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HQ 950221


November 22, 1991

CLA-2 CO:R:C:M 950221 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.:3919.90.50; 4901.99.00; 8310.00.00; 8524.90.40; 8471.91.00; 8471.92.20; 8471.92.80; 8471.93.30; 8471.93.40; 8473.30.40

Mr. J. Allan Haynie
Premier Innovations, Inc.
10310 Harwin Drive
Houston, Texas 77036

RE: Automatic Data Processing Machines; ADP; Units; Parts; Motherboard Without CPU; Floppy Disc Drive; Keyboards; Cabinet Assemblies; Software; Manuals; Labels

Dear Mr. Haynie:

This is in response to your letter of August 19, 1991, on behalf of Premier Innovations, Inc., requesting classification of subassemblies and parts for automatic data processing (ADP) machines, imported from Taiwan, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

You state that "[d]ue to the differences in customer program requirements, we have discontinued, with the exception of notebook computers, importing complete computers, and have established an assembly line where customer requirements can be inserted into the computers during the initial assembly." You intend to enter parts and subassemblies via separate shipments as outlined below:

1. Motherboards containing a CPU (Central Processing Unit).

2. Motherboards not containing a CPU.

3. Floppy disk drives

4. Case assemblies (containing case with power supply and floppy disk harness included therein), DOS manual, floppy disk with DOS information, keyboards, labels (FCC, Model No.)

5. Items in #4 above plus floppy disk drives.

You state that some shipments "intended to be accomplished separately" may be consolidated and arrive together.

ISSUE:

What are the classifications of the above referenced ADP machine units, subassemblies, and parts, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA 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...

A "motherboard" is the main interconnecting circuit board in an electronic device, to which the various subassemblies, as printed circuit boards, are plugged or wired. See Webster's New World Dictionary, Third College Edition (1988), page 886. See HQ 085894, dated February 14, 1990.

"Motherboards" for ADP systems have been consistently deemed to possess the essential character of an ADP processing unit. Therefore, the "motherboard" containing a CPU is properly classifiable in subheading 8471.91.00, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [d]igital processing units, whether or not entered with the rest of a system...."

The classification of a "motherboard" without a CPU was addressed in HQ 088118, dated February 22, 1991, which held that it was classifiable under subheading 8473.30.40, HTSUSA, which provides for: "[p]arts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines of headings 8469 to 8472: [p]arts and accessories of the machines of heading 8471: [n]ot incorporating a cathode ray tube."

Automatic data processing machine "floppy disk" drives, not assembled in cabinets, and without attached external power supplies, are classifiable in subheading 8471.93.30, HTSUSA, which provides for: "[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: [o]ther: [n]ot assembled in cabinets, and without attached external power supply." However, if the floppy disk drives in question are assembled in cabinets and/or have an attached external power supply, they are
classifiable in subheading 8471.93.40, HTSUSA, which provides for: "[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: [o]ther: [o]ther."

The "case assemblies" which consist of the case (cabinet) with power supply and floppy disk harness included therein, is classifiable in subheading 8473.30.40, HTSUSA, which provides for: "[p]arts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines of headings 8469 to 8472: [p]arts and accessories of the machines of heading 8471: [n]ot incorporating a cathode ray tube." In order to be classifiable here, the "case assembly" must be principally used with a machine classifiable in heading 8471, HTSUSA. Chapter 84, Legal Note 5 defines the scope of the term "automatic data processing machine" for the purposes of heading 8471.

Legal Note 5(A)(a), chapter 84, states:

(A) For the purposes of heading 8471, the expression "automatic data processing machines" means:

(a)Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for the 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.

"It is a well-established rule that a 'part' of an article is something necessary to the completion of that article. It is an integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article." United States v. Willoughby Camera Stores, Inc., 21 CCPA 322, 324, T.D. 46,851 (1933). In determining whether an item is a part of an article, the courts look to the "nature, function, and purpose of an item in relation to the article to which it is attached or designed to serve...." Ideal Toy Corp. v. United States, 58 CCPA 9, 13, C.A.D. 996, 433 F.2d 801, 803 (1979). See Clipper Belt Lacer Co., Inc. v. United States, Slip Op. 90-22 (March 13, 1990).

The "case assemblies" are utilized as original component parts of ADP operational systems since they are necessary to the completion of those articles, as integral, constituent, and component parts. Therefore, for tariff purposes, they should be considered "parts" of the machines of 8471, HTSUSA.

For similar holdings regarding similar merchandise, see HQ 088118, dated February 22, 1991, HQ 087791, dated February 1, 1991, and HQ 083956, dated April 12, 1989.

