CLA-2 CO:R:C:M 089356
District Director
U.S. Customs Service
111 West Huron St.
Buffalo, N.Y. 14202
RE: Protest No. 0901-9-000522; Motorola Communications
Processors; Unit; Automatic Data Processing; ADP;
Telegraphic; Local Area Network
Dear Sir:
This is in response to the request for further review of
protest number 0901-9-000522, dated June 1, 1989, on behalf of
Motorola Information Systems, regarding classification of various
Communications Processors, under the Harmonized Tariff Schedule
of the United States (HTSUS).
FACTS:
The protestant states that the merchandise at issue are
various products that control the flow of data in an automatic
data processing system (ADP), which encode data to be sent to
remote locations of the system. These products interact with the
host computer and other units in the ADP system to control the
communication of data. The products are specifically described
as follows:
1. The Intelligent Network Processors (INPs). Each of Motorola's
"600 Series" INPs (including the 6002, 6003, 6005, and 6015
models) incorporates a microprocessor connected to a set of
ports. Ports are the access points for the entry and exit of
data. When in use, a computer terminal is connected via an
interface to an assigned "terminal port" of the INP. A separate
"control port" on the INP gives the user centralized control of
configuration, monitoring, and diagnostics in the system. Each
INP also has a "network port," which generates or receives data
and provides data communications control functions.
ISSUE:
Whether the subject communications processors are classified
within heading 8517, HTSUS, as "Electrical apparatus for line
telephony or telegraphy, including such apparatus for carrier-
current line systems; parts thereof...", or within heading 8471,
HTSUS, as "Automatic data processing machines and units
thereof...."
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1
states in part:
for legal purposes, classification shall be determined
according to the terms of the headings and any relative
section or chapter notes...
The competing headings in the instant case are headings 8517
and 8471, HTSUS. These headings describe:
8517 Electrical apparatus for line telephony
or telegraphy, including such apparatus for
carrier-current line systems; parts
thereof...
8517.30.30 Telephonic or telegraphic switching
apparatus...Other
* * * * * * * * * * * * *
8471 Automatic data processing machines and units
thereof...Other
8471.99.15 Other...control or adapter units...
8471.99.90 Other...Other...
Chapter 84, Legal Note 5, HTSUS, defines the term "automatic
data processing machines" for the purposes of heading 8471,
HTSUS. Chapter 84, Note 5(A)(a) states that "automatic data
processing machines" includes:
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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..."
Legal Note 5(b) further provides that ADP machines may be in
the form of systems consisting of a variable number of separately
housed units. A unit must meet the following requirements to be
regarded as part of a complete system:
(a) It is connectable to the central processing unit either
directly or through one or more other units; and
(b) It is specifically designed as part of such a system.
HQ 085666, dated November 8, 1989, held that certain
communications controllers imported by Fujitsu America, were
classifiable under subheading 8471.99.15, HTSUSA, which provides
for automatic data processing machines and units thereof, other
control or adapter units. You argue that the instant merchandise
is similar, and therefore, should be similarly classifiable. We
agree. The instant merchandise is essentially an enormous,
highly diverse, front end processor. The result is that the main
frame computer spends less time servicing the "teleprocessing
network" and CPU resources are available for more application
processing. Thus, these communications controllers have taken
over certain processing functions originally performed by the CPU
of an ADP system. Furthermore, the Controller meets the
requirements of chapter 84, Legal Note 5(b), as a unit of an ADP
system.
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) to heading 8471, HTSUS, defines "control
or adapter units" as follows:
[Units which] effect interconnection of the central
processing unit to other digital data processing
machines, or to groups of input or output units which
may comprise visual display units, remote terminals,
etc.
Therefore, the IBM Model 3745 Communications Controller is
properly classifiable within subheading 8471.99.15, HTSUS, which
provides for: "[a]utomatic data processing machines and units
thereof...: [o]ther: [o]ther: [c]ontrol or adapter units."
The importer argues that the instant merchandise is "Data
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Terminal Equipment" (DTE) which is separate and distinct from
"Data Communications Equipment" (DCE). The Basics Book of Data
Communications, by Codex, in reference to DTE and DCE, states the
following:
Now, a data communications network can be divided into three
distinct parts. The Data Terminal Equipment (DTE) is any
digital device such as a terminal, printer or computer that
transmits and/or receives data. We call them "digital"
because they operate in binary. The Data Communications
Equipment (DCE) is any other device attached to the
communications line that manipulates the transmitted signal
or data (you'll see why it needs to be manipulated in a
second). The third part is the medium over which the
signal is sent. Often, the medium used is a telephone line.
The point at which these devices connect with one another is
called the interface....If two digital devices want to
communicate over an analog telephone line, then equipment
must be added at either end to convert the digital signal to
analog so it can travel the phone line, and then convert it
back to digital so it can feed directly into a DTE at the
receiving end. These devices that modulate and demodulate
or manipulate the signal are called modems and belong to the
DCE category.
However, Customs has consistently held that the most
important factor to be considered, for classification purposes,
is whether the merchandise is principally used for data
processing or for the transmission of data between two points.
HOLDING:
The IBM Model 3745 Communications Controller is classifiable
in subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic
data processing machines and units thereof...: [o]ther: [o]ther:
[c]ontrol or adapter units."
Sincerely,
John Durant, Director
Commercial Rulings Division