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HQ 960415




June 9, 1998

CLA-2 RR:CR:GC 960415 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8419.89.50; 8419.90.90

Port Director of Customs
33 New Montgomery Street, #1501
San Francisco, CA 94105

RE: Protest 2809-95-101066; Coolant Distribution and Control Unit; Cooler Header Assembly

Dear Port Director:

The following is our decision regarding Protest 2809-95-101066 concerning your action in classifying and assessing duty on a cooler distribution and control unit (CDU) and cooler header assembly under the Harmonized Tariff Schedule of the United States (HTSUS).

In a facsimile submission dated May 14, 1998, counsel for the protestant withdrew from the protest the value advance issue and the issue regarding the classification of a power supply for the CDU.

FACTS:

The CDU is a unit of the Amdahl mainframe computer system (Model 5995M). It is housed in a cabinet or frame separate from the other frames of the 5995M system. A basic CDU frame contains the following components: a control unit, which contains a microprocessor board, sensor board, and relay board; a power unit, which consists of a power supply; a reservoir tank module, which is a ventilated container which holds water, with water level and temperature sensors; and coolant distribution modules, consisting of a fan, heat exchange module, and water pumps and valves.

The CDU is connected to the central processing unit (CPU) frame of the 5995M by pipes or a "cooling loop." The CDU distributes cooled, de-ionized water to the CPU frame. The CPU frame contains a number of multi-layer glass ceramic assemblies (MLAs), which are printed circuit boards (PCBs) containing various large-scale integrated circuit (LSI) chips, circuitry, connectors, and other items. Each MLA generates a significant amount of heat in its operation which, if not dissipated, would destroy the chips and board quickly. Accordingly, a conductive cooling module (CCM) is attached to each MLA in the CPU frame. The CCMs cover and mate to the chips on the MLA boards. The CDU pumps cooled water through a piping system which is connected to the CCMs in the CPU frame. The coolant circulates through the CCMs which are attached to each MLA, thereby drawing off the heat from the MLA. The warmed water is then returned through the piping system to the CDU, where it is collected in the reservoir tank module. The reservoir tank module is open and has a ventilation unit, which allows some heat to dissipate from the water in the tank.

Warm water returning from the CPU frame is further cooled when pumped from the reservoir tank module through the heat exchange module of the CDU. This module consists of a radiator, or a tube with metal fins or vanes. The radiator is located in the CDU directly over the customer's below-floor air conditioning. Fans are installed within the CDU to pull cool air from the floor air conditioning through the unit and across the radiator. As the warm water flows through the radiator, its heat is thereby dissipated. The cooled water is then pumped through the piping system to the CPU frame.

In addition to monitoring functions, the control unit of the CDU establishes the correspondence between the pumps, cooling loops, and other units during the start-up phase of the system, based on instructions from the service processor (SVP), which is a mini-computer located in a separate frame of the 5995M. It also controls the pumps, fans, and valves to distribute coolant, and it starts, stops, and alternates pumps.

The cooler header assembly is comprised of a metal plate which is a component of the CCM, which, as previously stated, is attached to the MLA in the CPU frame of the 5995M.

The CDU and the cooler header assembly were entered on June 3, 10, 12, 17, 24, July 1, and 8, 1991, under subheading 8471.99.90, HTSUS, as an other unit of an automatic data processing (ADP) machine, and subheading 8473.30.40, HTSUS, as an other part (not incorporating a cathode ray tube) of machines of heading 8471, HTSUS, respectively. The entries were liquidated on June 9, 16, and 23, 1995, under subheading 8419.89.90, HTSUS, as other machinery for the treatment of materials by a process involving a change of temperature, and subheading 8419.90.80, HTSUS, as an other part of machinery for the treatment of materials by a process involving a change of temperature, respectively. The protest was timely filed on August 4, 1995.

ISSUE:

Whether the CDU is classifiable under subheading 8419.89.50, HTSUS, as other machinery for the treatment of materials by a process involving a change of temperature, or under subheading 8471.99.90, HTSUS, as an other unit of an ADP machine.

Whether the cooler header assembly is classifiable under subheading 8419.90.90, HTSUS, as an other part of machinery for the treatment of materials by a process involving a change of temperature, or under subheading 8473.30.40, HTSUS, as an other part (not incorporating a cathode ray tube) of machines of heading 8471, HTSUS.

