HQ 951165: Protest No. 5501-9X-XXXXXX; Smart AT Ringnodes; Local Area Network; LAN; NIB; ADP Machine; Control And Adapter Unit; HQ 951331; HQ 952659

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 951165

                      October 14, 1992    

CLA-2 CO:R:C:M  951165 MBR

CATEGORY:  Classification

TARIFF NO.:  8471.99.15

District Director
U.S. Customs
Dallas/Ft. Worth International Airport
P.O. Box 619050
Texas, 75261

RE:  Protest No. 5501-9X-XXXXXX; Smart AT Ringnodes; Local Area
     Network; LAN; NIB; ADP Machine; Control And Adapter Unit; HQ
     951331; HQ 952659 

Dear Sir:

     This is in reply to your protest and request for further
review number 5501-9X-XXXXXX, dated January 17, 1991, on behalf of
the Tandy Corporation, regarding the classification of the Smart
At Ringnodes LAN Network Interface Board, under the Harmonized
Tariff Schedule of the United States (HTSUS).

     We have recently reconsidered the classification of LAN
equipment in general, and Network Interface Boards in particular.
See HQ 951331, dated September 18, 1992, as modified by HQ 952659,
dated October 7, 1992. 

FACTS:

     The Smart AT Ringnode ("add-in adapter card") is a Network
Interface Board (NIB) for a local area network.  The Computer
Glossary, Fourth Edition, Alan Freedman (1989), defines a "Local
Area Network" as follows:

     A local area network is a communications network that serves
     several users within a confined geographical area.  Although
     the term may refer to any communications network within a
     building or plant, it typically refers to the interconnection
     of personal computers.

     Personal computer local area networks function as distributed
     processing systems in which each computer, or node, in the
     network does its own processing and manages some of its data. 
     Shared data is stored in a high-performance pc in the network,
     called a file server or network server, which acts as a remote

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     disk drive to all the users in the network.

     The printers that are attached to the network can function on
     a first-come, first-served basis, or they can be connected to
     a computer, called a print server, which collects the print
     output and feeds it to the printer one job at a time.

     A local area network is the backbone of office automation and
     allows electronic mail and other information to be
     communicated between all users of the system.  Local area
     networks are becoming essential for small work groups that
     enter, share and exchange the same information.
                                
     With the use of a gateway, local area network can connect to
     minicomputer and mainframe networks.

     BASEBAND NETWORKS
     Baseband networks are all digital networks that require
     information in digital form.  Examples are ARCNET, Token Ring,
     Ethernet and Starlan.  All of these networks are driven by
     network management software that resides in the file servers
     and the work stations.  Examples of network software are
     Microsoft's NetBIOS and LAN Manager, Apple Talk, TPC/IP and
     Novell's NetWare.

     BROADBAND NETWORKS
     Broadband networks use carrier frequencies and can handle
     voice and video transmission as well, for example, Wang
     Computer's WangNET.

ISSUE:

     What is the classification of the LAN "Smart AT Ringnode"
Network Interface Board?  Is it  classifiable under heading 8471,
HTSUS, which provides for ADP machine "Control or adapter units,"
or under heading 8517, HTSUS, which provides for "[e]lectrical
apparatus for line telephony or telegraphy"?

LAW AND ANALYSIS:

     Since the HTSUS came into effect there has been a great deal
of controversy regarding the classification of LAN boards. 
However, there is no clear classification guidance from either the
HTSUS or the Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), primarily due to the technological
advancements in this area.  

     However, Legal Note 5(B) to chapter 84, HTSUS, provides
guidance regarding units of automatic data processing machines. 
It states:
 


                               -3-

     Automatic data processing machines may be in the form of
     systems consisting of a variable number of separately housed
     units.  A unit is to be regarded as being a part of the
     complete system if it meets all of the following conditions:

     (a)  It is connectable to the central processing unit either
          directly or through one or more other units; and

     (b)  It is specifically designed as part of such a system (it
          must, in particular, unless it is a power supply unit,
          be able to accept or deliver data in a form (code or
          signals) which can be used by the system).

     We agree that the NIBs are essential to the ADP systems with
which they are integrated because they process and format the data
of the computers they serve. 

     The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), pages 1299-1300, describe separately
presented ADP units as follows:
 
     This heading also covers separately presented constituent
     units of data processing systems.  Constituent units are those
     defined in Parts (A) and (B) above as being parts of a
     complete system.

     Apart from central processing units and input and output
     units, examples of such units include:

     (4)  Control and adaptor units such as those to effect
          interconnection of the central processing unit to other
          digital data processing machines, or to groups of input
          or output units which may comprise visual display units,
          remote terminals, etc.

     After extensive research and analysis, it is now our opinion
that the principal function of the NIBs is, in fact, to effectuate
the interconnection of the CPU unit to other units or ADP machines,
thereby serving "control" and "adaption" functions, as described
by
the ENs.  Therefore, the "Smart AT Ringnode" NIBs are properly
classifiable in subheading 8471.99.15, HTSUS, which provides for
"Control or adapter units." 
 
HOLDING: 

     The Smart AT Ringnode Network Interface Boards for Local Area
Networking are classifiable in subheading 8471.99.15, HTSUS, which
provides for: "[a]utomatic data processing machines and units
thereof: [o]ther: [o]ther: [c]ontrol or adapter units."  The rate
of duty is Free.


                               -4-

     Since reclassification of the merchandise as indicated above
will result in the same rate of duty as claimed, you should allow
the protest in full.  A copy of this decision should be attached
to the Customs Form 19 and provided to the protestant as part of
the notice of action on the protest.
 
                              Sincerely,





                              John Durant, Director
                              Commercial Rulings Division

ATTACHMENT:    HQ 951331