CLA-2 CO:R:C:G 085281 AJS
TARIFF NO: 8537.10.00, 9032.89.60
Ms. Rose Low
Manager, Commodity Taxation
Price Waterhouse
Price Waterhouse Center
60 West Hastings Street
Vancouver, B.C. V6B 5A5
RE: Optimizer system
Dear Ms. Low:
Your letter of May 5, 1989, requesting the tariff
classification of the "Optimizer system", on behalf of your
client Newnes Automation Inc., has been referred to this office
for reply.
FACTS:
The optimizer system (OS) is a computerized scanning device
used in saw mill operations. It measures the dimensions of logs
and boards and determines the best way to cut them in order to
maximize the value or volume of lumber. The OS incorporates an
optical infrared scanner, process controller with software,
various input/output boards, power supply, and clocking and power
cables.
The OS's optical infrared scanner performs a three
dimensional measurement of the raw logs passing through its
station, by the use of an analog signal. This signal is
converted into a digital format and fed into the process
controller which makes the necessary calculations, and then
instructs the saws on how to slice the log to achieve the best
results for a maximum yield of usable lumber.
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ISSUE:
Whether the article in question is classifiable within
subheading 8537.10.00, Harmonized Tariff Schedule of the United
States Annotated (HTSUSA), which provides for "[b]oards panels
(including numerical control panels), consoles, desks, cabinets
and other bases, equipped with two or more apparatus of heading
8535 or 8536, for electrical control of the distribution of
electricity . . . [f]or a voltage not exceeding 1,000 V."; or
within subheading 9032.89.60, HTSUSA, which provides for
"[a]utomatic regulating or controlling instruments and apparatus
. . . [o]ther. [o]ther."
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is governed
by the General Rules of Interpretation (GRI's). GRI 1 provides
that classification is determined first in accordance with the
terms of the headings of the tariff and any relative section or
chapter notes.
Heading 8537, HTSUSA, provides for boards, panels, consoles,
desks, cabinets, and other bases for electrical control or the
distribution of electricity. Explanatory Note (EN) 85.37 states
that the articles of heading 8537 "consist of an assembly of
apparatus of the kind referred to in the two preceding headings
(e.g., switches and fuses) on a board, panel, console, etc., or
mounted in a cabinet, desk, etc. [t]hey usually also
incorporate meters, and sometimes also subsidiary apparatus such
as transformers, valves, voltage regulators or luminous circuit
diagrams." The OS satisfies this description.
The ENs further state that this heading covers
"[p]rogrammable controllers which are digital apparatus using a
programmable memory for the storage of instructions for
implementing specific functions such as logic, sequencing,
timing, counting and arithmetic, to control, through digital or
analog input/output modules, various types of machines." EN
85.37(3). The OS processes digital signals in a computer which
makes calculations and then issues instructions to various
machines which enable them to cut the lumber in the most
efficient manner. This function satisfies the description of an
article in heading 8517.
Heading 9032, HTSUSA, provides for automatic regulating or
controlling instrument or apparatus. Chapter 90, Note 6(a),
provides that heading 9032 applies to instruments and apparatus
for automatically controlling the flow, level, pressure or
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other variable of liquids or gases, or for automatically
controlling temperature. Clearly, the OS does not satisfy this
description.
However, Chapter 90, Note 6(b) provides that heading 9032
also applies to "automatic regulators of electrical quantities,
and instruments or apparatus for automatically controlling non-
electrical quantities the operation of which depends on an
electrical phenomenon varying according to the factor to be
controlled." EN 90.32(II) states that automatic regulators of
this heading are intended for use in complete "automatic control
systems which are designed to bring a quantity, electrical or
non-electrical, to, and maintain it at, a desired value,
stabilized against any disturbances, by constantly measuring its
actual value." The OS does not bring and maintain a quantity to
a desired value by constantly measuring its value. Instead, the
OS gathers data which it processes and then uses to instruct
other machines how to perform their function in the most
efficient manner. This type of device is not provided for in
heading 9032.
You claim that the OS meets the criteria in EN 90.32(II)
(A), (B), (C) and therefore is classifiable within heading 9032.
While all three of these above features are required for an
article to be classifiable within heading 9032, the article must
also perform the proper function. As discussed above, the OS
does not perform this function. Instead, the OS performs a
function classifiable within heading 8537.
HOLDING:
The article in question is classifiable within subheading
8537.10.00, HTSUSA, which provides for numerical control panels
with voltage not exceeding 1,000 V.
Sincerely,
John Durant, Director
Commercial Rulings Division