HQ 960383 - Protest 2501-96-100005; Power Supplies; Chapter 85, Note 5(A) 19 CFR 134.2 - United States International Trade Commision Rulings

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HQ 960383

September 18, 1997

RR:TC:MM 960383 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.99.32; 8471.99.34; 8504.40.80

Port Director of Customs
610 W. Ash Street
San Diego, CA 92188

RE: Protest 2501-96-100005; Power Supplies; Chapter 85, Note 5(A) 19 CFR 134.2

Dear Port Director:

The following is our decision regarding Protest 2501-96-100005 concerning your action in classifying and assessing duty on power supplies under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of power supplies (models 2100, 2101, 2118, 2136, 2166, 2167, 2172, 2173, 2174, 2180, 2196, 2200, 2122, 2220, 2176, 2197, and 2203) with various uses. It is our understanding from the Customs Form 6445A that your office agrees with the protestant concerning the classification of the power supplies except for models 2122, 2220, 2176, 2197, 2203. Therefore, we will limit our discussion to those models in disagreement, as well as models 2100 and 2101, as an alternative classification has been suggested for those two models. The protestant states that, except for Model 2220, all of the power supplies are designed to be mounted internally into their respective systems or machines. We note that the information provided concerning the power supplies is rather limited.

Models 2100 and 2101 are power supplies for a medical ultrasonic imaging system. The power supplies are used to increase the output capability of the scan converter power supply and retain the current power supply footprint. They will operate from a direct current (DC) bus and will provide a DC to DC conversion in excess of

80%. Model 2100 is a board incorporated in a housing within the middle section of the system, and model 2101 is a board with an L chassis mounted near the bottom of the system.

Model 2122 is an internal power supply used in the FM/AM-1600S Service Monitor, which forms the top portion of the FM/AM-1600CSA IS-136 Cellular Test Analyzer. The purpose of the testing system is to test and verify IS-136 AMPS and TDMA standards in cellular based and subscriber equipment.

Models 2176, 2197, and 2203 are power supplies enclosed in a metal chassis for use in redundant arrays of inexpensive disks (RAID) systems. It is our understanding from the information we have received that such systems are automatic data processing (ADP) storage units.

Model 2220 is a power supply which is a free standing unit enclosed in a metal chassis with a plastic front panel, and is designed for use in environments using 48 V DC power distribution systems. It is used with local area network (LAN) connectors (Hubs), and is connected in parallel by a shield power cable to the Hub power supply. It can be used independently or redundantly.

The merchandise was entered on June 5, 6, 7, 8, 9, 13, 14, 15, 16, 19, 20, 21, 22, 23, 26, 27, 28, July 6, and 7, 1995, under subheading 8471.99.32, HTSUS, as power supplies suitable for physical incorporation into ADP machines or units thereof. The entries were liquidated on January 12, 1996, under subheadings 8471.99.32, HTSUS (Models 2100, 2101, 2118, 2136, 2166, 2167, 2172, 2173, 2174, 2180, 2196, and 2200); 8504.40.80, HTSUS, as an other static converter (Model 2122); and 8471.99.34, HTSUS, as other power supplies for ADP machines or units thereof (Models 2200, 2176, 2197, and 2203). The protest was timely filed on February 1, 1996.

ISSUES:

Whether Models 2100, 2101, and 2122 are classifiable under subheading 8471.99.32, HTSUS, as power supplies suitable for physical incorporation into ADP machines or units thereof, or under subheading 8504.40.80, HTSUS, as other static converters.

Whether Models 2220, 2176, 2197, and 2203 are classifiable under subheading 8471.99.32, HTSUS, as power supplies suitable for physical incorporation into ADP machines or units thereof, or under subheading 8471.99.34, HTSUS, as other power supplies for ADP machines or units thereof.

LAW AND ANALYSIS:

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

The 1995 HTSUS provisions under consideration are as follows:

8471.99.32: [a]utomatic data processing machines and units thereof; . . . :
[o]ther: [o]ther: [p]ower supplies: [u]nits suitable for physical incorporation into automatic data processing machines or units thereof.

