CLA-2 CO:R:C:M 956750 DWS
District Director
U.S. Customs Service
555 Battery Street
San Francisco, CA 94111
RE: Protest 2809-94-100542; Rack-Mounted Hard Disk Drive Unit;
Disk Storage Facility; Chapter 84, Note 5(B); HQs 954361,
955419, 952952, and 088747; Condition As Imported ;
8471.93.15
Dear District Director:
The following is our decision regarding Protest 2809-94-
100542 concerning your action in classifying and assessing duty
on a rack-mounted hard disk drive unit under the Harmonized
Tariff Schedule of the United States (HTSUS).
FACTS:
The merchandise consists of the Tandem XL80 hard disk drive
unit for the Tandem XL80 Disk Storage Facility. The disk drive
unit is imported separately and will be inserted into the disk
storage facility in the U.S. Up to eight hard disk drive units
are rack-mounted in the disk storage facility. The disk storage
facility contains the interfaces, power supplies, and grounding
signals for the hard disk drive units. The XL80 storage units
are self-contained in their own housing. The hard disk drives
are placed on a specially designed chassis to facilitate slide
in/out installation and removal. Each drive unit with its
chassis weighs approximately 75 pounds (lbs).
The merchandise was entered under subheading 8471.93.15,
HTSUS, as a magnetic disk drive unit for physical incorporation
into automatic data processing machines or units thereof. The
entries were liquidated on January 21, 1994, under subheading
8471.93.20, HTSUS, as an other magnetic disk drive unit. The
protest was timely filed on April 21, 1994.
The subheadings under consideration are as follows:
8471.93.15: [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: [f]or a
disk of a diameter exceeding 21 cm: [u]nits for
physical incorporation into automatic data
processing machines or units thereof.
Goods classifiable under this provision receive duty-free
treatment.
8471.93.20: . . . : [m]agnetic disk drive units: [f]or a
disk of a diameter exceeding 21 cm: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 3.7 percent ad valorem.
ISSUE:
Whether the hard disk drive unit is classifiable under
subheading 8471.93.15, HTSUS, as a magnetic disk drive unit for
physical incorporation into automatic data processing machines or
units thereof, or under subheading 8471.93.20, HTSUS, as an other
magnetic disk drive unit.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1 provides that classification is determined
according to the terms of the headings and any relative section
or chapter notes.
Chapter 84, note 5(B), HTSUS, states that:
[a]utomatic data processing machines may be in the form
of systems consisting of a variable number of separately
housed units. A unit is to be regarded as being a part of
the complete system if it meets all of the following
conditions:
(a) It is connectable to the central processing unit either
directly or through one or more other units; and
(b) It is specifically designed to be part of such a system
(it must, in particular, unless it is a power supply
unit, be able to accept or deliver data in a form (code
or signals) which can be used by the system).
In HQ 954361, dated November 2, 1993, we held that the
subject merchandise is classifiable under subheading 8471.93.20,
HTSUS. In that ruling, we stated that:
[t]he XL80 disk drives meet the Chapter 84, Legal Note 5(B)
requirements for ADP "units" since they are connectable to
the CPU through the interface and they accept and deliver
data in a form which can be used by the system.
The XL80 disk drives are designed to be mounted in a rack
enclosure which consists of a cabinet, power supply, fan
cooling, and interface. Clearly the rack enclosure itself
does not meet the Chapter 84, Legal Note 5(B) requirements
for ADP units since the rack itself is not connectable to
the CPU and the rack itself is not able to deliver data in
a form which can be used by the system. In fact, the rack
enclosure would be classifiable in subheading 8473.30.40,
HTSUS, which provides for parts and accessories of ADP
machines. When the XL80 disk drives are installed in the
rack, the rack would then be classifiable as an ADP unit
since the disk drives are connectable to the CPU and are
able to deliver data. However, the rack enclosure itself
is not classifiable as an ADP unit. Thus, the XL80 disk
drives cannot be said to be units suitable for physical
incorporation into automatic data processing machines or
units thereof since the rack is not an ADP unit.
