CLA-2 CO:R:C:M 953935 MBR
Mr. Sydney H. Kuflik
Lamb & Lerch
233 Broadway
New York, NY 10279
RE: Revocation of HQ 089224; Bel Fuse, Inc.; "10 Base T Filters";
Local Area Network; LAN; Apparatus; Electronic Filter; Hybrid
Integrated Circuit; Parts of Automatic Data Processing
Machines
Dear Mr. Kuflik:
On July 26, 1991, we issued HQ 089224 to you, regarding the
classification of the Bel Fuse, Inc. "10 Base T Filter" part for
the 10 Base T automatic data processing (ADP) local area networking
boards, under the Harmonized Tariff Schedule of the United States
(HTSUS). However, based on HQ 953921, dated April 26, 1993, we
have reconsidered our analysis in HQ 089224. Our analysis follows.
FACTS:
You state that "the 10 Base T Filters are specifically
designed to be affixed to 10 Base T networking boards used to
facilitate communications between personal computers (PC's)." You
also state that the 10 Base T Filters permit PC to PC electronic
signal communications to be maintained within the appropriate FCC
frequency range and within the prescribed signal radiation limits.
Thus, the 10 Base T networking boards facilitate the creation of
a Local Area Network ("LAN"). The 10 Base T filters will be
installed on the networking boards after importation.
Four models of the 10 Base T Filters are the subject of the
instant ruling request. Models A556-2006-DE and A556-3899-00 "10
Base T Filters" consist of discrete passive components; capacitors,
inductors, and transformers, which are mounted on a printed circuit
board and encapsulated. Models 0556-3392-00 and 0556-3392-01 "10
Base T Filters" also consist of discrete passive components;
capacitors, inductors, and transformers, but are mounted on a
ceramic based substrate using thick film technology.
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ISSUE:
What is the classification of the "10 Base T Filter"
("Filter") which is a part for the LAN 10 Base T networking board?
Is the Filter classifiable under subheading 8473.30.40, HTSUS,
which provides for parts of ADP machines, or under heading 8517,
HTSUS, which provides for "[e]lectrical apparatus for line
telephony or telegraphy"?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
Since the HTSUS came into effect there has been a great deal
of controversy regarding the classification of LAN equipment.
However, there is no clear classification guidance from either the
HTSUS or the Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), primarily due to the technological
advancements in this area.
In HQ 952659, dated October 8, 1992, regarding LAN boards, we
cited Legal Note 5(B) to chapter 84, HTSUS, which provides guidance
regarding the classification of units of automatic data processing
machines. It states:
Automatic data processing machines may be in the form of
systems consisting of a variable number of separately housed
units. A unit is to be regarded as being a part of the
complete system if it meets all of the following conditions:
(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 (it
must, in particular, unless it is a power supply unit,
be able to accept or deliver data in a form (code or
signals) which can be used by the system).
We agree that the 10 Base-T networking board is connectable
to the CPU either directly or through one or more units.
Furthermore, the 10 Base-T networking board is designed to be a
constituent unit of an ADP system, and is able to accept and
deliver data.
In HQ 952659 we also cited the Harmonized Commodity
Description and Coding System Explanatory Notes (ENs), pages 1299-
1300, which describe separately presented ADP units, in pertinent
part, as follows:
-3-
This heading also covers separately presented constituent
units of data processing systems. Constituent units are those
defined in Parts (A) and (B) above as being parts of a
complete system.
Apart from central processing units and input and output
units, examples of such units include:
(4) Control and adaptor units such as those to 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.
We agree that the principal function of the instant 10 Base-
T networking board is, in fact, to effectuate the interconnection
of the CPU unit to other units or ADP machines, thereby serving
"control" and "adaption" functions. See HQ 953205 for a revocation
of HQ 951009.
However, the 10 Base T filter is only a part of the 10 Base
T networking board. Therefore, the 10 Base T filter is
classifiable under subheading 8473.30.40, HTSUS, which provides for
parts of ADP machines.
In the alternative, you argued that the 10 Base T Filters are
classifiable as hybrid integrated circuits, under subheading
8542.20.00, HTSUS. However, the Legal Notes to chapter 85 state:
5. For the purposes of headings 8541 and 8542:
(b) "Electronic integrated circuits and
microassemblies" are:
(ii) Hybrid integrated circuits in which
passive elements (resistors, capacitors,
interconnections, etc.) obtained by thin- or
thick-film technology and active elements
(diodes, transistors, monolithic integrated
circuits, etc.) obtained by semiconductor
technology, are combined to all intents and
purposes indivisibly, on a single insulating
substrate (glass, ceramic, etc.). These
circuits may also include discrete components.
Pursuant to Legal Note 5(b)(ii) above, the 10 Base T Filters
cannot be considered hybrid integrated circuits due to the fact
that they do not contain any active elements, i.e., (diodes,
transistors, monolithic integrated circuits, etc.).
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HOLDING:
The Bel Fuse, Inc., LAN 10 Base-T Filters, models A556-2006-
DE, A556-3899-00, 0556-3392-00 and 0556-3392-01, are classifiable
under subheading 8471.30.40, HTSUS, which provides for: "[p]arts
and accessories (other than covers, carrying cases and the like)
suitable for use solely or principally with the machines of
heading 8469 to 8472: [p]arts and accessories of the machines of
heading 8471: [n]ot incorporating a cathode ray tube." The rate
of duty is Free.
EFFECT ON OTHER RULINGS:
HQ 089224, dated July 26, 1991, held that the "10 Base-T
Filters" were classifiable in subheading 8517.90.80, HTSUS, which
provides for electrical apparatus for line telegraphy. For the
reasons stated above, HQ 089224 is revoked under authority of
Section 177.9(d), Customs Regulations.
Sincerely,
John Durant, Director
Commercial Rulings Division