CLA-2 CO:R:C:M 089277 MBR
Mr. William J. LeClair
Transborder Customs Services, Inc.
One Trans-Border Drive, P.O. Box 800
Champlain, N.Y. 12919
RE: The EDA Instruments, Inc., MCN.1008 Asynchronous Packet
Assembler/Disassembler (PAD); Logic and Support Circuitry
Necessary for Asynchronous Communication Over Private or
Public Data Networks; Telegraphic Apparatus
Dear Mr. LeClair:
This is in reply to your letter of January 29, 1991, on
behalf of EDA Instruments, Inc., requesting classification of
MCN.1008 Asynchronous Packet Assembler/Disassembler (PAD), under
the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA).
FACTS:
You state that the "Packet Assembler/Disassembler" (PAD) is
a data communications multiplexor designed to operate on X.25
networks provided by both public and private communications
carriers, in other words, telephone companies. PADs are
utilized in the following typical data network communication
system configuration: COMPUTER + PAD + MODEM = NETWORK = MODEM +
PAD + COMPUTER.
The literature that you have submitted states that EDA
Instruments, Inc., MCN.1008 Asynchronous Packet
Assembler/Disassembler (PAD) contains the logic and support
circuitry necessary for asynchronous communication over private
or public data networks. The MCN.1008 PAD is an X.3 Packet
Assembler/Disassembler (PAD) which allows from one to eight
device interfaces to share a common X.25 communication trunk.
The PAD can adapt to different types of devices through the
assignment of a set of parameter values for each interface.
There are also parameters to control the format of data transfer
between a terminal and a computer, to improve communication
efficiency by reducing the number of packets generated over the
network. These parameters can be software configured according
to the user's needs and are stored in a battery backed up memory
called NV (non-volatile) RAM.
X.25 is a document describing internationally standardized
protocol to be used by packet switching networks. It was
proposed by the Comite Consultatif International Telephonique et
Telegraphique (CCITT) and has been adopted by most of the common
carriers of the world involved in packet switched data networks.
Packet networks offer the ability to statistically multiplex
several users onto a single network access point through the use
of Packet Assemblers and Disassemblers (PADs).
The PAD requires an external modem in order to transmit and
receive data over carrier current line systems. However, the PAD
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 PAD is not intended for the transmission
of speech or other sounds.
The Uniscope PAD is used with Unisys Uniscope (formerly
Sperry Uniscope) computers and terminals. Burroughs PADs are
used with Burroughs equipment and Asynchronous PADs are used with
a variety of computer equipment which supports standard
asynchronous protocols.
ISSUE:
Whether the "Packet Assembler/Disassembler" (PAD) is
classifiable under heading 8471, Harmonized Tariff Schedule of
the United States Annotated (HTSUSA), which provides for
"[a]utomatic data processing machines," or under heading 8517,
HTSUSA, which provides for "[e]lectrical apparatus for line
telephony or telegraphy"?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUSA
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...
The PAD is not classifiable as an automatic data processing
machine, as defined by Legal Note 5(A)(a) to Chapter 84, HTSUSA.
Legal Note 5(A)(a)(2) requires that digital machines must be
capable of: "(2) being freely programmed in accordance with the
requirements of the user." Although the PAD does perform some
forms of data processing (such as service data which defines
protocol, packet size, etc.) it is Customs position that the PAD
is not freely programmed, and therefore is not classifiable under
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heading 8471.
Heading 8517, HTSUSA, provides for: "[e]lectrical apparatus
for line telephony or line telegraphy, including such apparatus
for carrier-current line systems." The Harmonized Commodity
Description and Coding System Explanatory Notes (ENs) to heading
8517 of the HTSUSA, page 1360, state:
The term "electrical apparatus for line telephony or
line telegraphy" means apparatus for the transmission
between two points of speech or other sounds (or of
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 transmitting station to the
receiving station. The heading covers all such
electrical apparatus designed for this purpose,
including the special apparatus used for carrier-
current line systems.
The term "apparatus" has been defined by the courts as a
combination of articles and materials which are intended,
adapted, and necessary for the accomplishment of some purpose.
The Deseret Co., v. United States, ___CIT___, Slip Op. 86-93
(1986). Your literature states that the PAD contains the logic
and support circuitry necessary for asynchronous communication
over private or public data networks, and that the MCN.1008 PAD
is an X.3 Packet Assembler/Disassembler (PAD) which allows from
one to eight device interfaces to share a common X.25
communication trunk. Therefore, clearly the PAD data
communications system is a combination of articles and materials
intended, adapted and necessary for the accomplishment of a
specific purpose, i.e., that of network data communication.
