CLA-2 RR:CR:GC 963280 GOB
Carolyn D. Amadon
Robert E. Burke
Barnes, Richardson & Colburn
303 East Wacker Drive
Suite 1100
Chicago, IL 60601
RE: Keyboards; Keytops; HQ 961259 modified
Dear Ms. Amadon and Mr. Burke:
This letter is with respect to your letter of November 22, 1999, on behalf of Preh Electronics, Inc. (“Preh”), concerning the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of keyboards, keypads, and parts thereof. You made an additional submission dated August 29, 2000.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of HQ 961973, as described below, was published in the Customs Bulletin on August 22, 2001.
The only comment received in response to the notice was the comment you submitted by letter of September 21, 2001, on behalf of Preh. Your comment and our reply are discussed in the LAW AND ANALYSIS section of this ruling.
FACTS:
In your submission of November 22, 1999, you “request a ruling on products similar to that covered by HQ 961259 (December 8, 1998) which modified HQ 957491 (July 31, 1996). While HQ 961259 addressed one
representative model of keyboard, the PC-POS, we believe the principles involved apply to all of Preh’s imported products that have the same characteristics as the Preh PC-POS.”
In HQ 961259, we held that the PC-POS keyboard with a magnetic stripe reader (MSR) is classified under subheading 8471.92.20, HTSUS (1994 “HTSUS”) and 8471.60.20, HTSUS (1998 HTSUS), as a keyboard.
The merchandise at issue in HQ 961259 was described as follows in that ruling:
The PC-POS keyboard with MSR ... is a QWERTY-style keyboard with housing and interface electronics containing a slot for the MSR. It also consists of additional “rows and columns” keys which may be programmed to accommodate a customer’s unique specifications, such as POS applications ... the keyboard is specifically designed for use with IBM or IBM-compatible PCs. The keyboard also includes an additional “wedge,” which extends the flexibility of both the keyboard and a PC using the keyboard to various other external applications, such as laser scanners.
In your November 22, 1999 submission, you describe the goods at issue in this request as follows:
The first category of merchandise described herein includes Preh’s MC and WX series completed keyboards ... They are either “rows and columns” keyboards or, in some cases, “QWERTY-style” keyboards containing 84 or 128 keys, and like the Preh PC-POS keyboard that was the subject of HQ 961259 (December 8, 1998), both the MC and WX series are imported
with housings and interface electronics. They are configured for data entry functions, and have applications in commercial office and POS settings. Like the Preh PC-POS, the MC and WX series cannot be operated unless connected to a CPU through the interface. In addition, they send and receive data from the ADP system, and are used with an ADP system in the same manner as the Preh PC-POS keyboard.
Preh’s second category of merchandise in question includes three types of unfinished computer keyboards [footnote omitted]: (1) “rows and columns” keypads, including the NW and the MTF series; (2) QWERTY-style reconfigurable keypads, including the AK series; and, (3) customized keypads
and keyboards, in which the size, shape and layout are specified by Preh’s customers. The bare keyboards and keypads are not imported with housings or interface electronics. However, they have the same basic design and function as the Preh PC-POS Keyboard with MSR that was described in HQ 961259, dated December 8, 1998. First, the keys consist of three-fourths inch key-spacing, which is consistent with the standard spacing of all computer keyboards. Second, they have identical actuation mechanisms. Third, the bare keyboards and keypads cannot be operated unless they
are connected to a CPU through an interface. Fourth, after
being equipped with interface electronics, the keyboards and
keypads are able to send and receive data from the ADP system. Thus, once they are equipped with interface electronics, Preh’s bare keyboards and keypads are used with an ADP system in the same manner as the Preh PC-POS keyboard that was the subject of HQ 961259.
With respect to parts and accessories, the final category of merchandise described herein, Preh separately imports keytops for use with its keyboards. They are both printed and unprinted, and are interchangeable. They are specifically designed for use with the keyboards described herein.
You refer to the first category of merchandise, described above, as the Preh MC and WX series of completed keyboards. You break down the second category of merchandise, described above, into the following four groups: sample A1: rows and columns keyboards; sample A2: QWERTY-
style keypad; sample A3: customized keyboards; and keytops separately
imported by Preh.
ISSUE:
What is the tariff classification of the subject merchandise?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s 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.
The HTSUS provisions under consideration are as follows:
8471 Automatic data processing machines and units thereof ... :
8471.60 Input or output units, whether or not containing storage units in the same housing:
Other:
8471.60.20 Keyboards
* * * * * *
8537 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:
8537.10 For a voltage not exceeding 1,000 V:
8537.10.90 Other
* * * * * *
8538 Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537:
8538.90 Other:
Other:
8538.90.80 Other
* * * * * *
8485 Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, and not specified or included elsewhere in this chapter:
8485.90.00 Other
* * * * * *
8548 ... electrical parts of machinery or apparatus, not specified or included elsewhere in this chapter:
8548.90.00 Other
* * * * * *
You claim that the goods at issue here are classifiable under heading 8471, HTSUS. Heading 8471, HTSUS, is governed by the terms of Legal Note 5 to Chapter 84, HTSUS, which provides, in relevant part:
(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:
(a) It is of a kind solely or principally used in an automatic data processing system;
(b) It is connectable to the central processing unit either directly or through one or more other units; and
(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.
