CLA-2 CO:R:C:M 957319 RFA
District Director of Customs
33 New Montgomery Street
P.O. Box 2450
San Francisco, CA 94126
RE: Protest No. 2809-94-101294; Head Disk Assemblies (HDA); Head Disk Units (HDU); Disk Storage Subsystems; Chapter 84, Legal Note 5(B); HQs 956750, 955419, 954361, 952952
Dear District Director:
The following is our decision regarding Protest 2809-94-101294, which concerns the classification of the Hitachi head disk assemblies (HDA) and head disk units (HDU) for the Hitachi 7390 disk drive subsystem under the Harmonized Tariff Schedule of the United States (HTSUS). The subject entry was liquidated on June 24, 1994. The protest was timely filed on September 21, 1994.
FACTS:
The subject merchandise consists of the Hitachi head disk assemblies (HDAs) (model numbers: 1501731-a; 163716-a; 2081680-b; 2081680-c; 2084038-b; 2084038-c; 2084038-k; 3213075-a; 3213077-a; 548517-a) and DKU-F871-104 and DKU-F871-304 head disk units (HDUs) for the Hitachi 7390 disk drive subsystem. The HDA consists of a spindle which is attached to the magnetic disk media, a direct coupled brushless DC motor which rotates the spindle and attached disks, and a voice coil motor/actuator assembly with closed loop servo control and read-write heads. The HDA is sealed in an environmentally secure housing which prevents the magnetic disk media and heads from coming into contact with contaminants.
The HDU consists of an HDA, electronic printed circuit board (PCB) assemblies containing the electronic circuitry to control the read-write function, an AC/DC power supply and cooling fan, which are mounted on a specially designed, non-industry standard frame to facilitate physical installation and attachment to the frame of the Hitachi 7390 disk storage subsystem.
The 7390 disk storage subsystem is a large capacity data storage system for an ADP machine, and consists of one or more separately housed units, referred to as "DKUs". Contained within each DKU is one or more groups of head disk units. There are two basic frame configurations for the 7390 system, an "A" unit and a "B" unit. An A unit is the initial unit in the system and is directly connected to a Disk Control Unit through the "string controller", which, in turn, is connected to the Input/Output (I/O) processor of the CPU. B units are expansion units and only operate when connected to the system through the A unit.
The merchandise was entered under subheading 8471.93.15, HTSUS, as magnetic disk drive storage units, exceeding 21 cm diameters, for physical incorporation into ADP machines or units. The entry was liquidated under subheading 8471.93.20, HTSUS, as magnetic disk drive storage units, exceeding 21 cm diameters, other than for physical incorporation into ADP machines or units. Classification of the merchandise under subheading 8473.30.50, HTSUS, as parts of ADP machines, is also under consideration.
The subheadings under consideration are as follows:
8471.93: Automatic 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:
8471.93.15 Units for physical incorporation into automatic data processing machines or units thereof. . . .
Goods classifiable under this provision have a general, column one rate of duty of free.
8471.93.20 Other . . . .
Goods classifiable under this provision have a general, column one rate of duty of 3 percent ad valorem.
8473.30.50 Parts and accessories . . . suitable for use solely or principally with machines of headings 8469 to 8472: [p]arts and accessories of the machines of heading 8471: [n]ot incorporating a cathode ray tube: [o]ther: [o]ther. . . .
Goods classifiable under this provision have a general, column one rate of duty of free.
ISSUE:
Whether the HDAs and HDUs are classifiable as storage units for physical incorporation into ADP machines or as other storage units or as parts of ADP machines under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
Legal Note 5(B) to Chapter 84, HTSUS, defines units of ADP machines as follows:
Automatic 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 the following conditions:
(a) it is connectable to the central processing unit either directly or through one or more other units;
(b) it is specifically designed as 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).
There is no dispute that the HDUs meet the chapter 84, Legal Note 5(B) requirements for ADP "units" because 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 through the "string controller." The issue to be decided is whether the HDUs are classifiable under heading 8471, HTSUS, as storage units for physical incorporation into ADP machines or as other storage units.
In HQ 954361, dated November 2, 1993, Customs classified the XL80 disk drive units, which were to be mounted in a rack enclosure with other units, as storage units for physical incorporation into ADP machines. The basis for this decision was that:
the 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.
The classification of the XL80 disk drives and similar merchandise was upheld in several rulings. See HQ 956750, dated August 18, 1994; HQ 955419, dated February 3, 1994; HQ 952952, dated October 26, 1993.
According to the information provided, the 7390 disk drive subsystem (the "A" unit) is entered into the United States containing all of the necessary components (i.e., one or more HDU and string controller) to be classified as an ADP "unit". This is a different factual scenario than the one Customs has previously ruled upon in the above-cited rulings. In the present case, the HDUs are imported to either replace or expand existing disk drive subsystems. Therefore, we find that the HDUs are imported for incorporation into separately presented, stand-alone storage units for ADP machines. The HDU is classifiable under subheading 8471.93.15, HTSUS. This conclusion is therefore distinguishable from the holdings in HQs 956750, 955419, 952953. These rulings are still valid.
The only remaining issue is whether or not the HDA, which is part of the HDU, is classifiable as a storage unit under heading 8471, HTSUS, or as a part of ADP machines. We find that the HDA does not meet the chapter 84, Legal Note 5(B) requirements for ADP "units" because they cannot accept and deliver data in a form which can be used by the system (i.e., the HDA will not contain the read/write PCB assemblies). Because the HDA does not meet the definition of an ADP "unit", classification under heading 8471, HTSUS is precluded. However, the HDA is designed to be used solely or principally with ADP machines. Therefore, we find that the HDA is classifiable under subheading 8473.30.50, HTSUS.
HOLDING:
The Hitachi DKU-F871-104 and DKU-F871-304 HDU is classifiable under subheading 8471.93.15, HTSUS, which provides for: "Automatic 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: Units for physical incorporation into automatic data processing machines or units thereof. . . . " Goods classifiable under this provision have a general, column one rate of duty of free.
The Hitachi HDA (model numbers: 1501731-a; 163716-a; 2081680-b; 2081680-c; 2084038-b; 2084038-c; 2084038-k; 3213075-a; 3213077-a; 548517-a) is classifiable under subheading 8473.30.50, HTSUS, which provides for other parts of ADP machines. Goods classifiable under this provision have a general, column one rate of duty of free.
The protest should be GRANTED. 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