HQ 952680: Madge Local Area Network Interface Boards; NIBs; ADP Machine; Control And Adapter Unit; HQ 951331; HQ 952659

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                           HQ 952680
                                
                        October 14, 1992
                               
CLA-2 CO:R:C:M  952680 MBR

CATEGORY:  Classification

TARIFF NO.:  8471.99.15

Donald L. Fischer, Esq.
Horton, Whitely & Cooper
1900 Embarcadero, Suite 201
Oakland, California 94606

RE:  Madge Local Area Network Interface Boards; NIBs; ADP Machine;
     Control And Adapter Unit; HQ 951331; HQ 952659

Dear Mr. Fischer:

     This is in response to your letter of September 29, 1992,
requesting classification of the Madge Networks Network Interface
Boards, under the Harmonized Tariff Schedule of the United States
(HTSUS).

     We have recently reconsidered the classification of LAN
equipment in general, and Network Interface Boards in particular.
See HQ 951331, dated September 18, 1992, as modified by HQ 952659,
dated October 7, 1992. 

FACTS:

     You state that these Local Area Network (LAN) Interface Boards
are identical to those classified under HQ 951331, dated September
18, 1992.  Specifically, these LAN boards are printed circuit
boards designed for physical incorporation into a personal computer
or into an ADP system.  As such, they are connectable to other PC's
and units thereof, over a variety of LAN media, including coaxial
cables and twisted pair wire.  Madge's LAN network interface boards
(NIBs) convert, process, and format data in order that several ADP
machines or systems are able to communicate and share data.

ISSUE:

     Whether the Madge Network Interface Boards are classifiable
under headings 8471, HTSUS, which provide for automatic data
processing machines, or under heading 8517, HTSUS, which provides
for "[e]lectrical apparatus for line telephony or telegraphy"?



                               -2-

LAW AND ANALYSIS:

     Since the HTSUS came into effect there has been a great deal
of controversy regarding the classification of LAN boards. 
However, there is no clear classification guidance from either the
HTSUS or the Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), primarily due to the technological
advancements in this area.  

     However, 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).

     We agree that the NIBs are essential to the ADP systems with
which they are integrated because they process and format the data
of the computers they serve. 

     The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), pages 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.

     After extensive research and analysis, it is now our opinion
that the principal function of the NIBs is, in fact, to effectuate
the interconnection of the CPU unit to other units or ADP machines,
thereby serving "control" and "adaption" functions, as described
by

                               -3-

the ENs.  Therefore, the NIBs are properly classifiable in
subheading 8471.99.15, HTSUS, which provides for "Control or
adapter units." 
 
HOLDING: 

     The Madge Network Interface Boards are 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.
 
                              Sincerely,





                              John Durant, Director
                              Commercial Rulings Division

ATTACHMENT:    HQ 951331
               HQ 952659