CLA-2-RR:CTF:TCM 967549 IOR
Tariff No.: 9013.80.90
Area Port Director
Customs and Border Protection
605 W. 4th Ave., Rm 205
Anchorage, AK 99501
Attn: Karen Beaudin, IS
Re: Protest AFR No. 3195-02-100053; optical couplers
Dear Port Director:
This is our decision on the application for further review (AFR) of protest no. 3195-02-100053, filed against your classification of optical couplers, under the Harmonized Tariff Schedule of the United States (HTSUS). As originally filed, the protest was against the liquidation of 24 entries, and the subject merchandise also included transponders and optical amplifiers. By letter dated May 7, 2002, the protestant notified Customs and Border Protection (CBP) that the protest was withdrawn with respect to 22 of the entries previously covered. By letter dated March 4, 2004, the protestant notified CBP, that the protest was withdrawn with respect to one of the two remaining entries. Our decision follows a teleconference held on May 11, 2005, between counsel for the protestant and a member of the staff of the Office of Regulations and Rulings, Tariff Classification & Marking Branch.
FACTS:
The subject entry, 110-xxxx021-5, consists of optical couplers, and was made on February 2, 2002, on behalf of Cisco Systems, Inc. (“Cisco”). The merchandise was entered under subheading 9013.80.90, HTSUS, as “other optical appliances and instruments, not specified or included elsewhere in this chapter.” The entry was liquidated as entered, on December 14, 2001. A timely protest was filed by Cisco on March 14, 2002. In a submission dated March 4, 2004, it is asserted that the optical couplers are used exclusively as parts of networking equipment for optical networking or telecommunications systems. It is further asserted that based on their principal use, judicial precedent, and CBP rulings, the couplers are properly classified in subheading 8517.90, HTSUS, as parts of telecommunications apparatus, more specifically, under subheadings 8517.90.5600 or 8517.90.6600, HTSUS.
The protestant has provided specifications for optical couplers, referred to as fused couplers therein, and literature from several manufacturers. According to the protestant, the product information for the exact couplers that were imported is not available as the manufacturer, FIBX Corporation, was acquired by another manufacturer, E-TEK. However, the protestant asserts that for purposes of classification, the couplers described in the submitted literature are similar to that which is the subject of the protested entry. The couplers which are referred to as “fused couplers” in the submitted literature, will be hereinafter referred to as “optical couplers” consistent with the protestant’s submission of March 4, 2004. The literature from E-TEK describes the optical couplers as “multi-port devices that split or combine light.” JDS Uniphase literature states that the optical coupler “splits or combines light.” According to the literature, the purpose of the optical coupler is to split and monitor optical signals in the infrared wavelength range. The JDS product literature submitted shows two configurations for the optical coupler. One is referred to as the one by two (one fiber into the housing and two fibers out of the housing: and the other is referred to as the two by two (two fibers into the housing and two fibers out of the housing). The optical couplers operate in the 1310 band (1295 to 1325 nanometers), the 1480 band (1465 to 1495 manometers), C band (1528 to 1563 nanometers) and L band (1570 to 1605 nanometers). The optical couplers operate in the infrared wavelength range. The optical couplers consist of a housing and optical fibers.
ISSUE:
Whether the optical couplers are classified under heading 8517, HTSUS, as parts of “electrical apparatus for line telephony or line telegraphy,” or heading 9013, HTSUS as “other optical appliances and instruments.”
LAW AND ANALYSIS:
Initially we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification, and the protest was timely filed, within ninety days of the liquidation of the entry.
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 GRIs 2 through 6 may then be applied in order.
The HTSUS subheadings under consideration are as follows:
8517 Electrical apparatus for line telephony or line telegraphy, including
line telephone sets with cordless handsets and telecommunication
apparatus for carrier-current line systems or for digital line systems;
videophones; parts thereof:
8517.90 Parts:
Other:
Parts including face plates and lock latches, for
printed circuit assemblies:
8517.90.56 For telegraphic apparatus………………..
Other:
8517.90.66 For telegraphic apparatus………………..
9013 Liquid crystal devices not constituting articles provided for more
specifically in other headings; lasers, other than laser diodes; other
optical appliances and instruments, not specified or included
elsewhere in this chapter; parts and accessories thereof:
9013.80 Other devices, appliances and instruments:
9013.80.90 Other……………………………………………………..
Section XVI Note 1(m), HTSUS provides that section XVI does not cover articles of chapter 90. Heading 8517, HTSUS, is included in section XVI, HTSUS. With respect to the application of Note 1(m) the decision in Sharp Microelectronics Technology, Inc v. United States, 122 F.3d 1446 (Fed. Cir. 1997), is instructive. In Sharp, the Court of Appeals determined that Note 1(m) can be complementary to a relative specificity analysis between competing headings. Id. at 1450-1451.
