PC-1+ Micro Controller for the control of laser disc and compact disc players; Processor based control used for interactive video point of purchase system

HQ 087776 December 6, 1990 CLA-2 CO:R:C:G 087776 MBR CATEGORY: Classification TARIFF NO.: 8537.10.00 Mr. Joseph L. Giumentaro Ameri-Can Customhouse Brokers, Inc. Peace Bridge Plaza Buffalo, New York 14213-2488 RE: PC-1+ Micro Controller for the control of laser disc and compact disc players; Processor based control used for interactive video point of purchase system Dear Mr. Giumentaro: This is in reply to your letter of July 23, 1990, on behalf of Technovision, requesting classification of the PC-1+ Micro Controller, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). FACTS: The PC-1+ Micro controller ("PC-1+") is a processor based control apparatus which controls an interactive video point of purchase system. The PC-1+ is usually connected to a keypad and a laser disc/ compact disc player. The laser disc player is then connected to a display screen. "Interactive point of purchase systems" are used primarily for information systems for the general public in museums, transportation terminals, etc., whereby individuals can make inquiries by inputting numbers on the keypad which is connected to the PC-1+. The PC-1+ then selects the appropriate laser disc image to be displayed. The PC-1+ is a small black box measuring 2.5" X 1.25" X 4.5". The PC-1+ has two RS232 serial channels, a 4X4 matrixed keypad port, a Pioneer 'SR' port, memory card based application software, battery backed-up memory, and EPROM based BIOS can be installed. ISSUE: What is the classification of the PC-1+ Micro Controller under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)? 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... You argue that the PC-1+ is classifiable under heading 8471, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof." However, the PC-1+ does not meet the requirements of Legal Note 5, to chapter 84. Legal Note 5(A)(a) requires that ADP machines must be capable of: (1) storing the processing program...; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and, (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run; Although the PC-1+ is programmed, it is programmed at the manufacture site, and is therefore not capable of being "freely programmed." The PC-1+ is also not capable of "performing arithmetical computations specified by the user." The PC-1+ also does not meet the requirements of Legal Note 5(B), chapter 84, which delineates "units" of ADP systems. Legal Note 5(B) 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... (b) It is specifically designed as part of such a system... The PC-1+ is not connectable to any central processing unit, nor is it specifically designed as a part of an ADP system. The PC-1+ is designed as a component of a point of purchase system which does not utilize an ADP system. Heading 8537, HTSUSA, provides for: "[b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity...." Clearly, the PC-1+ is designed, manufactured, marketed, and used for "electric control." Therefore, under GRI 1, the PC-1+ Micro Controller is properly classifiable under subheading 8537.10.00.60, HTSUSA. HOLDING: For the foregoing reasons, the PC-1+ Micro Controller is classifiable under subheading 8537.10.00.60, HTSUSA, which provides for: "[b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity...: [f]or a voltage not exceeding 1,000v: [o]ther: [p]rogrammable controllers." The rate of duty is 3.1% ad valorem, (2.1%, January 1, 1991), if the requirements of the United States-Canada Free Trade Agreement are met. Sincerely, John Durant, Director Commercial Rulings Division