CLA-2 OT:RR:CTF:TCM H035572 RM
C.J. Erickson, Esq.
Cowan, Liebowitz & Latman, P.C.
1133 Avenue of the Americas
New York, NY 10036
RE: Classification of the AC-4780 Array Test System
Dear Mr. Erickson:
This is in response to your letter dated July 14, 2008, to United States Customs and Border Protection (“CBP”), in which you requested a binding ruling on behalf of Photon Dynamics, Inc. pertaining to classification of the AC-4780 Array Test System under the Harmonized Tariff Schedule of the United States (“HTSUS”). Your request was forwarded to this office for a response.
In reaching this decision, we also considered the arguments raised during our telephone conference on September 22, 2008, and those presented in your September 29, 2008, letter.
FACTS:
You propose to import the AC-4780 Array Test System (“AC-4780”), a machine used to detect defects on liquid crystal display (“LCD”) glass substrates by inspecting and testing their active matrix circuitry, prior to their assembly into flat panel displays. Specifically, you indicated in your submission that testing by the AC-4780 is achieved by applying voltages to the thin film transistor (“TFT”) circuits etched onto the glass substrates, and then, using voltage imaging technology to determine whether the circuitry is operating correctly. Defective pixels on the substrates are identified by type, number, and location. If a repair is required, the glass substrates i.e., the panels, are either passed to a separate machine that repairs them or discarded.
The main components of the AC-4780 are: (1) infeed and outfeed air tables; (2) “grippers,” used to move the glass plate along the Y axis; (4) Dual Voltage Imaging Optical System (“VIOS”) stages, sensor heads used to detect and characterize defects; (5) a Defect Review Camera (“DRC”) attached to the VIOS; (6) the “Chuck,” a translucent glass block mounted in a ceramic holder; (7) two probe bars, installed on the infeed and outfeed tables; and (8) the “Environmental Chamber,” which provides clean room during the inspection.
You described the machine’s sequence of operation as follows:
Loading: The glass is loaded onto lift pins by the robot or rolled on through the conveyor (depending on the configuration). The lift pins then lower the glass onto the air table (robot load only).
Coarse Alignment (Squaring): The glass is aligned using multi-position edge sensors. The glass is moved by means of grippers.
Move to Test: The glass is moved to test the position using infeed grippers. The grippers contact the glass from the back side and move to the test position.
Alignment: The glass is aligned via the fiducial marks using the alignment cameras mounted on the VIOS stage.
Probe Bar Contact: The probe bar makes contact with the glass. ESS test is performed.
Testing: Voltage imaging is done.
Move to unload: The glass is moved on the outfeed table and rolled off the system using the conveyor.
ISSUE:
What is the proper tariff classification of the AC-4780 Array Test System under the HTSUS?
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation ("GRIs"). GRI 1 provides, in part, that "for legal purposes, classification shall be determined according to terms of the headings and any relative section or chapter notes[.]" In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied in order.
Per our telephone conference, the HTSUS provisions under consideration are as follows:
9030 Oscilloscopes, spectrum analyzers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of heading 9020; instruments and apparatus for measuring or detecting alpha, beta, gamma, X-ray, cosmic or other ionizing radiations; parts and accessories thereof:
Other instruments and apparatus:
9030.82.00 For measuring or checking semiconductor wafers or devices …
9030.89.01 Other …
9031 Measuring and checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof:
Other optical instruments and appliances:
9031.41.00 For inspecting semiconductor wafers or devices for inspecting photomasks or reticles used in manufacturing semiconductor devices …
9031.49 Other:
9031.49.90 Other …
Other instruments, appliances and machines:
9031.80.80 Other …
The primary issue before CBP is whether the AC-4780 performs a “measuring” or “checking” function and under what heading this function falls within. The terms “measuring” and “checking” are not defined in the HTSUS nor in the Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”). However, CBP has adopted the meaning of the term given by the Court of International Trade (“CIT”) in Agatec Corp. v. United States, Slip Op. 2007-92, 2007 Ct. Intl. Trade LEXIS 90 (Ct. Int’l Trade June 6, 2007). In Agatec Corp., 2007 Ct. Int. LEXIS, at *23, quoting Webster's Third New International Dictionary, 381 (1971), the CIT defined these terms as:
“Checking” is the present participle of “check,” which Webster’s Dictionary defines as “to inspect and ascertain the condition of, esp. in order to determine if the condition is satisfactory” or “to investigate and ensure accuracy, authenticity, reliability, safety, or satisfactory performance of.”
"Measuring” is “the present participle of "measure," which Webster's defines as "to lay off, mark, or fix (a specified distance or extent) by making measurements" or "to appraise in comparison with something taken as a criterion."
