Protest 2720-96-100433; Multimedia Printed Circuit Assemblies; Fax/Voice/Modem Cards; Speaker Phone; Answering Machine; GRI 1 and GRI 6; Legal Note 3 to Section XVI; Heading 8517; HQs 086851, 955273; NYs 842533, 852480, 864579

HQ 959190 May 19, 1999 CLA-2 RR:CR:GC 959190 RFA CATEGORY: Classification TARIFF NO.: 8517.40.10 Port Director U.S. Customs Service 300 S. Ferry Street Terminal Island, CA 90731 RE: Protest 2720-96-100433; Multimedia Printed Circuit Assemblies; Fax/Voice/Modem Cards; Speaker Phone; Answering Machine; GRI 1 and GRI 6; Legal Note 3 to Section XVI; Heading 8517; HQs 086851, 955273; NYs 842533, 852480, 864579 Dear Port Director: The following is our decision regarding Protest 2720-96-100433, which concerns the classification of multimedia printed circuit assemblies (PCAs), imported by AST Research, under the Harmonized Tariff Schedule of the United States (HTSUS). We regret the delay. FACTS: The 318 300 Series Modems are internal add-on printed circuit board assemblies (“PCAs”) for personal computers (PCS). The PCA is a 19.2 kilobits per second (kbps) data fax/modem with speaker phone/telephone answering device/audio record and play back capabilities. The telephone answering device allows users to record and play back voice messages through a telephone handset or speaker. Software applications provide additional features including voice mail, message forwarding, etc. The subject merchandise was entered on October 20, November 9, 15, and 16, 1995, under subheading 8517.40.10, HTSUS, as modems, of a kind used with data processing machines of heading 8471, HTSUS. The entries were liquidated on February 23, and March 1, 1996, under subheading 8517.81.00 (now 8517.80.10), HTSUS, which provides for other telephonic apparatus. The protest was timely filed on April 11, 1996. ISSUE: Whether the multimedia cards are classifiable as modems under subheading 8517.40.10, HTSUS, or as other telephonic apparatus under heading 8517, 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 shall be determined according to the terms of the headings and any relative section or chapter notes. The 1995 HTSUS subheadings under consideration are as follows: 8517: Electrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems; parts thereof: 8517.40.10: Other apparatus, for carrier-current line systems: [m]odems, of a kind used with data processing machines of heading 8471. . . Goods classifiable under this provision, have a column one, general rate of duty of 4.2 percent ad valorem. 8517.81.00: Other apparatus: [t]elephonic . . . Goods classifiable under this provision, have a column one, general rate of duty of 8.5 percent ad valorem. There is no dispute that the subject PCAs are classifiable under heading 8517, HTSUS, as telephonic apparatus. The issue to be decided is whether the subject PCAs are classifiable as modems or as other telephonic apparatus. GRI 6 states in part that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, by appropriate substitution of terms, to GRIs 1 through 5, on the understanding that only subheadings at the same level are comparable. For the purposes of GRI 6, the relative section, chapter and subchapter notes also apply, unless the context requires otherwise.  The PCAs under consideration contain fax/modem, an answering machine, and speaker phone capabilities. These features had formerly been on separate PCAs. The classification of the separate PCAs has been previously determined by Customs. Modem boards are classified as "[m]odems, of a kind used with ADP machines of heading 8471," under subheading 8517.40.10, HTSUS. See NY 842533, dated June 23, 1989; HQ 086851, dated April 8, 1990. Fax boards are classified as other telegraphic apparatus under subheading 8517.82.00, HTSUS. See HQ 955273, dated March 7, 1994. Fax/modem boards are composite machines which, in accordance with note 3 to section XVI, HTSUS, would also be classifiable under subheading 8517.40.10, HTSUS. Finally, answering machine boards/cards are classified as other telephonic apparatus under subheading 8517.81.00, HTSUS. See NY 864579, dated July 3, 1991 (voice mail cards); NY 852480, dated May 31, 1990 (voicing cards). Based upon the application of GRI 6, Legal Note 3 to Section XVI, HTSUS, which governs the classification of multi-function machines within chapters 84 and 85, HTSUS, provides as follows: Unless 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. The subject PCAs are configured to perform a variety of "complementary or alternative” functions, including fax/modem, answering machine, and speaker phone functions. The PCAs, according to Legal Note 3 to Section XVI, HTSUS, are classifiable as if consisting only of that component which performs the "principal function.” While the PCA is capable of being used as both a modem card and as a telephone answering device for a personal computer, we find that the principal function of the subject PCA is the modem. In comparing the subheadings in heading 8517, we find that subheading 8517.40.10, accurately describes the function of the subject merchandise. HOLDING: Under the authority of Legal Note 3 to Section XVI, applied at the subheading level by GRI 6, the 318 300 Series Modem is classifiable under subheading 8517.40.10, HTSUS, which provides for: “[e]lectrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems; parts thereof: [o]ther apparatus, for carrier-current line systems: [m]odems, of a kind used with data processing machines of heading 8471. . . .” The protest should be GRANTED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, John Durant, Director Commercial Rulings Division