CLA-2 CO:R:C:M 955419 DWS
Mr. Stephen R. Handy
Digital Equipment Corporation
50 Nagog Park
Acton, MA 01720-3499
RE: Reconsideration of HQ 952952; Hard Disk Drive Unit;
Chapter 84, Note 5(B); 8471.93.15
Dear Mr. Handy:
This is in response to your letters of November 15, 1993, and
February 1, 1994, requesting reconsideration of HQ 952952, dated
October 26, 1993, which dealt with the classification of a Digital
Equipment Corporation (DEC) hard disk drive unit (model no. RA92)
under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The DEC SA850 automatic data processing (ADP) storage array
has up to 11.3 Gbytes of usable ADP storage. Each SA850 storage
array consists of two SA70 Storage Array Building Blocks (SABBs).
Each SA70 consists of four independent RA70 disk drives (in a
powered and cooled package), and six independent RA92 disk drives.
DEC also offers the SA800 storage array which encompasses 12 Gbytes
of usable storage provided by eight RA92 disk drives. The RA92
disk drive units are imported separately, and do not have a housing
since they are designed to be mounted in a rack enclosure with
other units.
The rack enclosures consist of a cabinet, brackets for disk
drive insertion, a power supply, and wiring. The wiring connects
the rack to a controller. Each controller is designed to connect
several racks. The controller is then connected to the mainframe
computer.
The subheadings under consideration are as follows:
8471.93.15: [a]utomatic data processing machines and units
thereof . . . : [o]ther: [s]torage units, whether
or not entered with the rest of a system:
[m]agnetic disk drive units: [f]or a disk of a
diameter exceeding 21 cm: [u]nits for physical
incorporation into automatic data processing
machines or units thereof.
Goods classifiable under this provision receive duty-free
treatment.
8471.93.20: [s]torage units, whether or not entered with the
rest of a system: [m]agnetic disk drive units:
[f]or a disk of a diameter exceeding 21 cm:
[o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 3.7 percent ad valorem.
ISSUE:
Whether the RA92 hard disk drive unit is classifiable under
subheading 8471.93.15, HTSUS, as a unit for physical incorporation
into a unit, or under subheading 8471.93.20, HTSUS, as an other
storage unit.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
In HQ 952952, the RA92 was held to be classifiable under
subheading 8471.93.20, HTSUS. This was based upon the premise that
the RA92 is not for physical incorporation into a unit, in that,
for classification purposes, the rack enclosure is not a unit.
However, the RA92 was held to be classifiable under subheading
8471.93.20, HTSUS, because, for classification purposes, it is
itself a unit.
Chapter 84, note 5(B), HTSUS, states that:
[a]utomatic 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 to be 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).
Such units entered separately are also to be classifiable in
heading 8471.
The RA92 itself meets the above definition of an ADP unit,
because it is connectable to the central processing unit (CPU)
through the controller and it accepts and delivers data in a form
which can be used by the system.
However, we agree with the holding in HQ 952952 that the rack
enclosure does not meet the definition of an ADP unit. This issue
was effectively and thoroughly discussed in that ruling. It was
stated that:
[t]he RA92 disk drives are designed for incorporation into a
rack enclosure which consists of a cabinet, brackets, a power
supply, and wiring. Clearly the rack enclosure does not meet
the chapter 84, note 5(B), HTSUS, requirements for ADP units
since the rack itself is not connectable to the CPU and the
rack itself is not able to deliver data in a form which can
be
used by the system. In fact, the rack enclosure would be
classifiable in subheading 8473.30.40, HTSUS, which provides
for parts and accessories of ADP machines. When the RA92 disk
drives are installed in the rack, the rack would then be
classifiable as an ADP unit since the disk drives are
connectable to the CPU and are able to deliver data. However,
the rack enclosure itself is not classifiable as an ADP unit.
Thus, the RA92 disk drives cannot be said to be units suitable
for physical incorporation into automatic data processing
machines or units thereof.
Therefore, we find that the RA92 hard disk drive unit is
classifiable under subheading 8471.93.20, HTSUS.
It is our understanding that some of the RA92 hard disk drives
units may be for physical incorporation directly into ADP machines.
We note that this ruling is strictly limited to those RA92 units
which are principally used for physical incorporation into rack
enclosures. The above scenario involving ADP machines is an
entirely different issue.
As was claimed in the case of HQ 952952, it is again suggested
that the computer industry participated in the drafting of the
above HTSUS provisions and had intended these independent disk
drives, which are suitable for rack mounting, to be classifiable
under subheading 8471.93.15, HTSUS. However, as was stated in HQ
952952:
the courts have stated: "it is not for us to distort the
statute to 'fix' what Congress either intentionally or
inadvertently failed to anticipate." Sea-Land Service, Inc.
v. U.S., Appeal No. 90-1311 (Decided November 30, 1990) . .
.
If it is your belief that an HTSUS provision has been
incorrectly written, we suggest that you contact your Congressional
representative.
HOLDING:
The RA92 hard disk drive unit is classifiable under subheading
8471.93.20, HTSUS, as an other storage unit.
EFFECT ON OTHER RULINGS:
HQ 952952 is affirmed.
Sincerely,
John Durant, Director