* * * * *
(D) Printers, keyboards, X Y coordinate input devices and disk storage units which satisfy the conditions of paragraphs (B)(b) and (B)(c) above, are in all cases to be classified as units of heading 8471.
(E) Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
The General EN to Chapter 84, HTSUS, provides in pertinent part ((E) (1)) as follows:
A machine incorporating an automatic data processing machine and performing a specific function other than data
processing is classifiable in the heading corresponding to the function of that machine or, in the absence of a specific heading, in a residual heading, and not in heading 84.71.
Note 2 to Section XVI, HTSUS, provides in pertinent part as follows:
Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of chapters 84 and 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in
heading 8409, 8431,8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate ...
(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate, or failing that, in heading 8485 or 8548.
Preh MC and WX Series Completed Keyboards
In your August 29, 2000 submission you excerpt the following language from HQ 961259:
The test for meeting the terms of note (D) should be what is specifically required in note (D). If certain devices satisfy the conditions of chapter 84, notes 5(B)(b) and (c), HTSUS, they are to be classified as units of heading 8471, HTSUS.
We are no longer of that opinion as expressed in HQ 961259. Note 5(D) to Chapter 84, HTSUS, is subject to Note 5(E). Accordingly, if a machine performs a specific function other than data processing and incorporates or works in conjunction with an automatic data processing machine, it is to be classified in the heading
corresponding to the function of the machine, and not in heading 8471, HTSUS.
In HQ 957491, which was modified by HQ 961259 only as to the classification of the PC-POS, we stated:
Thus, while note 5(D) negates the sole or principal use requirement when considering the classification of printers,
keyboards, X-Y coordinate input devices and disk storage units, note 5(E) provides a separate prerequisite to the classification
of any ADP machine and, therefore, ADP unit. To be classified as an ADP unit, a device must be used with a machine that is
considered, for classification purposes, an ADP machine. See chapter 84, note 5(A), HTSUS (1994/1996) (defining “automatic
data processing machines” for purposes of heading 8471, HTSUS).
In HQ 960081 dated February 12, 2001, we determined that a 3M Scotchprint Printer is classified in subheading 8443.59.50, HTSUS, based upon Note 5(E) to Chapter 84.
In HSC 25 in March 2000 (Annex H/6 to Doc. NC0250E2), the Harmonized System Committee (“HSC”) of the World Customs
Organization (“WCO”) confirmed the classification of the “Iris 3047” ink-jet printer in heading 8443 and subheading 8443.51, rather than in heading 8471, by application of GRI 1 (Notes 5(B), 5(D) and 5(E) to Chapter 84). In essence, the HSC determined that the goods of Note 5 (D) to Chapter 84 are units of automatic data processing and therefore are subject to Note 5(E) of Chapter 84. See Note 5 (B) which contains the language “Subject to paragraph (E) below ...” and Note 5 (D) which pertains to “... satisfy[ing] the conditions of paragraphs (B)(b) and (B)(c) ...” As stated above, Note 5 (E) provides:
Machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.
Classification opinions of the HSC may provide assistance in the understanding of the international agreement, the Harmonized System, on which the HTSUS is based. The HSC decision is consistent with our decision in HQ 960081 and here.
The Preh MC and WX series of completed keyboards are either “rows and columns” keyboards, or, in some cases, “QWERTY”- style keyboards which contain 84 or 128 keys. They are both imported with housings and all of the interface electronics. They are configured for data entry functions, and have applications in commercial office and POS settings. They are designed for connections to IBM-PC compatible types of computers, and are compatible with all common operating systems.
We find that the Preh MC and WX series of completed keyboards are described in heading 8471, HTSUS. They are not excluded from heading 8471 by Note 5(E) as they perform no function other than data processing. They are classified in subheading 8471.60.20, HTSUS, as: “Automatic data processing machines and units thereof ... : ... Input or output units, whether or not containing storage units in the same housing: Other: Keyboards.”
In your comment, you state that you agree with classification of these keyboards in subheading 8471.60.20, HTSUS. You further state that you disagree with Customs position that Note 5(D) to Chapter 84, HTSUS, is subject to Note 5(E). We believe there is clear and substantial basis for our position, as outlined above.
Rows and Columns Keyboards (sample A1), QWERTY-style Keypads (sample A2), and Customized Keyboards (sample A3)
In your comment, you state that Preh disagrees with the classification of its other keyboard and keypad models (samples A1, A2, and A3). It states that these devices are designed for and can only be used with a personal computer; by their nature they serve only one purpose – to facilitate the sending of a signal to the CPU.
