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HQ 952621


October 13, 1992

CLA-2 CO:R:C:M 952621 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.99.15

Mr. William J. Maloney, Esq.
Rode & Qualey
Attorneys at Law
295 Madison Avenue
New York, N.Y. 10017

RE: Revocation of HQ 088772; Intel Corporation; Bart Network Interface and Ethernet Controller Board; ADP; Control or Adapter Units; HQ 951331; HQ 952659

Dear Mr. Maloney:

On October 23, 1991, we issued HQ 088772 to you, regarding the classification of the Intel Corporation "Bart Network Interface and Ethernet Controller Board," under the Harmonized Tariff Schedule of the United States (HTSUS).

Subsequently, in HQ 951331, dated September 18, 1992, as modified by HQ 952659, we have reconsidered the classification of Local Area Network (LAN) equipment.

FACTS:

The subject merchandise is described as a network interface and ethernet controller board which will be physically incorporated within IBM personal computers (PCs), IBM compatible PCs, and certain automatic data processing (ADP) units to allow the PCs and other units to be interconnected to a LAN.

ISSUE:

What is the classification of the "Bart Network Interface and Ethernet Controller Board," under the Harmonized Tariff Schedule of the United States (HTSUS)?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Legal Note 5(B) to chapter 84, HTSUS, provides guidance regarding units of automatic data processing machines. It states:

Automatic data processing machines may be in the form of systems consisting of a variable number of separately housed units. A unit is to be regarded as being a part of the complete system if it meets all of the following conditions:

(a) It is connectable to the central processing unit either directly or through one or more other units; and

(b) It is specifically designed as part of such a system (it must, in particular, unless it is a power supply unit, be able to accept or deliver data in a form (code or signals) which can be used by the system).

It has been asserted that networking systems such as your network interface and ethernet controller boards are essential to the ADP systems they are connected to because they process and format the data of the computers they serve. We now agree.

It is also important to note that the ENs, page 1299-1300, describe separately presented ADP units as follows:

This heading also covers separately presented constituent units of data processing systems. Constituent units are those defined in Parts (A) and (B) above as being parts of a complete system.

Apart from central processing units and input and output units, examples of such units include:

(4) Control and adaptor units such as those to effect interconnection of the central processing unit to other digital data processing machines, or to groups of input or output units which may comprise visual display units, remote terminals, etc.

This category includes channel to channel adapters used to connect two digital systems to each other.

(5) Signal Converting units. At input, these enable an external signal to be understood by the machine, while at output, they convert the output signals that result from the processing carried out by the machine into signals which can be used externally.

The "Network Interface and Ethernet Controller Board" does in fact effectuate interconnection of the CPU unit to other units or ADP machines, thereby serving control and adaption functions, as well as performing signal conversion. Thus, classification is appropriate in subheading 8471.99.15, HTSUS, which provides for ADP control or adapter units.

Our diligent fact finding, and research and analysis of this issue, has been continually ongoing. Therefore, we have learned more about this merchandise, its functions, and its geometrically progressive technological developments.

Therefore, based on the new information submitted, and in an effort to expeditiously and accurately address this classification issue, we have reconsidered our position. It is now our conclusion that the data processing features of control and adaption do in fact represent the principal function of your "Network Interface and Ethernet Controller Board," directing classification in subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [o]ther: [c]ontrol or adapter units."

HOLDING:

The Intel Corporation "Bart Network Interface and Ethernet Controller Board" is classifiable in subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [o]ther: [c]ontrol or adapter units." The rate of duty is Free.

EFFECT ON OTHER RULINGS:

For the reasons stated in HQ 951331, dated September 18, 1992, (as modified by HQ 952659), HQ 088772, dated October 23, 1991, is revoked under authority of section 177.9(d), Customs Regulations.

Sincerely,

John Durant, Director

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