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HQ 966473




September 15, 2003

CLA-2 RR:CR:GC 966473 DSS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8543.89.40

Port Director
U.S. Customs and Border Protection

610 South Canal Street

Chicago, IL 60173

RE: Internal Advice 03/007; encoders from Germany

Dear Port Director:

This is in response to your memorandum dated March 31, 2003, addressed to the Customs Information Exchange regarding Internal Advice Request 03/007. This is in reference to a letter in which Emery Forwarding, on behalf of Heidenhain Corporation (“importer”), requests internal advice on the classification of various encoders under the Harmonized Tariff Schedule of the United States ("HTSUS"). The Chief, Metals and Machinery Branch, National Commodity Specialist Division (“NCSD”), forwarded your memorandum to our office and an accompanying NCSD memorandum dated May 7, 2003.

FACTS:

The articles at issue are described as rotary encoders, exposed linear encoders, sealed linear encoders, and angle encoders. An encoder is a device that converts positional information into corresponding digital data by interrupting light beams directed on photoelectric devices. On the outer edge of a coded disk built into the encoder are a number of slots that allow light to pass through. The encoder utilizes a single LED to produce a concentrated beam of light. As the disk rotates, a photoelectric sensor in the encoder senses the light as it appears through the slots. Each time the light appears a pulse is generated. Electronic circuitry within the optical encoders designed to convert mechanical rotary motion or linear motion to an accurate measure, converts the pulses into a usable data format which a computer or control systems reads by means of an interface module.

The importer entered the merchandise under subheading 9031.90.90, HTSUS, and parts under subheading 9031.90.58, HTSUS, as other measuring or checking instruments. A CF-28 Request for Information was issued on September 17, 2002 to Heidenhain Corporation for their encoders and parts thereof. Based on literature supplied to the Port of Chicago by Heidenhain, the port issued a CF-29 Notice of Action on October 11, 2002, classifying the merchandise under subheading 9031.49.90, HTSUS, and parts under subheading 9031.90.58, HTSUS, as other measuring or checking instruments, optical measuring instruments.

Other rulings, however, have classified similar devices as electric transducers under heading 8543, HTSUS. See Headquarters Ruling Letters (“HQs”) 964599, dated December 22, 2000, and HQ 963802, dated January 10, 2001.

ISSUE:

Whether the instant optical encoders are classified as measuring or checking devices under heading 9031, HTSUS, or as electric transducers under heading 8543, HTSUS.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are thus useful in ascertaining the classification of merchandise under the System. The Bureau of Customs and Border Protection (Customs) believes the ENs should always be consulted. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The HTSUS provisions under consideration are as follows:

Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus:
Other:
8543.89.40 Electric synchros and transducers; flight data recorders; defrosters and demisters with electric resistors for aircraft; Parts:
Other:
Other:
8543.90.88 Other

9031 Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other optical instruments and appliances: Other:
Other
Other instruments, appliances and machines: Other
Parts and accessories:
Of other optical instruments and appliances, other than test benches: Other
Other:
9031.90.90 Other

The Port of Chicago would classify the instant merchandise under heading 9031, HTSUS, as an optical measuring device because the literature submitted indicates that the encoders operate on the principle of photoelectric scanning, and hence meet the definition of an optical instrument under Chapter 90, Additional U.S. Note 3. Chapter 90, Additional U.S. Note 3 provides in relevant part, “For the purposes of this chapter, the term ‘optical instrument’ refer[s] only to those instruments which incorporate one or more optical elements, but do not include any instruments in which the incorporated optical element or elements are solely for viewing a scale or for some subsidiary purpose.”

Optical encoders similar to the instant optical encoders were classified in HQ 964599, dated December 22, 2000, the principles of which are incorporated by reference in this decision. For the reasons that follow, we are of the opinion that the instant encoders are provided for in heading 8543, HTSUS, as electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85.