The optical coupler, by itself, is not telecommunications apparatus but is a part thereof. As such, it is prima facie described in heading 8517, HTSUS, as a part of “[e]lectrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems.”
The optical coupler is also described as “optical appliances and instruments.” Additional U.S. Note 3, to Chapter 90, HTSUS, states as follows:
For the purposes of this chapter, the terms ”optical appliances” and “optical instruments” refer only to those appliances and instruments which incorporate one or more optical elements, but do not include any appliances or instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose.
The coupler incorporates optical elements, in the form of the optical fibers, which direct light by splitting or joining the rays. The optical elements are for the purpose of directing light, and not a subsidiary purpose. The direction of the light is the only purpose of the coupler. The protestant takes the position that based on the decision in Celestaire, Inc. v. United States, 120 F.3d 1232 (Fed. Cir. 1997), the optical coupler is not an optical element for purposes of Chapter 90, HTSUS, because the optical coupler operates in the infrared wavelength range, and thus cannot “permit or enhance human vision,” because human vision is only sensitive to light in the range of 380 to 720 nanometers in wavelength. In Celestaire, the court applied a three part test to determine whether a marine sextant is an optical instrument:
1. Whether the device acts on or interacts with light;
2. Whether the device permits or enhances human vision through the use
of one or more optical elements; and
3. Whether the device uses the optical properties of the device in
something more than a “subsidiary” capacity.
Id., at 1233.
In HQ 962947, dated March 12, 2001, in determining whether a tunable laser diode is classified under heading 9013, HTSUS, as optical appliances and instruments, CBP explained why the criteria applied in Celestaire, including the second criterion, that the device permit or enhance human vision through the use of one or more optical elements, are not controlling or exhaustive, in determining whether an article is an optical instrument or appliance. The analysis in HQ 962947, is incorporated herein. Furthermore, we take the position that the decision in Celestaire, is not controlling in this case, because, the marine sextant met the three specific criteria set out, and the court did not need to consider additional factors, or determine whether the three criteria set out were controlling in all cases. Accordingly, we conclude that the optical coupler is prima facie described in heading 9013, HTSUS.
The protestant argues that in HQ 962947, CBP incorrectly characterized the earlier decision in Engis Equipment Co. v. United States, 294 F. Supp. 964 (Cust. Ct. 1969), when discussing Celestaire, as only requiring that optical instruments “primarily” aid human vision. However, subsequent decisions applying the criteria in Engis, are consistent with CBP’s characterization. See United States v. Ataka America Inc., 550 F.2d 33 (CCPA 1977).
In Sharp, supra, the Court of Appeals affirmed the Court of International Trade’s (CIT) conclusion that under a relative specificity analysis, a parts provision is less specific than heading 9013, HTSUS. The CIT had looked “to the provision with ‘requirements which are more difficult to satisfy and which describe the article with the greatest degree of accuracy and certainty’, citing Amersham Corp. v. United States, 5 C.I.T. 49, 564 F. Supp. 813, 824 (Ct. Int’l Trade 1983).” Id. at 1449. The CIT had also applied Additional U.S. Rule of Interpretation (AUSRI) 1(c), which provides that “a provision for ‘parts’ or ‘parts and accessories’ shall not prevail over a specific provision for such part or accessory.” In this case, under a relative specificity analysis, as applied in Sharp, we find that the optical couplers are precisely described by heading 9013, HTSUS as “optical appliances and instruments,” and heading 9013 is more difficult to meet than a parts provision. In addition, under AUSRI 1(c), the specific heading of 9013, HTSUS, is preferred over the “parts” provision. In HQ 966041, dated April 29, 2003, citing Sharp, supra, it was determined that the terms “not elsewhere specified or included” in heading 9013, HTSUS, does not render the heading a “basket” or non-specific provision. Therefore, under a relative specificity analysis, the optical couplers are classified under heading 9013, HTSUS.
