CLA-2 OT:RR:CTF:TCM HQ H240212 TNA
Port Director, Service Port- Blaine
U.S. Customs and Border Protection
9901 Pacific Highway
Blaine, WA 98230
Attn: Emily Pramodh, Senior Import Specialist
RE: Internal Advice Request 13/013; classification of certain remote site monitoring systems
Dear Port Director:
This is in response to your letter, dated March 11, 2013, forwarding with comments the Request for Internal Advice submitted by Metro Customs Brokers Inc. on behalf of Tasc Systems, Inc. (“Tasc” or “Requester”), on November 27, 2012, concerning the proper classification of certain remote site monitoring systems under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The subject merchandise consists of the Site RSM 1RU and the Site RSM 2RU, two types of remote site monitoring systems that function in the same manner. Tasc’s remote monitoring systems are designed for a range of industries, from telecommunications, hospitals and education, electrical and energy utilities, fresh water and waste water utilities, public safety, to oil and gas production. In each of these applications, Tasc’s remote monitoring system moves data between a satellite location and a main location; these data provide information about the communication system within these industries. In particular, these data convey any problems with the communication system so that these problems can be fixed in a timely fashion. Thus, in the telecommunication industry, for example, Tasc’s remote monitoring system monitors equipment at tower and in-building sites and provide data regarding dropped calls and the network’s low signal strength. As a further example, typical oil and gas operations include a number of wells in remote locations. Tasc’s remote monitoring systems allow oil and gas companies to monitor the communication link from the end of the main line to the well head.
In particular, Tasc’s Site RSM series, to which the subject 1RU and 2RU belong, is a remote monitoring system that provides personnel with the data needed to determine if there is a problem with a radio site. This monitoring can happen by way of two-way radio, Ethernet, serial, landline dial-up or cellular, as these are the methods that transport the data between the remote site and the main location. The subject 1RU and 2RU contain the following standard inputs and outputs: eight digital inputs capable of accepting a wide input voltage range from contact closures, passive switches or solid state switching devices; eight analog inputs that can be programmed with upper and lower set points; and eight open drain output channels capable of switching up to 50VDC at 150mA each. They also contain a forward and reflected power sensor, and a differential sensor for measuring current. Furthermore, when equipped with optional sensors, the 1RU and 2RU can contain eight temperature inputs. The subject 1RU and 2RU are not imported with a PC, nor do they contain an internal one; however, they must be used with a PC and are imported with software that is specific to the SITE RSM monitoring system. This software must be installed on a PC for the monitoring system to function.
In its Request for Internal Advice, Tasc argues for classification in subheading 8517.62.00, HTSUS, which provides for “Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof: Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus.”
The port is of the opinion that the subject merchandise 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; profile projectors; parts and accessories thereof: Other instruments, appliances and machines: Other.” In advocating for this classification, the port argues that the subject merchandise has broader applications than simply transmitting data between the remote site and the central monitoring location. The port believes that the subject merchandise’s ability to monitor systems and determine the existence of a problem, take it out of the scope of heading 8517, HTSUS.
ISSUE:
Whether the subject remote site monitoring systems are classified in heading 8517, HTSUS, as other apparatus for the transmission of data; in heading 9030, HTSUS, as other instruments and apparatus for measuring or checking electrical quantities; or in heading 9031, HTSUS, as measuring or checking instruments, appliances and machines, not specified or included elsewhere in Chapter 90, HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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, GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof:
9030 Oscilloscopes, spectrum analyzers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of heading 9028; instruments and apparatus for measuring or detecting alpha, beta, gamma, X-ray, cosmic or other ionizing radiations; parts and accessories thereof:
9031 Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof:
Note 1 to Section XVI, HTSUS, of which heading 8517, HTSUS, is a part, states, in pertinent part, the following:
This section does not cover:…
(m) Articles of chapter 90
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs 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 (Aug. 23, 1989).