The rows and columns keyboards (sample A1), QWERTY-style keypads (sample A2), and customized keyboards (sample A3) are imported without their housings and interface electronics. They do not have the ability to accept or deliver data in a form (codes or signals) which can be used by an ADP system. See Legal Note 5(B)(c) to Chapter 84, HTSUS. There is no documentary evidence as to the principal function of these goods. Accordingly, we find that classification of these goods in heading 8471, HTSUS, is precluded. We find that they are described in heading 8537, HTSUS, and therefore classified in subheading 8537.10.90, HTSUS, as: “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 ... : For a voltage not exceeding 1,000 V: ... Other.”
Keytops Separately Imported by Preh
Printed keytops are classified in subheading 8538.90.80, HTSUS, as: “Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537: ... Other: ... Other: ... Other.”
Unprinted keytops cannot be classified pursuant to Legal Note 2 (b) to Section XVI, HTSUS, because satisfactory evidence has not been provided that the unprinted keytops are suitable for use solely or principally with a
particular kind of machine, as required by that Note. Note 2(c) to Section XVI provides: “All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548.” Pursuant to Note 2(c) to Section XVI, the unprinted or interchangeable keytops which do not contain electrical connectors are classified in subheading 8485.90.00, HTSUS, as: “Machinery parts, not containing electrical connectors, insulators, coils, contacts or other electrical features, and not specified or included elsewhere in this chapter: ... Other.” If there are keytops which include electrical connectors, they are classified in subheading 8548.90.00, HTSUS, as “... electrical parts of machinery or apparatus, not specified or included elsewhere in this chapter: ... Other.”
1994 HTSUS
HQ 961259 also dealt in part with the 1994 HTSUS. Note 5 of Chapter 84, HTSUS (1994), provided in pertinent part as follows:
(B) 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 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).
Both units entered separately are also to be classified in heading 8471.
Heading 8471 does not cover machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function. Such machines are classified in the
headings appropriate to their respective functions or, failing that, in residual headings.
We find that there would be no different result under the 1994 HTSUS from the above findings stated above for the 2001 HTSUS.
HQ 961259
HQ 961259 provided in pertinent part as follows:
The test for meeting the terms of note (D) should be what is specifically required in note (D). If certain devices satisfy the conditions of chapter 84, notes 5(B)(b) and (c), HTSUS, they are to be classified as units of heading 8471, HTSUS. As we have previously stated, the subject keyboard is connectable to a CPU and it is able to accept or deliver data in a form which can be used by an ADP machine, thereby satisfying the terms of chapter 84, notes 5(B)(b) and (c), and note 5(D), HTSUS.
We will confine the application of chapter 84, note 5(E), HTSUS, to the subject merchandise. Based upon the
information provided, and contrary to the holding in HQ 957491, the subject keyboard performs a data processing function, as its intended use is to input data. In fact, it is our understanding that a keyboard user can manually input the data from a credit card or other card into the PC by punching the keys of the keyboard rather than sliding the card through the MSR. Therefore, the MSR does not necessarily have to be utilized. Consequently, because the purpose of the keyboard is
for data input, it is now our position that chapter 84, note 5(E), HTSUS, does not preclude classification of the keyboard in heading 8471, HTSUS. We also note that, as previously stated, MSRs themselves are classifiable in heading 8471, HTSUS.
This language in HQ 961259 no longer reflects our view of Note 5 to Chapter 84, HTSUS. Our view is reflected in the language of HQ 957491 (more fully excerpted above), where we stated that “... note 5(E) provides a separate prerequisite for the classification of any ADP machine and, therefore, ADP unit." [Emphasis in original.] Our view is also reflected in the classification opinion with respect to the “Iris 3047” ink-jet printer, described above.
HOLDINGS:
The Preh MC and WX series completed keyboards are classified in subheading 8471.60.20, HTSUS, as: “Automatic data processing machines and units thereof ... : ... Input or output units, whether or not containing storage units in the same housing: Other: Keyboards.”
The rows and columns keyboards (sample A1), QWERTY-style Keypads (sample A2), and customized keyboards (sample A3) are classified in subheading 8537.10.90, HTSUS, as: “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 ... : For a voltage not exceeding 1,000 V: ... Other.”
The printed keytops separately imported by Preh are classified in subheading 8538.90.80, HTSUS, as: “Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537: ... Other: ... Other: ... Other.”
The unprinted or interchangeable keytops which do not contain electrical connectors are classified in subheading 8485.90.00, HTSUS, as: “Machinery parts, not containing electrical connectors, insulators, coils,
contacts or other electrical features, and not specified or included elsewhere in this chapter: ... Other.”
If there are unprinted or interchangeable keytops which include electrical connectors, they are classified in subheading 8548.90.00, HTSUS, as “... electrical parts of machinery or apparatus, not specified or included elsewhere in this chapter: ... Other.”
EFFECT ON OTHER RULINGS:
HQ 961259 is modified to the extent described above, i.e., the language in HQ 961259 no longer reflects our view of Note 5 to Chapter 84, HTSUS. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
John Durant, Director
Commercial Rulings Division