CLA-2 CO:R:C:M 950221 MBR
8471.91.00; 8471.92.20; 8471.92.80; 8471.93.30;
8471.93.40; 8473.30.40
Mr. J. Allan Haynie
Premier Innovations, Inc.
10310 Harwin Drive
Houston, Texas 77036
RE: Automatic Data Processing Machines; ADP; Units; Parts;
Motherboard Without CPU; Floppy Disc Drive; Keyboards; Cabinet
Assemblies; Software; Manuals; Labels
Dear Mr. Haynie:
This is in response to your letter of August 19, 1991, on
behalf of Premier Innovations, Inc., requesting classification of
subassemblies and parts for automatic data processing (ADP)
machines, imported from Taiwan, under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA).
FACTS:
You state that "[d]ue to the differences in customer program
requirements, we have discontinued, with the exception of notebook
computers, importing complete computers, and have established an
assembly line where customer requirements can be inserted into the
computers during the initial assembly." You intend to enter parts
and subassemblies via separate shipments as outlined below:
1. Motherboards containing a CPU (Central Processing Unit).
2. Motherboards not containing a CPU.
3. Floppy disk drives.
4. Case assemblies (containing case with power supply and
floppy disk harness included therein), DOS manual, floppy
disk with DOS information, keyboards, labels (FCC, Model
No.).
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5. Items in #4 above plus floppy disk drives.
You state that some shipments "intended to be accomplished
separately" may be consolidated and arrive together.
ISSUE:
What are the classifications of the above referenced ADP
machine units, subassemblies, and parts, under the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA)?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUSA
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...
A "motherboard" is the main interconnecting circuit board in
an electronic device, to which the various subassemblies, as
printed circuit boards, are plugged or wired. See Webster's New
World Dictionary, Third College Edition (1988), page 886. See HQ
085894, dated February 14, 1990.
"Motherboards" for ADP systems have been consistently deemed
to possess the essential character of an ADP processing unit.
Therefore, the "motherboard" containing a CPU is properly
classifiable in subheading 8471.91.00, HTSUSA, which provides for:
"[a]utomatic data processing machines and units thereof: [o]ther:
[d]igital processing units, whether or not entered with the rest
of a system...."
The classification of a "motherboard" without a CPU was
addressed in HQ 088118, dated February 22, 1991, which held that
it was classifiable under subheading 8473.30.40, HTSUSA, which
provides for: "[p]arts and accessories (other than covers, carrying
cases and the like) suitable for use solely or principally with the
machines of headings 8469 to 8472: [p]arts and accessories of the
machines of heading 8471: [n]ot incorporating a cathode ray tube."
Automatic data processing machine "floppy disk" drives, not
assembled in cabinets, and without attached external power
supplies, are classifiable in subheading 8471.93.30, HTSUSA, which
provides for: "[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: [o]ther: [n]ot
assembled in cabinets, and without attached external power supply."
However, if the floppy disk drives in question are assembled in
cabinets and/or have an attached external power supply, they are
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classifiable in subheading 8471.93.40, HTSUSA, which provides for:
"[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: [o]ther: [o]ther."
The "case assemblies" which consist of the case (cabinet) with
power supply and floppy disk harness included therein, is
classifiable in subheading 8473.30.40, HTSUSA, which provides for:
"[p]arts and accessories (other than covers, carrying cases and the
like) suitable for use solely or principally with the machines of
headings 8469 to 8472: [p]arts and accessories of the machines of
heading 8471: [n]ot incorporating a cathode ray tube." In order
to be classifiable here, the "case assembly" must be principally
used with a machine classifiable in heading 8471, HTSUSA. Chapter
84, Legal Note 5 defines the scope of the term "automatic data
processing machine" for the purposes of heading 8471.
Legal Note 5(A)(a), chapter 84, states:
(A) For the purposes of heading 8471, the expression
"automatic data processing machines" means:
(a) Digital machines, capable of (1) storing the
processing program or programs and at least the data
immediately necessary for the execution of the
program; (2) being freely programmed in accordance
with the requirements of the user; (3) performing
arithmetical computations specified by the user;
and (4) executing, without human intervention, a
processing program which requires them to modify
their execution, by logical decision during the
processing run.
"It is a well-established rule that a 'part' of an article is
something necessary to the completion of that article. It is an
integral, constituent, or component part, without which the article
to which it is to be joined, could not function as such article."
United States v. Willoughby Camera Stores, Inc., 21 CCPA 322, 324,
T.D. 46,851 (1933). In determining whether an item is a part of
an article, the courts look to the "nature, function, and purpose
of an item in relation to the article to which it is attached or
designed to serve...." Ideal Toy Corp. v. United States, 58 CCPA
9, 13, C.A.D. 996, 433 F.2d 801, 803 (1979). See Clipper Belt
Lacer Co., Inc. v. United States, Slip Op. 90-22 (March 13, 1990).
The "case assemblies" are utilized as original component parts
of ADP operational systems since they are necessary to the
completion of those articles, as integral, constituent, and
component parts. Therefore, for tariff purposes, they should be
considered "parts" of the machines of 8471, HTSUSA.
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For similar holdings regarding similar merchandise, see HQ
088118, dated February 22, 1991, HQ 087791, dated February 1, 1991,
and HQ 083956, dated April 12, 1989.
The DOS manual is classifiable in subheading 4901.99.00,
HTSUSA, which provides for: "[p]rinted books, brochures, leaflets
and similar printed matter, whether or not in single sheets:
[o]ther: [o]ther."
