HQ 958720

March 28, 1996

CLA-2 RR:TC:MM 958720 RFA

CATEGORY: Classification

TARIFF NO.: 8517.90.44

Port Director

U.S. Customs Service

Los Angeles Airport Area

300 S. Ferry Street

Terminal Island, CA 90731

RE: Protest 2720-95-101202; Modem Board Missing Firmware;

Unfinished or Incomplete; Parts; Heading 8517; GRI 2(a)

Dear Port Director:

The following is our decision regarding Protest 2720-95-101202, which
concerns the classification of unfinished modem

boards under the Harmonized Tariff Schedule of the United States

(HTSUS).

FACTS:

The subject merchandise are semi-finished printed circuit

board assembly modem cards, part numbers 1442FQ, 1442FT, and

1442VFT. As imported, the modem boards have the following

components: a telephone/modem interface; logic/memory interface

chips for the computer; transformers; 2 crystals for the

controllers; and relays. After importation, the controller,

modem data pump, and EPROM chip will be added to the modem board.

The controller controls the modulation and demodulation of a

signal. The modem data pump contains the algorithms which allow

the modem to connect to the telephone line. The EPROM chip

maintains preprogrammed information.

The merchandise was entered under subheading 8517.40.10,

HTSUS, as unfinished modem boards. The entries were liquidated

on September 15 and 22, October 6 and 20, 1995, under subheading

8517.90.26, HTSUS, as other parts of telegraphic apparatus. The

protest was timely filed on October 20, 1995.

The subheadings under consideration are as follows:

8517: Electrical apparatus for line telephony or

telegraphy, including such apparatus for

carrier-current line systems; parts thereof:

8517.40.10: Other apparatus, for carrier-current line

systems: \[m\]odems, of a kind used with data

processing machines of heading 8471. . . .

Goods classifiable under this provision have a general,

column one rate of duty of 4.2 percent ad valorem.

8517.90: Parts:

8517.90.26: Other parts, incorporating printed

circuit assemblies: Parts for articles

of subheadings 8517.20, 8517.30,

8517.40.50 and 8517.81: For telegraphic

switching apparatus. . . .

Goods classifiable under this provision have a general,

column one rate of duty of 4.7 percent ad valorem.

8517.90.38: Other: Printed circuit assemblies: For

telephonic apparatus: Other. . . .

Goods classifiable under this provision have a general,

column one rate of duty of 8.5 percent ad valorem.

8517.90.44: Other: Printed circuit assemblies: For

telegraphic apparatus. . . .

. Goods classifiable under this provision have a general,

column one rate of duty of 4.7 percent ad valorem.

ISSUE:

Whether the modem board, missing the controller, modem data

pump and EPROM chip, is classifiable as an unfinished modem or as

part of a modem, 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.

Complete or finished modems are classifiable under

subheading 8517.40.10, HTSUS. The protestant states that the

semi-finished modem boards are classifiable as incomplete or

unfinished modem boards based upon GRI 2(a), which states that:

\"any reference in a heading to an article shall be taken to

include a reference to that article incomplete or unfinished,

provided that, as presented, the incomplete or unfinished article

has the essential character of the complete or finished article.\"

To be classified as an incomplete or unfinished modem, the

merchandise must have the essential character of the complete or

finished articles. The term \"modem\" is not defined in the HTSUS

or in the Harmonized Commodity Description and Coding System

Explanatory Notes (EN), which constitute the official

interpretation of the HTSUS. See T.D. 89-80, 54 FR 35127, 35128

(August 23, 1989).

In Rico Import Co. v. United States, 16 CIT 770, 797 F.

Supp. 1028 (1992), the court stated that \"\[i\]t is well settled

that tariff acts must be construed to carry out the intent of the

legislature.\" See Nippon Kogaku (USA), Inc. v. United States, 69

CCPA 89, 92, 673 F.2d 380, 382 (1982)(citing Sandoz Chem. Works,

Inc. v. United States, 43 CCPA 152, 156, C.A.D. 623 (1956)). The

first place to look to establish the intent of Congress is the

language of the statute itself. Consumer Prod. Safety Comm\'n v.

GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). The court may

resolve ambiguities in the plain language of a statute by

resorting to legislative history and other extrinsic sources.

Sandoz Chem. Works, 43 CCPA at 156.

A tariff term that is not defined in the HTSUS or in the

EN\'s is construed in accordance with its common and commercial

meaning. Nippon Kogaku (USA) Inc. v. United States, 69 CCPA 89,

673 F.2d 380 (1982). Common and commercial meaning may be

determined by consulting dictionaries, lexicons, scientific

authorities and other reliable sources. C.J. Tower & Sons v.

United States, 69 CCPA 128, 673 F.2d 1268 (1982). Lexicon

sources defines \"modem\" as follows:

1\. The Computer Glossary, Sixth Edition, by Alan

Freedman: Modem (MOdulator-DEModulator) Device that

adapts a terminal or computer to a telephone line. It

converts the computer\'s digital pulses into audio

frequencies and converts them back into pulses at the

receiving side.

2\. New Grolier Encyclopedia Electronic Publishing,

Inc., 1994: A modem is a device that converts one form

of communication signal into another. It is used as a

link between devices that use different forms of

signals, such as computers and telephones. The word

modem derives from this use. That is, conversion from

the digital signals . . . of computers to the analog

signals . . . of telephones is called modulation, while

the reverse process is called demodulation. Modems can

also carry out various control functions for

coordinating the transmitted data.

Digital data from a computer, in the form of a sequence

of bits, is fed to a modem. The modem converts the

bits into an analog signal that preserves the

distinction between the low and high bits; for

example, the bits may be converted into two frequencies

such as 1,200 Hz and 2,200 Hz. At the receiving end,

another modem detects the two frequencies and produces

a digital signal that is identical to the original

digital signal. In this way, data can be transmitted

at the rate of up to 9,600 bits per second over

ordinary telephone lines, and at even higher rates over

\"shielded\" lines.

We find that the semifinished boards do not have the

essential character of a finished modem board because in its

condition as imported, it lacks the ability to modulate and

demodulate a signal, and it does not have the capability of being

able to connect to the telephone line. Therefore, the

semifinished boards are not classifiable under subheading

8517.40.10, HTSUS, as unfinished modems based upon the

application of GRI 2(a). We find that the semifinished printed

circuit board assemblies are classifiable as parts for the use of

sending and receiving telegraphic signals. The subject modem

cards are properly classifiable under subheading 8517.90.44,

HTSUS, which provides for printed circuit assembly parts for

telegraphic apparatus.

HOLDING:

The semi-finished printed circuit board assembly modem

cards, part numbers 1442FQ, 1442FT, and 1442VFT, are classifiable

under subheading 8517.90.44, HTSUS, which provides for:

\"\[e\]lectrical apparatus for line telephony or telegraphy,

including such apparatus for carrier-current line systems; parts

thereof: \[p\]arts: \[o\]ther: \[p\]rinted circuit assemblies: \[f\]or

telegraphic apparatus. . . .\" Goods classifiable under this

provision have a general, column one rate of duty of 4.7 percent

ad valorem.

Because reclassification of the merchandise as indicated

above is the same as the liquidated rate of duty, you should DENY

the protest. In accordance with Section 3A(11)(b) of Customs

Directive 099 3550-065, dated August 4, 1993, Subject: Revised

Protest Directive, this decision, together with the Customs Form

19, should be mailed by your office 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 take

steps to make the decision available to Customs personnel via the

Customs Rulings Module in ACS and the public via the Diskette

Subscription Service, Freedom of Information Act and other public

access channels.

Sincerely,

John Durant, Director

Tariff Classification Appeals

Division