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HQ 965582




August 5, 2002

CLA-2 RR:CR:GC 965582 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8525.20.30

Port Director
U.S. Customs Service
4735 Oakland Street
Denver, CO 80239

RE: Protest 3307-01-100035/3307-02-100012; Cortex NT

Dear Port Director:

The following is our decision regarding Protest 3307-01-100035/3307-02-100012, filed by CounterTrade Products, Inc., concerning the classification of the Cortex NT under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

According to the limited information in the file, the Cortex NT consists of a personal computer-based workstation containing two proprietary circuit boards (an IF modulator board and a main signal processing board) that allow the user to access telemetry, tracking, and control functions for a satellite control station. The Cortex transmits signal at 70 MHz frequency (IF). It performs the following functions: telemetry signal acquisition/demodulation and telemetry data transmission to the satellite control center; modulation of TC data received from the satellite control center; and satellite range measurement (tone transmission/reception to/from satellite, phase offset measurement and distance computation). It is mainly used in the United States by satellite manufacturers, satellite operators, and satellite ground station architects.

The merchandise was entered on September 25, 2001, under subheading 8471.41.00, HTSUS, as other automatic data processing (ADP) machines. The entries were liquidated on January 4, 2002, under subheading 8526.92.00, HTSUS, as other radio remote control apparatus. The protest was timely filed on

April 1, 2002. Classification under subheading 8525.20.30, HTSUS, as transmission apparatus incorporating reception apparatus for radiotelephony, radiotelegraphy, or radiobroadcasting, is also under consideration.

The HTSUS provisions under consideration are as follows:

8471.41.00: Automatic data processing machines and units thereof; . . . : [o]ther digital automatic data processing machines: [c]omprising in the same housing at least a central processing unit and an input and output unit, whether or not combined. . . .

Goods classifiable under this provision have a column one, general rate of duty of free.

8525.20.30: Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; . . . : [t]ransmission apparatus incorporating reception apparatus: [t]ransceivers: [o]ther. . . .

Goods classifiable under this provision have a column one, general rate of duty of free.

8526.92.00: Radar apparatus, radio navigational aid apparatus and radio remote control apparatus: [o]ther: radio remote control apparatus . . . .

Goods classifiable under this provision have a column one, general rate of duty of 4.9 percent ad valorem.

ISSUE:

Whether the Cortex NT is classifiable as other ADP machines, or as radio remote control apparatus or as transmission apparatus for radio signals 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 order to be classified as an ADP machine, merchandise must meet the criteria in Legal Note 5(A)(a) to Chapter 84, HTSUS, which provides as follows:

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;

Additionally, Legal Note 5(E) to Chapter 84, HTSUS, provides that: “[m]achines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.”

The Cortex NT is a special purpose computer designed for telemetry, tracking and control functions. As such, it does not meet the terms of Legal Note 5(A)(a)(2) to Chapter 84 in that it is not freely programmable in accordance with the requirements of the user. Although it is programmed to perform specific functions, the protestant has not offered any evidence that it is freely programmable and the partial technical literature submitted demonstrates that the Cortex NT is not. Therefore, for tariff purposes, the Cortex NT is not an ADP machine. (See HQ 962182, dated March 25, 1999 and HQ 960012, dated June 16, 1997, for further discussion on the issue of “freely programmable”).

The port liquidated the entry of the subject merchandise under heading 8526, as other radio remote control apparatus. We have examined the information in the file and cannot find sufficient evidence that would indicate that the Cortex NT is actually controlling, remotely by radio frequency signals, the actual functioning, positioning or rotation of the satellite. Therefore, we find classification under heading 8526, HTSUS, is precluded because the merchandise does not meet the terms of the heading.

Heading 8525, HTSUS, provides for, among other things, transmission apparatus for radiotelephony, radiotelegraphy, or radiobroadcasting, whether or not incorporating reception apparatus. The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding nor 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 85.25(A), pages 1667-1668, states in pertinent part:

This apparatus is used for the transmission of signals (representing speech, messages or still pictures) by means of electro-magnetic waves which are transmitted through the ether without any line connection.

This group includes, inter alia:
(9) Transmitters or transmitter/receivers of telemetric signals.

The Cortex NT transmits and receives telemetry signal acquisition/demodulation and telemetry data transmissions with the satellite control center. Based upon these facts and EN 85.25(9), we find that the subject merchandise is classified in heading 8525, HTSUS, as transceivers of telemetric signals.

HOLDING:

The Cortex NT is classifiable under subheading 8525.20.30, which provides for: “[t]ransmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; . . . : [t]ransmission apparatus incorporating reception apparatus: [t]ransceivers: [o]ther. . . .” Goods classifiable under this provision have a column one, general rate of duty of free.

Because reclassification of the subject merchandise will result in the same rate of duty as claimed, you should GRANT the protest. In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, 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,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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