HQ 0950238 - -4 Data, Inc.; Model Series 8900, 9800, 9900, 9948; Automatic Data Processing (ADP) Machine Tape Storage Back Up Device; Desk-Top and Rack-Mounted Models - United States International Trade Commision Rulings

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HQ 950238

November 26, 1991

CLA-2 CO:R:C:M 950238 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.93.50; 8471.93.60

Ms. Susan Pomerantz
Priority One Brokers, Inc.
P.O. Box 620967
Orlando, Florida 32862

RE:M-4 Data, Inc.; Model Series 8900, 9800, 9900, 9948; Automatic Data Processing (ADP) Machine Tape Storage Back Up Device; Desk-Top and Rack-Mounted Models

Dear Ms. Pomerantz:

This is in reply to your letter of August 8, 1991, on behalf of M-4 Data, Inc., requesting classification of ADP machine tape storage back up devices, model series 8900, 9800, 9900, 9948, imported from England, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

Your descriptive literature describes the M-4 Data 9948 as an alternative to the IBM 9348 providing additional features and enhanced ease of use. Models B35 through B45 support up to two 9948s and Models 50 through 70 support up to four 9948s. Models C04, C06 and C10 support one tabletop 9948 while models C20 and C25 support up to two tabletop 9948s, with an expansion unit. Thus, the 9948 can be utilized in a rack mounted configuration or as a table top unit.

The 9900 series "streamers" are the low-profile series with two streaming speeds and automatic front loading. Recording densities range from 800 bpi (bits per inch) NRZ (Non-Return-To- Zero) up to 6250 bpi GCR. Data capacities vary up to 270 Mbytes using 1.0 mil tapes. The model 9903 and 9905 are designed to function both in a rack mounted configuration and as free-standing storage units. Page 5 of the technical manual states that the free-standing desk top models are approximately 230 mm in height, whereas, the rack mounted models are 203 mm in height.

The 9800 series "streamer" is the miniature desk-top two-speed streamer with a footprint similar to most personal computers. It has unformatted capacities of up to 23 Mbytes using standard 1.5 mil tapes, or 34 Mbytes using 1.0 mil tapes.

The 8900 series "streamers" are high-performance streamers featuring start/stop and streaming modes with fast reposition cycles. Recording densities range from 800 bpi NRZ up to 6250 bpi GCR. The data capacities vary up to 270 Mbytes using 1.0 mil tapes. It is also stated that "ruggedised" or dc powered models are available. This model appears to be primarily designed to function as a rack mounted unit.

ISSUES:

What are the classifications of the M-4 Data, Inc., ADP machine tape storage back up units, 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...

In HQ 089330, dated October 7, 1991, and HQ 085946, dated January 2, 1990, we addressed the classification of ADP storage units that could be either rack mounted or operate independently. In those rulings we stated that:

The determination of a unit's state of completion is made by determining the state of the unit itself and not the final "completed systems" in which they will ultimately function. They are fully assembled, have cooling apparatus and their own power sources. To make them fully functional one need only plug them in. In fact, it is clear that the only purpose of rack-mounting the units together is for the convenience of proximity in connecting them together with cables and, perhaps, space consolidation. Thus, it is our view that these units are complete.

Whether separate or joined, each is complete in and of itself and each is a distinct and separate commercial entity. The most that can be said is that they may (or may not) be used together with another particular type of unit of a data processing system, one as support for the other. It does not make them, for tariff classification purposes, a "part" of the ultimate automatic data processing system. United States v. Willoughby Camera Stores, Inc., 21 CCPA 322, T.D. 46075

(1933).

The fact that each unit at issue requires the attachment of another article in order to be capable of performing its function does not render each of them a "part," in that there is no requirement that a machine must be "self-activating." Nord Light, Inc. v. United States, 49 CCPA 12, C.A.D. 786 (1961). Although incapable of functioning unless placed in configuration with certain other devices, they nevertheless are, in and of themselves, peripheral machines used in conjunction with data processing machines, specifically provided for....Westinghouse Electric International Co. v. United States, 28 Cust. Ct. 209, C.D. 1411 (1952), cited with approval by Fairchild Camera & Instrument Corp., Inter- Maritime Forwarding Co., Inc. v. United States, 53 CCPA 122, 126, C.A.D. 887 (1966). Furthermore, the fact that they are designed to share a common "rack-mounting" does not mandate their classification as a part. General Electric Company v. United States, 2 CIT 84 (1981).

However, these prior cases had to determine if the ADP units where "[u]nits for physical incorporation" or units "[n]ot assembled in cabinets, and without attached external power supply."

The instant merchandise meets the chapter 84 legal note 5(B) definition of a "unit" of an ADP system. All of the M-4 "data streamers" appear to be imported in some form of a housing and incorporate their own control switches, cooling, and power supply.

However, subheading 8471.93.50, HTSUSA, 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: [o]ther storage units: [n]ot assembled in cabinets for placing on a table, desk, wall, floor or similar place." Therefore, the issue ultimately is, whether, at importation, these various models are "assembled in cabinets for placing on a table, desk, wall, floor or similar place." Clearly, if the models are imported without any cabinet at all, they are classifiable in subheading 8471.93.50, HTSUSA. Similarly, the units to be rack mounted would not be considered "for placing on a table...." Conversely, all models imported in "table top" form, with a cabinet, are classifiable under subheading 8471.93.60, HTSUSA.

HOLDING:

The M-4 Data, Inc., model 8900 ADP machine tape storage "data streamers," imported in a form for "rack mounting," is classifiable under subheading 8471.93.50, 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: [o]ther storage units: [n]ot assembled in cabinets for placing on
a table, desk, wall, floor or similar place." The rate of duty is Free.

Models 9903 and 9905, are imported both in rack mounting form and table top form. The 203 mm in height, "table top" model, is classifiable in subheading 8471.93.60, 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: [o]ther storage units: [o]ther." The rate of duty is 3.7% ad valorem.

The M-4 Data models 9903 and 9905, imported in "rack mounting" format, which are 203 mm in height, are classifiable in subheading 8471.93.50, 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: [o]ther storage units: [n]ot assembled in cabinets for placing on a table, desk, wall, floor or similar place." The rate of duty is Free.

The M-4 Data model 9948 comes in both rack mounting and "table top" form. Therefore, when it is imported "not assembled in cabinets for placing on a table...," it is classifiable in subheading 8471.93.50, HTSUSA. However, when it is imported in the "table top" form, it is classifiable in subheading 8471.93.50, HTSUSA.

Sincerely,

John Durant, Director

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