CLA-2 RR:TC:MM 960012 DWS
Mr. Herbert J. Lynch
Sullivan & Lynch
156 State Street
Boston, MA 02109-2508
RE: QuickTalk Audio Conferencing System; Chapter 84, Notes
5(A)(a) and (B);
Explanatory Note 85.17; 8471
Dear Mr. Lynch:
This is in response to your letter of November 25, 1996, on
behalf of Autel, Inc., concerning the classification of the
QuickTalk Audio Conferencing System under the Harmonized Tariff
Schedule of the United States (HTSUS). We regret the delay in
our response.
FACTS:
The merchandise consists of the QuickTalk Audio Conferencing
System (QuickTalk), which is a fully digital audio conferencing
bridge using advanced digital signal processor technology. The
QuickTalk, which connects either to the public telephone network
via an Integrated Services Digital Network (ISDN) or to a Private
Branch Exchange (PBX), operates automatically without requiring the
assistance of a telephone operator. It can accommodate up to
thirty callers simultaneously in one telephone conference or
grouped together in multiple conferences, each of which may have
between two to thirty participants (i.e., up to fifteen conferences
may be held at the same time without one interfering with the
other). The QuickTalk features personal identification numbers
(PINs) for conference participants to maintain security and protect
conferences from unauthorized callers. You claim that it utilizes
five digital automatic central processing units programmed to
perform individual and group functions.
When a caller dials a QuickTalk conference number, QuickTalk
asks the caller to enter the conference access PIN. QuickTalk
confirms that the correct PIN has been entered and plays a message
welcoming the caller to the conference. Each time a new caller
joins a conference, QuickTalk plays a brief "headcount" message to
all the members of the conference, telling them how many people are
now participating. The caller is joined to the conference and can
start talking to other callers in the same conference. When a
caller leaves a conference, QuickTalk plays another "headcount"
message.
ISSUE:
Whether the QuickTalk is classifiable under heading 8471,
HTSUS, as an automatic data processing machine or a unit thereof,
or under subheading 8517.50.50, HTSUS, as other telephonic
apparatus.
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 is determined according to the terms of the
headings and any relative section or chapter notes.
The HTSUS provisions under consideration are as follows:
8471: [a]utomatic data processing machines and units thereof
. . .
8517.50.50: [e]lectrical apparatus for line telephony or line
telegraphy, including
line telephone sets with cordless handsets
and telecommunication
apparatus for carrier-current line systems
or for digital line systems;
videophones; parts thereof: [o]ther
apparatus, for carrier-current line
systems or for digital line systems:
[o]ther: [t]elephonic.
The general, column one rate of duty for goods classifiable
under this provision
is 8.5 percent ad valorem.
As you claim that the QuickTalk is either an automatic data
processing (ADP) machine or a unit thereof, we must first determine
whether it is described in any provision under
heading 8471, HTSUS.
Chapter 84, notes 5(A)(a) and (B), HTSUS, state:
(A) For purposes of heading 8471, the expression "automatic
data processing
machines" means:
(a) Digital machines, capable of (1) storing the
processing program or programs
and at least the data immediately necessary for
execution of the program;
(2) being freely programmed in accordance with
the requirements of the user;
(3) performing arithmetical computations specified
by the user; and, (4)
executing, without human intervention, a
processing program which requires
them to modify their execution, by logical
decision during the processing run;
(B) Automatic data processing machines may be in the form of
systems consisting of
a number of separate units. Subject to paragraph (E)
below, a unit is to be
regarded as being a part of a complete system if it
meets all the following
conditions:
(a) It is of a kind solely or principally used in an
automatic data processing
system;
(b) It is connectable to the central processing unit
either directly or through
one or more other units; and
(c) It is able to accept or deliver data in a form
(coded or signals) which can be
used by the system.
The QuickTalk does not meet the terms of chapter 84, note
5(A)(a), HTSUS, as it does not appear to be freely programmable in
accordance with the requirements of the user. Although it is
programmed to perform specific functions, you have offered no
evidence that it is freely programmable, and the provided
literature demonstrates that the QuickTalk is not. Therefore, for
tariff purposes, the QuickTalk is not an ADP machine.
The QuickTalk also does not meet the terms of chapter 84, note
5(B), as it is not of a kind solely or principally used in an
automatic data processing system. Therefore, for tariff purposes,
the QuickTalk is not an ADP unit.
Because the QuickTalk is neither an ADP machine nor an ADP
unit, and because it is not described elsewhere under heading 8471,
HTSUS, it is precluded from classification under heading 8471,
HTSUS.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive or
legally binding, provide a commentary on the scope of each heading
of the HTSUS, and are generally indicative of the proper
interpretation of these headings. See T.D. 89-80, 54 Fed. Reg.
35127, 35128 (August 23, 1989). In part, Explanatory Note 85.17
(p. 1472) states that:
[t]he term "electrical apparatus for line telephony or line
telegraphy" means
apparatus for the transmission between two points of speech or
other sounds
(or of symbols representing written messages, images or other
data), by variation
of an electric current or of an optical wave flowing in a
metallic or dielectric
(copper, optical fibres, combination cable, etc.) circuit
connecting the transmitting
station to the receiving station.
The heading covers all such electrical apparatus designed for
this purpose,
including the special apparatus used for carrier-current line
systems.
We find that the QuickTalk is described under heading 8517,
HTSUS, as it meets the definition of "electrical apparatus for line
telephony". The QuickTalk is solely designed for audio
teleconferencing, doing so by connecting to a PBX or using an ISDN
to connect to a public telephone network. The QuickTalk is
"apparatus for the transmission between two points of speech".
Therefore, as it is not more specifically described elsewhere in
the HTSUS, the QuickTalk is classifiable under subheading
8517.50.50, HTSUS.
HOLDING:
The QuickTalk Audio Conferencing System is classifiable under
subheading 8517.50.50, HTSUS, as other telephonic apparatus.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division