You argue that the AC-4780 is properly classified in heading 9030, specifically, in subheading 9030.82.00, HTSUS, as: “[O]ther instruments and apparatus for measuring or checking electrical quantities …: Other instruments and apparatus: For measuring or checking semiconductor wafers or devices. “ It is your contention that the principal function of the machine is to check for defects on TFTs etched onto the glass substrates. You submit that the AC-4780 “does not check any characteristics of the glass, but solely the TFTs through electrical charging[.]”
In support of this position, you argue that in Headquarters Ruling Letter (“HQ”) 965528, dated August 14, 2002, HQ 958898, dated May 14, 1996, and HQ 961882, dated August 3, 1998, CBP classified functionally similar machines in heading 9030, HTSUS, as “[A]pparatus for measuring and checking electrical quantities[.]” HQ 965528 discussed the “Agilent 3070 In Circuit Test Outsource Series,” a machine designed to test the individual component elements of a printed-circuit board. Specifically, the machine tested the components on the board to verify that they were not shorted or open. HQ 958898 involved the “Hi-Test Rope Tester,” a device designed to check the electrical conductivity of ropes, straps or other materials used near sources of high voltage. Finally, HQ 958934 concerned circuit testers designed to check 6 and 12 volt systems for shorts, grounds, open circuits, etc.
Legal Note 3 to Chapter 90, HTSUS, states that: “[t]he provisions of Note 3 and 4 to section XVI apply also to this chapter.” Note 4 to section XVI provides as follows:
Where a machine (including a combination of machine) consists of individual components … intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.
The AC-4780 meets the definition of a functional unit because it consists of individual components that contribute together to the clearly defined function of “checking” LCD glass substrates for defects. It does so by testing the TFTs etched on the substrates, after which the substrates are sorted based on their acceptability as to the number of defective pixels found and their location on the panel. As such, the AC-4780 is distinguishable from the machines discussed in the rulings you cite in that it does not function principally to “measure or check electrical quantities.” Accordingly, classification under heading 9030, HTSUS, is precluded.
This case is analogous to HQ 954682, dated July 14, 1994, concerning the classification of the “Eisai Ampoule Inspection Machine (AIM),” designed for foreign particulate detection in glass ampules, vials and large infusion bottles. We described the machine’s operations as follows:
Containers such as ampoules, vials, etc., which are filled with liquid injectables are conveyed onto the slowly rotating inspection table. On the inspection table, the container is spun three times and inspected twice for foreign particulate matter and once for fill. Each container is spun at a high speed and braked just before entering the inspection beam. When in the beam, only the solution inside the glass vials is still rotating. Any particulate matter present in the solution blocks the light. The sensor perceives the light variation caused by the particulate matter and judges the container acceptable or faulty, in accordance with the preset sensitivity level. The containers judged acceptable are collected into a separate hopper.
Protestant in that case argued that the machine “measured” the light received on the photodiode array after it was passed through the ampule and was therefore classifiable in heading 9027, HTSUS, as “[I]instruments and apparatus for measuring or checking quantities of … light (including exposure meters)[.]” CBP disagreed. Applying Note 3 to Chapter 90, HTSUS, CBP determined that, while the AIM was a functional machine, it was not “measuring quantities of light,” but rather, checking ampule vials and their liquid fills to determine whether they should be accepted or rejected. Accordingly, CBP found that classification under heading 9027, HTSUS, was precluded, and instead classified the machine under heading 9031, HTSUS. Similarly, in this case, the principal function of the AC-4780 is to check LCD glass substrates for defects to determine if the panels are acceptable for further manufacturing into a display or should be repaired or rejected, not the electrical quantities of the TFTs etched onto the substrates.
We conclude, therefore, that because the AC-4780 is not provided for elsewhere in the Nomenclature, it is classified in heading 9031, HTSUS, which provides for “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this Chapter[.]” With regard to the applicable subheading, Additional U.S. Note 3 to Chapter 90, HTSUS, states that:
"[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."
You explained in your submission that the optical elements of the AC-4780, i.e., the VIOS, “help transform the detection of electrical field into a volting image.” Put differently, they transform the data scanned into a format understandable by the end user; they do not perform the measuring or checking functions of the AC-4780. Accordingly, we find that the optical elements of the AC-4780 play a subsidiary role to the “checking” of LCD glass substrates, which is performed electronically. As such, classification in heading 9031 under one of the subheadings that provide for “Other optical instruments and appliances” is precluded. Instead, the AC-4780 is classified in subheading 9031.80.80, HTSUS, which provides for: “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this Chapter …: Other instruments, appliances and machines: Other.”
HOLDING:
By application of GRI 1, the AC-4780 Array Test System is classified in heading 9031, specifically in subheading 9031.80.80, HTSUS, which provides for: “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this Chapter; …: Other instruments, appliances and machines: Other.” The 2008 column one, general rate of duty is: 1.7 percent, ad
valorem.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov/tata/hts/.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division