Circuit Assemblies Used in Robot Arm Controllers Not Classifiable as Data Processing Machine Parts, CIT Says

Printed circuit assemblies (PCAs) imported as components of industrial robot controllers are classifiable as parts for electricity control boards and panels, and not as parts of automatic data processing machines, the Court of International Trade said in a decision issued July 26. The importer, FANUC, had argued the PCAs have data processing functions, but CIT held that a rule against classification as ADPs for machines with a specific function other than data processing also applies to ADP parts.

FANUC had imported the PACs in 2002. The 10 types of PCAs were manufactured for use as components of a programmable controller, that was in turn linked by cable to an industrial robotic arm. That robotic arm can perform functions including welding, material handling and painting. The components included a main board, a memory board, an axis control board, power supply board and control circuit board, among other types of PCAs.

CBP originally liquidated the PCAs under subheading 8538.90.30 as printed circuit assemblies suitable for use solely or principally with apparatus of heading 8535, 8536 or 8537, dutiable at 3.5%. Crucially, the agency considered the programmable controllers themselves classifiable under heading 8537 as boards and panels “for electric control or the distribution of electricity. The government argued that, “being parts suitable for use solely with an article classified under heading 8537,” the PCAs “must be classified under the parts heading associated with that heading, i.e., heading 8538,” CIT said.

FANUC, on the other hand, argued that they should be classifiable in either heading 8471 as units of automatic data processing machines, or in heading 8473 as parts of automatic data processing machines. Both of those provisions are duty free. According to FANUC, though the programmable controllers are classifiable in heading 8537, the PCAs together form a system within the programmable controllers that should be considered an ADP.

Note 5(e) to chapter 84 of the tariff schedule provides that “machines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.” As a result, the programmable controllers can’t be classified as ADPs because they perform the specific function of controlling the robotic arm.

And the limitations in that note are not only applicable to the programmable controllers as a whole, but also to any systems within the controllers, CIT said. “According to the uncontested facts, some of the ADP Parts in fact perform automatic data processing.” But those PCAs “also perform the function of controlling robotic and associated factory equipment.” Just as with the controller as a whole, note 5(e) excludes the PCAs from classification as ADPs because they are meant to perform the specific function of controlling the robotic arm, CIT said.

(FANUC Robotics Am., Inc. v. U.S., Slip Op. 19-94, CIT # 04-00197, dated 07/26/19, Judge Stanceu)

(Attorneys: Michael S. O’Rourke of Sandler Travis for plaintiff FANUC America Corporation; Amy Rubin for defendant U.S. government)