CLA-2 CO:R:C:G 085661 AJS
TARIFF NO: 8471.99.15; 8471.99.60; 8471.92.80; 8473.30.40;
8517.90.40
Mark K. Neville, Jr., Esq.
Lamb and Lerch
601 California Street
San Francisco, CA 94108
RE: Channel units
Dear Mr. Neville:
Your letter of August 18, 1989, requesting a tariff
classification under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA) of channel units imported by your
client Telco Systems-Network Access Corporation has been referred
to this office for reply.
FACTS:
The articles in question are channel units which are
inserted, along with a power supply, into a chassis in order to
form channel banks. The channel unit's basic function is to
convert analog and/or digital data signal inputs into a series of
digital signal outputs onto the channel bank line interface unit.
In the reverse direction, the channel unit receives the digital
signal output from the line interface unit and converts it into
the appropriate analog and/or digital channel output signal. In
short, the channel unit acts very much like a language translator
in that it takes electromagnetic signals and redefines them into
a form usable by other parts of a system. Basically, The channel
units perform this function by either translating signals,
transmitting signals or translating and transmitting signals.
The channel bank itself is a digital Pulse-Code-Modulated
(PCM) multiplexer designed to multiplex up to 24 analog and/or
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digital data circuits onto a PCM digital signal output. A
multiplexer is a system by which several individual information
carrying channels are combined for transmission over one bearer
(line, fiber or radio), using frequency division for analog
signals or time techniques for digital signals. This PCM signal
output is received by the far end channel bank and demultiplexed
into the original twenty-four digital signals originating from
the other end. This arrangement provides for channel to channel
connectivity between the local channel unit adapter circuit and
the far-end channel unit adapter circuit. The channel bank
consists of a line interface unit, power supply unit, chassis and
up to 24 channel units.
You state that there are basically two types of channel
banks. The so-called "DCB 24" is the basic channel bank which is
manually operated by use of dip switches. The "Route 24" channel
bank is a so-called intelligent channel bank. It is controlled
by software which permits remote programming and changes by means
of the software. The Route 24 technology would be linked to
either a VT 100 terminal or personal computer to allow for
network terminal management. However, your client has received a
ruling (NY 835316) on a Muxview channel bank which you claim does
not apply to this merchandise.
The channel units in question consist of four models which
are all based on the model 2440-00. This model is a device that
connects customer provided terminal analog equipment (CPE or
customer premises equipment) to transmission and switching
equipment. Data analog signals transmitted from the CPE are
converted to Pulse-Code-Modulation for multiplexing onto a
digital system. Received digital data signals are converted to
analog signals for transmission to the CPE. The PCM codec
performs the analog-to-digital and digital-to-analog conversion.
The 2440-00 provides the 6-wire interface toward the CPE for
signaling and data transmission toward the digital data
processing center via an interface unit. Basically, this model
and the other models at issue translate and transmit electro-
magnetic signals
The first model is the 2443-20 which is identical to the
2440-00, except that it provides a 2-wire interface towards the
CPE for signaling and data transmission. In a point-to-point
network application it interfaces one end of the network.
The second model is the 2443-10 which is identical to the
model 2443-20, except that it provides dedicated network
signalling features for signaling purposes toward the digital
data center.
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The third model is the 2443-40 which is almost identical to
the 2443-20. However, it is different in that it can be remotely
optioned and tested by using a terminal via specific software and
an interface unit.
The final model is the 2443-41, which is a cost reduced
version of the model 2443-40.
ISSUE:
Whether the channel units in question are properly
classifiable within heading 8471, HTSUSA, which provides for
automatic data processing machines and units thereof; or within
heading 8517, HTSUSA, which provides for electrical apparatus for
line telephony or telegraphy.
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 8471 provides for automatic data processing (ADP)
machines and units thereof. The article in question clearly does
not satisfy the description of an ADP machine within the meaning
of Chapter 84, Note 5(A). However, ADP machines may be in the
form of a system consisting of a variable number of separately
housed units. A unit is to be regarded as part of the complete
system if:
(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). Chapter 84,
Note 5(B).
A channel bank does not satisfy this description of a
separate unit of an ADP system. It is not specifically designed
as a part of an ADP system. Instead, the channel bank is
designed to translate and/or transmit signals between two points.