The DOS manual is classifiable in subheading 4901.99.00, HTSUSA, which provides for: "[p]rinted books, brochures, leaflets and similar printed matter, whether or not in single sheets: [o]ther: [o]ther."

The floppy disk with DOS information (software) is classifiable in subheading 8524.90.40, HTSUSA, which provides for: "[r]ecords, tapes and other recorded media...: [o]ther: [o]ther."

The automatic data processing machine keyboards are classifiable in subheading 8471.92.20, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [i]nput or output units, whether or not entered with the rest of a system...: [o]ther: [k]eyboards." However, if the keyboards will be incorporated into the processor (as in a "laptop" or "notebook" computer), then the keyboards are classifiable in subheading 8471.92.80, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [i]nput or output units, whether or not entered with the rest of a system...: [o]ther: [o]ther: [u]nits suitable for physical incorporation into automatic data processing machines or units thereof."

The self-adhesive plastic FCC labels are classifiable in subheading 3919.90.50, HTSUSA, which provides for: "[s]elf-adhesive plates, sheets, film, foil, tape, strip and other flat shapes, of plastics, whether or not in rolls: [o]ther."

The metal model number labels are classifiable in subheading 8310.00.00, HTSUSA, which provides for: "[s]ign plates, name plates, address plates and similar plates, numbers, letters and other symbols, and parts thereof, of base metal, excluding those of heading 9405."

You state that some shipments "intended to be accomplished separately" may be consolidated and arrive together. In the event that this occurs, you argue that "classification as incomplete or disassembled machines based on essential character may occur." GRI 2(a) provides direction here. It states:

2. (a)Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), regarding the Section XVI General Notes, further elaborate when they state the following on page 1132:

(IV) Incomplete Machines

Throughout the section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine). Thus a machine lacking only a flywheel, a bed plate, calendar rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading providing for parts. Similarly a machine or apparatus normally incorporating an electric motor (e.g., electro- mechanical hand tools of heading 85.08) is classified in the same heading as the corresponding complete machine even if presented without that motor.

However, you state that these are separate shipments which may be consolidated for ease of transportation. General Rule of Interpretation 2(a), HTSUSA, states in part that a heading which provides for a particular article will cover that article incomplete or unfinished provided that, as imported, the unfinished article has the essential character of the complete or finished article. The rule also applies to incomplete or unfinished articles imported unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of GRI 2(a).

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) although not dispositive, should be looked to for the proper interpretation of the HTSUSA. See 54 Fed. Reg. 35128 (August 23, 1989). The relevant ENs, page 2, provide some guidance on the application of GRI 2(a) to unassembled goods by stating that "when goods are so presented it is usually for reasons such as requirements or convenience of packing, handling or transport." The ENs provide further that for purposes of Rule 2(a) the expression "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved.

You have made no statements or offered any evidence that these proposed shipments would be anything more than bulk shipments of numerous components and parts. This is not the type of "convenience of packing, handling or transport" that the ENs contemplate. We have previously addressed this issue in Internal Advice 4/91, HQ 088595, HQ 089204, and HQ 087888, dated December 3, 1990, and held that these types of shipments are "nothing more than disparate components in bulk form."

However, see also HQ 088760, dated March 18, 1991, which held that when merchandise is shipped in "blister packs" and referred to as "kits" which require only a "nut-and-bolt assembly operation," they may possess the essential character of a complete article.

HOLDING:

The "motherboard" containing a CPU is properly classifiable in subheading 8471.91.00, HTSUSA.

The "motherboard" imported without a CPU is classifiable under subheading 8473.30.40, HTSUSA.

ADP "floppy disk" drives, not assembled in cabinets, and without attached external power supplies, are classifiable in subheading 8471.93.30, HTSUSA.

ADP "floppy disk" drives which are assembled in cabinets and/or have an attached external power supply are classifiable in subheading 8471.93.40, HTSUSA.

The "case assemblies" which consist of the case (cabinet) with power supply and floppy disk harness included therein, is classifiable in subheading 8473.30.40, HTSUSA.

The DOS manual is classifiable in subheading 4901.99.00, HTSUSA.

The floppy disk with DOS information (software) is classifiable in subheading 8524.90.40, HTSUSA.

The automatic data processing machine keyboards are classifiable in subheading 8471.92.20, HTSUSA.

ADP keyboards suitable for physical incorporation into the processor unit (as in laptop or "notebook" computers) are classifiable in subheading 8471.92.80, HTSUSA.

The self-adhesive plastic FCC labels are classifiable in subheading 3919.90.50, HTSUSA.

The model number labels made of base metal are classifiable in subheading 8310.00.00, HTSUSA.

Sincerely,

John Durant, Director

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