HQ 0955419 - Reconsideration of HQ 952952; Hard Disk Drive Unit; Chapter 84, Note 5(B); 8471.93.15 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1994 HQ Rulings > HQ 0955419 - HQ 0955512 > HQ 0955419

HQ 955419
February 3, 1994

CLA-2 CO:R:C:M 955419 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.93.20

Mr. Stephen R. Handy
Digital Equipment Corporation
50 Nagog Park
Acton, MA 01720-3499

RE: Reconsideration of HQ 952952; Hard Disk Drive Unit; Chapter 84, Note 5(B); 8471.93.15

Dear Mr. Handy:

This is in response to your letters of November 15, 1993, and February 1, 1994, requesting reconsideration of HQ 952952, dated October 26, 1993, which dealt with the classification of a Digital Equipment Corporation (DEC) hard disk drive unit (model no. RA92) under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The DEC SA850 automatic data processing (ADP) storage array has up to 11.3 Gbytes of usable ADP storage. Each SA850 storage array consists of two SA70 Storage Array Building Blocks (SABBs). Each SA70 consists of four independent RA70 disk drives (in a powered and cooled package), and six independent RA92 disk drives. DEC also offers the SA800 storage array which encompasses 12 Gbytes of usable storage provided by eight RA92 disk drives. The RA92 disk drive units are imported separately, and do not have a housing since they are designed to be mounted in a rack enclosure with other units.

The rack enclosures consist of a cabinet, brackets for disk drive insertion, a power supply, and wiring. The wiring connects the rack to a controller. Each controller is designed to connect several racks. The controller is then connected to the mainframe computer.

The subheadings under consideration are as follows:

8471.93.15: [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: [f]or a disk of a diameter exceeding 21 cm: [u]nits for physical incorporation into automatic data processing machines or units thereof.

Goods classifiable under this provision receive duty-free treatment.

8471.93.20: [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: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 3.7 percent ad valorem.

ISSUE:

Whether the RA92 hard disk drive unit is classifiable under subheading 8471.93.15, HTSUS, as a unit for physical incorporation into a unit, or under subheading 8471.93.20, HTSUS, as an other storage unit.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

In HQ 952952, the RA92 was held to be classifiable under subheading 8471.93.20, HTSUS. This was based upon the premise that the RA92 is not for physical incorporation into a unit, in that, for classification purposes, the rack enclosure is not a unit. However, the RA92 was held to be classifiable under subheading 8471.93.20, HTSUS, because, for classification purposes, it is itself a unit.

Chapter 84, note 5(B), HTSUS, states that:

[a]utomatic 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 of the following conditions:

(a) It is connectable to the central processing unit either directly or through one or more other units; and

(b) It is specifically designed to be 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).

Such units entered separately are also to be classifiable in heading 8471.

The RA92 itself meets the above definition of an ADP unit, because it is connectable to the central processing unit (CPU) through the controller and it accepts and delivers data in a form which can be used by the system.

However, we agree with the holding in HQ 952952 that the rack enclosure does not meet the definition of an ADP unit. This issue was effectively and thoroughly discussed in that ruling. It was stated that:

[t]he RA92 disk drives are designed for incorporation into a rack enclosure which consists of a cabinet, brackets, a power supply, and wiring. Clearly the rack enclosure does not meet the chapter 84, note 5(B), HTSUS, 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 RA92 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 RA92 disk drives cannot be said to be units suitable for physical incorporation into automatic data processing machines or units thereof.

Therefore, we find that the RA92 hard disk drive unit is classifiable under subheading 8471.93.20, HTSUS.

It is our understanding that some of the RA92 hard disk drives units may be for physical incorporation directly into ADP machines. We note that this ruling is strictly limited to those RA92 units which are principally used for physical incorporation into rack enclosures. The above scenario involving ADP machines is an entirely different issue.

As was claimed in the case of HQ 952952, it is again suggested that the computer industry participated in the drafting of the above HTSUS provisions and had intended these independent disk drives, which are suitable for rack mounting, to be classifiable under subheading 8471.93.15, HTSUS. However, as was stated in HQ 952952:
the courts have stated: "it is not for us to distort the statute to 'fix' what Congress either intentionally or inadvertently failed to anticipate." Sea-Land Service, Inc. v. U.S., Appeal No. 90-1311 (Decided November 30, 1990) . . .

If it is your belief that an HTSUS provision has been incorrectly written, we suggest that you contact your Congressional representative.

HOLDING:

The RA92 hard disk drive unit is classifiable under subheading 8471.93.20, HTSUS, as an other storage unit.

EFFECT ON OTHER RULINGS:

HQ 952952 is affirmed.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling