HQ 958720: Protest 2720-95-101202; Modem Board Missing Firmware; Unfinished or Incomplete; Parts; Heading 8517; GRI 2(a)

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 958720

                          March 28, 1996

CLA-2 RR:TC:MM 958720  RFA

CATEGORY: Classification

TARIFF NO.: 8517.90.44


Port Director 
U.S. Customs Service 
Los Angeles Airport Area 
300 S. Ferry Street
Terminal Island, CA  90731

RE:  Protest 2720-95-101202; Modem Board Missing Firmware;
     Unfinished or Incomplete; Parts; Heading 8517; GRI 2(a)

Dear Port Director:

     The following is our decision regarding Protest 2720-95-101202, which concerns the classification of unfinished modem
boards under the Harmonized Tariff Schedule of the United States
(HTSUS). 

FACTS:

     The subject merchandise are semi-finished printed circuit
board assembly modem cards, part numbers 1442FQ, 1442FT, and
1442VFT.  As imported, the modem boards have the following
components: a telephone/modem interface; logic/memory interface
chips for the computer; transformers; 2 crystals for the
controllers; and relays.  After importation, the controller,
modem data pump, and EPROM chip will be added to the modem board. 
The controller controls the modulation and demodulation of a
signal.  The modem data pump contains the algorithms which allow
the modem to connect to the telephone line.  The EPROM chip
maintains preprogrammed information.

     The merchandise was entered under subheading 8517.40.10,
HTSUS, as unfinished modem boards.  The entries were liquidated 
on September 15 and 22, October 6 and 20, 1995, under subheading
8517.90.26, HTSUS, as other parts of telegraphic apparatus.   The
protest was timely filed on October 20, 1995. 

     The subheadings under consideration are as follows:

     8517:     Electrical apparatus for line telephony or
               telegraphy, including such apparatus for
               carrier-current line systems; parts thereof:

     8517.40.10:    Other apparatus, for carrier-current line
                    systems: [m]odems, of a kind used with data
                    processing machines of heading 8471. . . .

          Goods classifiable under this provision have a general,
          column one rate of duty of 4.2 percent ad valorem.

     8517.90:  Parts:

     8517.90.26:         Other parts, incorporating printed
                         circuit assemblies: Parts for articles
                         of subheadings 8517.20, 8517.30,
                         8517.40.50 and 8517.81: For telegraphic
                         switching apparatus. . . . 

          Goods classifiable under this provision have a general,
          column one rate of duty of 4.7 percent ad valorem.

     8517.90.38:         Other: Printed circuit assemblies: For
                         telephonic apparatus: Other. . . . 

          Goods classifiable under this provision have a general,
          column one rate of duty of 8.5 percent ad valorem. 

     8517.90.44:         Other: Printed circuit assemblies: For
                         telegraphic apparatus. . . . 
.         Goods classifiable under this provision have a general,
          column one rate of duty of 4.7 percent ad valorem.

ISSUE:

     Whether the modem board, missing the controller, modem data
pump and EPROM chip, is classifiable as an unfinished modem or as
part of a modem, under the HTSUS?

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 shall be determined according to
the terms of the headings and any relative section or chapter
notes.

     Complete or finished modems are classifiable under
subheading 8517.40.10, HTSUS.  The protestant states that the
semi-finished modem boards are classifiable as  incomplete or
unfinished modem boards based upon GRI 2(a), which states that:
"any reference in a heading to an article shall be taken to
include a reference to that article incomplete or unfinished,
provided that, as presented, the incomplete or unfinished article
has the essential character of the complete or finished article."

     To be classified as an incomplete or unfinished modem, the
merchandise must have the essential character of the complete or
finished articles.  The term "modem" is not defined in the HTSUS
or in the Harmonized Commodity Description and Coding System
Explanatory Notes (EN), which constitute the official
interpretation of the HTSUS.  See T.D. 89-80, 54 FR 35127, 35128
(August 23, 1989).

