CLA-2 RR:CR:GC 962946 RFA
Port Director
U.S. Customs Service
10 Causeway Street
Boston, MA 02222
RE: Protest 1401-1999-100155; Backplanes Boards; Computer Expansion Slot Boards; Electrical Apparatus for Making Connections to Electrical Circuits; Legal Note 2 to Section XVI; Legal Note 4 to Chapter 85; Nidec Corporation v. United States, 861 F. Supp. 136, aff'd. 68 F. 3d 1333 (1995); HQ 957719; HQ 959022; NY D83330, affirmed
Dear Port Director:
The following is our decision regarding Protest 1401-1999-100155, which concerns the classification of certain backplane boards under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject merchandise are backplane boards, model nos. 54-23907-01EO27 and 54-23957-01, for storage works desktop hard-drive storage cabinets. They are basically PCB sub-assemblies that are incorporated into hard disk drive storage assemblies. They are comprised of connectors, which enable the data to be temporarily stored until controllers within the whole assembly allow its onward transmission. These backplanes include printed wiring boards, connectors, gaskets, shroud housings, and covers, but do not include a CPU or other discrete components.
The merchandise was entered in 1998 under subheading 8537.10.90, HTSUS, as boards for electric control or the distribution of electricity. The entries were liquidated on February 19 and 26, 1999, under subheading 8537.10.90, HTSUS. The protest was timely filed on May 20, 1999.
The subheadings under consideration are as follows:
8473.30.50: Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 8469 to 8472: [p]arts and accessories of the machines of heading 8471: Not incorporating a cathode ray tube: [o]ther. . . .
Goods classifiable under this provision have a general, column one rate of duty of free.
8537.10.90 Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of
heading 8517: For a voltage not exceeding 1,000 V: [o]ther. . . .
Goods classifiable under this provision have a general, column one rate of duty of 3.2 percent ad valorem.
8534.00.00 Printed circuits. . . .
Goods classifiable under this provision have a general, column one rate of duty of 1.9 percent ad valorem.
ISSUE:
Whether the backplane boards are classifiable as boards for electric control or the distribution of electricity, or as parts and accessories of ADP machines, or as printed circuits, 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.
In HQ 957719, dated July 26, 1995, Customs outlined its position on how to classify backplanes under the HTSUS. We note that the term “backplane” is defined as a "[p]rinted circuit board, or device, containing slots, or sockets, for plugging in boards or cables." See The Computer Glossary, p. 32, by Alan Freedman. Industrial node chassis comprised of a 6-slot passive backplane or a 12-slot passive backplane, a power supply, a fan, and a rugged housing for one or more disk drives have been classified under subheading 8473.30.40 [now 8473.30.50], HTSUS, as parts and accessories of the machines of heading 8471, HTSUS. See HQ 953712 (April 16, 1993) and NY 877073 (August 7, 1992). Customs also classified slot board computer cards incorporating central processing unit (CPU) microprocessors, as well as an on-board keyboard connectors, real-time clock/calendars, and battery interfaces under subheading 8471.91.00 [now 8471.50.00], HTSUS, as digital processing units. See NY 877073.
However, Customs determined that passive backplane boards without a CPU or other discrete components merely operates as a connector between other boards inside of an industrial chassis, allowing signals to travel from one board to another. These boards were classified under subheading 8537.10.00 [now, 8537.10.90], HTSUS, which provides for boards, equipped with two or more apparatus of headings 8535 or 8536, HTSUS, for the electric control or the distribution of electricity. See NY 880138 (November 19, 1992). This position was upheld in HQ 959022, dated June 18, 1996.
The classification of the subject merchandise was previously addressed in a ruling issued by the National Commodity Specialist Division in NY D83330, dated October 16, 1998. In determining the classification, Customs concluded that the subject merchandise are passive backplane boards and that based upon HQ 957719, they are precluded from classification under heading 8473, as parts and accessories of ADP machines or units. In NY D83330, Customs held that the subject merchandise is classifiable under subheading 8537.10.90, as boards for electric control or the distribution of electricity.