Because of the holding in HQ 954361, it is our continued
position that the hard disk drive units are classifiable under
subheading 8471.93.20, HTSUS, as the XL80 Disk Storage Facility
is not a unit as defined under chapter 84, note 5(B), HTSUS. See
also HQ 955419, dated February 3, 1994, and HQ 952952, dated
October 26, 1993, for rulings classifying similar merchandise
under the HTSUS.
The protestant claims that language in HQ 955419, which was
also used in HQ 954361, justifies classification under subheading
8471.93.15, HTSUS. In that ruling, we quoted language from HQ
952952 which stated that:
[w]hen the RA92 disk drives are installed in the rack, the
rack would then be classifiable as an ADP unit since the
disk drives are connectable to the CPU and are able to
deliver data. . .
However, in HQ 955419, we continued the above language by
stating that:
. . . However, the rack enclosure itself is not classifiable
as an ADP unit. Thus the RA92 disk drives cannot be said to
be units suitable for physical incorporation into automatic
data processing machines and units thereof.
We agree with the statement that once the hard disk drive
unit is incorporated into the disk storage facility, the disk
storage facility would be classifiable as an ADP unit.
Nevertheless, such merchandise is not the subject of this
protest. The merchandise to be imported is a hard disk drive
unit to be installed into a disk storage facility in the U.S. It
is the condition of the merchandise as imported which controls
classification, not what it is made into after importation,
except where classification is dependent upon use. Leonard Levin
Co. v. U.S., 27 CCPA 101, 105, C.A.D. 69 (1939). It is our
position that a disk storage facility is not an ADP unit.
Therefore, in its condition as imported, the hard disk drive unit
is not for physical incorporation into an ADP unit. For
classification purposes, the installment of the hard disk drive
unit into the disk storage facility after importation is
irrelevant. Therefore, we find that HQ 955419 is actually in
contradiction to the importer's claims.
Relying solely on a letter, dated January 31, 1991, from
another company stating that that company had received duty-free
treatment for the merchandise under subheading 8471.93.15, HTSUS,
the protestant states that Customs has made a practice of
classifying this class of merchandise under subheading
8471.93.15, HTSUS. We disagree.
An established and uniform practice may arise on the basis
of uniform liquidations of entries throughout the Customs
territory of the U.S. over an extended period of time. Other
than this letter, the protestant has provided no evidence that
entries of the subject merchandise have ever been liquidated
under subheading 8471.93.15, HTSUS. Further, as provided in
section 177.10(b), Customs Regulations [19 CFR 177.10(b)], any
ruling regarding a rate of duty or charge, which is published in
the Customs Bulletin, will establish a uniform practice. We have
cited several rulings under the HTSUS classifying this class of
merchandise under subheading 8471.93.20, HTSUS. In fact, the
holdings in these rulings continue the Customs position on this
class of merchandise from the Tariff Schedules of the United
States (TSUS) to the HTSUS. See HQ 088747, dated October 25,
1993.
HOLDING:
The Tandem XL80 hard disk drive unit is classifiable under
subheading 8471.93.20, HTSUS, as an other magnetic disk drive
unit.
The protest should be DENIED in full. In accordance with
Section 3A(11)(b) of Customs Directive 099 3550-065, dated August
4, 1993, Subject: Revised Protest Directive, this decision,
together with the Customs Form 19, should be mailed by your
office to the protestant no later than 60 days from the date of
this letter. Any reliquidation of the entry in accordance with
the decision must be accomplished prior to mailing of the
decision. Sixty days from the date of the decision the Office of
Regulations and Rulings will take steps to make the decision
available to Customs personnel via the Customs Rulings Module in
ACS and the public via the Diskette Subscription Service, Freedom
of Information Act, and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division