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HQ 961929

September 2, 1998

CLA-2 RR:CR:GC 961929 DWS


TARIFF NO.: 9028.90.00

Mr. Chris Garcia
Kuehne & Nagel, Inc.
8870 Boggy Creek Road, Suite 100
Orlando, FL 32824

RE: Scancoder; Chapter 84, note 5(B); Explanatory Note 85.17; Section XVI, Note 4;
Chapter 90, Notes 2 and 3; General Explanatory Note IV to Chapter 90;
HQs 087077, 961387, and 952942; NYs 857097, B84956, and A83385;
8471.80.90; 8517.50; 9028.20.00

Dear Mr. Garcia:

This is in response to your letter of May 15, 1998, on behalf of ABB Water Meters Inc., to the Customs National Commodity Specialist Division, New York, concerning the classification of a Scancoder under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for a response.


The merchandise consists of a Scancoder, which, based upon the provided literature, is an encoder device principally used as an attachment to an existing water meter for transcoding the meter reading into an electronic signal. The signal is then retrieved by the utility or municipality and downloaded for billing and/or statistical purposes. The Scancoder consists of a body comprised of a brass case bottom and a translucent plastic top. It operates by way of a magnet on the inside bottom of the base. The device is fitted into the reader portion of a meter, and, as the meter gears turn (measuring the volume or quantity of the medium), a magnet on top of the meter turns causing the magnet in the Scancoder to turn in sync. This turning causes gears inside the Scancoder to register a reading of its own based upon its calibration. This reading is then encoded digitally by way of an electronic system comprised of a battery, computer chip, and transmission apparatus. The computer chip compiles and translates the meter reading into electronic signals which may be stored in a black circular plastic dish on the outside of the Scancoder, otherwise known as the "pad." A utility employee can then retrieve the information by downloading it onto a hand-held device (sold separately from the Scancoder). The signal may also be transmitted directly through telephone lines; instead of utilizing the "pad", a telephone line may be connected to the Scancoder.


Whether the Scancoder is classifiable under subheading 8471.80.90, as an other automatic data processing (ADP) unit; under subheading 8517.50, HTSUS, as other telegraphic apparatus, for carrier-current line systems or for digital line systems; under subheading 9028.20.00, HTSUS, as a liquid meter; or under subheading 9028.90.00, HTSUS, as an accessory for liquid meters.


Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

The HTSUS provisions under consideration are as follows:

8471 Automatic data processing machines and units thereof; *****:

8471.80 Other units of automatic data processing machines:


8471.80.90 Other.

8517 Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof:

8517.50 Other apparatus, for carrier-current line systems or for digital line systems.

9028 Gas, liquid or electricity supply or production meters, including calibrating meters thereof; parts and accessories thereof:

9028.20.00 Liquid meters.

9028.90.00 Parts and accessories.

You suggest possible classification of the Scancoder in heading 8471, HTSUS, which covers ADP machines and units thereof. As you do not claim that the Scancoder is an ADP machine, for it to be classifiable in heading 8471, HTSUS, it would have to be as an ADP unit. Chapter 84, note 5(B), HTSUS, states:

[a]utomatic data processing machines may be in the form of systems consisting of a variable number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:

(a) It is of a kind solely or principally used in an automatic data processing system;

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

(c) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.

Based upon the information provided, as the Scancoder is used to transmit signals so that the information contained therein may be downloaded onto a remote ADP machine, it is our understanding that the Scancoder is not itself principally used within an ADP system. Therefore, the Scancoder is precluded from classification in heading 8471, HTSUS.

You cite NY 857097, dated October 30, 1990, as precedent for classification of the Scancoder in heading 8517, HTSUS. In that ruling, Customs held that a digital encoder which processes and transmits NTSC signals between two points using a line connection is classifiable in heading 8517, HTSUS. Inasmuch as that ruling does not explain how the article is used and operated, we cannot agree that it is precedent to be followed in this case.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 85.17 (p. 1475) states that:

[t]he heading also excludes:

(k) Carrier-current receivers and transmitters which form a single unit with analogue or digital telemetering instruments or apparatus, or which, together with the latter, constitute a functional unit within the meaning of Note 3 to Chapter 90 (Chapter 90).

Section XVI, note 4, HTSUS, states that:

[w]here a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.

Chapter 90, note 3, HTSUS, states that:

[t]he provisions of note 4 to section XVI apply also to this chapter.

General Explanatory Note IV to chapter 90, HTSUS, states:

(Chapter Note 3)

Note 3 specifies that the provisions of Note 4 to Section XVI apply also to this Chapter (see Part (VII) of the General Explanatory Notes to Section XVI).

Thus, this Chapter covers, as functional units, for example, the electrical (including electronic) instruments or apparatus which make up an analogue or digital telemetering system. These are essentially the following:

(I) Apparatus at the transmitting end:

(i) A primary detector (transducer, transmitter, analogue-digital converter, etc.) which transforms the quantity to be measured, whatever its nature, into a proportional current, voltage or digital signal.

(ii) A measurement amplifier, transmitter and receiver basic unit which (if necessary) boosts this current, voltage or digital signal to the level required by the pulse or frequency-modulated transmitter.

