HQ 960815

July 1, 1998

CLA-2 RR:CR:GC 960815 DWS

CATEGORY: Classification

TARIFF NO.: 8541.40.20

Port Director of Customs

1624 E. 7th Avenue, Suite 101

Tampa, FL 33605

RE: 1801-97-100022; Laser Diode Modules; NEC v. U.S.

Dear Port Director:

The following is our decision regarding Protest 1801-97-100022
concerning your action in classifying and assessing duty

on laser diode modules under the Harmonized Tariff Schedule of

the United States (HTSUS).

FACTS:

Based upon the information provided, the merchandise

consists of laser diode modules (LDMs), each of which is

comprised of a laser diode component, a built-in coaxial optical

isolator and 25 ohm impedance matching circuit, a photodiode for

optical monitoring, and, in some cases, a fiber pigtail allowing

coupling to a fiber optic cable. The LDMs are used in an Optical

Wavelength Division Multiplexer (an optical networking system) to

convert electronic signals into laser light.

The merchandise was entered on September, 10, 18, 25, 30,

October, 2, 9, June 6, 20, 25, July 3, 11, 15, 17, 30, 31, August

6, and December 30, 1996, under subheading 9013.20.00, HTSUS, as

lasers, other than laser diodes. However, the protestant now

claims classification of the LDMs under subheading 8541.40.95,

HTSUS, as other photosensitive semiconductor devices. The

entries were liquidated on January 24, 31, and February 14, 1997,

under subheading 9013.80.60, HTSUS, as other optical instruments,

not specified or included elsewhere in chapter 90, HTSUS. The

protest was timely filed on February 22, 1997.

ISSUE:

Whether the LDMs are classifiable under subheading

8541.40.20, HTSUS, as light-emitting diodes (LEDs), under

subheading 8541.40.95, HTSUS, as other photosensitive

semiconductor devices, or under subheading 9013.80.60, HTSUS, as

other optical instruments, not specified or included elsewhere in

chapter 90, 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 is determined according to the

terms of the headings and any relative section or chapter notes.

The 1996 HTSUS provisions under consideration are as

follows:

8541 Diodes, transistors and similar semiconductor devices;

photosensitive

semiconductor devices, including photovoltaic cells whether

or not

assembled in modules or made up into panels; light-emitting

diodes;

mounted piezoelectric crystals; parts thereof:

8541.40 Photosensitive semiconductor devices, including

photovoltaic cells whether or not assembled in modules

or made up into panels; light- emitting diodes:

8541.40.20 Light-emitting diodes (LED\'s).

Other:

8541.40.95 Other.

\* \* \* \* \* \* \* \* \*

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:

9013.80.60 Other.

\* \* \* \* \* \* \* \* \*

NEC v. U.S., Slip Op. 97-38, March 28, 1997 (CIT), aff\'d

Slip Op. 97-1403, May 19, 1998 (CAFC), dealt with the

classification of a LDM under the HTSUS similar to the subject

merchandise, consisting of a laser diode, a photodiode detector,

a

columnating lens, and/or an optical fiber attachment or

connector. In NEC, the Court held that laser diodes are

classifiable with LEDs under subheading 8541.40.20, HTSUS. It

also stated that:

\[t\]he Court makes a similar finding with respect to laser diode
modules.

According to General

Rule of Interpretation 3(b), goods comprised of different components

must be classified as

though they were wholly made of the material or component which gives

their essential character.

Because the Court finds that the laser diode component gives the laser

diode module its essential

character, the Court\'s finding with respect to laser diodes controls
the

classification of laser diode

modules.

Based upon the holding in NEC, because the subjects LDMs are

similar in kind to the LDM in NEC, we find that they belong to

the class or kind of merchandise classifiable under subheading

8541.40.20, HTSUS.

The protestant cites HQ 088628, dated August 20, 1991, as

precedent for the classification of the LDMs under subheading

8541.40.95, HTSUS. In HQ 088628, which dealt with the

classification of a LDM similar to the subject merchandise, we

held that the LDM, was classifiable under subheading 8541.40.95,

HTSUS, because it consisted of both a laser diode and a

photodiode. However, the holding in NEC states that, in such a

situation, the laser diode imparts the essential character of the

module and the LDM is classifiable under subheading 8541.40.20,

HTSUS. Therefore, the holding in NEC effectively revokes the

holding in HQ 088628.

Your office claims that, because the subject LDMs include

optical components, they are classifiable in heading 9013, HTSUS.

Chapter 90, additional U.S. note 3, HTSUS, states that:

\[f\]or 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 LDM in NEC also contained optical components. However,

because the Court did not entertain classification of the LDM in

heading 9013, HTSUS, we must infer that the optical components

for this class of merchandise are subsidiary to the function of

the laser diode. Therefore, based upon chapter 90, additional

U.S. note 3, HTSUS, the subject LDMs do not meet the terms of

\"optical instruments\" and are precluded from classification in

heading 9013, HTSUS.

HOLDING:

The LDMs are classifiable under subheading 8541.40.20,

HTSUS, as LEDs.

You should DENY the protest, except to the extent

reclassification of the merchandise as indicated above results in

a partial allowance. 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 this 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