CLA-2 OT:RR:CTF:TCM H246733 DSR
Assistant Area Port Director
Anchorage Service Port
605 W. 4th Ave., Suite 230
Anchorage, AK 99501
RE: Application for Further Review of Protest 3195-13-100200; classification of printed circuit board assembly consisting of a patient programmer and a recharger
Dear Assistant Area Port Director:
This is in response to the Application for Further Review (AFR) of Protest 3195-13-100200, received on August 21, 2013, and filed on behalf of Benchmark Electronics (Protestant), in response to your classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a printed circuit board assembly that is to be incorporated into a patient programmer and a recharger.
FACTS:
The merchandise is a printed circuit board assembly (“PCBA”) that is designed to be inserted into what are referred to as an external “patient programmer” and an “INSR” (recharger). The patient programmer is used to control, program, analyze and monitor an implanted neuro-stimulator device. The recharger is used to recharge the batteries within the implanted NSD using a radiofrequency technique known as inductive coupling. The neuro-stimulator is designed to be implanted into a patient’s body to send electric pulses to the spinal cord to manage chronic pain.
The PCBA is described as a type of mother board that contains a processor memory and basic operating system. The PCBA is not programmed at the time of importation. It is only programmed for its intended function after importation and only according to the end customer’s specifications and requirements. The PCBA is physically designed to be inserted only into pre-determined housings of the patient programmer or recharger.
This Protest and AFR concerns two entries. The first entry occurred June 18, 2012, and Protestant classified the PCBA in subheading 9021.90.81, HTSUS, which provides for parts and accessories of “other” artificial parts of the body. The rate of duty was “Free.” The second entry occurred on August 2, 2012, and Protestant classified the PCBA in 9032.90.60, HTSUS, which provides for parts and accessories of “other” automatic regulating or controlling instruments and apparatus. The rate of duty was 1.7% ad valorem. On July 16, 2013, U.S. Customs and Border Protection (CBP) reclassified the PCBA to subheading 8529.90.97, HTSUS, which provides for parts of radio remote control apparatus, and liquidated the entries on August 2, 2013, with an attendant duty rate of 3.2% ad valorem.
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed on August 5, 2013, which was within 180 days of the classification and rate and amount of duties chargeable. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further review is properly accorded to the protest pursuant to 19 C.F.R. 174.24(a), because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule 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 GRI may then be applied.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
8529 Parts suitable for use solely or principally with the apparatus of headings
8525 to 8528:
8543 Electrical machines and apparatus, having individual functions, not
specified or included elsewhere in this chapter; parts thereof:
9021 Orthopedic appliances, including crutches, surgical belts and trusses;
splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; parts and accessories thereof:
First, it should be noted that Note 1(m), to Section XVI, HTSUS, states that Section XVI does not cover articles of Chapter 90, HTSUS. Section XVI contains headings 84 and 85. See Sharp Microelectronics Technology, Inc. v. United States, 122 F. 3d 1446 (Fed. Cir. 1997) (“if one determines that a [good] belongs in [chapter 90] because it is not more specifically captured elsewhere in the schedule, then Note 1(m) complements the rule of relative specificity by excluding the device from classification in Chapter 84. We prefer the complementary role which we assign to Note 1(m) in the setting of this case.”)
Furthermore, under both Note 2 to Section XVI, HTSUS and Note 2 to Chapter 90, HTSUS, parts that are themselves goods (that is, articles) of any of the headings of Chapter 84 or 85, HTSUS, are properly classified in Chapter 84 or Chapter 85. Note 2 to Section XVI, provides as follows:
Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:(a) Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;
(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548.
Note 2 to Chapter 90, HTSUS, provides as follows:
Subject to Note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:
Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings; (emphasis added)
Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of heading 9010, 9013 or 9031) are to be classified with the machines, instruments or apparatus of that kind.
This is consistent with Additional U.S. Rule of Interpretation (AUSRI) 1(c), which provides that “a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for ‘parts’ or ‘parts and accessories’ shall not prevail over a specific provision for such part or accessory.” Thus, we first examine whether the subject PCBA is an article in its own right.
Based upon the information provided, as imported, the PCBA is not programmed and is not solely or principally used in a particular device. Instead, it is designed to eventually be programmed and inserted into two different housings to function as a data processing board to process the data needed to carry out the various functions of the patient controller and recharger. EN 85.43 explains that the introductory provisions of EN 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of Heading 8543. The introductory language to EN 84.79 states:
This heading is restricted to machinery having individual functions, which:
Is not excluded from this Chapter by the operation of any Section or Chapter Note [and]
Is not covered more specifically by a heading in any other Chapter of the Nomenclature [and]
Cannot be classified in any other particular heading of this Chapter since:
No other heading covers it by reference to its method of functioning, description or type [and]
No other heading covers it by reference to its use or to the industry in which it is employed [or]
It could fall equally well into two (or more) other such headings (general purpose machines).
The subject PCBA meets each criterion stated in EN 84.79, and mutatis mutandi, EN 85.43. Therefore, we find that the PCBA is classifiable in subheading 8543.70.96, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; Other machines and apparatus: Other: Other: Other.”
Protestant asserts that the PCBA is classified in heading 9021, HTSUS, by application of Note 2(b) to Chapter 90, HTSUS, because the PCBA is “… ‘part’ of an item implanted in the body to compensate for a defect or disability.” This is not so. The devices in which the PCBAs are used, a battery charger and neuro-stimulation controller, are external to the body and do not directly affect it. Therefore, to the extent the PCBAs are parts of either a battery charger or a controller, those devices are imported separately from the neuro-stimulator itself and cannot be said to be an item implanted in the body to compensate for a defect or disability. As such, New York Ruling Letters (NY) N229156, dated August 30, 2012, NY N226995, dated July 27, 2012, and NY N221061, dated July 10, 2012, classifying program controllers and other items imported with the neuro-stimulators they controlled in heading 9021, HTSUS, are not relevant to the circumstances here.
Protestant cites Headquarters Ruling Letter (HQ) H247306, dated December 12, 2014 and NY N234669, dated November 19, 2012, in support of their argument that PCBAs are parts of machines or devices. See December 9, 2015 Submission by Protestant. In both of those rulings, we classified PCBA’s as parts of the specific machine or device in which they were to be incorporated. Here, there is no specific machine or device as such, and as noted supra, the PCBA is itself a good included in a heading of Chapter 85, HTSUS. The instant merchandise is thus precluded from being classified as a “part” of an article of Chapter 90, or as a “part” in Section XVI, HTSUS, by operation of Note 2(a) to Section XVI.
With regard to heading 8529, HTSUS, that heading covers parts suitable for use solely or principally with the apparatus of headings 8525 to 8528. Heading 8526, HTSUS, provides in pertinent part for radio remote control apparatus. EN 85.26 states that the heading includes, in pertinent part, radio apparatus for the remote control of machines. As imported, the PCBA is un-programmed and is not, at importation, specifically identifiable as a “part” that is solely or principally used with a radio remote control apparatus. It can also be used in the battery charger, depending upon its eventual programming. We therefore find that the PCBA is not classified in subheading 8529.90.96, HTSUS.
HOLDING:
By application of GRI 1, the PCBA is classified in heading 8543, HTSUS, as an electrical apparatus having individual functions. Specifically, it is classified in subheading 8543.70.96, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other.” The 2012 column one, general rate of duty is 2.6% ad valorem.
You are instructed to DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website located at www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division