CLA-2 CO:R:C:M 952628 MBR
Mr. William J. LeClair
Transborder Customs Services, Inc.
One Trans-Border Drive, P.O. Box 800
Champlain, N.Y. 12919
RE: Revocation of HQ 089277; 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; HQ 951331; HQ 952659
Dear Mr. LeClair:
On August 14, 1991, we issued HQ 089277 to you regarding the
classification of the MCN.1008 Asynchronous Packet Assembler/
Disassembler (PAD), under the Harmonized Tariff Schedule of the
United States (HTSUS).
Subsequently, due to our ongoing research and analysis, we
have reconsidered the classification of automatic data processing
machine (ADP) networking equipment. See HQ 951331, dated September
18, 1991, as modified by HQ 952659, dated October 7, 1992.
FACTS:
You stated 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
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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.
ISSUE:
Whether the "Packet Assembler/Disassembler" (PAD) is
classifiable under heading 8471, HTSUS, which provides for
"[a]utomatic data processing machines and units thereof," 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 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...
Legal Note 5(B) to chapter 84, HTSUS, provides guidance
regarding 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).
It has been asserted that ADP networking systems such as the
MCN.1008 Asynchronous Packet Assembler/Disassembler (PAD) units are
essential to the ADP systems they are connected to because they
process and format the data of the computers they serve. We now
agree.
It is also important to note that the ENs, page 1299-1300,
describe separately presented ADP units as follows:
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.
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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.
This category includes channel to channel adapters
used to connect two digital systems to each other.
(5) Signal Converting units. At input, these enable an
external signal to be understood by the machine, while
at output, they convert the output signals that result
from the processing carried out by the machine into
signals which can be used externally.
The PAD unit does in fact effectuate interconnection of the
CPU unit to other units or ADP machines, thereby serving control
and adaption functions, as well as performing signal conversion.
Thus, classification is appropriate in subheading 8471.99.15,
HTSUS, which provides for ADP control or adapter units.
Our diligent fact finding, and research and analysis of this
issue, has been continually ongoing. Therefore, we have learned
more about this merchandise, its functions, and its geometrically
progressive technological developments.
Therefore, based on the new information submitted, and in an
effort to expeditiously and accurately address this classification
issue, we have reconsidered our position. It is now our conclusion
that the data processing features of control and adaption do in
fact represent the principal function of the PAD unit, directing
classification in subheading 8471.99.15, HTSUS, which provides for:
"[a]utomatic data processing machines and units thereof: [o]ther:
[o]ther: [c]ontrol or adapter units."
HOLDING:
The EDA Instruments, Inc., MCN.1008 Asynchronous Packet
Assembler/Disassembler (PAD) unit is properly classifiable under
subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic data
processing machines and units thereof: [o]ther: [o]ther: [c]ontrol
or adapter units." The rate of duty is Free.
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EFFECT ON OTHER RULINGS:
For the reasons stated above, HQ 089277, dated August 14,
1991, is revoked under authority of section 177.9(d), Customs
Regulations.
Sincerely,
John Durant, Director
Commercial Rulings Division
ATTACHMENT: HQ 951331
HQ 952659