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HQ 950762


February 20, 1992

CLA-2 CO:R:C:M 950762 AJS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.91.00; 9903.41.20

District Director
U.S. Customs Service
555 Battery Street
P.O. Box 2450
San Francisco, CA 94126

RE: Protest 2809-90-000549; CPU board; Chapter 84, note 5(A)(a); GRI 2(a); HQ 087695; HQ 950832; HQ 088118; HQ 554581; Daisy- Heddon, Div. Victor Comptometer Corp. v. U.S.; H. Conf. Rep. No. 576; Footnote 1/ 8471.91.00; Subheading 9902.84.71; Chapter 99, Subchapter II, U.S. note 2.

Dear District Director:

Protest for further review number 2809-90-000549, dated 3/28/90, was filed against the classification of a "CPU Board" from Japan within subheading 9903.41.20, Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise under protest is the main printed circuit board in the B28-EXP CPU module. It contains an Intel 80286 microprocessor, two 64K EPROMS and a DMA (direct memory access) controller. The subject CPU (central processing unit) board executes the start-up for the processor module, executes the programs resident in the main memory, and is the controller or interface between the 80286 chip and the system's main dynamic memory. Although used in conjunction with a video board and an expansion board in the module, the CPU board functions as the main board of the processor module.

ISSUE:

Whether the CPU board is properly classifiable within subheading 8471.91.00, HTSUS, which provides for "[d]igital processing units, whether or not entered with the rest of a

[automatic data processing] system . . ."; or classifiable within subheading 8473.30.40, HTSUS, which provides for "[p]arts and accessories of the machines of heading 8471: [n]ot incorpo- rating a cathode ray tube."

Whether the CPU board is also classifiable within subheading 9903.41.20, HTSUS, which provides for "[a]utomatic data processing machines, of the type of which the constituent units are separately housed, whether finished or unfinished, which incorporate a microprocessor-based calculating mechanism, are capable of handling data words of at least 16-bits off the microprocessor, designed for use while affixed to or placed on a table, desk, or similar place: [h]aving a microprocessor-based calculating mechanism capable of directly handling memory of over 8 megabits (provided for in subheading 8471.91)."

LAW AND ANALYSIS:

Heading 8471, HTSUS, provides for automatic data processing (ADP) machines and units thereof. The expression ADP machine means "[d]igital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for 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. Chapter 84, note 5(A)(a). The subject CPU board satisfies this description of an ADP machine. The 80286 microprocessor and EPROMS enable the board to perform these functions. Accordingly, the CPU board satisfies the terms of heading 8471, HTSUS, and is classifiable therein.

Subheading 8471.91.00, HTSUS, provides for "[d]igital processing unit, whether or not entered with the rest of a [ADP] system, which may contain in the same housing one or two of the following types of units: storage units, input units, output units." The CPU board satisfies this description. Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. General Rule of Interpretation (GRI) 2(a). The subject CPU board is an incomplete or unfinished digital processing unit. It has the essential character of a complete or finished digital processing unit because it possesses the essential elements required for data processing. This conclusion is based on the fact that the board contains an 80286 microprocessor chip, two 64K EPROMS and a

DMA controller. Therefore, the CPU board satisfies the terms of subheading 8471.91.00, HTSUS, and is properly classifiable therein.

Customs has previously discussed the issue of essential character for incomplete or unfinished ADP machines. In HQ 087695 (3/6/91), we addressed the classification of an incomplete or unfinished printed circuit board (motherboard) without processing chips. See also HQ 950832 (2/11/92) and HQ 088118 (2/2/91). We stated that this motherboard did not possess the essential character of an ADP machine because it lacked the essential chips required for data processing. In this instance, however, the subject CPU board possesses the essential chip for data processing. Consequently, we view the above decisions as supporting the conclusion that a CPU board with a data processing chip possesses the essential character of a complete or finished ADP machine.

