CLA-2 CO:R:C:M 950196 LTO
Mr. Chuck J. Thompson
XL Brokers International, Inc.
P.O. Box 60132, AMF
Houston, Texas 77205
RE: Geolink Directional Measurement While Drilling [MWD]
System; 8431.43.80; 9026; 9027; 9030; John S. James a/c
The Consolidated Packaging Corp. v. United States;
United States v. Corning Glass Works; Webster's Third New
International Dictionary ("check"/"measure"); NY 837951;
Section XVI, note 1(m); Section XVI, note 4; Chapter 84,
note 5; EN Chapter 84, General Note (E), pg. 1139; Chapter
90, note 3
Dear Mr. Thompson:
This ruling is in response to your letter of July 24, 1991,
requesting the classification of the Geolink Directional MWD
System under the Harmonized Tariff Schedule of the United States
(HTSUS). Your letter was referred to this office for a response.
FACTS:
The Ensco Technology Corporation imports a system called the
"Geolink Orienteer MWD Directional Surveying System" [GEOLINK].
The GEOLINK is a multipart system that is used to indicate the
direction and temperature of a drill. The directional system is
composed of a downhole system component that is attached to the
drill and a surface system component that receives and interprets
the data from the drill. The process begins with the downhole
equipment. You stated that most, if not all, drilling procedures
incorporate the GEOLINK or a similar device.
The downhole system, which is contained in the Transmitter
Sub, consists of the following components: the Power Section
Assembly; the Survey Electronics Assembly; the Actuator Power
Controller Assembly; and the Transmitter Assembly. The
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Transmitter Sub is a specially machined, non-magnetic drill
collar section for housing the mud pulse transmitter. The Power
Section Assembly supplies the power to the Transmitter Assembly
and the Survey Electronics Assembly. The Survey Electronics
Assembly collects the mud pulse data. This assembly includes
triaxial magnetometers, inclinometers and control electronics.
These instruments indicate the inclination, temperature, tool
face, and azimuth of the drill. The Actuator Power Controller
Assembly carries the power from the Power Section Assembly to the
Transmitter Assembly. The Transmitter Assembly collects the data
from the Survey Electronics Assembly and converts it into a mud
pulse signal that is sent to the Standpipe Pressure Transmitter
on the surface.
The surface system consists of the following components:
the Standpipe Pressure Transmitter; the Pump Synchronization
Sensors; a Systems Interface Box; a Control Terminal; a Laptop
PC; a Strip Chart Recorder; a Printer; and a Rig Floor Display.
The Standpipe Pressure Transmitter receives the mud pulse signal
from the Transmitter Assembly and sends the signal to the Systems
Interface Box. The Pump Synchronization Sensors synchronize the
mud pumps with the Systems Interface Box to enhance pulse
detection. The Systems Interface Box supplies power to the
entire surface system, except the computer. It acts as the
interface for the transmission of data between the various
surface system components, except the printer. It converts raw
signals into digital signals that are then sent to the computer.
The Control Terminal is a hand-held interface that acts as a
direct control device to the Systems Interface Box. The Laptop
PC is a computer that analyzes the data from the drill. It is
used for storage of data, printout, directional survey
calculation, and other applications programs. The Strip Chart
Recorder prints the data from the Systems Interface Box. The
Printer produces hard copy output of data from the drill and
other programs. The Rig Floor Display is a unit on the drill rig
platform that displays the directional data of the drill. The
data is sent from the computer through the Systems Interface Box.
You stated that the surface equipment does not and cannot
control the downhole equipment--it can only be used to interpret
the data sent to the surface from the downhole equipment. To
change the drill's direction, the downhole equipment must be
taken out of the ground.
ISSUE:
Whether the GEOLINK Directional MWD System is a measuring or
checking instrument, appliance or machine under the Harmonized
Tariff Schedule of the United States (HTSUS).
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LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to
the terms of the headings and any relative section
or chapter notes...
You contend that the GEOLINK is classifiable under
subheading 8431.43.80, HTSUS, which provides for "[p]arts
suitable for use solely or principally with the machinery of
headings 8425 to 8430 . . . [p]arts for boring or sinking
machinery of subheading 8430.41 or 8430.49 . . . [o]ther."
However, according to Section XVI, note 1(m), if this merchandise
is classifiable in Chapter 90, it cannot be classified under this
subheading.
Heading 9031, HTSUS, provides for "[m]easuring or checking
instruments, appliances and machines, not specified or included
elsewhere in this chapter . . . ." Measuring or checking
instruments are included in Chapter 90 under the following
headings: Heading 9026, HTSUS, provides for "[i]nstruments and
apparatus for measuring or checking the flow, level, pressure or
other variables of liquids or gases . . . ;" Heading 9027,
HTSUS, provides for "instruments and apparatus for measuring and
checking viscosity, porosity, expansion, surface tension or the
like; instruments and apparatus for measuring or checking
quantities of heat, sound or light . . . ;" and Heading 9030,
HTSUS, provides for "other instruments and apparatus for
measuring or checking electrical quantities . . . ."
