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HQ 959787




December 17, 1997

CLA-2 RR:CR:GC 959787 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.50.00; 8473.30.10

Mr. Bernard J. Babb
Wasserman, Schneider & Babb
90 John Street
New York, NY 10038

RE: CP113 Coordination Processor; Various Printed Circuit Boards; Chapter 84,
Note 5(A)(a); HQs 952862 and 956839; Freely Programmable; Additional U.S.
Rule of Interpretation 1(a); Principal Use; Condition As Imported; Section XVI,
Note 2; 8517.90.24; 8517.90.36

Dear Mr. Babb:

This is in response to your letters of September 9, 1996, to the Director, National Commodity Specialist Division, New York, and August 27 and November 26, 1997, to this office, on behalf of Siemens Stromberg-Carlson, concerning the classification of the CP113 Coordination Processor and its components, when imported separately, under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of the CP113 Coordination Processor (CP113) which, after importation into the U.S., is marketed to network service providers as a controller for telecommunications network segments. You claim that it can perform various tasks, similar to a sophisticated personal computer (PC), dependent solely on the application software and without change to the hardware. Its functional hardware structure consists of modules utilizing Very Large Scale Integration (VLSI) technology in a multi-processor, multi-input/output environment. The primary responsibility of the CP113 is to perform certain central functions which can be divided into three major categories: connection processing, operation and maintenance, and safeguarding. The CP113 is configured into three different versions (A, B, and C). Versions A and B contain exactly the same boards; version C contains additional boards and other optional configurations. All three versions contain the following boards, each of which are assembled on one side of a fiberglass printed circuit board (PCB):

- I/O PROCESSOR FOR TIME AND ALARM: Operates as the "hardware clock" for the system time and rack alarm interface; consists of resistors, capacitors, diodes, integrated circuits, processors, display units, EPROM, and programmable logic.

- COMMON MEMORY ADDRESS NETWORK: Provides the coordination processor with storage for data with which the processors perform their functions of coordinating the activities of switching system elements; consists of resistors, capacitors, and integrated circuits.

- INTERFACE FOR MAGNETIC DESK DEVICE: Provides a connection link between the input/output processor controller and the peripheral magnetic disk device (MDD); consists of resistors, capacitors, integrated circuits, processors, and a RAM chip.

- LINE CONTROL UNIT, MODULE B: Provides a control link between the I/O processor and serial communication data packet; consists of resistors, capacitors, integrated circuits, processors, a RAM chip, EPROM, and programmable logic.

- COORDINATION PROCESSOR, CENTRAL INTERFACE FOR CP113: Connects processors to the bus system for common memory and provides buffering required for the information transfer; consists of resistors, capacitors, integrated circuits, and programmable logic.

- I/O CONTROLLER INTERFACE CP113: Executes the CP113 software programs that control the Input/Out processors; consists of resistors, capacitors, integrated circuits, programmable logic, and quartz.

- BUS CONTROL AND TRACER INTERFACE: Provides connection between drivers/selectors and processors; consists of resistors, capacitors, integrated circuits, processors, an EPROM chip, light emitting diodes (LEDs), transistors and programmable logic.

- MEMORY INTERFACE, ADDRESS, AND DATA BUS: Part of the memory interface circuit; consists of resistors, capacitors, integrated circuits, programmable logic, and processors.

- SIGNALING PERIPHERY ADAPTER: Performs signal exchange between a computer and databases in a network; consists of resistors, capacitors, integrated circuits, processors, an EPROM chip, transistors, diodes, a RAM chip, and hybrids.

You claim that these boards may also be imported separately and individually.

In your August 27, 1997, letter, you stated that the CP113 is imported without any hardware or software dedicating its use to that of telecommunications. After importation, certain hardware and software is added to the CP113 based on and according to the U.S. customer's needs and applications. The CP113, in its condition as imported, is able to perform various tasks, similar to a sophisticated personal computer (PC), depending upon the application software downloaded into the processor. The CP113 is used primarily for medium to large telecommunications network applications when telecommunications software is installed. Small applications do not require the massive computer power of the CP113 and a PC is used instead. You stated that none of the boards, imported separately, meet the requirements of unfinished ADP machines as held in past Customs Headquarters rulings.

In your November 26, 1997, letter, you claim that the CP113, in its condition as imported, is capable of performing arithmetical computations, and the subject boards, imported individually and separately, are used primarily for upgrading previously shipped CP113 processors and repair replacement.

ISSUE:

Whether the CP113 is classifiable under subheading 8471.50.00, HTSUS, as a digital processing unit, or under subheading 8517.90.24, HTSUS, as a part for telephonic switching or terminal apparatus.

