CLA-2 CO:R:C:M 956406 DWS
District Director
U.S. Customs Service
11 W. Huron Street, Room 603
Buffalo, NY 14202-2378
RE: Protest 0901-94-100090; Data Switching Device; Section XVI,
Note 3; Composite Machine; HQs 951331, 086035, 954059,
and 952993; NY 843415; 8517.30.50
Dear District Director:
The following is our decision regarding Protest 0901-94-
100090 concerning your action in classifying and assessing duty
on a data switching device under the Harmonized Tariff Schedule
of the United States (HTSUS).
FACTS:
The merchandise consists of a data switching device (model
no. DPN-100), imported from Canada. It is designed to handle
large scale, wide area data networks supporting from less than
100 lines to over 1,000,000 lines. This enables users to send
data between multiple points, usually host computers and
terminals. Typical user applications include electronic funds
transfers, electronic mail, file transfers between computers, and
point of sale or credit card authorization terminal transaction
processing with a host computer. These applications usually
involve industries such as banking, utilities, government, public
telephone companies, large corporations, and retail industries.
The data switching device requires an external modem to
transmit and receive data over carrier current line systems.
However, it is dedicated to the transmission between two points
of electrical impulses representing text and/or images and other
data using a line connection connecting the transmitting station to the receiving station. The device is not intended for the
transmission of speech or other sounds.
The data switching device was entered under subheading
8471.99.15, HTSUS, as an automatic data processing (ADP) control
or adapter unit. The entry was liquidated on November 19, 1993,
under subheading 8517.30.50, HTSUS, as other telephonic or
telegraphic switching apparatus. The protest was timely filed on
February 1, 1994.
The subheadings under consideration are as follows:
8517.30.50: [e]lectrical apparatus for line telephony or
telegraphy, including such apparatus for
carrier-current line systems; parts thereof:
[t]elephonic or telegraphic switching apparatus:
[o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 4.7 percent ad valorem.
8471.99.15: [a]utomatic data processing machines and units
thereof; . . . : [o]ther: [o]ther: [c]ontrol or
adapter units.
Goods classifiable under this provision receive duty-free
treatment.
ISSUE:
Whether the data switching device is classifiable under
subheading 8517.30.50, HTSUS, as other telephonic or telegraphic
switching apparatus, or under subheading 8471.99.15, HTSUS, as an
ADP control or adapter unit.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1 provides that classification is determined
according to the terms of the headings and any relative section
or chapter notes.
Section XVI, note 3, HTSUS, states that:
[u]nless the context otherwise requires, composite machines
consisting of two or more machines fitted together to form a
whole and other machines adapted for the purpose of
performing two or more complementary or alternative
functions are to be classified as if consisting only of that
component or as being that machine which performs the
principal function.
Because the subject merchandise consists of a machine
adapted for the purpose of performing both communication (heading
8517, HTSUS) and data processing (heading 8471, HTSUS) functions,
it is a composite machine. Therefore, we must determine its
principal function.
In HQ 951331, dated September 18, 1992, in classifying local
area network (LAN) interface boards, we revoked, among other
rulings, NY 843415, dated August 8, 1989, and HQ 086035, dated
August 2, 1990, both of which held that a digital packet network
(DPN), very similar to the subject merchandise and from the same
importer, was classifiable under subheading 8517.30.50, HTSUS.
In 951331, we stated that the principal function of this class of
merchandise is imparted by the data processing functions.
Therefore, based upon the reasoning in HQ 951331, it is our
position that the data switching device is classifiable under
subheading 8471.99.15, HTSUS. See also 954059, dated July 16,
1993.
You have cited HQ 952993, dated February 8, 1993, as
precedent for classification of the subject merchandise under
subheading 8517.30.50, HTSUS. In that ruling, we held that a
switching node solely for use with an automatic teller machine
(ATM) was classifiable under heading 8517, HTSUS. It is our
position that the merchandise in that ruling is not in the same
class of merchandise as that of the subject data switching
device, and therefore is not relevant to this case.
HOLDING:
The data switching device (model no. DPN-100) is
classifiable under subheading 8471.99.15, HTSUS, as an ADP
control or adapter unit.
The protest should be GRANTED in full. In accordance with
Section 3A(11)(b) of Customs Directive 099 3550-065, dated August
4, 1993, Subject: Revised Protest Directive, this decision,
together with the Customs Form 19, should be mailed by your
office to the protestant no later than 60 days from the date of
this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the
decision. Sixty days from the date of the decision the Office of
Regulations and Rulings will take steps to make the decision
available to Customs personnel via the Customs Rulings Module in
ACS and the public via the Diskette Subscription Service, Freedom
of Information Act, and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division