CLA-2 CO:R:C:M 953921 MBR
Mr. Sidney H. Kuflik
Lamb & Lerch
233 Broadway
New York, NY 10279
RE: Revocation of HQ 951009; "10 Base-T MAU Adapter -
Transceiver"; Networking Data Communications System; ADP
Control or Adapter Unit; Part Number 0580-2940-00; HQ 953205
Dear Mr. Kuflik:
On May 1, 1992, we issued HQ 951009 to you, regarding the
classification of the "10 Base-T MAU Adapter - -Transceiver," under
the Harmonized Tariff Schedule of the Unites States (HTSUS). In
HQ 951009 we concluded that the instant merchandise was
classifiable in subheading 8517.82.00, HTSUS, which provides for
electrical apparatus for line telegraphy. However, in HQ 953205
we have reconsidered the classification of this merchandise and
have concluded that the "10 Base-T MAU Adapter - Transceiver" is
properly classifiable in subheading 8471.99.15, HTSUS, which
provides for ADP control or adapter units.
FACTS:
You stated that "Ethernet is the popular system by which
computer networks can transmit and receive data to and from other
ADPs and/or peripheral units." Computers using the Ethernet system
contain an Ethernet "card" (printed circuit board with components
mounted thereon). The older Ethernet cards were designed for
networking over coaxial cable. Coaxial cable has a greater
transmission capacity (bandwidth) than standard twisted pair
telephone wires. However, the current medium of choice for
Ethernet networks is over unshielded twisted-pair (UTP) cable using
the 10 Base-T standard passed by the IEEE (Institute of Electrical
and Electronics Engineers). This allows computers to transmit and
receive data over existing telephone lines within a commercial
building. In order for the older Ethernet cards to transmit and
receive over twisted-pair cable, instead of coaxial cable, a 10
Base-T Adapter must be utilized. "MAU" represents: "Media
Attachment Unit."
-2-
ISSUE:
What is the classification of the "10 Base-T MAU Adapter -
Transceiver" ("10 Base-T Adapter")? Is the 10 Base-T Adapter
classifiable under heading 8471, HTSUS, which provides for "Control
or adapter units" of ADP machines, 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 HTSUS
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...
Since the HTSUS came into effect there has been a great deal
of controversy regarding the classification of LAN equipment.
However, there is no clear classification guidance from either the
HTSUS or the Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), primarily due to the technological
advancements in this area.
In HQ 952659, dated October 8, 1992, regarding LAN boards, we
cited Legal Note 5(B) to chapter 84, HTSUS, which provides guidance
regarding the classification of 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).
We agree that the 10 Base-T Adapter is connectable to the CPU
either directly or through one or more units. Furthermore, the 10
Base-T Adapter is designed to be a constituent unit of an ADP
system, and is able to accept and deliver data.
In HQ 952659 we also cited the Harmonized Commodity
Description and Coding System Explanatory Notes (ENs), pages 1299-
1300, which describe separately presented ADP units, in pertinent
part, as follows:
-3-
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.
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.
We agree that the principal function of the instant 10 Base-
T Adapter is, in fact, to effectuate the interconnection of the CPU
unit to other units or ADP machines, thereby serving "control" and
"adaption" functions. See HQ 953205 for a revocation of HQ 951009.
HOLDING:
The Bel Fuse, Inc., LAN 10 Base-T MAU Adapter - Transceiver,
part number 0580-2940-00, is 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.
Sincerely,
John Durant, Director
Commercial Rulings Division