Goods classifiable under this provision receive duty-free treatment.

8471.99.34: . . . : . . . : . . . : [p]ower supplies: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 2.4 percent ad valorem.

8504.40.80: [e]lectrical transformers, static converters (for example, rectifiers) and inductors; parts thereof: [s]tatic converters: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 2.7 percent ad valorem.

Chapter 84, notes 5(A) and (B), HTSUS, state:

(A) For 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 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;

(b) Analog machines capable of simulating mathematical models and comprising at least: analog elements, control elements and programming elements;

(c) Hybrid machines consisting of either a digital machine with analog elements or an analog machine with digital elements.

(B) Automatic data processing machines may be in the form of systems consisting of a number of separate units. Subject to paragraph (E) below, a unit is to be regarded as being a part of a complete system if it meets all the following conditions:

(a) It is of a kind solely or principally used in an automatic data processing system;

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

(c) It is able to accept or deliver data in a form (coded or signals) which can be used by the system.

For Models 2100, 2101, and 2122 to be classifiable under subheading 8471.99.32, HTSUS, the machines into which the power supplies are physically incorporated must meet the terms of chapter 84, notes 5(A)(a) or 5(B), HTSUS, which define ADP machines and units thereof.

With regard to Models, 2100 and 2101, they are for use in medical ultrasonic imaging systems, which are themselves classifiable in chapter 90, HTSUS. Based upon the information provided, it is our position that they do not meet the terms of chapter 84, note 5, HTSUS, and are not ADP machines or units thereof. Therefore, Models 2100 and 2101 are classifiable under subheading 8504.40.80, HTSUS.

Similarly, Model 2122 is for use in testing equipment which does not meet the terms of chapter 84, note 5, HTSUS. Therefore, Model 2122 is classifiable under subheading 8504.40.80, HTSUS.

Although Model 2220 is used with equipment which meet the terms of chapter 85, note 5, HTSUS, it is a free standing unit. Consequently, as it is not suitable for physical incorporation into an ADP machine or unit thereof, it is precluded from classification under subheading 8471.99.32, HTSUS. However, Model 2220 is classifiable under subheading 8471.99.34, HTSUS.

As it is our understanding that the RAID systems, which incorporate Models 2176, 2197, and 2203, operate as ADP storage units, they do meet the terms of chapter 84, note 5, HTSUS. Therefore, Models 2176, 2197, and 2203 are classifiable under subheading 8471.99.32, HTSUS.

Your office assessed 10% marking duties on certain of the articles subject to this protest pursuant to section 134.2, Customs Regulations (19 CFR 134.2), for improper country of origin marking. Protestant contends that the marking duties were incorrectly assessed as all of the articles subject to this protest were properly marked with their country of origin. It is our understanding that your office concurs with the protestant that these duties were incorrectly assessed. Therefore, the imported articles encompassed by this protest were properly marked with their country of origin.

HOLDING:

Models 2118, 2136, 2166, 2167, 2172, 2173, 2174, 2180, 2196, 2200, 2176, 2197, and 2203 are classifiable under subheading 8471.99.32, HTSUS, as power supplies suitable for physical incorporation into ADP machines or units thereof.

Models 2100, 2101, and 2122 are classifiable under subheading 8504.40.80, HTSUS, as other static converters.

Model 2220 is classifiable under subheading 8471.99.34, HTSUS, as an other power supply for ADP machines or units thereof.

With regard to the classification of Models 2118, 2136, 2166, 2167, 2172, 2173, 2174, 2180, 2196, 2200, 2176, 2197, and 2203, the protest should be GRANTED.

With regard to Models 2100 and 2101, as the rate of duty under the classification indicated above is more than the liquidated rate, you are instructed to DENY the protest and, if the protestant files summons against said denial, then Customs shall file a counterclaim against said summons.

With regard to Models 2220 and 2122, the protest should be DENIED.

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 the decision must be accomplished prior to mailing of this decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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