CLA-2 R:C:M 955748 RFA
Port Director
U.S. Customs Service
P.O. Box 619050
Dallas/Fort Worth, TX 75261
RE: High frequency fiber optical amplifier; erbium-doped optical fiber; laser diode; cable television; transmission apparatus; optical instruments and optical appliances; subsidiary; headings 8517, 8525, 8543, 9013; Additional U.S. Note 3 to chapter 90; Legal Note 1(m) to Section XVI; HQs 088628, 088941, 953516, 955114, 955230 and 956919
Dear Port Director:
This is in response to your memorandum of July 28, 1994 (CLA-1-D:C:D JW), forwarding a request for Internal Advice filed by counsel on behalf of Pirelli Cable Corporation, concerning the tariff classification of a high frequency fiber optical amplifier under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this ruling, we considered counsel?s submission of December 17, 1993, as well as arguments provided in a telephone conference on October 5, 1994, between counsel and a member of my staff, and information provided in counsel's letters of November 28 and December 1, 1994, and May 19, 1995.
FACTS:
The merchandise is an erbium-doped high frequency fiber optical amplifier (hereinafter "optical amplifier") designed to extend the range (i.e., amplify) of any type of optical signal (digital, analog, or pulse) transmitted via a single mode optical fiber cable. The usefulness of optical fiber amplifiers has been demonstrated in a variety of applications, including long haul fiber optic telecommunication systems, optical cable television systems, optical distribution networks, and analytical instrumentation with the optical time domain reflectometers.
In the past, conventional repeaters would convert weakened optical signals to electrical signals, reshape and amplify the electrical signal and then convert the signal back to an amplified optical signal. Instead of converting the optical signal into an electrical signal to boost or amplify it, the optical amplifier boosts the signal photonically by making a weak light signal stronger. The optical amplifier contains an erbium (a rare earth element) doped optical fiber and an external laser pump (a laser diode). The laser pump ?excites? the electrons in the doped fiber, raising the electrons to a higher energy state. The incoming weak light signals are then introduced into the doped fiber causing the electrons to give up their extra charge of energy to the signal. It then matches the incoming weak signal's wavelength and phase resulting in an exactly corresponding amplified outgoing optical signal. The light signal is then retransmitted by optical fiber for another 40-60 kilometers, where the process is repeated again. The optical amplifier is capable of amplifying optical transmissions between the wavelengths of 1530 to 1560 nanometers (nm).
Even though the subject optical amplifiers sold by Pirelli are mainly used in telecommunication applications, counsel indicates that 75-80 percent of the domestic optical amplifier sales market is to cable television system operators.
ISSUE:
Is the optical amplifier classifiable as transmission apparatus for telephony or for cable television, or as electrical machines and apparatus, not specified or included elsewhere, or as other optical instruments and apparatus, under the 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 following subheadings are under consideration:
8517.81.00: Electrical apparatus for line telephony or telegraphy, including such apparatus for carrier current line systems. . . : Other apparatus: Telephonic. . . .
Goods classifiable under this provision have a general, column one rate of duty of 8.5 percent ad valorem.
8525.10.20: Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras: [t]ransmission apparatus: [t]elevision. . . .
Goods classifiable under this provision have a column one, general rate of duty of 3.3 percent ad valorem.
8543.80.98: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter . . . : [o]ther machines and apparatus: [o]ther: [o]ther: [o]ther. . . .
Goods classifiable under this provision have a column one, general rate of duty of 3.6 percent ad valorem.
9013.80.60: Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter . . . : [o]ther devices, appliances and instruments: [o]ther. . . .
Goods classifiable under this provision have a column one, general rate of duty of 8.1 percent ad valorem.
Legal Note 1(m) to section XVI, HTSUS, states that: ?[t]his section does not cover . . . [a]rticles of chapter 90.? If the optical amplifier is classifiable under one of the headings of chapter 90, HTSUS, then it cannot be classifiable under heading 8517, 8525, or 8543, HTSUS.
To classify merchandise as an "optical appliance" or "optical instrument", it must meet the requirements of Additional U.S. Note 3 to chapter 90, HTSUS, which states as follows:
[f]or the purposes of this chapter, the terms "optical appliances" and "optical instruments" refer only to those appliances and instruments which incorporate one or more optical elements, but do not include any appliances or instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose.
The term ?subsidiary? is not defined in the tariff schedule. A tariff term that is not defined in the HTSUS or in the Harmonized Commodity Description and Coding System Explanatory Notes (EN) is construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).
In HQ 088941, dated January 16, 1992, Customs, citing Webster's II New Riverside University Dictionary (1984), p. 1155, defined "subsidiary" as "[s]erving to supplement or assist . . . [s]econdary in importance: subordinate." Customs further stated that "[t]he meaning of 'subsidiary' has nothing to do with the amount of time optics are used in the overall use of a device, but it relates more to the type of task which the optics perform when being used in the operation of the device." See also HQ 955230, dated July 12, 1994.
Counsel states that the optical amplifier is not an optical instrument or optical appliance because the optical elements (i.e., the erbium doped fiber) included within it, make up only a small fraction of the value of the merchandise. Because of the small fraction of the value of the merchandise, counsel believes that the optical elements are subsidiary, thereby precluding classification of the merchandise under chapter 90, HTSUS. In support of this position, counsel cites to HQ 088628, dated August 20, 1991, in which Customs classified a laser diode module (LDM) containing a laser diode, a discrete parabolic rod or similar lens, a photodiode, and fiber pigtail allowing coupling to a fiber optic cable. After determining that the LDM can be used with or without the lenses, indicating that the lenses were subsidiary, Customs concluded that the LDM was not an optical appliance or instrument within the meaning of chapter 90, HTSUS.
However, in subsequent rulings, Customs determined that LDMs which contain lenses which are necessary for the functioning of the LDM, are classifiable as an optical appliance or instrument within the meaning of chapter 90, HTSUS. See HQ 953516, dated July 1, 1993; HQ 955114, dated October 19, 1993; and HQ 956919, dated December 12, 1994. In each of the above-cited rulings, Customs has examined the merchandise in its condition as imported and looked at the role the laser diode plays in relation to the optical elements in order to determine whether or not it is classifiable as an optical instrument or appliance.
According to the submitted literature, ?[t]he heart of the system is an erbium doped fiber amplifier. This converts continuous wave optical energy, generated by a local pump source, into energy of the same wavelength and phase as an incoming 1550 nm optical signal; the net effect being signal amplification. Pumping the erbium doped fiber with a 980 nm laser diode not only maximizes the energy conversion efficiency of the amplifier but also achieves a very low noise figure.? We find that the optical amplifier meets the terms of Additional U.S. Note 3 to chapter 90, HTSUS. Based upon the submitted literature, we find that the erbium doped fiber is a critical component which needs the interaction of the laser diode to extend the range (i.e., amplify) of any type of optical signal (digital, analog, or pulse) transmitted via a single mode optical fiber cable. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý ? õ ? ý ? õ ? ý ? ý ? ý ? ý ? ?0 `H?(H????` ??` ??A ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý ? õ ? ý ? õ ? ý ? ý ? ý ? ý ? ?0 `H?(H????` ??` ??A ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý ? ??? ? ? ? ??? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý ? õ ? ý ? ? ? ? ? ? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý ? õ ? ý ? õ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý ? õ ? ý ? õ ? ý ? ý ? ý ? ý ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ý ? ý? ? ? ? ? ? ? ? ? ?
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