HQ 952626 - Revocation of HQ 089596; "Aster, Tamarix and Cypress" Networking Cards; Local Area Networking; HQ 951331; HQ 952659 - United States International Trade Commision Rulings

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HQ 952626

October 13, 1992

CLA-2 CO:R:C:M 952626 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.99.15

Ms. Stella C. Hall
Porter International Incorporated
P.O. Box 81488
San Diego, CA 92138

RE: Revocation of HQ 089596; "Aster, Tamarix and Cypress" Networking Cards; Local Area Networking; HQ 951331; HQ 952659

Dear Ms. Hall:

On September 17, 1991, we issued HQ 089596 to you regarding the classification of the Lantana Technology, Inc., "Aster, Tamarix and Cypress" LAN equipment, under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The submitted literature stated that the specific trademarks of the Lanatana Technology, Inc., local area networking cards are the "Aster," the "Tamarix" and the "Cypress."

ISSUE:

Whether the "Aster, Tamarix and Cypress" local area networking boards are classifiable under heading 8471, HTSUS, which provides for "[a]utomatic data processing machines," or under heading 8517, HTSUS, which provides for "[e]lectrical apparatus for line telephony or telegraphy"?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Legal Note 5(B) to chapter 84, HTSUS, provides guidance regarding units of automatic data processing machines. It states:

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).

It has been asserted that networking systems such as the "Aster, Tamarix and Cypress" are essential to the ADP systems they are connected to because they process and format the data of the computers they serve. We now agree. See HQ 951331, dated September 18, 1992, as modified by HQ 952659, dated October 7, 1992.

It is also important to note that the ENs, page 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.

This category includes channel to channel adapters used to connect two digital systems to each other.

(5) Signal Converting units. At input, these enable an external signal to be understood by the machine, while at output, they convert the output signals that result from the processing carried out by the machine into signals which can be used externally.

The instant LAN systems do in fact effectuate interconnection of the CPU unit to other units or ADP machines, thereby serving control and adaption functions, as well as performing signal conversion. Thus, classification is appropriate in subheading 8471.99.15, HTSUS, which provides for ADP control or adapter units.

Our diligent research and analysis of this issue has been continually ongoing. Therefore, we have learned more about this merchandise, its functions, and its geometrically progressive technological developments.

Therefore, based on the new information acquired, and in an effort to expeditiously and accurately address this classification issue, we have reconsidered our position. It is now our conclusion that the data processing features of control and adaption do in fact represent the principal function of the this merchandise, 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."

HOLDING:

The "Aster, Tamarix and Cypress" LAN networking cards are 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.

EFFECT ON OTHER RULINGS:

For the reasons stated above, HQ 089596, dated September 17, 1991, is revoked under authority of section 177.9(d), Customs Regulations.

Sincerely,

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