Whether the boards are classifiable under subheading 8473.30.10, HTSUS, as parts of the machines of heading 8471, HTSUS, not incorporating a cathode ray tube, or under subheading 8517.90.36, HTSUS, as printed circuit assemblies for telephonic apparatus.

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 is determined according to the terms of the headings and any relative section or chapter notes.

The HTSUS provisions under consideration are as follows:

8471.50.00: [a]utomatic data processing machines and units thereof; . . . : [d]igital processing units other than those of subheading 8471.41 and 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units.

Goods classifiable under this provision receive duty-free treatment.

8473.30.10: [p]arts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 8469 to 8472: [p]arts and accessories of the machines of heading 8471: [n]ot incorporating a cathode ray tube: [p]rinted circuit assemblies.

Goods classifiable under this provision receive duty-free treatment.

8517.90.24: [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; parts thereof: [p]arts: [o]ther parts, incorporating printed circuit assemblies: [p]arts for articles of subheadings 8517.22, 8517.30, 8517.50.50 and 8517.80.10: [f]or telephonic switching or terminal apparatus.

The general, column one rate of duty for goods classifiable under this provision is 6.4 percent ad valorem.

8517.90.36: . . . : [p]arts: [o]ther: [p]rinted circuit assemblies: [f]or telephonic apparatus: [f]or switching or terminal apparatus (other than telephone sets).

The general, column one rate of duty for goods classifiable under this provision is 6.4 percent ad valorem.

We must first determine the classification of the CP113, as its classification will affect the classification of the boards.

Chapter 84, note 5(A)(a), HTSUS, states:

(A) For purposes of heading 8471, the expression "automatic data processing machines" means:

(a) Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and, (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.

Based upon the information provided, it is our position that the CP113 meets the terms of chapter 84, note 5(A)(a), HTSUS, and, for classification purposes, is a digital processing unit. Because, in its condition as imported, the CP113 is capable of performing various functions based upon the software which is downloaded, we find that the CP113 is "freely programmable in accordance with the requirements of the user." See HQ 952862, dated November 1, 1994, and HQ 956839, dated March 28, 1996, for discussions concerning the term "freely programmable". The fact that the CP113 may have more processing power and may be more expensive than a standard personal computer is irrelevant in meeting the terms of chapter 84, note 5(A)(a), HTSUS. Consequently, the CP113 is described under subheading 8471.50.00, HTSUS.

It has been suggested that, because the CP113 is marketed for telecommunications use, it is more specifically classifiable under subheading 8517.90.24, HTSUS, a use provision. Additional U.S. rule of interpretation 1(a), HTSUS, states that:

[i]n the absence of special language or context which otherwise requires--

(a) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.

Based upon your statements concerning the merchandise, in its condition as imported, the CP113 cannot be said to be principally used for telecommunications purposes under heading 8517, HTSUS, because it can be used for many different purposes depending upon the software which is downloaded. Telecommunications software and hardware is added to the CP113 only after importation into the U.S. As their is no evidence demonstrating that the CP113, in its condition as imported, is principally used for telecommunications purposes, it is our position that the CP113 is precluded from classification under subheading 8517.90.24, HTSUS.

Because the computer boards are parts of the CP113, which is a good of chapter 84, HTSUS, we must consult section XVI, note 2, HTSUS. It states that:

[s]ubject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter
85, parts of machines (not being parts of the articles of heading 8484, 8544,
8546 or 8547) are to be classifiable according to the following rules:

(a) Parts which are goods included in any of the headings of chapters 84 and 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;

(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use with goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;

(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548.

As the computer boards are not goods in any of the headings of chapters 84 or 85, HTSUS, section XVI, note 2(a) is inapplicable. However, as the boards are parts of the CP113, which is classifiable in heading 8471, HTSUS, based upon section XVI, note 2(b), HTSUS, they are to be classified with the CP113 in heading 8473, HTSUS, which includes the parts provision for heading 8471, HTSUS. Therefore, the subject computer boards are classifiable under subheading 8473.30.10, HTSUS. Because the CP113 is not classifiable in heading 8517, HTSUS, the boards are likewise precluded from classification under subheading 8517.90.36, HTSUS.

HOLDING:

Based upon the specific information provided in your submissions, the CP113 Processor is classifiable under subheading 8471.50.00, HTSUS, as a digital processing unit, and the computer boards, imported separately and individually, are classifiable under subheading 8473.30.10, HTSUS, as parts of the machines of heading 8471, HTSUS, not incorporating a cathode ray tube.

Sincerely,

John Durant, Director
Commercial Rulings Division

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