In HQ 554581 (7/2/87), Customs addressed the classifi- cation of unfinished data-processing machines under the Tariff Schedules of the United States (TSUS). That case partially dealt with single board computers (SBCs) which incorporated a CPU and memory device. We ruled that these stuffed printed circuit boards which incorporated a CPU are classifiable as data processing machines. HQ 554581, p. 23. Congress has indicated that earlier tariff rulings must not be disregarded in applying the HTSUS. The conference report to the 1988 Omnibus Trade Bill states that "on a case-by-case basis prior decisions should be considered instructive in interpreting the HTS[US], particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTS[US]." H. Conf. Rep. No. 576 100th Cong., 2D Sess. 548, 550 (1988). HQ 554581 satisfies this description. The nomenclature previously interpreted was also "data processing machines", and no dissimilar interpretation is required by the HTSUS. Accordingly, we find HQ 554581 instructive for determining that the CPU board is an incomplete or unfinished ADP machine.

In HQ 554581, we also discussed the applicability of the concept of "substantially complete articles" as articulated in Daisy-Heddon, Div. Victor Comptometer Corp. v. United States, 66 CCPA 97, C.A.D. 1228 (1979). HQ 554581, p. 13. You state that the subject board is an integral part of the B28-EXP CPU module and is designed solely for use with that unit. You contend that based upon the analysis of Daisy-Heddon, that the subject board is not a substantially complete article. In HQ 554581, we stated that the application of the Daisy-Heddon criteria to this type of situation is misplaced. HQ 554581, p. 13. Instead, the analysis
should be directed to the board in its complete or finished form, not the ultimate completed systems in which it will function. HQ 554581, p. 13. In this case, the subject board is an unfinished ADP machine as it relates to the finished CPU board, and not the finished B28-EXP CPU module which also contains other boards. Thus, we also find HQ 554581 instructive for determining that the subject board is a "substantially complete" CPU board.

Footnote 1/ to subheading 8471.91.00, HTSUS, states "[c]ertain automatic data processing machines and units thereof, the product of Japan, subject to increased duty. See subheadings 9903.41.15 and 9903.41.20." Subheading 9903.41.20, HTSUS, provides for ADP machines "of the type of which the constituent units are separately housed, whether finished or unfinished, which incorporate a microprocessor-based calculating mechanism, are capable of handling data words of at least 16 bits off the microprocessor, designed for use while affixed to or placed on a table, desk, or similar place: [h]aving a microprocessor-based calculating mechanism capable of directly handling memory of over 8 megabits (provided for in subheading 8471.91)." (emphasis added). The CPU board satisfies this description. It is an unfinished ADP machine from Japan, and its 80286 CPU chip qualifies as a microprocessor-based calculating mechanism capable of handling memory of over 8 megabits. Therefore, the CPU board is also classifiable within subheading 9903.41.20, HTSUS.

Heading 9902.84.71, HTSUS, provides for "[d]igital processing units for automatic data processing machines, unhoused, consisting of a printed circuit (single or multiple) with one or more electronic integrated circuits or other semiconductor devices mounted directly thereon, certified as units designed for use other than in an automatic data processing machine of subheading 8471.20 (provided for in subheading 8471.91)." You contend that the subject CPU board satisfies this description. However, this heading does not apply to any article classifiable in [sub]heading 9903.41.20, to the extent to which this subheading is in effect. Chapter 99, Subchapter II, U.S. Note 2, p. XXII 99-5 (1990--Supplement 2). As discussed previously, the CPU board is classifiable within subheading 9903.41.20, HTSUS, and this subheading was in effect on the date of entry (i.e., 8/24/89). Accordingly, [sub]heading 9902.84.71, HTSUS, does not apply in this instance.

HOLDING:

The CPU board is properly classifiable within subheading 8471.91.00, HTSUS, which provides for digital processing units. This merchandise, when a product of Japan, is also classifiable within subheading 9903.41.20, HTSUS, which provides for unfin-
ished ADP machines provided for in subheading 8471.91, dutiable at the rate of 100 percent ad valorem. You should deny the protest in full. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division


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