The floppy disk with DOS information (software) is
classifiable in subheading 8524.90.40, HTSUSA, which provides for:
"[r]ecords, tapes and other recorded media...: [o]ther: [o]ther."
The automatic data processing machine keyboards are
classifiable in subheading 8471.92.20, HTSUSA, which provides for:
"[a]utomatic data processing machines and units thereof: [o]ther:
[i]nput or output units, whether or not entered with the rest of
a system...: [o]ther: [k]eyboards." However, if the keyboards will
be incorporated into the processor (as in a "laptop" or "notebook"
computer), then the keyboards are classifiable in subheading
8471.92.80, HTSUSA, which provides for: "[a]utomatic data
processing machines and units thereof: [o]ther: [i]nput or output
units, whether or not entered with the rest of a system...:
[o]ther: [o]ther: [u]nits suitable for physical incorporation into
automatic data processing machines or units thereof."
The self-adhesive plastic FCC labels are classifiable in
subheading 3919.90.50, HTSUSA, which provides for: "[s]elf-
adhesive plates, sheets, film, foil, tape, strip and other flat
shapes, of plastics, whether or not in rolls: [o]ther."
The metal model number labels are classifiable in subheading
8310.00.00, HTSUSA, which provides for: "[s]ign plates, name
plates, address plates and similar plates, numbers, letters and
other symbols, and parts thereof, of base metal, excluding those
of heading 9405."
You state that some shipments "intended to be accomplished
separately" may be consolidated and arrive together. In the event
that this occurs, you argue that "classification as incomplete or
disassembled machines based on essential character may occur." GRI
2(a) provides direction here. It states:
2. (a) Any reference in a heading to an article shall be
taken to include a reference to that article
incomplete or unfinished, provided that, as entered,
the incomplete or unfinished article has the
essential character of the complete or finished
article. It shall also include a reference to that
article complete or finished (or falling to be
classified as complete or finished by virtue of this
rule), entered unassembled or disassembled.
-5-
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), regarding the Section XVI General Notes,
further elaborate when they state the following on page 1132:
(IV) Incomplete Machines
Throughout the section any reference to a machine or
apparatus covers not only the complete machine, but also an
incomplete machine (i.e., an assembly of parts so far advanced
that it already has the main essential features of the
complete machine). Thus a machine lacking only a flywheel,
a bed plate, calendar rolls, tool holders, etc., is classified
in the same heading as the machine, and not in any separate
heading providing for parts. Similarly a machine or apparatus
normally incorporating an electric motor (e.g., electro-
mechanical hand tools of heading 85.08) is classified in the
same heading as the corresponding complete machine even if
presented without that motor.
However, you state that these are separate shipments which may
be consolidated for ease of transportation. General Rule of
Interpretation 2(a), HTSUSA, states in part that a heading which
provides for a particular article will cover that article
incomplete or unfinished provided that, as imported, the unfinished
article has the essential character of the complete or finished
article. The rule also applies to incomplete or unfinished
articles imported unassembled or disassembled provided that they
are to be treated as complete or finished articles by virtue of the
first part of GRI 2(a).
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) although not dispositive, should be looked
to for the proper interpretation of the HTSUSA. See 54 Fed. Reg.
35128 (August 23, 1989). The relevant ENs, page 2, provide some
guidance on the application of GRI 2(a) to unassembled goods by
stating that "when goods are so presented it is usually for reasons
such as requirements or convenience of packing, handling or
transport." The ENs provide further that for purposes of Rule 2(a)
the expression "articles presented unassembled or disassembled"
means articles the components of which are to be assembled either
by means of simple fixing devices (screws, nuts, bolts, etc.) or
by riveting or welding, for example, provided only simple assembly
operations are involved.
You have made no statements or offered any evidence that these
proposed shipments would be anything more than bulk shipments of
numerous components and parts. This is not the type of
"convenience of packing, handling or transport" that the ENs
contemplate. We have previously addressed this issue in Internal
Advice 4/91, HQ 088595, HQ 089204, and HQ 087888, dated December
3, 1990, and held that these types of shipments are "nothing more
than disparate components in bulk form."
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However, see also HQ 088760, dated March 18, 1991, which held
that when merchandise is shipped in "blister packs" and referred
to as "kits" which require only a "nut-and-bolt assembly
operation," they may possess the essential character of a complete
article.
HOLDING:
The "motherboard" containing a CPU is properly classifiable
in subheading 8471.91.00, HTSUSA.
The "motherboard" imported without a CPU is classifiable under
subheading 8473.30.40, HTSUSA.
ADP "floppy disk" drives, not assembled in cabinets, and
without attached external power supplies, are classifiable in
subheading 8471.93.30, HTSUSA.
ADP "floppy disk" drives which are assembled in cabinets
and/or have an attached external power supply are classifiable in
subheading 8471.93.40, HTSUSA.
The "case assemblies" which consist of the case (cabinet) with
power supply and floppy disk harness included therein, is
classifiable in subheading 8473.30.40, HTSUSA.
The DOS manual is classifiable in subheading 4901.99.00,
HTSUSA.
The floppy disk with DOS information (software) is
classifiable in subheading 8524.90.40, HTSUSA.
The automatic data processing machine keyboards are
classifiable in subheading 8471.92.20, HTSUSA.
ADP keyboards suitable for physical incorporation into the
processor unit (as in laptop or "notebook" computers) are
classifiable in subheading 8471.92.80, HTSUSA.
The self-adhesive plastic FCC labels are classifiable in
subheading 3919.90.50, HTSUSA.
The model number labels made of base metal are classifiable
in subheading 8310.00.00, HTSUSA.
Sincerely,
John Durant, Director
Commercial Rulings Division