The EN to heading 8517, HTSUS, provides, in pertinent part:
This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks…
(II) OTHER APPARATUS FOR TRANSMISSION OR RECEPTION OF VOICE, IMAGES OR OTHER DATA, INCLUDING APPARATUS FOR COMMUNICATION IN A WIRED OR WIRELESS NETWORK (SUCH AS A LOCAL OR WIDE AREA NETWORK)…
(G) Other communication apparatus.
This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network.
Communication networks include, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture.
The EN to heading 9030, HTSUS, provides, in pertinent part:
(B) OSCILLOSCOPES, SPECTRUM ANALYSERS AND OTHER INSTRUMENTS AND APPARATUS FOR MEASURING OR CHECKING ELECTRICAL QUANTITIES…
“Logic analysers”, which are apparatus used to examine electrical circuits consisting for the most part of semiconductor devices, are also classified here…
Some electrical measuring instruments can be used for many purposes, for example, electrical or electronic instruments known as “universal testers” (e.g., multimeters) which serve for the rapid measurement of voltages (direct or alternating), currents (direct or alternating), resistances and capacitances.
The heading also includes a wide range of electrical or electronic instruments used in radio-communications or telecommunications.
The EN to heading 9031, HTSUS, provides, in pertinent part:
In addition to profile projectors, this heading covers measuring or checking instruments, appliances and machines, whether or not optical. It should, however, be noted that this group does not include any instruments, apparatus, etc., falling in headings 90.01 to 90.12 or 90.15 to 90.30; in particular, the following are therefore excluded:…
(h) Instruments and apparatus for measuring and checking electrical
quantities and instruments and apparatus for measuring or detecting ionising radiations of heading 90.30.
In requesting this Internal Advice, Tasc argues for classification in heading 8517, HTSUS, as an other apparatus for the transmission or reception of data, including apparatus for communication in a wired or wireless network. In support of this classification, Tasc argues that the subject merchandise is capable of handling most methods of transporting data between the remote site and the central monitoring location. Tasc argues that this data transmission is what allows the subject remote monitoring system to provide field personnel with effective remote site monitoring and control.
In response, we note that Note 1 to Section XVI, HTSUS, of which heading 8517, HTSUS, is a part, states that merchandise of Chapter 90, HTSUS, cannot be classified in Section XVI, HTSUS. As a result, we must first examine whether the subject merchandise can be classified in Chapter 90, HTSUS, before we can examine whether it is provided for in heading 8517, HTSUS.
The port advocates for classification of the subject merchandise in heading 9031, HTSUS, which provides for “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter.” By the terms of this heading, merchandise is only classified in heading 9031, HTSUS, when it cannot be classified elsewhere in Chapter 90, HTSUS. See heading 9031, HTSUS; EN 90.31. In particular, heading 9031, HTSUS, excludes instruments and apparatus of heading 9030, HTSUS, that are for measuring and checking electrical quantities and instruments. See EN 90.31. As a result, we first examine whether the subject merchandise can be classified in heading 9030, HTSUS.
Heading 9030, HTSUS, provides for “Oscilloscopes, spectrum analyzers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of heading 9028.” The terms “measuring” and “checking” of headings 9030 and 9031, HTSUS, are not defined in the HTSUS or in the ENs. In United States v. Corning Glass Works, 66 CCPA 25, 27 (1978), however, the court defined the term “check” as “to inspect and ascertain the condition of, especially in order to determine that the condition is satisfactory; … investigate and insure accuracy, authenticity, reliability, safety, or satisfactory performance of …; to investigate and make sure about conditions or circumstances….” See United States v. Corning Glass Works, 66 CCPA 25, 27 (1978) (“Corning Glass Works”).
Furthermore, the court stated that the provision for “checking instruments” clearly and unambiguously encompasses machines that carry out steps in a process for inspecting. Id. at 27. As a result, CBP has consistently held that equipment that is principally used in the process of measuring or checking is classifiable under that provision, even if it does not actually perform the measuring or checking operation itself. See HQ 089391, dated February 6, 1992; HQ 953382, dated April 15, 1993; and HQ H009364, dated November 23, 2009. In addition, CBP has applied the above definition of the term “checking” to heading 9030, HTSUS, as well as to heading 9031, HTSUS, because both headings contain the identical “measuring and checking” language. See, e.g., HQ H096888, dated June 8, 2010. As such, this definition is equally applicable to both headings 9030 and 9031, HTSUS.