(iii) A pulse or frequency-modulated transmitter which transmits an analogue or digital signal to another station.

(II) Devices at the receiving end:

(i) A pulse, frequency-modulated or digital signal receiver which converts the transmitted information into an analogue or digital signal.

(ii) A measurement amplifier or converter which, if necessary, amplifies the analogue or digital signal.

(iii) Indicating or recording instruments calibrated in terms of the primary quantity and equipped with a mechanical pointer or opto-electronic display.

Telemetering systems are mainly used in oil, gas and production pipelines, water, gas and sewage disposal installations and environmental monitoring systems.

Line or radio transmitters and receivers for telemetering pulses remain in their respective headings (heading 85.17, 85.25 or 85.27, as the case may be) unless they are combined as a single unit with the instruments and apparatus referred to in (I) and (II) above or the whole forms a functional unit within the meaning of Note 3 to Chapter 90; the complete unit then falls in this Chapter.

We find that the Scancoder does not constitute a functional as described in General Explanatory Note IV to chapter 90, HTSUS. Although the Scancoder incorporates apparatus at the transmitting end, based upon the information provided, it does not incorporate apparatus at the receiving end of the signal transmitted by the Scancoder. Both apparatus are required for the Scancoder to be a telemetering system and a functional unit. Unfinished functional units are not recognized by any Legal or Explanatory Notes to the HTSUS. See HQ 087077, dated March 27, 1991.

We find that the Scancoder is precluded from classification in heading 8517, HTSUS. Based upon the descriptions you supplied, it appears that Scancoder is telemetering apparatus, unlike the merchandise in NY 857097. Also, we note that only one version of the Scancoder utilizes a line connection to transmit signals. Furthermore, the exclusionary language in Explanatory Note 85.17 makes it clear that telemetering apparatus, such as the Scancoder, is precluded from classification heading 8517, HTSUS.

We will now ascertain whether the Scancoder is classifiable in any of the provisions of heading 9028, HTSUS.

In HQ 961387, dated March 20, 1998, we held a similar electric meter module, which attaches to existing electricity meters and transmits signals using a short-range radio frequency to a remote site for the downloading of the meter information, to be classifiable in heading 9028, HTSUS, specifically under subheading 9028.90.00, HTSUS. See also NY B84956, dated May 30, 1997.

It continues to be our position that the class of merchandise to which the Scancoder belongs, which is principally used for attachment to existing meters, is not classifiable as meters in heading 9028, HTSUS. Although the Scancoder is capable of registering a reading from an existing meter, such capability is principally for the purpose of transmitting the information to a remote site where it is downloaded, not for visual inspection. Based upon the literature provided, it is our understanding that Scancoder is not purchased merely for use as a water meter; it is used for the transmission of meter information to a remote site.

NY A83385, dated June 6, 1996, has been cited as precedent for classification of the Scancoder in heading 9028, HTSUS, as a meter. In that ruling, Customs held an integrated metering transponder (IMT), which is composed of an electric supply meter providing a user the ability to remotely read total electric consumption, to be classifiable under subheading 9028.30.00, as an electricity meter. Based upon a review of the literature describing the IMT, it is our understanding that, although capable of being retrofitted to existing meters, the IMT is principally used as an electricity meter in and of itself to be installed in a new line. Consequently, as explained above, because the Scancoder is used as an attachment to existing meters, it is our position that the holding in NY A83385 is inapplicable to the classification of the Scancoder, which is precluded from classification under subheading 9028.20.00, HTSUS.

In HQ 952942, dated April 27, 1993, we stated that:

[a] part of an article, for tariff purposes, is a thing necessary to the completion of that article. It is an integral, constituent or component part, without which the article to which it is joined could not function as such article. An accessory, on the other hand, is something that is not essential in itself but adds to the effectiveness of something else. In each case, the nature, function, and purpose of an article must be examined in relation to the article to which it is attached or which it is designed to serve.

Again, based upon the literature provided, it is our understanding that the Scancoder is not essential to the operation of an existing water meter; however, it adds to the effectiveness of the meter by allowing its readings to be transmitted to a remote location and downloaded by a user. As with the merchandise in HQ 961387, it is our position that the Scancoder is an accessory for liquid meters and is described under subheading 9028.90.00, HTSUS.

As the Scancoder meets the term "parts and accessories", chapter 90, note 2, HTSUS, is applicable. It states that:

[s]ubject to note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:

(a) Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8485, 8548 or 9033) are in all cases to be classified in their respective headings;

(b) Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading (including a machine, instrument or apparatus of heading 9010, 9013 or 9031) are to be classified with the machines, instruments or apparatus of that kind;

(c) All other parts and accessories are to be classified in heading 9033.

As it is our position that the Scancoder is not a good of chapters 84, 85, 90, or 91, HTSUS, chapter 90, note 2(a), HTSUS, is inapplicable. However, because the
Scancoder is an accessory for liquid meters of heading 9028, HTSUS, in accordance with chapter 90, note 2(b), HTSUS, it is classifiable with those meters in heading 9028, HTSUS, specifically under subheading 9028.90.00, HTSUS.


The Scancoder is classifiable under subheading 9028.90.00, HTSUS, as an accessory for liquid meters.


John Durant, Director
Commercial Rulings Division

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