CLA-2 CO:R:C:M 950762 AJS
District Director
U.S. Customs Service
555 Battery Street
P.O. Box 2450
San Francisco, CA 94126
RE: Protest 2809-90-000549; CPU board; Chapter 84, note 5(A)(a);
GRI 2(a); HQ 087695; HQ 950832; HQ 088118; HQ 554581; Daisy-
Heddon, Div. Victor Comptometer Corp. v. U.S.; H. Conf. Rep. No.
576; Footnote 1/ 8471.91.00; Subheading 9902.84.71; Chapter 99,
Subchapter II, U.S. note 2.
Dear District Director:
Protest for further review number 2809-90-000549, dated
3/28/90, was filed against the classification of a "CPU Board"
from Japan within subheading 9903.41.20, Harmonized Tariff
Schedule of the United States (HTSUS).
FACTS:
The merchandise under protest is the main printed circuit
board in the B28-EXP CPU module. It contains an Intel 80286
microprocessor, two 64K EPROMS and a DMA (direct memory access)
controller. The subject CPU (central processing unit) board
executes the start-up for the processor module, executes the
programs resident in the main memory, and is the controller or
interface between the 80286 chip and the system's main dynamic
memory. Although used in conjunction with a video board and an
expansion board in the module, the CPU board functions as the
main board of the processor module.
ISSUE:
Whether the CPU board is properly classifiable within
subheading 8471.91.00, HTSUS, which provides for "[d]igital
processing units, whether or not entered with the rest of a
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[automatic data processing] system . . ."; or classifiable within
subheading 8473.30.40, HTSUS, which provides for "[p]arts and
accessories of the machines of heading 8471: [n]ot incorpo-
rating a cathode ray tube."
Whether the CPU board is also classifiable within subheading
9903.41.20, HTSUS, which provides for "[a]utomatic data
processing machines, of the type of which the constituent units
are separately housed, whether finished or unfinished, which
incorporate a microprocessor-based calculating mechanism, are
capable of handling data words of at least 16-bits off the
microprocessor, designed for use while affixed to or placed on a
table, desk, or similar place: [h]aving a microprocessor-based
calculating mechanism capable of directly handling memory of over
8 megabits (provided for in subheading 8471.91)."
LAW AND ANALYSIS:
Heading 8471, HTSUS, provides for automatic data processing
(ADP) machines and units thereof. The expression ADP machine
means "[d]igital machines, capable of (1) storing the processing
program or programs and at least the data immediately necessary
for 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. Chapter 84, note 5(A)(a). The
subject CPU board satisfies this description of an ADP machine.
The 80286 microprocessor and EPROMS enable the board to perform
these functions. Accordingly, the CPU board satisfies the terms
of heading 8471, HTSUS, and is classifiable therein.
Subheading 8471.91.00, HTSUS, provides for "[d]igital
processing unit, whether or not entered with the rest of a [ADP]
system, which may contain in the same housing one or two of the
following types of units: storage units, input units, output
units." The CPU board satisfies this description. Any reference
in a heading to an article shall be taken to include a reference
to that article incomplete or unfinished, provided that, as
presented, the incomplete or unfinished article has the essential
character of the complete or finished article. General Rule of
Interpretation (GRI) 2(a). The subject CPU board is an
incomplete or unfinished digital processing unit. It has the
essential character of a complete or finished digital processing
unit because it possesses the essential elements required for
data processing. This conclusion is based on the fact that the
board contains an 80286 microprocessor chip, two 64K EPROMS and a
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DMA controller. Therefore, the CPU board satisfies the terms of
subheading 8471.91.00, HTSUS, and is properly classifiable
therein.
Customs has previously discussed the issue of essential
character for incomplete or unfinished ADP machines. In HQ
087695 (3/6/91), we addressed the classification of an incomplete
or unfinished printed circuit board (motherboard) without
processing chips. See also HQ 950832 (2/11/92) and HQ 088118
(2/2/91). We stated that this motherboard did not possess the
essential character of an ADP machine because it lacked the
essential chips required for data processing. In this instance,
however, the subject CPU board possesses the essential chip for
data processing. Consequently, we view the above decisions as
supporting the conclusion that a CPU board with a data processing
chip possesses the essential character of a complete or finished
ADP machine.
