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HQ 950196


January 8, 1992

CLA-2 CO:R:C:M 950196 LTO

CATEGORY: CLASSIFICATION

TARIFF NO.: 9031.80.00

Mr. Chuck J. Thompson
XL Brokers International, Inc.
P.O. Box 60132, AMF
Houston, Texas 77205

RE: Geolink Directional Measurement While Drilling [MWD] System; 8431.43.80; 9026; 9027; 9030; John S. James a/c The Consolidated Packaging Corp. v. United States; United States v. Corning Glass Works; Webster's Third New International Dictionary ("check"/"measure"); NY 837951; Section XVI, note 1(m); Section XVI, note 4; Chapter 84, note 5; EN Chapter 84, General Note (E), pg. 1139; Chapter 90, note 3

Dear Mr. Thompson:

This ruling is in response to your letter of July 24, 1991, requesting the classification of the Geolink Directional MWD System under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for a response.

FACTS:

The Ensco Technology Corporation imports a system called the "Geolink Orienteer MWD Directional Surveying System" [GEOLINK]. The GEOLINK is a multipart system that is used to indicate the direction and temperature of a drill. The directional system is composed of a downhole system component that is attached to the drill and a surface system component that receives and interprets the data from the drill. The process begins with the downhole equipment. You stated that most, if not all, drilling procedures incorporate the GEOLINK or a similar device.

The downhole system, which is contained in the Transmitter Sub, consists of the following components: the Power Section Assembly; the Survey Electronics Assembly; the Actuator Power Controller Assembly; and the Transmitter Assembly. The

Transmitter Sub is a specially machined, non-magnetic drill collar section for housing the mud pulse transmitter. The Power Section Assembly supplies the power to the Transmitter Assembly and the Survey Electronics Assembly. The Survey Electronics Assembly collects the mud pulse data. This assembly includes triaxial magnetometers, inclinometers and control electronics. These instruments indicate the inclination, temperature, tool face, and azimuth of the drill. The Actuator Power Controller Assembly carries the power from the Power Section Assembly to the Transmitter Assembly. The Transmitter Assembly collects the data from the Survey Electronics Assembly and converts it into a mud pulse signal that is sent to the Standpipe Pressure Transmitter on the surface.

The surface system consists of the following components: the Standpipe Pressure Transmitter; the Pump Synchronization Sensors; a Systems Interface Box; a Control Terminal; a Laptop PC; a Strip Chart Recorder; a Printer; and a Rig Floor Display. The Standpipe Pressure Transmitter receives the mud pulse signal from the Transmitter Assembly and sends the signal to the Systems Interface Box. The Pump Synchronization Sensors synchronize the mud pumps with the Systems Interface Box to enhance pulse detection. The Systems Interface Box supplies power to the entire surface system, except the computer. It acts as the interface for the transmission of data between the various surface system components, except the printer. It converts raw signals into digital signals that are then sent to the computer. The Control Terminal is a hand-held interface that acts as a direct control device to the Systems Interface Box. The Laptop PC is a computer that analyzes the data from the drill. It is used for storage of data, printout, directional survey calculation, and other applications programs. The Strip Chart Recorder prints the data from the Systems Interface Box. The Printer produces hard copy output of data from the drill and other programs. The Rig Floor Display is a unit on the drill rig platform that displays the directional data of the drill. The data is sent from the computer through the Systems Interface Box.

You stated that the surface equipment does not and cannot control the downhole equipment--it can only be used to interpret the data sent to the surface from the downhole equipment. To change the drill's direction, the downhole equipment must be taken out of the ground.

ISSUE:

Whether the GEOLINK Directional MWD System is a measuring or checking instrument, appliance or machine 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...

You contend that the GEOLINK is classifiable under subheading 8431.43.80, HTSUS, which provides for "[p]arts suitable for use solely or principally with the machinery of headings 8425 to 8430 . . . [p]arts for boring or sinking machinery of subheading 8430.41 or 8430.49 . . . [o]ther." However, according to Section XVI, note 1(m), if this merchandise is classifiable in Chapter 90, it cannot be classified under this subheading.

Heading 9031, HTSUS, provides for "[m]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter . . . ." Measuring or checking instruments are included in Chapter 90 under the following headings: Heading 9026, HTSUS, provides for "[i]nstruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases . . . ;" Heading 9027, HTSUS, provides for "instruments and apparatus for measuring and checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light . . . ;" and Heading 9030, HTSUS, provides for "other instruments and apparatus for measuring or checking electrical quantities . . . ."

