CLA-2 RR:CR:GC 958643 RFA
Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island, CA 90731
RE: Protest 2720-95-101137; Multimedia Printed Circuit Assemblies; Sound/Fax/Voice/Modem Cards; Speaker Phone; Answering Machine; Legal Note 3 to Section XVI; Headings 8473 and 8517; HQs 086851, 955273; NYs 803937, 842533, 852480, 864579, 890485, 800603
Dear Port Director:
The following is our decision regarding Protest 2720-95-101137, which concerns the classification of multimedia printed circuit assemblies (PCAs), imported by Packard Bell Electronics, Inc., under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this ruling, we also considered arguments provided in our meeting with counsel for the protestant on September 24, 1998, and information provided in letters of October 23 and December 2, 1998, from counsel.
FACTS:
The Packard Bell "Multimedia Cards” are internal add-on printed circuit board assemblies (“PCAs”) for personal computers (PCS). These enhanced PCAs include sound card/fax/modem components, which formerly had been on separate PCAs. Some of these PCAs also include a speaker phone component. The PCAs are essential to the operation of the Packard Bell Multimedia Computer Systems (i.e., the Packard Bell Legend 301CD) in which they operate.
The sound card portion of the PCAs provides 16/8 Bit stereo digital sound recording and playback; a stereo analog/digital mixer; master volume and mixer volume control; a stereo FM music synthesizer; Sound Blaster 2.0 and Sound Blaster PRO II compatibility; a CD-ROM drive interface; MIDI (Music-Instrument-Digital-Interface); a game port; SRS 3D effect; sound card configuration resources; and connectors interface. The fax/modem portion provides: digital sound recording and playback using socket modem; and integrated 14.4 or 28.8 kilobits per second (kbps) fax/voice/modem. The protestant claims that the PCA's fax/modem function is dependent upon the basic sound card PCA features to operate, and the fax/modem components are inserted into the sound card, not vice versa.
All models of the PCAs perform an answering machine function. Although the answering machine component shares some of the same required components already included on the fax/voice/modem, the PCA itself has no special components which are exclusively dedicated to this function. According to the protestant, the answering machine function is only operational when special software is added to the computer's hard drive.
Between January 2 through May 5, 1995, the subject merchandise was entered under subheading 8473.30.10, HTSUS, as parts and accessories (printed circuit assemblies) of the machines of heading 8471, HTSUS. The entries were liquidated on July 14, 1995, under subheading 8517.81.00 (now 8517.80.10), HTSUS, which provides for other telephonic apparatus. The protest was timely filed on October 11, 1995. In the protest, the protestant alternatively contends that the PCAs should be classified under subheading 8517.40.10 (now 8517.50.10), HTSUS, which provides for modems, of a kind used with data processing machines of heading 8471, HTSUS.
ISSUE:
Whether the multimedia cards are classifiable as accessories of ADP machines (printed circuit assemblies) under subheading 8473.30.10, HTSUS, as other telephonic apparatus under subheading 8517.81.00, HTSUS, or as modems under subheading 8517.40.10, HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
The 1995 subheadings under consideration are as follows:
8473: Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines of headings 8469 to 8472:
8473.30.10: Parts and accessories of the machines of heading 8471: [n]ot incorporating a cathode ray tube: [p]rinted circuit assemblies, other than for power supplies for automatic data processing machines. . . .
Goods classifiable under this provision, have a column one, general rate of duty of free.
8517: Electrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems; parts thereof:
8517.40.10: Other apparatus, for carrier-current line systems: [m]odems, of a kind used with data processing machines of heading 8471. . . .
Goods classifiable under this provision, have a column one, general rate of duty of 4.2 percent ad valorem.
8517.81.00: Other apparatus: [t]elephonic . . .
Goods classifiable under this provision, have a column one, general rate of duty of 8.5 percent ad valorem.
The multimedia cards under consideration are PCAs that contain sound card, fax/modem, and an answering machine component which had formerly been on separate PCAs. Some of these PCAs also include a speaker phone component. The classification of the separate PCAs has been previously determined by Customs. Sound cards that do not incorporate a fax/modem are classified as parts and accessories of ADP machines: printed circuit assemblies, under subheading 8473.30, HTSUS. See NY 803937, dated November 8, 1994 (Tropez Sound Board); NY 890485, dated September 27, 1993 (Creative Labs Soundblaster Pro, Media Vision Pro Audio Spectrum 16 and the LaserWave Supra 16). Modem boards are classified as "[m]odems, of a kind used with ADP machines of heading 8471," under subheading 8517.40.10, HTSUS. See NY 842533, dated June 23, 1989; HQ 086851, dated April 8, 1990. Fax boards are classified as other telegraphic apparatus under subheading 8517.82.00 (now, 8517.80.20), HTSUS. See HQ 955273, dated March 7, 1994. Fax/modem boards are composite machines which, in accordance with note 3 to section XVI, HTSUS, would also classifiable under subheading 8517.40.10, HTSUS. Finally, answering machine boards/cards are classified as other telephonic apparatus under subheading 8517.81.00 (now, 8517.80.10), HTSUS. See NY 864579, dated July 3, 1991 (voice mail cards); NY 852480, dated May 31, 1990 (voicing cards).
Legal Note 3 to Section XVI, HTSUS, which governs the classification of multi-function machines within chapters 84 and 85, HTSUS, provides as follows:
Unless 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.
The "Multimedia Cards” are configured to perform a variety of "complementary or alternative” functions, including sound, fax/modem, answering machine, and, in some models, speaker phone functions. The PCAs, according to Legal Note 3 to Section XVI, HTSUS, are classifiable as if consisting only of that component which performs the "principal function.”
The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 FR 35127, 35128 (August 23, 1989). General EN (VI) to Section XVI, HTSUS, states that for multi function machines and composite machines: “[i]n general, multi function machines are classified according to the principal function of the machine. . . . Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3 (c).”
The multimedia card is capable of being used as both a sound card and as a modem card for a personal computer. Both functions are of equal importance to the user. Because the principal use will be determined by the requirements of the individual user, we find that no principal function can be determined. Therefore, based upon the application of GRI 3(c) as required by Legal Note 3 to Section XVI, HTSUS, we find that the multimedia card is classifiable in heading 8517, HTSUS.
We note that within heading 8517, HTSUS, there are two subheadings which each describe a function of the multimedia card. Customs has previously determined that a printed circuit assembly that adds fax, modem, sound card, and telephone answering capabilities to a personal computer is classifiable under subheading 8517.40.10, HTSUS, as a modem used with an ADP machine. See NY 800603, dated August 11, 1994. While the multimedia card is capable of other telephonic uses other than as a modem card, we find that based upon NY 800603, the function of the subject merchandise is accurately described in subheading 8517.40.10, HTSUS.
HOLDING:
The multimedia sound card PCAs are classifiable, according to Legal Note 3 to Section XVI, HTSUS, under subheading 8517.40.10, HTSUS, which provides for: “[e]lectrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems; parts thereof: [o]ther apparatus, for carrier-current line systems: [m]odems, of a kind used with data processing machines of heading 8471. . . .”
You should DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance. In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division