Protest 0901-94-100090; Data Switching Device; Section XVI, Note 3; Composite Machine; HQs 951331, 086035, 954059, and 952993; NY 843415; 8517.30.50

HQ 956406 September 26, 1994 CLA-2 CO:R:C:M 956406 DWS CATEGORY: Classification TARIFF NO.: 8471.99.15 District Director U.S. Customs Service 11 W. Huron Street, Room 603 Buffalo, NY 14202-2378 RE: Protest 0901-94-100090; Data Switching Device; Section XVI, Note 3; Composite Machine; HQs 951331, 086035, 954059, and 952993; NY 843415; 8517.30.50 Dear District Director: The following is our decision regarding Protest 0901-94- 100090 concerning your action in classifying and assessing duty on a data switching device under the Harmonized Tariff Schedule of the United States (HTSUS). FACTS: The merchandise consists of a data switching device (model no. DPN-100), imported from Canada. It is designed to handle large scale, wide area data networks supporting from less than 100 lines to over 1,000,000 lines. This enables users to send data between multiple points, usually host computers and terminals. Typical user applications include electronic funds transfers, electronic mail, file transfers between computers, and point of sale or credit card authorization terminal transaction processing with a host computer. These applications usually involve industries such as banking, utilities, government, public telephone companies, large corporations, and retail industries. The data switching device requires an external modem to transmit and receive data over carrier current line systems. However, it is dedicated to the transmission between two points of electrical impulses representing text and/or images and other data using a line connection connecting the transmitting station to the receiving station. The device is not intended for the transmission of speech or other sounds. The data switching device was entered under subheading 8471.99.15, HTSUS, as an automatic data processing (ADP) control or adapter unit. The entry was liquidated on November 19, 1993, under subheading 8517.30.50, HTSUS, as other telephonic or telegraphic switching apparatus. The protest was timely filed on February 1, 1994. The subheadings under consideration are as follows: 8517.30.50: [e]lectrical apparatus for line telephony or telegraphy, including such apparatus for carrier-current line systems; parts thereof: [t]elephonic or telegraphic switching apparatus: [o]ther. The general, column one rate of duty for goods classifiable under this provision is 4.7 percent ad valorem. 8471.99.15: [a]utomatic data processing machines and units thereof; . . . : [o]ther: [o]ther: [c]ontrol or adapter units. Goods classifiable under this provision receive duty-free treatment. ISSUE: Whether the data switching device is classifiable under subheading 8517.30.50, HTSUS, as other telephonic or telegraphic switching apparatus, or under subheading 8471.99.15, HTSUS, as an ADP control or adapter unit. LAW AND ANALYSIS: Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes. Section XVI, note 3, HTSUS, states that: [u]nless 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. Because the subject merchandise consists of a machine adapted for the purpose of performing both communication (heading 8517, HTSUS) and data processing (heading 8471, HTSUS) functions, it is a composite machine. Therefore, we must determine its principal function. In HQ 951331, dated September 18, 1992, in classifying local area network (LAN) interface boards, we revoked, among other rulings, NY 843415, dated August 8, 1989, and HQ 086035, dated August 2, 1990, both of which held that a digital packet network (DPN), very similar to the subject merchandise and from the same importer, was classifiable under subheading 8517.30.50, HTSUS. In 951331, we stated that the principal function of this class of merchandise is imparted by the data processing functions. Therefore, based upon the reasoning in HQ 951331, it is our position that the data switching device is classifiable under subheading 8471.99.15, HTSUS. See also 954059, dated July 16, 1993. You have cited HQ 952993, dated February 8, 1993, as precedent for classification of the subject merchandise under subheading 8517.30.50, HTSUS. In that ruling, we held that a switching node solely for use with an automatic teller machine (ATM) was classifiable under heading 8517, HTSUS. It is our position that the merchandise in that ruling is not in the same class of merchandise as that of the subject data switching device, and therefore is not relevant to this case. HOLDING: The data switching device (model no. DPN-100) is classifiable under subheading 8471.99.15, HTSUS, as an ADP control or adapter unit. The protest should be GRANTED in full. 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 the 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