HQ 954146 - Protest No. 5301-92-100422; Compaq Computer Corporation; Keyboards; ADP Desktop System; Units; HQ 950221 - United States International Trade Commision Rulings

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HQ 954146

January 25, 1994

CLA-2 CO:R:C:M 954146 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471

District Director
U.S. Customs Service
701 San Jacinto
P.O. Box 52790
Houston, Texas 77052

RE: Protest No. 5301-92-100422; Compaq Computer Corporation; Keyboards; ADP Desktop System; Units; HQ 950221

Dear District Director:

This is our response to Protest Number 5301-92-100422, regarding the classification of keyboards for desktop Automatic Data Processing ("ADP") machines, under the Harmonized Tariff Schedule of the United States (HTSUS). The subject merchandise was entered on April 24, and April 29, 1992, and the entries were liquidated on August 14, 1992. The protest was timely filed on November 12, 1992.

FACTS:

The importer states that the entries at issue consisted of desktop ADP systems which comprised three separate units; a processor unit, a cathode ray tube output display unit and a keyboard input unit.

The systems were classified under subheading 8471.20.00, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [d]igital automatic data processing machines, containing in the same housing at least a central processing unit and an input and an output unit, whether or not combined," at a duty rate of 3.9% ad valorem.

The protestant claims that the keyboards are separately classifiable under subheading 8471.92.20, HTSUS, which provides for ADP keyboards, at a free rate of duty.

The subheadings under consideration are as follows:

8471 Automatic data processing machines and units thereof...

8471.20.00 Digital automatic processing machines, containing in the same housing at least a central processing unit and an input and output unit, whether or not combined (3.9% ad valorem)

8471.92.20 Other: Input or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: Other: Keyboards (Free rate of duty)

8471.92.40 Other: Input or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: Other: Display units: Other (3.7% ad valorem)

ISSUE:

Whether the ADP desktop systems are classifiable separately according to their constituent units, or are they classifiable together in a single provision?

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...

The instant desktop computer systems are not classifiable under subheading 8471.20.00, HTSUS, because this provision provides exclusively for ADP machines containing in the same housing at least a CPU and an input and output unit. The instant desktop systems do not contain an input or output unit in the same housing with the CPU. Subheading 8471.20.00, HTSUS, provides for what is commonly and commercially known as laptop computers, which contain the display and keyboard in the same housing with the CPU.

Therefore, the ADP desktop units are separately classifiable in their constituent headings. See HQ 950221, dated November 22, 1991, for a similar holding regarding similar merchandise.

HOLDING:

The processor unit is classified in subheading 8471.91.00, HTSUS, which provides for: "[d]igital processing units, whether or
not entered with the rest of a system...", at a rate of 3.9% ad valorem.

The cathode ray tube display unit is classifiable in subheading 8471.92.40, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: Other: Input or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: Other: Display units: Other," at a rate of 3.7% ad valorem.

The ADP desk top system keyboards are classifiable in subheading 8471.92.20, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: Other: Input or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: Other: Keyboards," at a Free rate of duty.

Since reclassification of the merchandise as indicated above will result in a lower rate of duty then claimed, you should allow the protest in full. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: "Revised Protest Directive," this decision, together with the Customs Form 19, should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to the mailing of this decision. Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

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