CLA-2 CO:R:C:M 955868 MBR
Mr. Rudy A. Pina
R.A. Pina & Associates, Inc.
P.O. Box 2496
Nogales, Arizona 85628
RE: CR5 Point of Sale System Power Supply; Static Converter; HQ
087975; HQ 086121
Dear Mr. Pina:
This is in reply to your letter of January 31, 1994, on behalf
of Delta Products Company, requesting the classification of the
"CR5 Point of Sale System" power supply, under the Harmonized
Tariff Schedule of the United States (HTSUS).
FACTS:
The CR5 Point of Sale System ("POS") combines a CompuAdd 486
Personal Computer ("PC") with POS I Controller card, printer, 101-
key keyboard, cash drawer, magnetic stripe reader and MVGA
monochrome monitor. The cash drawer, stripe reader, and Central
Processing Unit ("CPU") are built into the custom designed
enclosure, with a built-in printer rack and monitor stand. The
Epson printer prints 211 characters per second and handles a
journal roll, receipt roll and slip paper.
The power supply, which is the subject of this ruling, is
manufactured in Mexico and imported into the U.S. for incorporation
into the CR5 POS.
ISSUE:
Are the CR5 POS power supplies classifiable in subheading
8471.99.32, HTSUS, which provides for automatic data processing
machine power supplies suitable for physical incorporation, or in
subheading 8504.40.80, HTSUS, which provides for other static
converters?"
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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 is determined according to the terms of the
headings and any relative section or chapter notes.
In order to determine the classification of the power supply,
it is necessary first to establish the appropriate classification
of the CR5 POS. The CR5 POS is prima facie classifiable under the
following headings:
8470 Calculating machines; accounting machines, postage-
franking machines, ticket-issuing machines and similar
machines, incorporating a calculating device; Cash
registers
* * * * * * * * * * * * *
8471 Automatic data processing machines and units thereof
You argue that the CR5 POS is classifiable in heading 8471,
HTSUS, because the CPU "has the specifications of an automatic data
processing machine," and because the system "supports the following
operating systems: DOS, UNIX, OS/2, Xenix, Windows NT as well as
Novell and other network systems."
We agree that the CR5 POS is based upon a programmable 486
personal computer CPU. However, as stated in the literature you
submitted, the CR5 POS is one single integrated unit. The
Harmonized Commodity Description and Coding System Explanatory
Notes (ENs) regarding heading 8471, HTSUS, state in pertinent part,
page 1297, as follows:
However, the heading excludes machines, instruments or
apparatus incorporating or working in conjunction with an
automatic data processing machine and performing a specific
function. Such machines, instruments or apparatus are
classified in the headings appropriate to their respective
functions or, failing that, in residual headings (See Part (E)
of the General Explanatory Note to this Chapter).
Therefore, because the ADP machine is incorporated into the
CR5 point of sale terminal, the whole CR5 POS is classifiable
pursuant to its function as a point of sale terminal. The EN
regarding "Cash Registers," provided for in subheading 8470.50.00,
HTSUS, page 1295, states in pertinent part:
These machines are used in shops, offices, etc., to
provide a record of all transactions (sales, services
rendered, etc.) as they occur, of the amounts involved, the
total of the amounts recorded and, in some cases, the code
number of the article sold, quantity sold, time of
transaction, etc...
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This heading also covers cash registers working in
conjunction, on-line or off-line, with an automatic data
processing machine and cash registers which use, for example,
the memory and microprocessor of another cash register (to
which they are linked by cable) to perform the same functions.
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN), although not dispositive, should be looked
to for the proper interpretation of the HTSUS. See T.D. 89-80, 54
Fed. Reg. 35128 (August 23, 1989).
Therefore, heading 8470, HTSUS, which provides for cash
registers, includes cash registers working in conjunction with an
ADP machine, such as the instant merchandise. Thus, the power
supplies in question are, in fact, classifiable as power supplies
for cash registers.
The ENs regarding electrical static converters (power
supplies), pages 1338, and 1339, state, in pertinent part, as
follows:
The apparatus of this group are used to convert
electrical energy in order to adapt it for further use. They
incorporate converting elements (e.g., valves) of different
types. They may also incorporate various auxiliary devices
(e.g., transformers, induction coils, resistors, command
regulators, etc.). Their operation is based upon the
principle that the converting elements act alternately as
conductors and non-conductors.
The instant power supplies meet this description, but are also
prima facie classifiable under subheading 8473.29.00, HTSUS, which
provides for other parts and accessories of the machines of heading
8470, HTSUS. However, Section XVI, Legal Note 2, provides
direction regarding the classification of parts. It states, in
pertinent part:
(a) Parts which are goods included in any of the headings of
chapters 84 and 85 (other than headings 8485 and 8548)
are in all cases to be classified in their
respective headings;
Consequently, the power supplies are properly classifiable in
heading 8504, HTSUS, rather than under a parts provision.
HOLDING:
The instant power supplies, imported from Mexico, for
incorporation into the CR5 Point of Sale Terminal, are classifiable
in subheading 8504.40.80, HTSUS, which provides for: "[e]lectrical
transformers, static converters (for example, rectifiers) and
inductors: [s]atic converters: [o]ther." The rate of duty is 3%
ad valorem.
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However, if the provisions of the North American Free Trade
Agreement are met, as set out in General Note 12 of the HTSUS, the
rate of duty is Free.
Sincerely,
John Durant, Director