In the present case, the subject remote site monitoring systems are designed to ascertain the condition of a remote site, whether that site is a remote oil well or a wind turbine that is far from the main facility. The subject monitoring systems are designed to determine when a flaw has occurred at these remote sites, or when another situation, such as a cellular network’s low signal strength, could cause problems for the network being monitored. As such, the subject merchandise meets definition of “checking” as found in Corning Glass Works and multiple CBP rulings.
Furthermore, heading 9030, HTSUS, provides for apparatus that check electric quantities. The heading provides for merchandise such as logic analyzers, which are apparatus used to examine electrical circuits. See EN 90.30. A logic analyzer is an electronic instrument that captures and displays multiple signals from a digital system or digital circuit; in PC-based logic analyzers, hardware connects to a computer through a USB or Ethernet connection and relays the captured signals to the software on the computer. See http://en.wikipedia.org/wiki/Logic_analyzers. The subject merchandise functions by checking electric signals that it receives via any one of the eight inputs it contains. Its data is then sent to and analyzed by specialized software installed on a PC. In this regard, we note that all of the applications for which the subject remote monitoring systems are designed feature a data network of some kind. The sole purpose of the subject merchandise is to check the signals (which are electrical quantities) to identify flaws in the network, like logic analyzers identify flaws in individual currents. As such, the subject merchandise is described by the terms of heading 9030, HTSUS, and is similar to the exemplars of EN 90.30.
In addition, CBP has previously examined the definition of “telecommunications” as that term appears in subheading 9030.40.00, HTSUS. In HQ H096888, CBP examined multiple lexicographic sources and noted that:
Newton’s Telecom Dictionary defines telecommunications as “the art and science of ‘communicating’ over a distance by telephone, telegraph, and/or radio. The transmission, reception and the switching of signals, such as electrical or optical, by wire, fiber or electromagnetic (i.e., through-the-air) means.” See Newton’s Telecom Dictionary, 23rd Edition (2009). The General Services Administration Glossary defines telecommunications as “1. any transmission, emission, or reception of signs, signals, writing, images and sounds or intelligence of any nature by wire, radio, optical or other electromagnetic systems. 2. Any transmission, emission, or reception of signs, signals, writings, images, sounds, or information of any nature by wire, radio, visual, or other electromagnetic systems.” See www.everyspec.com. Other dictionaries provide similarly broad definitions. See, e.g., Webster’s New World Dictionary, 4th Ed. (2007) and Computer Telephone & Electronics Glossary (www.csgnetwork.com).
See HQ H096888.
The subject merchandise is a monitoring system that checks the communication networks of the industries in which it is used. As examples, it checks the communication systems of hospitals, such as beepers and pagers. It also checks the communications between remote oil wells and the main monitoring site. It is also compatible with most modes of wired and wireless communication. See http://www.tascsystems.com/pages/industries.html. As such, we find that the subject remote monitoring system is “specially designed for telecommunications” within the meaning of subheading 9030.40.00, HTSUS, and will be classified there.
Because the subject merchandise is described by the terms of heading 9030, HTSUS, it precluded from classification in heading 9031, HTSUS. See heading 9031, HTSUS; EN 90.31. Furthermore, because the subject merchandise is classified in Chapter 90, it is precluded from classification in Section XVI and heading 8517, HTSUS. See Note 1 to Section XVI, HTSUS.
HOLDING:
By application of GRI 1, the subject Site RSM 1RU and Site RSM 2RU are classified in heading 9030, HTSUS. They are specifically provided for in subheading 9030.40.00, HTSUS, which provides in pertinent part for “Oscilloscopes, spectrum analyzers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of heading 9028:… Other instruments and apparatus, specially designed for telecommunications (for example, cross-talk meters, gain measuring instruments, distortion factor meters, psophometers).” The applicable duty rate is Free.
You are to mail this decision to the Internal Advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on CBP’s 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