As we have determined that the optical couplers are described under heading 9013, HTSUS, the application of section XVI Note 1(m), without a relative specificity analysis also results in a determination that the optical couplers are classified under heading 9013, HTSUS.
The protestant takes the position that under CBP precedent, goods which are principally used for digital line system transmission, are classified under heading 8517, HTSUS, without regard to section XVI Note 1(m). Specifically, the protestant cites to HQ 961518, dated January 23, 2002, HQ 964874, dated September 26, 2002, and HQ 965942, dated December 19, 2002. In each of the cited rulings, the articles at issue were more complex articles and finished goods which incorporated optical elements, but the optical elements were for a subsidiary purpose, and as such the articles were not classifiable in heading 9013, HTSUS. Moreover, we note that in the cases cited by the protestant, the articles were not classified as parts in heading 8517, HTSUS, but as articles.
The protestant also cites to NY G86274, dated February 12, 2001, in support of classification of the subject merchandise in heading 8517, HTSUS. In NY G86274, the item in question was classified as a part in heading 8517, HTSUS, but only after a specific determination that the item was not described in heading 9013, HTSUS. We do not find that the decisions cited support the protestant’s position that the subject merchandise is classifiable in heading 8517, HTSUS.
With respect to HQ 965942, which addressed the classification of circuit packs and dispersion compensation modules, it was stated that Note 1(m) did not operate in that instance. However, in HQ 965942, although it was not stated, a determination had been made that the circuit packs and the dispersion compensation modules were not described in heading 9013, HTSUS. Any optical appliances and apparatus incorporated in the circuit packs and dispersion compensation modules, had optical elements which were subsidiary in function. It follows, that in such a situation, Note 1(m) is not applicable. In the statement in HQ 965942, that “the circuit packs contain optical amplifiers, which may, if principally used in other applications, be classified in heading 9013, HTSUS”, the use of the term “optical amplifiers” was misleading, as the sentence was intended to refer to “optical appliances and apparatus.” The use of the term optical amplifiers in the referenced sentence is not consistent with the text of the ruling, because earlier in the ruling, it is stated that optical amplifiers are referred to as “circuit packs” therein, and it therefore is misleading in that context to state that a circuit pack contains an optical amplifier. The reference to the classification of optical amplifiers in heading 9013, does not address what is meant by “other applications.” The intent of the sentence was to state that optical appliances and apparatus, when presented separately and not incorporating optical elements with a subsidiary purpose, may be classified under heading 9013, HTSUS. Identical language was used in HQ 965367, dated September 26, 2002, and the clarification herein of the intent of the statement is also applicable to HQ 965367. This is consistent with other decisions issued by CBP. For example, see HQ 956839, dated March 28, 1996, which discusses articles that contain optical elements, and states that where the optics are determined to be subsidiary, the article is not classifiable under heading 9013, HTSUS.
We also note language in HQ 966888, dated May 10, 2004, which may lead to the incorrect conclusion that Note 1(m) is not applicable with respect to articles of Chapter 90, principally used in digital telecommunications systems. HQ 966888 pertained to printed circuit board assemblies designed for use within circuit packs used in telecommunications systems. While the decision correctly concluded that the article was classified in heading 8517, HTSUS, it precluded classification under heading 9013, HTSUS, for the wrong reason. There is no indication that the article in issue was determined to be an optical instrument or appliance, therefore, neither heading 9013, HTSUS, nor Note 1(m) to Section XVI had any relevance to the classification of the merchandise. We note that the statement in the FACTS portion of the ruling regarding the decision in HQ 965367, is a misstatement of the decision in HQ 965367.
For the foregoing reasons, we conclude that the optical couplers are classified under heading 9013, HTSUS, as other optical appliances and instruments, specifically in subheading 9013.80.90, HTSUS, as “[l]iquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: Other devices, appliances and instruments: Other.”
HOLDING:
By application of GRI 1, the optical couplers are classified in heading 9013, specifically subheading 9013.80.9000, HTSUSA, which provides for “[l]iquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof: Other devices, appliances and instruments: Other,” with a column one, general duty rate of (in 2001) of 4.5% ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usits.gov/tata/hts/.
The protest should be DENIED. In accordance with the Protest/Petition Processing Handbook (CIS HB, June 2002, pp. 18 and 21), 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division