In filing their request for further review, the protestant also sought reconsideration of NY D83330. Protestant claims that the subject merchandise is appropriately classified under heading 8473, as parts and accessories of ADP machines or units. In support of their claim, protestant cites GRI 1 and GRI 3(a), that heading 8473 is more specific and more appropriate than heading 8537. Protestant also cites Legal Note 2(b) to Section XVI as support for classification under heading 8473 because the backplane is designed and intended for use only with ADP machines.
Subject to certain exceptions that are not relevant here, goods that are identifiable as parts of machines or apparatus of Chapter 84 or Chapter 85, are classifiable in accordance with Section XVI, Legal Note 2, HTSUS. Nidec Corporation v. United States, 861 F. Supp. 136, aff'd. 68 F. 3d 1333 (1995). Parts, 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. See Legal Note 2(a) to Section XVI. Other parts, if suitable for use solely or principally with a particular machine, or with a number of machines of the same heading, are to be classified with the machines of that kind. See Legal Note 2(b) to Section XVI. The Court, after observing that “parts of the machines are to be classified according to [Legal Notes 2(a) and 2(b) of Section 16]” stated that:
[t]he Explanatory Notes hereon state (at page 1131) 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”. This statement, however, does “not apply to parts which in themselves constitute an article covered by a heading of this section . . .; these are in all cases classified in their own appropriate heading even if specifically designed to work as part of a specific machine.” (861 F. Supp. at 141-142; footnote omitted; emphasis in original).
The court’s interpretation is that if a good can be classified in accordance with Legal Note 2(a), then classification under Legal Note 2(b) does not apply. The protestant has not offered any evidence as to why the subject merchandise does not meet the terms of heading 8537, HTSUS. Based upon the application of GRI 1, Legal Note 2(a) to Section XVI, the Nidec decision, and the Customs rulings cited above, we find that the subject merchandise is under heading 8537, HTSUS. Because classification can be determined in accordance with GRI 1 and Legal Note 2(a) to Sections XVI, we find that classification under GRI 3(a) or Legal Note 2(b) to Section XVI, HTSUS, is precluded.
In the alternative, protestant claims classification under heading 8534, as printed circuits. To classify the merchandise under heading 8534, HTSUS, it must meet the criteria of Legal Note 4 to chapter 85, HTSUS, which provides that:
For the purposes of heading 8534 "printed circuits" are circuits obtained by forming on an insulating base, by any printing process (for example, embossing, plating-up, etching) or by the "film circuit" technique, conductor elements, contacts or other printed components (for example, inductances, resistors, capacitors) alone or interconnected according to a pre-established pattern, other than elements which can produce, rectify, modulate or amplify an electrical signal (for example, semiconductor elements).
The term "printed circuits" does not cover circuits combined with elements other than those obtained during the printing process. Printed circuits may, however, be fitted with non-printed connecting elements.
Thin- or thick-film circuits comprising passive and active elements obtained during the same technological process are to be classified in heading 8542.
In addition to the printed circuit, the backplanes consist of shroud housing cover, gaskets, and connectors. As these components are attached to the printed circuit by
methods other than a printing process or "film circuit" technique, we conclude that the subject merchandise does not meet the definition of a "printed circuit" as described in Legal Note 4 to chapter 85, HTSUS.
HOLDING:
The backplane boards, model nos. 54-23907-01EO27 and 54-23957-01, for storage works desktop hard-drive storage cabinets, are classifiable under subheading 8537.10.90, HTSUS, as boards for electric control or the distribution of electricity.
The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
EFFECT ON OTHER RULINGS:
NY D83330, dated October 16, 1998, is affirmed.
Sincerely,
John Durant, Director
Commercial Rulings Division