CLA-2 OT:RR:CTF:EMAIN H302043 NVF
Electronics Center of Excellence and Expertise
U.S. Customs and Border Protection
301 East Ocean Blvd.
Long Beach, CA 90802
Attn: Stephanie R. Demmer, Import Specialist
RE: Application for Further Review of Protest No. 419717101738; Classification of a Chassis/Shelf with Passive Backplane Board Subassembly.
Dear Center Director:
This letter is in response to the Application for Further Review (“AFR”) of Protest No. 419717101738, timely filed by Alcatel-Lucent USA, Inc. (“Alcatel”). The protest pertains to the classification and liquidation by U.S. Customs and Border Protection (“CBP”) of a chassis/shelf with passive backplane board subassembly under subheading 8537.10.91 of the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The import at issue is a Chassis/Shelf Telecommunication with Passive Backplane Board Sub-Assembly (Part # 8DG59319AAAC), also known in ALU documentation as a Rack/Sub-rack Assembly (RSA)-1830 Central Office Shelf 12IN/300MM.
The product is a sub-assembly that consists of a dedicated chassis/shelf which may or may not have discreet but passive additional components and is combined with a passive backplane board. Besides an air filter, a bracket, fasteners, labels, and a protection film it contains two lower level sub-assemblies as follows:
1) A dedicated chassis/shelf assembly “card cage” designed to house integrated circuits and other telecommunication apparatus.
2) A backplane assembly (printed circuit board with connectors for a voltage not exceeding 1,000 volts).
Alcatel states that the chassis/shelf is specifically designed for the ultimate end product which is an 1830 Photonic Service Switch (1830PSS). The shelf is engineered with slotting for photonic service switch cards (various telecommunication circuit packs such as optical amplifiers, telecommunication signal transponders, etc.). It comprises the structure of the finished 1830PSS.
ISSUE:
Whether the chassis with backplane is classified under heading 8517, HTSUS as a part of a telecommunication apparatus, or under heading 8537, HTSUS as a board, panel, or cabinet equipped with two or more apparatus of heading 8535 or 8536, for electrical control or the distribution of electricity.
LAW AND ANALYSIS:
We observe as an initial matter that the matters protested are protestable under 19 U.S.C. § 1514(a)(2) as decisions on classification and amount of duties chargeable. The subject merchandise was entered by Alcatel on August 25, 2016. CBP liquidated the entry on July 7, 2017. On December 1, 2017, Alcatel timely filed a protest and AFR, within 180 days of liquidation of the first entry. Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006). Further review of the protest is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a previous CBP decision concerning substantially similar merchandise.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all classification purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relevant section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration in this case are as follows:
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof
8537 Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 85.35 or 85.36, 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 85.17
Note 2 to Section XVI, HTSUS, further provides that:
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:
Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
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. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;
Therefore, before the chassis with backplane can be classified as a part of a good of heading 8517, HTSUS, per Note 2(b), we must first consider whether it is classified as a good of another heading of Chapter 84 or 85 per Note 2(a).
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
EN 85.37 explains, in relevant part:
These consist of an assembly of apparatus of the kind referred to in the two preceding headings (e.g., switches and fuses) on a board, panel, console, etc., or mounted in a cabinet, desk, etc. They usually also incorporate meters, and sometimes also subsidiary apparatus such as transformers, valves, voltage regulators, rheostats or luminous circuit diagrams.
The goods of this heading vary from small switchboards with only a few switches, fuses, etc. (e.g., for lighting installations) to complex control panels for machine-tools, rolling mills, power stations, radio stations, etc., including assemblies of several of the articles cited in the text of this heading.
The technical information provided by Alcatel indicate that the chassis and backplane is used to electrically connect and provide power to various telecommunication modules. At the time of import the unit does not contain any active telecommunication PCBA modules or cards. It only contains the backplane card used to mount and electrically connect telecommunication devices and provide power to them once they are eventually installed. The backplane card is fitted with slots where in its end-use various telecommunication PCBAs are installed. The chassis serves the sole function of housing the PCBAs and providing an electrical interconnection between each of the card slot busses.
Bases and cabinets designed to electrically connect and direct power are specifically provided for in heading 8537, HTSUS. Heading 8537 covers cabinets or shelves that incorporate a switch or a fuse, which precisely describes the instant chassis and backplane. Therefore, pursuant to Note 2 to Section XVI, the chassis and backplane must be classified under heading 8537, HTSUS and cannot be classified as a part in any heading of Section XVI.
Alcatel argues that Note 2 to Section XVI does not apply to the chassis and backplane because the chassis provides the dominant character of the entire good. However, Alcatel does not provide any legal or statutory support for its position. Moreover, we cannot bypass the directive of GRI 1 that classification is “determined first according to the terms of the headings of the tariff schedule and any relevant section or chapter notes.” In this case, the terms of heading 8537, HTSUS clearly describe the instant chassis and backplane assembly and Note 2 to Section XVI clearly states that the good must therefore be classified as a good and not a part.
Alcatel argues that New York Ruling (“NY”) 894463 (Mar. 2, 1994), NY R00513 (July 28, 2004) and Headquarters Ruling (“HQ”) 967961 (Mar. 21, 2006) support its position that the instant chassis and backplane are classified as a part of a good of heading 8517, HTSUS. However, the items classified by these rulings are not the same as the instant chassis with backplane. They all classify a chassis or cabinet without any incorporated switch or fuse of heading 8535 or 8536. Therefore, they do not apply to the instant chassis with backplane.
Our position is consistent with NY N239877 (April 9, 2013) and HQ 287893 (Aug. 29, 2018) which classified similar goods in heading 8537, HTSUS. Notably, the backplanes described in these rulings are virtually identical to the instant backplane.
In light of the foregoing, we conclude that the chassis with backplane is classified under heading 8537, HTSUS as “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 85.35 or 85.36, 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 85.17.”
HOLDING:
By application of GRIs 1 (Note 2(a) to Section XVI) and 6, the chassis with passive backplane is classified under subheading 8537.10.91, HTSUS which provides for “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: Other: Other.” The column one, general rate of duty is 2.7% ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under 8537.10.91, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheading 6307.90.98, HTSUS, listed above.
You are instructed to DENY the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, which can be found on the CBP website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division