo Manufacturing Corporation. In NY 810627, Customs determined the tariff classification of the Voice Interface Unit (VIU) under the Harmonized Tariff Schedule of the United States (HTSUS). Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057)(1993), notice of the proposed revocation of NY 810627 was published on March 20, 1996, in the Customs Bulletin, Volume 30, Number 12. No comments were received in response to the notice.

FACTS:

The merchandise, labeled as the Voice Interface Unit (VIU), is the interface between the in-home telephone equipment and the digital telephone network, the FPN 1000 System. The FPN 1000 System is a flexible and cost-effective way to provide customers with telephone service over coaxial cable networks- the same networks used to deliver conventional analog or compressed digital video programming. The end-user will be able to make local and long-distance telephone calls through the VIU and the FPN 1000 System. This system is suited for cable network hubs and Fiber To The Feeder (FTTF) serving areas of 200 to 2,000 subscribers. All communications are transmitted over a single broadband distribution system using fiber/coaxial cable technology. Telephone, data, and video occupy separate radio frequency (RF) channels. The network backbone is organized architecturally as independent high speed parallel buses. The feeder from the fiber hub is a standard cable television tree and branch mixed fiber/coaxial cable distribution network to the home. The VIU connects to the cable network receiving and transmitting signals.

The VIU supports standard DTMF or pulse dial telephones, modems, or FAX machines. The VIU converts the analog signal from the telephone equipment to a digital signal with which it time division multiplexes and pulse code modulates its RF transmit signal (inbound to the headend). It likewise demultiplexes and demodulates the outbound signals from the headend which are in its time slot and converts them to analog "voice" signals. A built-in auxiliary port facilitates the connection of data and video equipment to the VIU.

ISSUE:

Is the VIU classifiable as telecommunication apparatus for carrier-current line systems or for digital line systems, or as other electrical machines and apparatus not specified elsewhere, 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.

In NY 810627, dated May 22, 1995, Customs determined that the VIU was classifiable under subheading 8517.81.00 (now subheading 8517.80.10) HTSUS, as other telephonic apparatus. You indicate that the VIU should be classifiable under subheading 8543.80.60 (now subheading 8543.89.60), HTSUS, because the VIU is specifically designed for connection to a telephone apparatus and a telephone network. Subheading 8543.89.60, HTSUS, provides for: "[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter. . . : [o]ther machines and apparatus: [o]ther: [a]rticles designed for connection to telegraphic or telephonic apparatus or instruments or to telegraphic or telephonic networks. . . . "

To be classifiable under heading 8543, HTSUS, the VIU must not be described in any other heading within chapter 85, HTSUS. In 1996, the HTSUS amended Heading 8517, HTSUS, to provide for telecommunication apparatus for carrier-current line systems or for digital line systems.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding or dispositive, 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 T.D. 89-80, 54 FR 35127, 35128 (August 23, 1989). EN 85.17, page 1363, states as follows:

(III) APPARATUS FOR CARRIER-CURRENT LINE
SYSTEMS OR FOR DIGITAL LINE SYSTEMS

These systems are based on the modulation of an electrical carrier-current or of a light source by analogue or digital signals. Use is made of the carrier-current modulation technique and pulse code modulation (PCM) or some other digital system. These systems are used for the transmission of all kinds of information (words, data, images, etc.)

These systems include all categories of multiplexers and related line equipment for metal or optical-fibre cables. "Line equipment" includes transmitters and receivers or electro-optical converters. [Combined modulators-demodulators (modems) are also classified here.]

The VIU modulates the voice signals from analog to digital and from digital to analog when it receives and transmits audio signals from the telephone to the cable network/line equipment. The principal purpose of the VIU is to provide telephonic communication over existing cable line networks. Therefore, we find that the VIU is classifiable under heading 8517, HTSUS, as telecommunication apparatus for carrier-current line systems or for digital line systems. Because the VIU meets the terms of heading 8517, HTSUS, as telecommunication apparatus, classification under heading 8543, HTSUS, is precluded.

HOLDING:

The VIU is classifiable under subheading 8517.50.50, HTSUS, which provides for: "[e]lectrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones. . . : [o]ther apparatus, for carrier- current line systems or for digital line systems: [o]ther: [t]elephonic. . . . " The general, column one rate of duty is 8.5 percent ad valorem.

EFFECT ON OTHER RULINGS:

NY 810627, dated May 22, 1995, is hereby revoked. In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations [19 CFR 177.10(c)(1)].

Sincerely,

John Durant, Director
Tariff Classification Appeals

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