Heading 8543, HTSUS, is in Section XVI, HTSUS. Note 1(m) to Section XVI excludes articles of Chapter 90. Therefore, if the encoders at issue here are articles of heading 9031, or of any other heading of Chapter 90, they cannot be classified in heading 8543 or elsewhere in Chapter 85.

The encoders at issue merely convert shaft rotations to electric pulses in the form of positional information data about, for example, where a shaft is in its rotation cycle. This is data which the encoders send, through an interface, to any one of a number of computers, control systems, or other instrumentation. As we noted in HQ 964599, for the encoders in that ruling, the light pulses created by the turning wheel were detected and counted with special software to yield rotation or distance data. We also noted, “[I]t is apparent that the referenced software that does the ‘counting’ is in the computer that the encoder’s output is connected to, not in the encoder itself.” Thus, those encoders were classified as transducers which convert shaft rotations into an output of electric pulses. We also noted:

They are analogous to a device, useful to the blind, which would ring a bell each time a slowly rotating shaft completes a revolution. By converting the rotation to a pulse of sound, there would now be information the blind could use, but someone would still have to do the counting and speed determination. The optical encoders at issue are not within the EN description either for rotation counters or for tachometers.

The instant encoders are in fact transducers. The term transducer encompasses devices which convert variations in one energy form into corresponding variations in another, usually electrical form. Among these is the velocity transducer in which the velocity of rotating shafts can be measured by an optical encoder with a suitable light source and detector. By choosing an appropriate pattern, the output data can be produced in binary form suitable for direct input to a computer system. Optical encoders come in two kinds, absolute encoders and incremental encoders. The absolute encoder is a position transducer with output in the form of parallel binary digits. See McGraw-Hill Encyclopedia of Science & Technology, Vol. 18, pp. 459-462 (6th ed., 1987).

Heading 8543 covers all electrical appliances and apparatus not falling in any other heading of Chapter 85, nor covered more specifically by a heading of any other chapter of the HTSUS, or excluded by a legal note to Section XVI or to Chapter 85. The cited technical source indicates that optical encoders are a type of velocity transducer. While not conclusive, we note that subheading 8543.89.40, HTSUS, specifically provides for electric synchros and transducers. Notwithstanding the fact that optical encoders might function as parts of larger instrumentation systems, they are goods included in heading 8543 in accordance with Chapter 90, Note 2(a), HTSUS.

Heidenhain cites New York Ruling Letter (“NY”) A80711, dated March 13, 1996, in support of its claim. The facts of that ruling are distinguishable, however. In that ruling, a gear measuring system from Belgium, consisting of a contact probe, encoder, IBM computer and printer were classified as other optical instruments, coordinate-measuring machines under subheading 9031.49.40, HTSUS. In that ruling, we state that the system “measures pitch variation and accumulated pitch variation of gears.” EN 90.31 indicates in relevant part that heading 9031includes, “[(18)] Multidimensional measuring equipment, including Co-ordinate Measuring Machines (CMMs) used to perform dimensional checks, either manually or mechanically, on various components or parts of machines.” However, in this case, information in the file shows that these encoders merely convert shaft rotations into an output of electric pulses. Similar to the encoders of HQ 964599, in this instance, the encoders themselves do not count or measure the distances or positions involved, but merely convert data into pulses for conversion by other devices in the system. Thus, the instant optical encoders meet the definition of electric transducers for tariff purposes. Parts of the optical encoders would fall under subheading 8543.90.88, HTSUS.

HOLDING:

The instant optical encoders are classified in subheading 8543.89.40, HTSUS, which provides for, “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in chapter 85; parts thereof: Other: Electric synchros and transducers: Other: Other.” Parts of the optical encoders are classified in subheading 8543.90.88, HTSUS, which provides for, “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in chapter 85; parts thereof: Parts: Other: Other: Other.”

This decision should be mailed by your office to the internal advice requestor no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs and Border Protection Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon
Director,

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