     In Rico Import Co. v. United States, 16 CIT 770, 797 F.
Supp. 1028 (1992), the court stated that "[i]t is well settled
that tariff acts must be construed to carry out the intent of the
legislature." See Nippon Kogaku (USA), Inc. v. United States, 69
CCPA 89, 92, 673 F.2d 380, 382 (1982)(citing Sandoz Chem. Works,
Inc. v. United States, 43 CCPA 152, 156, C.A.D. 623 (1956)).  The
first place to look to establish the intent of Congress is the
language of the statute itself. Consumer Prod. Safety Comm'n v.
GTE Sylvania, Inc., 447 U.S. 102, 108 (1980).  The court may
resolve ambiguities in the plain language of a statute by
resorting to legislative history and other extrinsic sources.
Sandoz Chem. Works, 43 CCPA at 156.

     A tariff term that is not defined in the HTSUS or in the
EN's is construed in accordance with its common and commercial
meaning. Nippon Kogaku (USA) Inc. v. United States, 69 CCPA 89,
673 F.2d 380 (1982).  Common and commercial meaning may be
determined by consulting dictionaries, lexicons, scientific
authorities and other reliable sources. C.J. Tower & Sons v.
United States, 69 CCPA 128, 673 F.2d 1268 (1982).  Lexicon
sources defines "modem" as follows:

     1. The Computer Glossary, Sixth Edition, by Alan
     Freedman: Modem (MOdulator-DEModulator)   Device that
     adapts a terminal or computer to a telephone line.  It
     converts the computer's digital pulses into audio
     frequencies and converts them back into pulses at the
     receiving side.  

     2. New Grolier Encyclopedia Electronic Publishing,
     Inc., 1994: A modem is a device that converts one form
     of communication signal into another.  It is used as a
     link between devices that use different forms of
     signals, such as computers and telephones.  The word
     modem derives from this use.  That is, conversion from
     the digital signals . . . of computers to the analog
     signals . . . of telephones is called modulation, while
     the reverse process is called demodulation.  Modems can
     also carry out various control functions for
     coordinating the transmitted data.

     Digital data from a computer, in the form of a sequence
     of bits, is fed to a modem.  The modem converts the
     bits into an analog signal that preserves the
     distinction between the low and high bits;  for
     example, the bits may be converted into two frequencies
     such as 1,200 Hz and 2,200 Hz.  At the receiving end,
     another modem detects the two frequencies and produces
     a digital signal that is identical to the original
     digital signal.  In this way, data can be transmitted
     at the rate of up to 9,600 bits per second over
     ordinary telephone lines, and at even higher rates over
     "shielded" lines.
  
     We find that the semifinished boards do not have the
essential character of a finished modem board because in its
condition as imported, it lacks the ability to modulate and
demodulate a signal, and it does not have the capability of being
able to connect to the telephone line.  Therefore, the
semifinished boards are not classifiable under subheading
8517.40.10, HTSUS, as unfinished modems based upon the
application of GRI 2(a).   We find that the semifinished printed
circuit board assemblies are classifiable as parts for the use of
sending and receiving telegraphic signals.  The subject modem
cards are properly classifiable under subheading 8517.90.44,
HTSUS, which provides for printed circuit assembly parts for
telegraphic apparatus.  

HOLDING:

     The semi-finished printed circuit board assembly modem
cards, part numbers 1442FQ, 1442FT, and 1442VFT, are classifiable
under subheading 8517.90.44, HTSUS, which provides for:
"[e]lectrical apparatus for line telephony or telegraphy,
including such apparatus for carrier-current line systems; parts
thereof: [p]arts: [o]ther: [p]rinted circuit assemblies: [f]or
telegraphic apparatus. . . ."  Goods classifiable under this
provision have a general, column one rate of duty of 4.7 percent
ad valorem.

     Because reclassification of the merchandise as indicated
above is the same as the liquidated rate of duty, you should DENY
the protest.  In accordance with Section 3A(11)(b) of Customs
Directive 099 3550-065, dated August 4, 1993, Subject: Revised
Protest Directive, this decision, together with the Customs Form
19, should be mailed by your office to the protestant no later
than 60 days from the date of this letter.  Any reliquidation of
the entry in accordance with the decision must be accomplished
prior to mailing of the decision.  Sixty days from the date of
the decision the Office of Regulations and Rulings will take
steps to make the decision available to Customs personnel via the
Customs Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act and other public
access channels.

                              Sincerely,



                              John Durant, Director
                              Tariff Classification Appeals
Division