CLA-2 CO:R:C:G 085281 AJS

TARIFF NO: 8537.10.00, 9032.89.60

Ms. Rose Low
Manager, Commodity Taxation
Price Waterhouse
Price Waterhouse Center
60 West Hastings Street
Vancouver, B.C. V6B 5A5

RE: Optimizer system

Dear Ms. Low:

Your letter of May 5, 1989, requesting the tariff classification of the "Optimizer system", on behalf of your client Newnes Automation Inc., has been referred to this office for reply.


The optimizer system (OS) is a computerized scanning device used in saw mill operations. It measures the dimensions of logs and boards and determines the best way to cut them in order to maximize the value or volume of lumber. The OS incorporates an optical infrared scanner, process controller with software, various input/output boards, power supply, and clocking and power cables.

The OS's optical infrared scanner performs a three dimensional measurement of the raw logs passing through its station, by the use of an analog signal. This signal is converted into a digital format and fed into the process controller which makes the necessary calculations, and then instructs the saws on how to slice the log to achieve the best results for a maximum yield of usable lumber.



Whether the article in question is classifiable within subheading 8537.10.00, Harmonized Tariff Schedule of the United States Annotated (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 electrical control of the distribution of electricity . . . [f]or a voltage not exceeding 1,000 V."; or within subheading 9032.89.60, HTSUSA, which provides for "[a]utomatic regulating or controlling instruments and apparatus . . . [o]ther. [o]ther."


Classification of merchandise under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes.

Heading 8537, HTSUSA, provides for boards, panels, consoles, desks, cabinets, and other bases for electrical control or the distribution of electricity. Explanatory Note (EN) 85.37 states that the articles of heading 8537 "consist of an assembly of apparatus of the kind referred to in the two preceding headings (e.g., switches and fuses) on a board, panel, console, etc., or mounted in a cabinet, desk, etc. [t]hey usually also incorporate meters, and sometimes also subsidiary apparatus such as transformers, valves, voltage regulators or luminous circuit diagrams." The OS satisfies this description.

The ENs further state that this heading covers "[p]rogrammable controllers which are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines." EN 85.37(3). The OS processes digital signals in a computer which makes calculations and then issues instructions to various machines which enable them to cut the lumber in the most efficient manner. This function satisfies the description of an article in heading 8517.

Heading 9032, HTSUSA, provides for automatic regulating or controlling instrument or apparatus. Chapter 90, Note 6(a), provides that heading 9032 applies to instruments and apparatus for automatically controlling the flow, level, pressure or


other variable of liquids or gases, or for automatically controlling temperature. Clearly, the OS does not satisfy this description.

However, Chapter 90, Note 6(b) provides that heading 9032 also applies to "automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non- electrical quantities the operation of which depends on an electrical phenomenon varying according to the factor to be controlled." EN 90.32(II) states that automatic regulators of this heading are intended for use in complete "automatic control systems which are designed to bring a quantity, electrical or non-electrical, to, and maintain it at, a desired value, stabilized against any disturbances, by constantly measuring its actual value." The OS does not bring and maintain a quantity to a desired value by constantly measuring its value. Instead, the OS gathers data which it processes and then uses to instruct other machines how to perform their function in the most efficient manner. This type of device is not provided for in heading 9032.

You claim that the OS meets the criteria in EN 90.32(II) (A), (B), (C) and therefore is classifiable within heading 9032. While all three of these above features are required for an article to be classifiable within heading 9032, the article must also perform the proper function. As discussed above, the OS does not perform this function. Instead, the OS performs a function classifiable within heading 8537.


The article in question is classifiable within subheading 8537.10.00, HTSUSA, which provides for numerical control panels with voltage not exceeding 1,000 V.


John Durant, Director
Commercial Rulings Division