HQ 956406

September 26, 1994

CLA-2 CO:R:C:M 956406 DWS

CATEGORY: Classification

TARIFF NO.: 8471.99.15

District Director

U.S. Customs Service

11 W. Huron Street, Room 603

Buffalo, NY 14202-2378

RE: Protest 0901-94-100090; Data Switching Device; Section XVI,

Note 3; Composite Machine; HQs 951331, 086035, 954059,

and 952993; NY 843415; 8517.30.50

Dear District Director:

The following is our decision regarding Protest 0901-94-

100090 concerning your action in classifying and assessing duty

on a data switching device under the Harmonized Tariff Schedule

of the United States (HTSUS).

FACTS:

The merchandise consists of a data switching device (model

no. DPN-100), imported from Canada. It is designed to handle

large scale, wide area data networks supporting from less than

100 lines to over 1,000,000 lines. This enables users to send

data between multiple points, usually host computers and

terminals. Typical user applications include electronic funds

transfers, electronic mail, file transfers between computers, and

point of sale or credit card authorization terminal transaction

processing with a host computer. These applications usually

involve industries such as banking, utilities, government, public

telephone companies, large corporations, and retail industries.

The data switching device requires an external modem to

transmit and receive data over carrier current line systems.

However, it is dedicated to the transmission between two points

of electrical impulses representing text and/or images and other

data using a line connection connecting the transmitting station

to the receiving station. The device is not intended for the

transmission of speech or other sounds.

The data switching device was entered under subheading

8471.99.15, HTSUS, as an automatic data processing (ADP) control

or adapter unit. The entry was liquidated on November 19, 1993,

under subheading 8517.30.50, HTSUS, as other telephonic or

telegraphic switching apparatus. The protest was timely filed on

February 1, 1994.

The subheadings under consideration are as follows:

8517.30.50: \[e\]lectrical apparatus for line telephony or

telegraphy, including such apparatus for

carrier-current line systems; parts thereof:

\[t\]elephonic or telegraphic switching apparatus:

\[o\]ther.

The general, column one rate of duty for goods classifiable

under this provision is 4.7 percent ad valorem.

8471.99.15: \[a\]utomatic data processing machines and units

thereof; . . . : \[o\]ther: \[o\]ther: \[c\]ontrol or

adapter units.

Goods classifiable under this provision receive duty-free

treatment.

ISSUE:

Whether the data switching device is classifiable under

subheading 8517.30.50, HTSUS, as other telephonic or telegraphic

switching apparatus, or under subheading 8471.99.15, HTSUS, as an

ADP control or adapter unit.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in

accordance with the General Rules of Interpretation (GRI\'s),

taken in order. GRI 1 provides that classification is determined

according to the terms of the headings and any relative section

or chapter notes.

Section XVI, note 3, HTSUS, states that:

\[u\]nless the context otherwise requires, composite machines

consisting of two or more machines fitted together to form a

whole and other machines adapted for the purpose of

performing two or more complementary or alternative

functions are to be classified as if consisting only of that

component or as being that machine which performs the

principal function.

Because the subject merchandise consists of a machine

adapted for the purpose of performing both communication (heading

8517, HTSUS) and data processing (heading 8471, HTSUS) functions,

it is a composite machine. Therefore, we must determine its

principal function.

In HQ 951331, dated September 18, 1992, in classifying local

area network (LAN) interface boards, we revoked, among other

rulings, NY 843415, dated August 8, 1989, and HQ 086035, dated

August 2, 1990, both of which held that a digital packet network

(DPN), very similar to the subject merchandise and from the same

importer, was classifiable under subheading 8517.30.50, HTSUS.

In 951331, we stated that the principal function of this class of

merchandise is imparted by the data processing functions.

Therefore, based upon the reasoning in HQ 951331, it is our

position that the data switching device is classifiable under

subheading 8471.99.15, HTSUS. See also 954059, dated July 16,

1993\.

You have cited HQ 952993, dated February 8, 1993, as

precedent for classification of the subject merchandise under

subheading 8517.30.50, HTSUS. In that ruling, we held that a

switching node solely for use with an automatic teller machine

(ATM) was classifiable under heading 8517, HTSUS. It is our

position that the merchandise in that ruling is not in the same

class of merchandise as that of the subject data switching

device, and therefore is not relevant to this case.

HOLDING:

The data switching device (model no. DPN-100) is

classifiable under subheading 8471.99.15, HTSUS, as an ADP

control or adapter unit.

The protest should be GRANTED in full. 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

Commercial Rulings Division