Before determining the particular heading in which the
GEOLINK belongs, it is necessary to first determine whether the
article is "measuring or checking" apparatus for tariff purposes.
Absent contrary indications, tariff schedule language is given
its common meaning. John S. James a/c The Consolidated Packaging
Corp. v. United States, 48 CCPA 75, 79, C.A.D. 768 (1961). In
United States v. Corning Glass Works, 66 CCPA 25, 27, 586 F.2d
822, 825 (1978), the Court of Customs and Patent Appeals, quoting
Webster's Third New International Dictionary, 381 (1971), stated:
"Check" is defined as "to inspect and ascertain the
condition of especially in order to determine that
the condition is satisfactory; *** investigate and
insure accuracy, authenticity, reliability, safety,
or satisfactory performance of ***; to investigate
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and make sure about conditions or circumstances
***."
The term "measure" is defined as follows:
To ascertain the quantity, mass, extent, or degree
of in terms of a standard unit or fixed amount
. . .; measure the dimensions of; take the
measurements of . . .; to compute the size of . . .
from dimensional measurements."
Webster's Third New International Dictionary, 1400 (1986); See
also HQ 088025, dated January 17, 1991.
The GEOLINK's basic operating theory begins "downhole." The
Survey Electronics Assembly measures inclination, azimuth, and
tool face. The Transmitter Assembly generates a series of mud
pulses to transmit the directional data to the surface. The
Actuator Power Controller enables the downhole data to be
transmitted to the surface as a coded sequence of mud pulses.
On the surface, a Standpipe Pressure transducer monitors
circulating pressure to detect the mud pulse sequence transmitted
by the downhole tool. An Interface Box automatically filters the
raw mud pulse sequence and passes the data to a surface P.C.
which decodes that pressure signal to extract the directional
data. To enhance mud pulse detection, a pump synchronization
sensor is used to synchronize the mud pumps with the Interface
box.
The GEOLINK is used to indicate the direction (inclination,
azimuth, rotation) and temperature of a drill. The directional
system is composed of a downhole system component that is
attached to the drill and a surface system component that
receives and interprets the data from the drill. The GEOLINK
determines whether the drill is advancing in the proper
direction. However, the surface equipment does not and cannot
control the downhole equipment. To change the drill's direction,
the downhole equipment must be taken out of the ground.
Chapter 90, note 3 states that the provisions of note 4 to
Section XVI apply to Chapter 90. Section XVI, note 4 provides as
follows:
Where a machine (including a combination of
machines) consists of individual components
(whether separate or interconnected by piping, by
transmission devices, by electric cables or by
other devices) intended to contribute together to
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a clearly defined function covered by one of the
headings in chapter 84 or chapter 85 [or chapter
90], then the whole falls to be classified in the
heading appropriate to that function.
The article in question is a functional unit that performs a
"checking" and "measuring" function, as those terms are defined
above, and the GEOLINK is, therefore, classifiable under one of
the following headings: Heading 9026, Heading 9027, Heading
9030, or Heading 9031, HTSUS. The GEOLINK is not covered by the
terms of Heading 9026 (liquids and gases), HTSUS, Heading 9027
(viscosity, porosity, expansion, surface tension; heat, sound or
light); or Heading 9030 (electrical quantities), HTSUS. Thus,
the GEOLINK is classifiable under subheading 9031.80.00, HTSUS,
which provides for "[m]easuring or checking instruments,
appliances and machines, not specified or included elsewhere in
this chapter . . . [o]ther instruments, appliances and
machines." See NY 837951, dated March 15, 1989 (downhole probing
device used to check the condition of the hole being drilled--the
Posiprobe MWD Downhole Probe--classified under subheading
9031.80.00, HTSUS).
Finally, classification of the laptop PC and the printer
separately under Heading 8471, HTSUS, was considered. This
heading provides for "[a]utomatic data processing machines and
units thereof." The Explanatory Notes to Chapter 84 state "[i]n
accordance with the provisions of the last paragraph of Note 5 to
Chapter 84, the following classification principles should be
applied in the case of a machine incorporating or working in
conjunction with an automatic data processing machine, and
performing a specific function:
Machines presented with an automatic data processing
machine and intended to work in conjunction
therewith to perform a specific function other than
data processing, are to be classified as follows:
the automatic data processing machine must be
classified separately in heading 84.71 and the other
machines in the heading corresponding to the
function which they perform unless, by application
of Note 4 to Section XVI or Note 3 to Chapter 90,
the whole is classified in another heading of
Chapter 84, Chapter 85 or of Chapter 90 [emphasis
added]."
Because the GEOLINK, as a whole, is classifiable as a "functional
unit" according to Chapter 90, note 3, it is unnecessary to
classify the laptop PC and the printer in separate headings.
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HOLDING:
The GEOLINK is properly classifiable under subheading
9031.80.00, HTSUS, which provides for "[m]easuring or checking
instruments, appliances and machines, not specified or included
elsewhere in this chapter . . . [o]ther instruments, appliances
and machines." The corresponding rate of duty for articles of
this subheading is 4.9% ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division