CLA-2 RR:TC:MM 956839 LTO

Port Director
U.S. Customs Service
610 W. Ash Street, STE 1200
San Diego, California 92101-3213

RE: IA 43/94; Portable Data Collection Terminals; PDT 3100 Portable Data Computer with Laser Scanner Option; base assembly with speaker; HQs 083187, 088941, 952862, 957028; NYs 813679, 842537; NYs 802011, 896417 modified; heading 9013; GRI 3(b); GRI 6; "freely programmable;" section XVI, note 2(a); chapter 84, note 5(A)(B); chapter 90, note 2(a); chapter 90, additional U.S. note 3

Dear Port Director:

This is in response to your memorandum dated June 29, 1994 [Clas-1:CO MM], requesting the classification of a "base assembly with speaker" for the PDT 3100 Portable Data Computer with Laser Scanner Option, manufactured by Symbol Technologies, Inc., under the Harmonized Tariff Schedule of the United States (HTSUS).

In NY 896417, issued by the Area Director of Customs, New York Seaport, on April 6, 1994, the PDT 3100 with scanner, and in NY 802011, issued on September 19, 1994, the PDT 3300 and PDT 3300IS, were held to be classifiable under subheading 8471.20.00, HTSUS, which provides for "[d]igital automatic processing machines, containing in the same housing at least a central processing unit and an input and output unit, whether or not combined" (i.e., laptop computers). Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the - 2 -

proposed modification of NY 802011 and NY 896417 was published February 14, 1996, in the Customs Bulletin, Volume 30, Number 7.

FACTS:

The subject articles are "base assemblies with speakers" for the PDT 3100 Portable Data Collection Terminal (PDT 3100), which is a small, hand held terminal that is ideal for a wide range of data tracking applications, such as, package and asset tracking, electronic ordering systems and in-store retail. The PDT 3100 has a 35-key keyboard, 256K of NVM for program storage, a 4 x 20 supertwist display and 640K RAM for data collection. The PDT 3100 is normally sold with an optional laser scan device that fits on the end of the unit. Without the optional laser scan device, the PDT 3100 does not incorporate any optical components.

ISSUE:

Whether the "base assemblies with speakers" for the PDT 3100 terminal are classifiable as parts of ADP units under heading 8473, HTSUS, or as parts of optical appliances or instruments under heading 9013, HTSUS.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ."

Because the "base assembly with speakers" is a specially designed part of the PDT 3100 terminal and is not a "good included" in any chapter 84, 85 or 90 heading, it is necessary to determine the classification of the terminal. See section XVI, note 2(a); chapter 90, note 2(a), HTSUS. The headings under consideration are as follows:

8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included

9013 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; parts and accessories thereof - 3 - Heading 8471, HTSUS, covers both automatic data processing (ADP) machines and units thereof. Note 5(A) to chapter 84, HTSUS, defines the term automatic data processing machines for purposes of this heading. The definition is expressed in terms of the abilities an ADP machine must possess. Note 5(A)(a)(2) to chapter 84 states that digital ADP machines must be capable of "being freely programmed in accordance with the requirements of the user." The PDT 3100 terminal does not meet this definition.

The PDT 3100 terminal, which has a very small screen and keypad, is not a "general purpose" machine like a standard laptop or desktop terminal, nor does it provide the general purpose display capability of these machines. See HQ 952862, dated November 1, 1994 (regarding the "freely programmable" requirement). The PDT 3100 terminal is designed for specific applications (i.e., package and asset tracking, electronic ordering systems and in-store retail), and, unlike a standard laptop or desktop terminal, cannot be programmed by the user to perform word processing, make a spreadsheet, play games, etc. Although it has some processing capability, the PDT 3100 terminal is not "freely programmable," and therefore, is not an ADP machine. Accordingly, the PDT 3100 terminal cannot be classified under subheading 8471.20.00 (now, 8471.30.00 or 8471.41.00), HTSUS.

With regard to the classification of separately housed units of ADP machines, note 5(B) to chapter 84, HTSUS (for changes, see 1996 version of HTSUS), provides as follows:

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 a 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).

Such units entered separately are also to be classified in heading 8471. The PDT 3100 terminal is an ADP unit, as it connects to the host computer's central processing unit and accepts and delivers data which can be used by the ADP system. Specifically, the PDT 3100 terminal is classifiable under subheading 8471.92.10 (now, 8471.60.10), HTSUS, which provides for combined input/output units. - 4 -

The PDT 3100 itself does not incorporate any "optical" components. Thus, classification of the terminal as an optical instrument under heading 9013, HTSUS, was not a consideration.

