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HQ 963704




June 14, 2001

CLA-2 RR:CR:GC 963704 TPB

CATEGORY: CLASSIFICATION

TARIFF NO.: 9013.80.90

Port Director
Port of New York c/o Chief, Residual Liquidation and Protest Branch 6 World Trade Center
Room 761
New York, N.Y. 10048-0945

RE: Protest 1001-99-102722; Components of Laser Diode Modules

Dear Port Director:

This is our decision on Protest 1001-99-102722, filed by counsel on behalf of Lucent Technologies (“Protestant”), against your classification under the Harmonized Tariff Schedule of the United States (HTSUS), of semi-isolators and analyzers used in the manufacture of laser diode modules. The entries were liquidated March 5, 1999, and this protest timely filed on June 3, 1999.

FACTS:

The merchandise consists of three components to be used in the manufacture of laser diode modules. These components are: 1) a semi-isolator, 2) an analyzer and 3) a housing. These three components are used in laser modules manufactured by Lucent. The laser modules are used in telecommunications systems to convert voice or data signals into an optical signal which is launched into an optical fiber.

The analyzer and the semi-isolator work together within the laser module to prevent optical reflections from returning to the laser diode. The analyzer functions as a polarizer, which transmits only one polarization state and absorbs the other polarization state. The polarizer does this by using imbedded silver particles near the surface of a glass plate. The material is referred to as “Polarcor”, and is available from Corning, Inc.

The semi-isolator works in conjunction with the analyzer to prevent back reflections. The semi-isolator consists of a polarizer, which produces a plane polarized beam. The beam is then passed through the garnet (the second element of the semi-isolator). The garnet is a faraday rotator and rotates the plane of polarization by 45 degrees. The beam is then passed through the optical system to the analyzer.

The analyzer is orientated to pass this polarization state. As a result, very little light is lost in the forward direction. In the reverse direction, the garnet rotates the plane of polarization an additional 45 degrees, making it 90 degrees with respect to the pass direction of the first polarizer. The first polarizer will not transmit this beam, hence back reflections are prevented. This prevents the reflections from destabilizing the laser diode.

The housing protects the laser diode and provides electrical and optical pathways to the outside world. The housing was classified under subheading 8541.90.0000, HTSUS, and is not in dispute.

In New York Ruling D82171, dated October 15, 1998, Customs classified the semi-isolator and the analyzer under heading 9013.80.90, HTSUS. Protestant claims that the semi-isolators and analyzers are classified under 8541.90.00, HTSUS.

The HTSUS provisions under consideration are as follows:

Diodes, transistors and similar semiconductor devices parts thereof:

Parts

Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof:

Other devices, appliances and instruments

Other

ISSUE:

Are the components of laser diode modules properly classified under sub-heading 8541.90.00, HTSUS, as light emitting diodes and parts thereof, or sub-heading 9013.80.90, HTSUS, as other optical appliances or instruments?

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) states in part that incomplete or unfinished articles are to be classified as complete or finished if, as imported, they have the essential character of the complete or finished article. GRI 6 permits the comparison of same-level subheadings within the same heading, in part by application of Rules 1 through 5, applied by appropriate substitution of terms.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

Protestant claims that the semi-isolators and analyzers are properly classified as “parts” of laser diode modules in heading 8541, HTSUS, if two conditions exist: 1) the components are solely or principally used as parts of laser diode modules and 2) no other provision of the tariff specifically provides for the goods. Protestant bases this argument on U.S. Additional Rule of Interpretation 1(c), which provides as follows:

In the absence of special language or context which otherwise requires—
a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for “parts and accessories” shall not prevail over a specific provision for such part or accessory;

Protestant claims that the first condition is met because the semi-isolator and analyzer were designed by Lucent for use with its laser diode modules. These products are built to specification and used only by Lucent. They have no other use than as components of laser diode modules. Laser diodes have been consistently classified by Customs under subheading 8541.40, HTSUS. See HQ 088628, dated August 20, 1991; HQ 088754, dated June 2, 1992; and HQ 960815, dated July 1, 1998.

Protestant claims that subheading 9013.80.90, HTSUS, is a “basket” provision. Protestant claims that heading 8541, a “parts” provision, is more specific than the “basket” provision applied by Customs, and is therefore the correct classification.

The combination of a semi-isolator and an analyzer is functionally equivalent to a standard optical isolator. Customs has consistently classified optical isolators under subheading 9013.80, HTSUS. See HQ 954255, dated June 8, 1993; NY 899186, dated June 30, 1994; and NY A80542, dated March 14, 1996.

Additional U.S. Note 3 of Chapter 90, HTSUS, defines the terms “optical appliances” and “optical instruments” for the purposes of the chapter. Optical appliances and instruments are defined as referring only to those appliances and optical instruments which incorporate one or more optical elements, but do not include any appliances or instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose.

In the subject goods, the Polarcor in the analyzer and the garnet in the semi-isolator are the optical elements for the purposes of the Harmonized Tariff. The optical elements incorporated in the analyzer and in the semi-isolator are not considered to be subsidiary, thus meeting the requirements set forth by chapter 90 Additional U.S. Note 3. Therefore, the analyzer and semi-isolator meet the terms of “optical appliances and optical instruments” of heading 9013.

Protestant’s argument that the semi-isolators and analyzers are properly classified as “parts” of laser diode modules in heading 8541, HTSUS, by virtue of Additional U.S. Rules of Interpretation 1(c) is a misapplication of that Rule. The goods are more specifically described as an optical appliance or optical instrument of chapter 90 than in the parts provision of heading 8541, HTSUS. Thus, as directed by Additional U.S. Rule 1(c) and Section XVI Note 1(m), the goods cannot be classified in heading 8541, HTSUS.

As for protestant’s argument that heading 9013 is a “basket” provision, and that a “parts” provision would be more specific in describing the goods, consideration must be given to Sharp Microelectronics Technology, Inc., v. United States, 122 F.3d 1446 (Sept. 2, 1997). Sharp involved an appeal of a granting of summary judgment for the defendant by the Court of International Trade (Sharp Microelectronics Technology, Inc., v. United States, 20 C.I.T. 793, 1996). In that case, the appellate court held that heading 9013 was not a “basket” provision (id. 1450). The court found this because heading 9013 itself invites a relative specificity analysis whenever an article is susceptible of description under heading 9013 and another heading or sub-heading (ibid.).

Accordingly, the semi-isolators and analyzers are to be classified under subheading 9013.80.90, HTSUS, as other optical devices.

HOLDING:

For the reasons set forth above, the semi-isolators and analyzers are to be classified under subheading 9013.80.90, HTSUS, as other optical devices.

The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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