In HQ 554581 (7/2/87), Customs addressed the classifi-
cation of unfinished data-processing machines under the Tariff
Schedules of the United States (TSUS). That case partially dealt
with single board computers (SBCs) which incorporated a CPU and
memory device. We ruled that these stuffed printed circuit
boards which incorporated a CPU are classifiable as data
processing machines. HQ 554581, p. 23. Congress has indicated
that earlier tariff rulings must not be disregarded in applying
the HTSUS. The conference report to the 1988 Omnibus Trade Bill
states that "on a case-by-case basis prior decisions should be
considered instructive in interpreting the HTS[US], particularly
where the nomenclature previously interpreted in those decisions
remains unchanged and no dissimilar interpretation is required by
the text of the HTS[US]." H. Conf. Rep. No. 576 100th Cong., 2D
Sess. 548, 550 (1988). HQ 554581 satisfies this description.
The nomenclature previously interpreted was also "data processing
machines", and no dissimilar interpretation is required by the
HTSUS. Accordingly, we find HQ 554581 instructive for
determining that the CPU board is an incomplete or unfinished ADP
machine.
In HQ 554581, we also discussed the applicability of the
concept of "substantially complete articles" as articulated in
Daisy-Heddon, Div. Victor Comptometer Corp. v. United States, 66
CCPA 97, C.A.D. 1228 (1979). HQ 554581, p. 13. You state that
the subject board is an integral part of the B28-EXP CPU module
and is designed solely for use with that unit. You contend that
based upon the analysis of Daisy-Heddon, that the subject board
is not a substantially complete article. In HQ 554581, we stated
that the application of the Daisy-Heddon criteria to this type of
situation is misplaced. HQ 554581, p. 13. Instead, the analysis
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should be directed to the board in its complete or finished form,
not the ultimate completed systems in which it will function. HQ
554581, p. 13. In this case, the subject board is an unfinished
ADP machine as it relates to the finished CPU board, and not the
finished B28-EXP CPU module which also contains other boards.
Thus, we also find HQ 554581 instructive for determining that the
subject board is a "substantially complete" CPU board.
Footnote 1/ to subheading 8471.91.00, HTSUS, states
"[c]ertain automatic data processing machines and units thereof,
the product of Japan, subject to increased duty. See subheadings
9903.41.15 and 9903.41.20." Subheading 9903.41.20, HTSUS,
provides for ADP machines "of the type of which the constituent
units are separately housed, whether finished or unfinished,
which incorporate a microprocessor-based calculating mechanism,
are capable of handling data words of at least 16 bits off the
microprocessor, designed for use while affixed to or placed on a
table, desk, or similar place: [h]aving a microprocessor-based
calculating mechanism capable of directly handling memory of over
8 megabits (provided for in subheading 8471.91)." (emphasis
added). The CPU board satisfies this description. It is an
unfinished ADP machine from Japan, and its 80286 CPU chip
qualifies as a microprocessor-based calculating mechanism capable
of handling memory of over 8 megabits. Therefore, the CPU board
is also classifiable within subheading 9903.41.20, HTSUS.
Heading 9902.84.71, HTSUS, provides for "[d]igital
processing units for automatic data processing machines,
unhoused, consisting of a printed circuit (single or multiple)
with one or more electronic integrated circuits or other
semiconductor devices mounted directly thereon, certified as
units designed for use other than in an automatic data processing
machine of subheading 8471.20 (provided for in subheading
8471.91)." You contend that the subject CPU board satisfies this
description. However, this heading does not apply to any article
classifiable in [sub]heading 9903.41.20, to the extent to which
this subheading is in effect. Chapter 99, Subchapter II, U.S.
Note 2, p. XXII 99-5 (1990--Supplement 2). As discussed
previously, the CPU board is classifiable within subheading
9903.41.20, HTSUS, and this subheading was in effect on the date
of entry (i.e., 8/24/89). Accordingly, [sub]heading 9902.84.71,
HTSUS, does not apply in this instance.
HOLDING:
The CPU board is properly classifiable within subheading
8471.91.00, HTSUS, which provides for digital processing units.
This merchandise, when a product of Japan, is also classifiable
within subheading 9903.41.20, HTSUS, which provides for unfin-
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ished ADP machines provided for in subheading 8471.91, dutiable
at the rate of 100 percent ad valorem. You should deny the
protest in full. A copy of this decision should be attached to
the Customs Form 19 and provided to the protestant as part of the
notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division