CLA-2 R:C:M 957509 RFA
Mr. Steve Agnew
Border Brokerage Company
P.O. Box 3549
Blaine, WA 98231
RE: Telecommunications Equipment; Other Telephonic Apparatus;
Automatic Data Processing (ADP) Machines; Computers;
Software; Legal Note 6 to Chapter 85; EN 85.17; HQs 952154,
950925, 955273
Dear Mr. Agnew:
This is in response to your letter dated December 8, 1994,
to the Regional Commissioner of Customs in New York, on behalf of
Dees Communications Engineering, Ltd., concerning the tariff
classification of telecommunications products under the
Harmonized Tariff Schedule of the United States (HTSUS). Your
letter was referred to this office for response.
FACTS:
The merchandise is available in five different
configurations. Configuration 1 consists of the Mediator
Answering Position (MAP), model 1020, which is designed to
integrate the operation of a telephone answering position (i.e.,
the telephone switchboard for an office) onto a personal computer
(PC). The MAP 1020 enables the user to process (i.e., answer,
make or transfer) telephone calls on a PC with the use of a
headset. The MAP 1020 is a stand alone unit that connects the PC
and the telephone line. This configuration will consist of the
telephony/computer interface hardware module, the MAP software
diskette, model 1021 and user guide documentation. Configuration
2 consists of the MAP software, model 1021, imported without the
hardware.
Configuration 3 consists of the Mediator Automatic Call
Distribution (MACD), model 1030, which is a stand alone device
unit that connects the PC to the telephone line. The MACD 1030
automatically distributes telephone calls to various telephone
stations on an equitable basis. It also queues up extra calls
until a person is available to answer them. The MACD 1030 also
keeps track of the number of calls received and the time spent
answering them. This configuration will consist of the MACD 1030
telephony/computer interface hardware module, the MACD software
diskette, and user guide documentation. Configuration 4
consists of the MAP software, model 1031, imported without the
hardware.
Configuration 5 consists of the Mediator Software
Development Kit (MSDK), model 1011, which is the application
software recorded on a diskette. The MSDK 1011 is a software
development tool which allows individual companies to develop
software for Mediator applications.
ISSUE:
What is the proper classification for the five different
configurations of the Mediator telecommunications products under
the 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.
Initially, we note that Legal Note 6 to chapter 85, HTSUS,
states that: "[r]ecords, tapes and other media of heading 8523 or
8524 remain classified in those headings, whether or not they are
entered with the apparatus for which they are intended." In
classifying retail sets containing media of heading 8523 or 8524,
HTSUS, Customs has interpreted the meaning of Legal Note 6 to
Chapter 85, HTSUS, as requiring that software is to be broken out
from a retail set and classified separately. See HQ 952154
(November 17, 1992); HQ 950925 (May 12, 1992).
CONFIGURATION 1:
Configuration 1 consists of the MAP 1020 telephony/computer
interface hardware module, the MAP software diskette, model 1021
and user guide documentation. We note that the classification of
the software is excluded from classification of this
configuration based upon Legal Note 6 to chapter 85, HTSUS. The
MAP 1021 software is classified under subheading 8524.90.40,
HTSUS, as other recorded media.
In HQ 955273, dated March 7, 1994, Customs determined the
classification of a fax option kit for a PC which contained the
following components: a stuffed printed circuit board; a cable;
screws; an installation guide; a fax label and fax logo; and a
floppy disk containing software. In that ruling, Customs
separately classified the software pursuant to Legal Note 6 to
Chapter 85, HTSUS. Customs further determined that the stuffed
printed circuit board was the principal component of the fax
option kit. Customs concluded that the stuffed printed circuit
board was classifiable under heading 8517, HTSUS, as other
telegraphic apparatus.
In determining whether or not the stuffed printed circuit
board was provided for as telegraphic apparatus or as a unit for
an automatic data processing (ADP) machine or a part of an ADP
machine, Customs consulted the Harmonized Commodity Description
and Coding System Explanatory Notes (EN) which constitute the
Customs Cooperation Council's 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). EN 85.17, page
1360, defines the term "electrical apparatus for line telephony
or line telegraphy" as an
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 fibres,
combination cable, etc.) circuit connecting the
transmitting station to the receiving station. . . .
* * * * * * *
(II) TELEGRAPHIC APPARATUS
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.
Customs determined that the principal function of the
stuffed printed circuit board was the transmission of data
between two points (telegraphy), and that it was unlike the LAN
boards of HQ 952659 [October 7, 1992], because it did not have
data processing capabilities.
According to the information provided, the MAP 1020 is
designed to integrate the operation of a telephone answering
position (i.e., the telephone switchboard for an office) onto a
PC. The MAP 1020 enables the user to process (i.e., answer, make
or transfer) telephone calls on a PC with the use of a headset.
We believe that the principal function of the MAP 1020 is
telephonic apparatus of heading 8517, HTSUS, because it allows a
personal computer to be used as a telephonic switchboard for an
office environment. See HQ 955273. It is provided for under
subheading 8517.81.00, HTSUS, as other telephonic apparatus.
CONFIGURATIONS 2, 4, and 5
Based upon Legal Note 6 to chapter 85, HTSUS, we find that
the MAP software, model 1021, the MACD software model 1031, and
the MSDK software model 1011, are classifiable under subheading
8524.90.40, HTSUS, as other recorded media.
CONFIGURATION 3
Configuration 3 consists of the MACD 1030 telephony/computer
interface hardware module, the MACD software model 1031 diskette,
and user guide documentation. Based upon the analysis in
Configuration 1, we find that the MACD 1030 is classifiable under
heading 8517, HTSUS, because it automatically distributes
telephone calls to various telephone stations on an equitable
basis and queues up extra calls until a person is available to
answer them. The MACD 1030 is classifiable under subheading
8517.81.00, HTSUS, as other telephonic apparatus. The MACD 1031
software is separately classified under subheading 8524.90.40,
HTSUS, as other recorded media.
HOLDING:
CONFIGURATIONS 1 and 3:
The MAP 1020 interface and the MACD 1030 interface are
classifiable under subheading 8517.81.00, HTSUS, which provides
for: "[e]lectrical apparatus for line telephony or telegraphy,
including such apparatus for carrier-current line systems. . . :
[o]ther apparatus: [t]elephonic. . ." The general, column one
rate of duty is 8.5 percent ad valorem.
The MAP 1021 software and the MACD 1031 software are
classifiable under subheading 8524.90.40, HTSUS, which provides
for: "[r]ecords, tapes, and other recorded media for sound or
other similarly recorded phenomena . . . : [o]ther:
[o]ther. . . . " The general, column one rate of duty is 7.8
cents per square meter of recording surface."
CONFIGURATIONS 2, 4, and 5:
The MAP software, model 1021, the MACD software model 1031,
and the MSDK software model 1011, are classifiable under
subheading 8524.90.40, HTSUS, which provides for: "[r]ecords,
tapes, and other recorded media for sound or other similarly
recorded phenomena . . . : [o]ther: [o]ther. . . . " The
general, column one rate of duty is 7.8 cents per square meter of
recording surface."
Sincerely,
John Durant, Director
Commercial Rulings Division