CLA-2 CO:R:C:M 088964 MBR

Mr. J. G. Bradford
AT&T, Import Specialist
Guilford Center
P.O. Box 25000
Greensboro, NC 27420-5000

RE: Membrane Switch Assemblies for Multiline Telephone Sets; Section XVI, Note 2(b); Subheading 8517.90.30; Subheading 8537.10.00; Section XVI 2(a); Explanatory Note 85.37; United States v. General Electric; United States v. Rembrandt Electronics; Kyocera International, Inc., v. United States; H. Rep. No. 100-576;

Dear Mr. Bradford:

This is in response to your letter of February 25, 1991, on behalf of AT&T, requesting a tariff classification of "Membrane Switch Assemblies" for multiline telephone sets, imported from Mexico under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which has been referred to this office for a reply.

FACTS:

The "Membrane Switch Assemblies" for multiline telephone sets are comprised of four models identified as 3019-104288402, 3042C 4BP-105201990, 3042D-845459197, and III BK IDT 846337632. They usually include two flexible membrane circuits, adhesive paper spacers, plastic graphics, and in some variations, molded plastic housings or backplates. The flexible membranes are clear Melinex plastic that have a carbon ink circuitry printed on them. The switches are assembled in layers and bonded together with the self-contained adhesive of the spacers and graphics. They are varied in size from 2" to 8" in width and 4" to 18" in length including the insertible tails (electrical connectors). These switches are used exclusively in AT&T small multiline telephone systems.

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ISSUE:

Whether the article in question is properly classifiable within subheading 8537.10.00, HTSUSA, which provides for: "[b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity . . . [f]or a voltage not exceeding 1,000 V."; or within subheading 8517.90.30, HTSUSA, which provides for: "[e]lectrical apparatus for line telephony or telegraphy, including such apparatus for carrier-current line systems; parts thereof: [p]arts: [o]f telephonic apparatus: [o]f telephone sets."

LAW AND ANALYSIS:

Section XVI, Legal Note 2(b), states that parts if suitable for use solely or principally with a particular kind of machine are to be classified with that machine. Clearly, the membrane switch assemblies at issue are parts suitable for use solely or principally with telephone systems. Multiline telephone sets (including key, call director and consoles) are provided for within subheading 8517.10.00, HTSUSA. However, parts of telephone sets are provided for within subheading 8517.90.30, HTSUSA.

Additionally, Section XVI, Legal Note 2(a), states that parts which are goods included in any of the headings of chapters 84 and 85 are in all cases to be classified in their respective headings. The Membrane Switch Assemblies are prima facie classifiable in heading 8537, HTSUSA, which provides for "[b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity . . . other than switching apparatus of heading 8517." (Emphasis added).

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to heading 8537, page 1391, state that the merchandise of this heading consists of an assembly of apparatus of the kind referred to in the two preceding headings (e.g., switches and fuses) on a board, panel, console, etc., or mounted in a cabinet, desk, etc. In addition, the ENs state that the goods of this heading vary from small switchboards with only a few switches, fuses etc. (e.g., for lighting installations) to complex control panels for machine tools, rolling mills, power stations, radio stations etc., including assemblies of several of the articles cited in the text of this heading." However, the instant merchandise is not described by the terms of heading 8537, and thus is not properly classifiable therein. See HQ 087362, dated February 19, 1991, which held that a cellular mobile telephone (CMT) keyboard assembly was not properly -3-

classifiable in heading 8537, but was classifiable in subheading 8529.90.50, HTSUSA, which provides for other parts suitable for use solely or principally with the apparatus of heading 8525 (i.e., CMTs). See also NY 863577 which classified molded silicon rubber pads used for switching (buttons) in a telephone set in subheading 8517.90.30, HTSUSA.

In United States v. General Electric Company (General Electric), 441 F.2d 1186, 58 CCPA, C.A.D. 1021 (1971), the Court of Customs and Patent Appeals (CCPA) addressed the application of item 685.90, Tariff Schedules of the United States (TSUS). Item 685.90 is the predecessor provision of heading 8537, HTSUSA. The Court considered the applicability of General Interpretative Rule 10(ij) which provides that an article cannot be classified as a "part" if there is a specific provision for the article. The CCPA specifically rejected the argument that the provision of item 685.90, TSUS, for "other electrical apparatus for making or breaking electrical circuits" must prevail over the provision for parts of radio reception apparatus within item 685.22, TSUS. The Court held that the Customs Court was correct in its holding that imported jacks, used in low current audio circuits, are not specifically provided for in item 685.90, TSUS. Instead, the jacks were held properly classified as parts of radio reception apparatus.