Before determining the particular heading in which the GEOLINK belongs, it is necessary to first determine whether the article is "measuring or checking" apparatus for tariff purposes. Absent contrary indications, tariff schedule language is given its common meaning. John S. James a/c The Consolidated Packaging Corp. v. United States, 48 CCPA 75, 79, C.A.D. 768 (1961). In United States v. Corning Glass Works, 66 CCPA 25, 27, 586 F.2d 822, 825 (1978), the Court of Customs and Patent Appeals, quoting Webster's Third New International Dictionary, 381 (1971), stated:

"Check" is defined as "to inspect and ascertain the condition of especially in order to determine that the condition is satisfactory; *** investigate and insure accuracy, authenticity, reliability, safety, or satisfactory performance of ***; to investigate
and make sure about conditions or circumstances

The term "measure" is defined as follows:

To ascertain the quantity, mass, extent, or degree of in terms of a standard unit or fixed amount . . .; measure the dimensions of; take the measurements of . . .; to compute the size of . . . from dimensional measurements."

Webster's Third New International Dictionary, 1400 (1986); See also HQ 088025, dated January 17, 1991.

The GEOLINK's basic operating theory begins "downhole." The Survey Electronics Assembly measures inclination, azimuth, and tool face. The Transmitter Assembly generates a series of mud pulses to transmit the directional data to the surface. The Actuator Power Controller enables the downhole data to be transmitted to the surface as a coded sequence of mud pulses.

On the surface, a Standpipe Pressure transducer monitors circulating pressure to detect the mud pulse sequence transmitted by the downhole tool. An Interface Box automatically filters the raw mud pulse sequence and passes the data to a surface P.C. which decodes that pressure signal to extract the directional data. To enhance mud pulse detection, a pump synchronization sensor is used to synchronize the mud pumps with the Interface box.

The GEOLINK is used to indicate the direction (inclination, azimuth, rotation) and temperature of a drill. The directional system is composed of a downhole system component that is attached to the drill and a surface system component that receives and interprets the data from the drill. The GEOLINK determines whether the drill is advancing in the proper direction. However, the surface equipment does not and cannot control the downhole equipment. To change the drill's direction, the downhole equipment must be taken out of the ground.

Chapter 90, note 3 states that the provisions of note 4 to Section XVI apply to Chapter 90. Section XVI, note 4 provides as follows:

Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to
a clearly defined function covered by one of the headings in chapter 84 or chapter 85 [or chapter 90], then the whole falls to be classified in the heading appropriate to that function.

The article in question is a functional unit that performs a "checking" and "measuring" function, as those terms are defined above, and the GEOLINK is, therefore, classifiable under one of the following headings: Heading 9026, Heading 9027, Heading 9030, or Heading 9031, HTSUS. The GEOLINK is not covered by the terms of Heading 9026 (liquids and gases), HTSUS, Heading 9027 (viscosity, porosity, expansion, surface tension; heat, sound or light); or Heading 9030 (electrical quantities), HTSUS. Thus, the GEOLINK is classifiable under subheading 9031.80.00, HTSUS, which provides for "[m]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter . . . [o]ther instruments, appliances and machines." See NY 837951, dated March 15, 1989 (downhole probing device used to check the condition of the hole being drilled--the Posiprobe MWD Downhole Probe--classified under subheading 9031.80.00, HTSUS).

Finally, classification of the laptop PC and the printer separately under Heading 8471, HTSUS, was considered. This heading provides for "[a]utomatic data processing machines and units thereof." The Explanatory Notes to Chapter 84 state "[i]n accordance with the provisions of the last paragraph of Note 5 to Chapter 84, the following classification principles should be applied in the case of a machine incorporating or working in conjunction with an automatic data processing machine, and performing a specific function:

Machines presented with an automatic data processing machine and intended to work in conjunction therewith to perform a specific function other than data processing, are to be classified as follows:
the automatic data processing machine must be classified separately in heading 84.71 and the other machines in the heading corresponding to the function which they perform unless, by application of Note 4 to Section XVI or Note 3 to Chapter 90, the whole is classified in another heading of Chapter 84, Chapter 85 or of Chapter 90 [emphasis added]."

Because the GEOLINK, as a whole, is classifiable as a "functional unit" according to Chapter 90, note 3, it is unnecessary to classify the laptop PC and the printer in separate headings.

HOLDING:

The GEOLINK is properly classifiable under subheading 9031.80.00, HTSUS, which provides for "[m]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter . . . [o]ther instruments, appliances and machines." The corresponding rate of duty for articles of this subheading is 4.9% ad valorem.

Sincerely,

John Durant, Director

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