CLA-2 CO:R:C:M 955911 MBR
Mr. Jerome Schraub
MI-TU Instructional Services, Inc.
P.O. Box 346, Alden Manor Branch
Floral Park, N.Y. 11003
RE: Revocation of HQ 950417; Ferrite Substrate; Nickel Zinc Ferrite;
Thin Film Magnetic Recording Heads; Parts of Automatic Data
Processing Machines; Electrical Machines and Apparatus n.s.p.f.;
Ceramic; HQs 082097, 950623; ITT Thompson Industries, Inc. v. U.S;
The Deseret Co., v. U.S.
Dear Sir:
This is in reference to HQ 950417, dated January 7, 1992, regarding
the classification of ferrite substrates for thin film magnetic recording
heads, under the Harmonized Tariff Schedule of the United States (HTSUS).
We have reviewed this ruling and find that it is in error.
FACTS:
The ferrite substrates are imported both in disk form and
rectangular shape. They are comprised of undoped nickel zinc ferrite.
They are not comprised of more than one material. After importation, the
disks and rectangles are further manufactured into "Thin Film Heads."
Thin Film Heads are small electromagnets formed on a substrate using
processes very much like those used in semiconductor processing. These
substrates are machined (after importation) into sliders that fly at a
height of 11 millionths of an inch above the disk surface.
A thin film disk head records data on the media track by magnetic
impulses of zeros and ones. The head also reads the impulses by sensing
changes in the magnetic flux of signals already written, and translates
those signals back into data.
Ferrites are ceramic materials which exhibit a high degree of
magnetic sensitivity. Ferrite material is manufactured by combining
certain metallic oxides with a binding agent under high
temperature and pressure.
Because of their high electrical resistivity and magnetic
permeability, magnetically soft ferrites are particularly well
suited for the storage, transmission, or reception of magnetic
energy. The resistivity of ferrite material also allows those
materials to be used in the conversion of electric energy into
magnetic energy and vice versa via induction. Because of
these
capabilities, ferrite material is commonly used in computer
memories and electrical components.
ISSUE:
What is the classification of unfinished ferrite
substrates for thin film magnetic recording heads, under the
Harmonized Tariff Schedule of the United States (HTSUS)?
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...
HQ 950417, dated January 7, 1992, held that the instant
ferrite substrates were classifiable under subheading
8543.80.90, HTSUS, which provides for: "[e]lectrical machines
and apparatus, having individual functions, not specified or
included elsewhere in this chapter: [o]ther machines and
apparatus: [o]ther."
The term "apparatus" is intended to encompass a group of
devices or a collection or set of materials, instruments or
appliances to be used for a particular purpose or end. See
ITT Thompson Industries, Inc. v. United States, 3 CIT 36, 44,
537 F. Supp. 1272, 1277-78, aff'd 703 F. 2d 585 (Fed. Cir.
1982), and The Deseret Co., v. United States, 10 CIT 609, 611
(1986).
In HQ 950417 it was our understanding that, like the
ferrite cores in HQ 082097, dated March 14, 1989, the ferrite
core consisted of a collection of materials. However, it has
been brought to our attention that the instant ferrite cores
are merely disk shaped or rectangular shaped ferrites. They
are not sputtered or coated with metals or glass, as the
ferrite cores in HQ 950623, dated December 23, 1991. The
imported ferrite shapes are cut into numerous small
rectangles, and then further machined to exacting
specifications. Subsequently, they are manufactured into
"Thin Film Heads." Thin Film Heads are small electromagnets
formed on a substrate using processes very much like those
used in semiconductor processing.
-3-
Therefore, because the instant ferrite cores do not
consist of different materials, they are not classifiable as
"machines" or "apparatus" in subheading 8543.80.90, HTSUS.
In HQ 082097 it was determined that the ferrite magnetic
head had lost the character of ceramic articles. However, the
magnetic recording head in HQ 082097 also contained the
"slider unit" which was comprised of titanium carbide.
Similarly, the instant ferrite cores have not lost the
character of a ceramic article, and are thereby excluded from
classification in subheading 8473.30.40, HTSUS, by operation
of chapter 84 Legal Note 1(b).
Chapter 84, Legal Note 1(b) states:
1. This chapter does not cover:
(b) Appliances or machinery (for example,
pumps) or parts thereof, of ceramic
material (chapter 69) (Emphasis added).
Consequently, the ferrite cores are classifiable in
subheading 6914.90.00, HTSUS, which provides for: "[o]ther
ceramic articles: [o]ther."
HOLDING:
The MI-TU Instructional Services, Inc., ferrite
substrates for thin-film magnetic recording heads, not
comprising other materials, are classifiable under subheading
6914.90.00, HTSUS, which provides for: "[o]ther ceramic
articles: [o]ther." The rate of duty is 8% ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division