Heading 8517, HTSUSA, provides for: "[e]lectrical apparatus
for line telephony or line telegraphy, including such apparatus
for carrier-current line systems." The issue has been raised as
to what the term "Carrier Current" line systems encompasses.
"Carrier Current" is used in connection with both power and
communications circuits, however, the principle is basically the
same for both systems. The term refers to the use of a
relatively high-frequency alternating current superimposed on the
ordinary circuit frequencies in order to increase the usefulness
of a given transmission line. Thus, in the case of power
systems, carrier currents of several kHz frequency are coupled to
the 60-Hz transmission lines. These carrier currents may be
modulated to provide telephone communication between points on
the power system or they may be used to actuate relays on the
system. The latter use is known as carrier relaying. Carrier
currents have greatly extended the usefulness of existing line
facilities of the telephone and telegraph companies. Several
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carrier frequencies may be coupled to the lines already having
regular voice or telegraph signals on them. Each of these
carrier frequencies may be modulated with a separate voice or
telegraph channel and thus a given line may carry the regular
signal plus several new carrier channels, each of which is
equivalent to another circuit at regular frequencies. At the
receiving end, the various channels are separated by filters and
the signals are demodulated and then fed to conventional phone or
telegraph circuits. The number of carrier channels which may be
applied to a given line depends upon the characteristics of the
line, varying from one or two for some lines to several hundred
for a coaxial cable. See Van Nostrand's Scientific Encyclopedia,
Seventh Edition, Vol. 1, page 518 (1989).
Heading 8517, HTSUSA, provides for: "[e]lectrical apparatus
for line telephony or line telegraphy, including such apparatus
for carrier-current line systems." Therefore, heading 8517,
HTSUSA, includes apparatus for carrier-current line systems, but
is not limited to such apparatus.
The Customs Co-Operation Council Harmonized Commodity
Description and Coding System, Summary of Comments and
Observations by the Technical Team, Chapter 85, (April 25, 1979)
stated:
With regard to packet switching equipment, the Technical
Team reproduces below, for information, a text published by
the Secretariat for the attention of the Working Party on
Customs applications of computers (Doc. 21.926):
The transmission of computer system messages or parts
of messages between distant points in the form of
discrete packets which are transmitted over an
independently operated computer driven network. The
routes followed by messages are determined by the
network and not by the sending systems. Packet
switching is in many ways analogous to the conventional
manual postal system in which an independent
carrier receives and delivers letter packets for a
community of users. Any one transmission line of
the network may carry messages from different
senders to different addresses. A message to be
transmitted across a packet switched network is
handled in the following manner: [t]he message is
split into a number of packets of fixed maximum
size each prefixed by the source and destination
addresses, length and sequence number. Each
packet is then handled by the network as a
discrete message, being passed from one switch or
node of the network to the next as soon as
possible, depending on the destination address,
the traffic density and the routes available. At
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the destination, the addresses, etc., are stripped
off, the packets combined to form the original
message and an acknowledgement sent back to the
source according to whether or not the message is
free from error. By using high speed links for
the network, packets, originating from a large
number of users transmitting into the network at
moderate speeds, may be interleaved within the
network, while maintaining full integrity and
security. In this manner, network time is shared
between users in a similar manner to that of a
time sharing computer system.
Although the above text is not binding on us, such
information is helpful in that it is demonstrative of the Customs
Co-Operation Council's consideration for inclusion of this type
of apparatus in Chapter 85.
Certainly, the PAD data communication system is apparatus
designed for the transmission of data between two points, by
variation of an electric current connecting the transmitting
station to the receiving station.
Heading 8517, HTSUSA, specifically includes line telegraphy
for the transmission of symbols representing written messages,
images or other data. The definition of "telegraphic apparatus"
is found within the Harmonized Commodity Description and Coding
System Explanatory Note (EN) to 85.17, p. 1363, which states:
This is essentially designed for converting texts or images
into appropriate electrical impulses, for transmitting those
impulses, and at the receiving end, receiving these impulses
and converting them either into conventional symbols or
indications representing the text, or into the text or image
itself. (Emphasis added).
The issue has been raised whether or not the PAD is a
"modem." The Computer Glossary, Fourth Edition, by Alan
Freedman (1989), defines "Modem" as follows:
(MOdulator-DEModulator) A modem is a device that adapts a
terminal or computer to a communications network. Modems
turn digital pulses from the computer into frequencies
(modulate) within the audio range of the telephone system
and convert the frequencies back into digital pulses
(demodulate) on the receiving side. Specialized modems are
used to connect personal computers to a broadband local area
network, which, similar to the telephone system, use
electromagnetic waves for transmission signals, but at
different frequencies. The telephone industry also refers
to a modem as a dataset.