However, when imported with the scanner, the PDT 3100 terminal consists of an ADP input/output unit--the terminal--and a device which, arguably, is classifiable an optical instrument, not specified or included elsewhere in chapter 90, under heading 9013, HTSUS. The scanner incorporates an optical element (mirror) that is used in the device's scanning process. However, it is our opinion that the scanner, and devices similar to the scanner, which incorporate a laser diode, one or more optical elements (such as a mirror, prism or lens), and significant electrical or mechanical features (such as a decoder, digitizer, or motor), were not intended to be classified as "optical instruments or appliances" within chapter 90.

Similar devices incorporating laser diodes, optical elements and various electrical and/or mechanical features, include the laser printers, CD-ROM drives, document scanners and optical mice of heading 8471, HTSUS, the compact disc players of heading 8519, HTSUS, and the laser disc players of heading 8521, HTSUS. See, e.g., NY 813679, dated August 15, 1995 (CD-ROM drives); HQ 083187, dated October 16, 1989 (optical mice); and NY 842537, dated June 29, 1989 (compact disc players). The optics of these devices are considered "subsidiary" for tariff classification purposes, and therefore, the scanner portion of the PDT 3100, laser printers, CD-ROM drives, document scanners, optical mice, compact disc players, laser disc players and similar devices, cannot be classified as "optical instruments or appliances" within chapter 90. See Additional U.S. note 3 to chapter 90, HTSUS (defining "optical instruments" for chapter 90 purposes); HQ 088941, dated January 16, 1992 (defining "subsidiary"). The optional scanner portion of the PDT 3100 is prima facie classifiable under subheading 8471.92.84 (now, 8471.60.80), HTSUS, which provides for other input or output units: optical scanners.

As there is no single subheading that covers the PDT 3100 with scanner, it is necessary to resort to GRI 3, HTSUS, which governs the classification of goods that are, prima facie, classifiable under two or more headings. This rule is made applicable at the subheading level by GRI 6. GRI 3(a) requires that the heading (subheading) which provides the most specific description shall be preferred to headings (subheadings) providing a more general description. However, when two or more headings (subheadings) each refer to part only of the components contained in a composite good, those headings (subheadings) are to be regarded as equally specific in relation to those goods. Subheadings 8471.92.10 and 8471.92.84, HTSUS, each refer to part only of the PDT 3100 with scanner. Accordingly, no single subheading provides a specific description of the entire device. - 5 -

GRI 3(b), HTSUS, provides that "composite goods consisting of different materials or made up of different components, . . . which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable." The PDT 3100 terminal is a combined input/output unit that is "ideal for a wide range of data intensive applications." The scanner option "offers a cost-effective way to maximize . . . productivity through laser scanning." While the scanner option enhances the input capabilities of the PDT 3100, the PDT 3100 terminal functions as a sophisticated input/output device without it. Moreover, the terminal portion of the PDT 3100, when imported with the scanner, represents two-thirds of the total cost of the entire unit. Accordingly, the PDT 3100 terminal gives the unit its "essential character," and the PDT 3100 with scanner is therefore classifiable under subheading 8471.92.10, HTSUS. Because the PDT 3100 with scanner is classifiable as an ADP unit, it is unnecessary to discuss whether the device is classifiable as an "optical reader[ ] . . . not elsewhere specified or included (emphasis added)," under subheading 8471.99.90 (now, 8471.90.10), HTSUS. The "base assembly with speakers" for the PDT 3100 is classifiable as a part under subheading 8473.30.50, HTSUS, which provides for other parts and accessories for the machines of heading 8471, HTSUS.

In NY 896417, issued by the Area Director of Customs, New York Seaport, on April 6, 1994, the PDT 3100 with scanner, and in NY 802011, issued on September 19, 1994, the PDT 3300 and PDT 3300IS, were held to be classifiable under subheading 8471.20.00, HTSUS, which provides for "[d]igital automatic processing machines, containing in the same housing at least a central processing unit and an input and output unit, whether or not combined" (i.e., laptop computers). Like the PDT 3100 and PDT 3100 with scanner, the PDT 3300 and PDT 3300IS do not meet the definition of "ADP machine" found in note 5(A) to chapter 84, HTSUS. Rather, the PDT 3100, PDT 3100 with scanner (according to GRI 3(b)), PDT 3300 and PDT 3300IS terminals, are classifiable as combined input/output units under subheading 8471.92.10, HTSUS. NY 802011 and 896417 are modified accordingly.

HOLDING:

The "base assembly with speakers" for the PDT 3100 Portable Data Computer with Laser Scanner Option is classifiable under subheading 8473.30.50, HTSUS, which provides for other parts and accessories for the machines of heading 8471, HTSUS. The corresponding rate of duty for articles of this subheading is free.

In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after publication in the Customs Bulletin. Publication of rulings or decisions - 6 -

pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

Sincerely,

John Durant, Director
Tariff Classification
Appeals Division