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 1991 HTSUS provisions under consideration are as follows:

8419 Machinery, plant or laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change in temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof:

Other machinery, plant or equipment:

8419.89 Other:

8419.89.50 Other.

8419.90 Parts:

8419.90.90 Other.

8471 Automatic data processing machines and units thereof; * * *

Other:

8471.99 Other:

Other:

8471.99.90 Other.

8473 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 8469 to 8472:

8473.30 Parts and accessories of the machines of heading 8471:

8473.30.40 Not incorporating a cathode ray tube.

The protestant claims that, because the CDU operates with the 5995M, it is an ADP unit. In determining whether a good is an ADP unit, we must consult chapter 84, note 5(B), HTSUS. It states that:

(B) Automatic 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 a complete system if it meets all 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 as 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 (coded or signals) which can be used by the system).

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

Based upon the information supplied by the protestant, the CDU meets the requirements of an ADP unit in chapter 84, note 5(B), HTSUS. Therefore, the CDU is described under subheading 8471.99.90, HTSUS.

We must now ascertain whether the CDU is described in heading 8419, HTSUS. In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 84.19 (p. 1271) states that:

. . . the heading covers machinery and plant designed to submit materials (solid, liquid or gaseous) to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature change . . . But the heading excludes machinery and plant in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant, e.g., machines for coating biscuits, etc., with chocolate, and conches (heading 84.50 or 84.51), machines for spreading and tamping bituminous road-surfacing materials (heading 84.79).

We find that, based upon Explanatory Note 84.19, the 5995M is described in heading 8419, HTSUS, in that it is designed to submit the circulating water to a cooling process to cause a simple change in temperature. The principal function of the CDU is to chill and channel water throughout the 5995M in such a way as to dissipate heat.

It is our position that this function of the CDU is not secondary so as to preclude it from classification in heading 8419, HTSUS. The principal purpose of the CDU is to subject water to a cooling process to dissipate heat arising in the 5995M. Without the chilled water, the 5995M could not operate properly for an extended period of time. Such a function is not secondary for a machine which is described as a coolant distribution and control unit.

Counsel for the protestant cites HQ 958017, dated February 13, 1996, which dealt with the classification of humidifiers, as precedent for excluding the CDU from classification in heading 8419, HTSUS. In that ruling, we held that a machine whose purpose was to create steam is not a good of heading 8419. We find that the holding in HQ 958017 is not binding upon the classification of the CDU, as the two machines are different in both design and function. Again, the purpose of the CDU is to subject water to a cooling process to dissipate heat arising in the 5995M. This is a function covered by heading 8419, HTSUS.

We note that heat exchange units are specifically provided for in heading 8419, HTSUS. However, because the CDU consists of a heat exchange unit and several other components, we find that it is better described under subheading 8419.89.50, HTSUS.

Chapter 84, note 2, HTSUS, states that:

[s]ubject to the operation of note 3 to section XVI, a machine or appliance which answers to a description in one or more of the headings 8401 to 8424 and at the same time to a description in one or more of the headings 8425 to 8480 is to be classified under the appropriate heading of the former group and not the latter.

As it is our understanding that the CDU is a machine which is described in headings 8471 and 8419, HTSUS, chapter 84, note 2, HTSUS, is applicable. Based upon the note, the CDU is classifiable in heading 8419, HTSUS, under subheading 8419.89.50, HTSUS.

In the alternative, the protestant claims that the CDU is a part of an ADP machine classifiable in heading 8473, HTSUS. Based upon chapter 84, note 2, classification of the CDU in heading 8473, HTSUS, is precluded. See also section XVI, note 2, HTSUS.

In HQ 960980, dated October 28, 1997, we held a power and coolant distribution unit, the main function of which is the same as that of the subject CDU, to be classifiable in heading 8419, HTSUS.

With regard to the cooler header assembly, as it is our understanding that it is a metal plate specifically designed as a component piece for the CCM, we find that it is a part of the CDU classifiable under subheading 8419.90.90. See section XVI, note 2, HTSUS.

HOLDING:

The coolant distribution and control unit is classifiable under subheading 8419.89.50, HTSUS, as other machinery for the treatment of materials by a process involving a change of temperature.

The cooler header assembly is classifiable under subheading 8419.90.90, HTSUS, as an other part of machinery for the treatment of materials by a process involving a change of temperature.

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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