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The modem handles the dialing and answering of the call
and also generates the speed of the transmission, which is
measured in bits per second. Modems used on telephone lines
transmit at speeds of 300, 1200, 2400, 4800, 9600 and 19200
bits per second. The effective data rate is 10% of the bit
rate; thus, 300 bits per second (bps) is equivalent to 30
characters per second (cps). It would take a full minute to
fill up a video screen at that rate; 15 seconds at 1,200 bps
and about seven seconds at 2,400 bps. Due to noisy lines in
the dial-up telephone system, the higher speeds can be
problematic, and private lines may be required.
In order to have a personal computer dial up and
communicate with another computer or public information
service, more than a modem is required. The computer must
have a serial port available into which the modem is
connected. In addition, a communications program must be
used in order to direct the computer to do the transmitting
and receiving.
As this definition delineates, "[m]odems turn digital pulses
from the computer into frequencies (modulate) within the audio
range of the telephone system and convert the frequencies back
into digital pulses (demodulate) on the receiving side." The
PADs do not perform these particular, specialized functions. In
fact, the PADs require the use of a modem to function. PADs are
utilized in the following typical data network communication
system configuration: COMPUTER + PAD + MODEM = NETWORK = MODEM +
PAD + COMPUTER.
As you have stated in your submission, the PAD is a
"Multiplexor." The Computer Glossary defines a "Multiplexor" as
follows:
In communications, a multiplexor brings together
several low-speed communications lines, transforms them
into one high-speed channel and reverses the operation
at the other end. See multiplexing.
The Computer Glossary defines "Multiplexing" as follows:
Multiplexing is the transmission of multiple signals over a
single communications line or computer channel. The two
common multiplexing techniques are frequency division
multiplexing, which separates signals by using different
carrier frequencies to hold them in, and time division
multiplexing, which separates signals by interleaving them
one after the other.
However, the Packet Assembler/Disassembler does not perform
"Packet Switching." The Computer Glossary defines "Packet
Switching" as follows:
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Packet switching is a technique for handling high-volume
traffic in a communications network. Packet switching
breaks apart all messages to be transmitted into fixed
length units called packets. The packets are routed to
their destination through the most expedient route, and all
the packets in a single message may not travel the same
route. The destination computer reassembles the packets
into their appropriate sequence. This method is used to
efficiently handle messages of different lengths and
priorities in a single network. X.25 is an international
standard for a packet switching network.
Your product literature further delineates the differences
between packet switching equipment and the instant PAD
merchandise. Your "System Manual" defines these devices as
follows:
SWITCHES: A packet switch has many X.25 trunks. Its
purpose is the interconnection of network
users so they may exchange information. This
is accomplished by establishing permanent
intra-network channels or by routing X.25
calls and creating switched virtual circuits.
The routing function may include alternate
paths or destinations if the primary routing
cannot be established. Network optimization
can also be performed to achieve a desired
cost/performance curve.
PADS: PADs are statistical multiplexors that adhere
to the CCITT X.3 or X.25 standards, enabling
terminals, printers and computers to transmit
and receive data on X.25 trunks. The unique
structure of the MPX.25000 allows
asynchronous X.3 devices and equipment using
proprietary protocols to be supported within
the same unit. PADs interface with packet
switches to create larger PAD systems or X.25
networks.
The PAD is designed for use either in public or private data
networks. Therefore, it is not necessarily principally used for
carrier-current line systems.
Therefore, it is Customs position that the PAD data
communication system is properly classifiable under subheading
8517.82.00, which provides for: "[e]lectrical apparatus for line
telephony or telegraphy, including such apparatus for carrier-
current line systems: [o]ther apparatus: [t]elegraphic." For
similar holdings regarding similar data communications
merchandise, see HQ 089227, dated July 24, 1991, HQ 086035, dated
August 2, 1990, HQ 086478, dated April 9, 1990, HQ 087468, dated
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January 8, 1991, HQ 086615, dated April 20, 1990, HQ 085661,
dated February 15, 1990, and NY 852403, dated May 31, 1990.
The instant PADs are not similar to the "protocol
converters" considered in HQ 088667. The "protocol converter"
in that case was held to be simply an adapter unit which
converted data in order to interconnect peripherals of one type
to the CPU of another type.
HOLDING:
The EDA Instruments, Inc., "Packet Assembler/Disassembler"
(PAD) data communication system is properly classifiable under
subheading 8517.82.00, which provides for: "[e]lectrical
apparatus for line telephony or telegraphy, including such
apparatus for carrier-current line systems: [o]ther apparatus:
[t]elegraphic." The rate of duty is 4.7% ad valorem. The rate
of duty is Free if the applicable regulations of the United
States-Canada Free Trade Agreement are met.
Sincerely,
John Durant, Director
Commercial Rulings Division