This function could be for a telephone system or a telegraph
system. An article which has a function outside the scope of
heading 8471 cannot be considered specifically designed as part
of an ADP system. Furthermore, the fact that the customer may
adapt a channel bank to meet their particular needs does not mean
that the article is specifically designed as part of an ADP
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system. Instead, the article in question is designed for special
configuration by the customer for uses which could involve an ADP
system, a voice communication system or a data communication
system, or both.
Explanatory Note (EN) 84.71 I(A), states that digital data
processing systems "may also include peripheral units . . . de-
signed to increase the capacity of the system, for instance, by
expanding one or more of the functions of the central unit (see
Part (D) below)." Part I(D) states that this heading covers
separately presented constituent units of data processing
systems. (D)(4) lists as an example of a constituent unit,
"[c]ontrol and adapter units such as those to effect inter-
connection of the central processing unit to other digital data
processing machines, or to groups of input units or output units
which may comprise visual display units, remote terminals etc.
This category includes channel to channel adapters used to
connect two digital systems to each other."
You claim that EN 84.71 (I)(D)(4) has a twofold application.
First, it describes the function of the channel bank, of which
the imported channel unit will be one of four constituent parts.
Second, compatibility for channel to channel linkage is the
specific function of the imported channel units themselves. In
addition, you claim that channel banks are used to connect two
digital systems to each other as shown in the submitted point-
to-point diagram. Therefore, you claim that channel banks are
specifically provided for as channel to channel adapters by the
ENs to heading 84.71. We do not agree with this application of
EN 84.71.
Tariff terms are construed in accordance with their common
and commercial meaning. Nippon Kogasku (USA), Inc. v. United
States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial
meaning may be determined by consulting dictionaries, lexicons,
scientific authorities and other reliable sources. C.J. Tower &
Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).
Channel adapters are devices which permit connections between
various data channels of differing equipment. C.J. and R.J.
Sippl, Computer Dictionary and Handbook (3rd ed. 1980), p. 65. A
data channel is a bidirectional data path between the input/
output devices and the main memory in a digital computer that
permits one or more input/output operations to take place
concurrently with computation. Id. Data channels are synonymous
with channels which are described as "[a] physical path along
which data may be transferred or transmitted; or a physical path
along which data may be stored serially for subsequent recovery.
Martin H. Weik, Standard Dictionary of Computers and Information
Processing (2nd ed. 1977), at 60. Furthermore, a channel is also
described as that portion of the central processing unit (CPU) of
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a computer which connects input and output devices to the CPU.
Van Nostrand's Scientific Encyclopedia, (VN) (7th ed. 1988),
p. 565.
The channel bank and constituent channel units do not
satisfy the above description of channel adapters. They are not
related to data channels or channels. Instead, they translate
and/or transmit signals via a line interface apparatus. This
function is not related to that of the channel adapters as
described within EN 8471. Based on the fact that the channel
bank and constituent units are not an ADP machine or unit
thereof, they are thus excluded from classification within
heading 8471.
You state that channel units are used in both telephonic and
telegraphic applications. Heading 8517 provides for "[e]lectri-
cal apparatus for line telephony or line telegraphy." The ENs
to heading 85.17 state that this phrase "means apparatus for the
transmission between two points of speech or sound (or symbols
representing written messages, images or other data), by
variation of an electric current or of an optical wave flowing in
a metallic or dielectric (copper, optical fibers, combination
cable, etc.) circuit connecting the transmission station to the
receiving station." Channel banks are used for telephonic and
telegraphic purposes and are apparatus for the transmission
between two points of electromagnetic signals in the manner
described above. Thus, channel banks and their units are
classifiable by the terms of heading 8517 as electrical apparatus
for line telephony or line telegraphy.
There are three basic groupings of equipment used in modern
telecommunications: Customer premises equipment or "end point"
apparatus,such as telephones and other types of terminals,
transmission equipment such as certain multiplexers or repeaters,
and switching equipment. VN p. 2773. This equipment is linked
together as a network by an assortment of computers and software
programs. Telephony itself is defined as "[t]he technology of
communicating speech and other information between telephones and
other terminals, using analog or digital signals transmitted via
electrical or lightwave circuits. The information may be in the
form of speech, music, data, facsimile, or video communications."
VN p. 2772. Telephony is also defined as "[t]he transmission of
speech, data, graphics, or video signals to a distant point by
means of electric waves, digital pulses, and increasingly, by
light pulses sent through ultrapure, hair thin glass fibers."