The CCPA in General Electric also stated in reference to item 685.90, TSUS, "that a seemingly broad descriptive tariff term is not to be taken as encompassing every article which may literally come within that term but rather only those articles of the type intended by Congress . . ." Heading 8537, HTSUSA, is equally as broad as item 685.90, TSUS. While the Membrane Switch Assemblies in question may literally be involved with the use of electricity, they are not specifically described within either the text or ENs of heading 8537. However, there is no dispute that they are accurately described as parts of multiline telephone sets.

The CCPA revisited the rationale of General Electric in United States v. Rembrandt Electronics (Rembrandt), 405 F.Supp 588, rev'd 542 F.2d 1154 (1976). The Court reversed the holding of the Customs Court that switches which were designed for specific and sole use with television antennae were classifiable as television apparatus and parts within item 685.20, TSUS. Instead, the Court held that the switches were properly classifiable as electrical switches within item 685.90, TSUS. The Court based its reversal on the fact that the distinction between "electric power circuits" and "low current audio circuits" emphasized in General Electric, and relied upon by the Customs Court, did not exist. Rembrandt at 1156. The Court held that item 685.90, TSUS, must apply to merchandise enumerated therein without regard to whether the circuit in which it is used is a power or low-current circuit. Rembrandt at 1156. However, -4-

the Court did not reverse the result reached in General Electric because the rationale of the decision was based on the relative specificity of the competing provisions and not the type of circuit involved.

The rationale of Rembrandt is not instructive for the resolution of this ruling because the Membrane Switch Assemblies at issue are not, like the television switches, an item specifically enumerated within the provision for electrical apparatus for making or breaking electric circuits. As stated previously, they do not satisfy the description of any of the items enumerated within the text or ENs of heading 8537, HTSUSA. Accordingly, the decision reached in Rembrandt is inapplicable in this instance.

The Court of International Trade applied the General Electric rationale regarding the scope of item 685.90, TSUS, in Kyocera International, Inc., v. United States (Kyocera), 527 F.Supp 337 (1981), aff'd 681 F.2d 796 (1982). Kyocera dealt with the classification of certain ceramic articles used in the manufacture of integrated circuits. The Court cited verbatim the above discussed language from General Electric dealing with the scope of item 685.90, TSUS. The Court concluded that the provision for "other electrical apparatus . . . for the protection of electrical circuits or for making connections to or in electrical circuits" within item 685.90, TSUS, was not a specific provision for the subject parts of integrated circuits, and that these parts are properly classifiable as parts of other related electronic crystal components. This conclusion supports the classification of the instant Membrane Switch Assemblies within the heading for parts of telephone sets, as opposed to the classification of "other bases" equipped with two or more apparatus of heading 8536 for electric control or the distribution of electricity.

The Court in Kyocera also addressed the applicability of General Interpretative Rule 10(ij). Based on the conclusion that integrated circuit parts were not specifically provided for within item 685.90, TSUS, the Court stated that Rule 10(ij) was inapplicable. The Court stated that "[t]he record establishes, and the defendant concedes, that the imports are parts of `other related electronic crystal components'." This type of situation also exists in the present case, and lends additional support for the classification of the Membrane Switch Assemblies at issue within subheading 8517.90.15, HTSUSA.

The conference report to the Omnibus Trade Bill of 1988, states that "on a case-by-case basis prior decisions should be considered instructive in interpreting the HTS[USA], particularly where the nomenclature previously interpreted in those decisions remain unchanged and no dissimilar interpretation is required by the text of the HTS[USA]." H. Rep. No. 100-576, 100th Cong., 2D -5-

Sess. 548 (1988) at 550. In this instance, the nomenclature has remained unchanged and the text of the HTSUSA does not require a dissimilar interpretation. Accordingly, we find the previously discussed decisions regarding the scope of item 685.90, TSUS, to be instructive regarding the interpretation of heading 8537, HTSUSA.

HOLDING:

The AT&T Membrane Switch Assemblies for multiline telephone sets are properly classifiable within subheading 8517.90.30, HTSUSA, which provides for: "[e]lectrical apparatus for line telephony or telegraphy, including such apparatus for carrier- current line systems; parts thereof: [p]arts: [o]f telephonic apparatus: [o]f telephone sets." The rate of duty is 8.5 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division