McGraw-Hill Encyclopedia of Science &
Technology, (McG-H) (6th ed. 1987), vol. 17, p. 172. Telephonic
communications consist of three elements: "(1) telephone sets
that convert sound energy to electric waves and back again; (2)
transmission systems that carry signals over distance without
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distortion and attenuation; and (3) switching systems that
connect one caller to another." Id. Channel banks involve the
use of CPE and transmit and translate signals between points in
the manner described by the term "telephony".
Heading 8517 provides for telephonic switching apparatus.
Switching equipment involves the use of wires connected from
telephones to a central point, called an exchange or central
office, where individual connections to other telephones are made
by switches. VN p. 2781. Customs has previously stated that
switching apparatus permit the connection of two or more
terminals. (HQ 554295, 1/15/87). Switching systems act to
direct messages toward their ultimate destination or address.
McGraw-Hill Encyclopedia of Electronics and Computers (McG-Hill
E & C), (2nd ed. 1988), p. 892. In addition, switching apparatus
provide one of three functions: signalling, controlling, and
switching of electromagnetic signals. Id p. 5. This equipment
performs traffic management and measurement, maintenance,
routing, trouble shooting, and the like. Id. The channel banks
and their constituent units do not satisfy these descriptions of
switching apparatus. They perform a translation and transmission
function, not a switching function.
The ENs state that heading 8517 covers all electrical
apparatus for line telephony or line telegraphy, including the
special apparatus used for carrier-current line systems (CCLS).
EN 85.17. CCLS, used in both telephony and telegraphy, are
"based on the modulation of an optical source or of an electrical
frequency by impulses representing speech, messages or other
data. The apparatus of this group consists, in the transmitting
section, of oscillators, modulators, etc., and in the receiving
station, of filters, demodulators, etc. This group includes
combined modulators-demodulators (modems)." EN 85.17(III).
Channel banks are used in both telephony and telegraphy. They
are also based on the modulation of an electromagnetic signal by
impulses which can represent speech, messages or other data.
Thus, channel banks satisfy the description of CCLS apparatus
within this heading.
You state that the channel bank is a Pulse-Code-Modulated
multiplexer. Pulse code modulation (PCM) was invented in 1939
and is a method of transmitting continuously varying message
waves. McG-Hill E & C, (2nd ed. 1988), p. 729. PCM is the
method employed to convert analog signals into digital form for
transmission or binary storage. Telecommunications Systems and
Service Directory, (3rd ed. 1988), p. 759. PCM systems are
widely used in many ways and for many purposes by private and
public communications companies. MG-Hill E & C, p. 729. CCLS
apparatus involve the modulation of both analog and digital
signals for transmission, and are used in both line telephony and
line telegraphy.
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Multiplexing involves the various techniques used to enable
the transmission of multiple messages through a common channel.
McGraw-Hill, p. 434. The two techniques used for multiplexing
are frequency division and time division. Id. You state that
the channel unit's basic function is to convert analog and
digital signals into digital signal outputs. In addition, you
state that the channel bank is a multiplexer which uses frequency
division or time techniques to convert several channels into one
for transmission. CCLS multiplexes analog and digital signals
for transmission and reception for both telephony and telegraphy.
Section XVI, Note 2(a), states that "[p]arts which are goods
included in any of the headings of chapters 84 and 85 . . . are
in all cases to be classified in their respective headings."
Section XVI, General EN (II), states that parts which are
suitable for use solely or principally with particular machines
or apparatus are classified in the same heading as those machines
or apparatus. Channel units are solely used with channel banks
and therefore are classifiable as a part of a channel bank within
heading 8517. Parts for the apparatus of heading 8517 are
classifiable within subheading 8517.90. The channel units are
specifically provided for within subheading 8517.90.40 as other
parts of telephonic apparatus.
The articles in question are classifiable as parts of
telephonic apparatus and not telegraphic apparatus because they
involve the transmission of voice and data signals. As stated
previously, "telephony" can involve the transmission of both
speech and data signals. While telegraphic apparatus involve the
transmission of impulses representing texts or images. EN
85.17(II). The channel units at issue clearly fall within the
subheading for parts of telephonic apparatus because they involve
the transmission of both voice and data signals.
HOLDING:
The channel units in question are classifiable within
subheading 8517.90.40, HTSUSA, which provides for other parts of
telephonic apparatus dutiable at 8.5 percent ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division