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HQ 964208




January 4, 2002

CLA-2 RR:CR:GC 964208 KBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8504.40.95

Port Director
U.S. Customs Service
610 S. Canal Street
Chicago, IL 60607-4523

RE: Protest 3901-99-101514; Uninterruptible Power Supplies

Dear Port Director:

This is our decision on Protest 3901-99-101514, filed on behalf of Best Power, Division of Invensys plc, concerning the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of uninterruptible power supplies. The entry was liquidated on September 9, 1999, and this protest was timely filed on October 25, 1999.

FACTS:

The protest concerns the classification of uninterruptible power supplies (UPS) imported for Best Power, models UT310, UT315, UT320, UT330, UT340, UT360, UT380, UT3010, UT3120, UT3160, and UT3220. The function of these UPS is to provide a reliable, filtered and regulated source of AC power to secure against disturbances and interruptions from the main electrical power source. The UPS is associated with a battery which is used to power an internal static converter. The UPS is connected to the principal source of power and the critical equipment. If there is a disruption in the principal supply of power, the UPS automatically switches to the back-up power source and converts the DC power from the batteries to usable AC power. Counsel for the importer filed an additional submission dated May 25, 2000. This submission included a product brochure describing the features of various products, including the instant UPS models. In this brochure, at page 30 (See also Brochure at page 5), it describes the UPS models in issue as:

BUILT TO PROTECT:
Large mainframe-oriented data centers
Computer rooms
Small mainframes
Mini-computers
Medical analysis equipment such as MRI and CAT scanners Centralized or clustered servers
Mission-critical customized applications
Telecommunications applications
Industrial Process Control Equipment

The articles were entered under subheading 8471.49.70, HTSUS, as automatic data processing machines and units thereof, other digital automatic processing machines, other, entered in the form of systems: other: power supplies. Customs liquidated the entries under subheading 8504.40.95, HTSUS, as electrical transformers, static converters and inductors; static converters: other. The protestant asserts the correct classification of the articles is under subheading 8504.40.70, HTSUS, or subheading 8504.40.85, HTSUS.

ISSUE:

What is the classification of uninterruptible power supplies?

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

In interpreting the headings and subheadings, Customs looks to the Harmonized Commodity Description and Coding System Explanatory Notes (EN). Although not legally binding, they provide a commentary on the scope of each heading of the HTSUS. It is Customs practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The HTSUS provisions under consideration are as follows:

8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included:

Other digital automatic data processing machines:

8471.49 Other, entered in the form of systems:

Other:

8471.49.70 Power supplies

8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof:

8504.40 Static converters:

Power supplies for automatic data processing machines or units thereof of heading 8471:

8504.40.60 Suitable for physical incorporation into automatic data processing machines or units thereof of heading 8471

8504.40.70 Other

8504.40.85 For telecommunications apparatus

8504.40.95 Other

Although the importer entered the UPS in heading 8471, HTSUS, they now believe that heading is not the correct heading. Customs liquidated the UPS in heading 8504, HTSUS, and the importer agrees with this heading. The importer only questions which subheading correctly describes the goods.

The importer states that the UPS can be used for automatic data processing (ADP) machines and for telecommunications applications. Subheading 8504.40.60, HTSUS, and subheading 8504.40.70, HTSUS, provide for power supplies for ADP systems. See NY D88658 (March 24, 1999). Subheading 8504.40.85, HTSUS, provides for power supplies for telecommunications systems. However, the brochure the importer provided clearly states that the UPS may also be used for medical analysis equipment, such as MRI and CAT scanners, and for industrial process control equipment. Power supplies for purposes other than ADP machines or telecommunications apparatus are classified in subheading 8504.40.95, HTSUS.

GRI 6 states that:

For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.

GRI 3(c) states that:

3. When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

Additional Rule of Interpretation 1(a) states that:
a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use

The UPS has multiple uses. The importer’s brochures clearly state that the UPS may be used for purposes other than ADP machines and telecommunications apparatus. No principal use has been established, and multiple subheadings within heading 8504 are applicable. Pursuant to GRI 6 and GRI 3(c), the correct classification is the subheading which occurs last among those provisions noted above, which is 8504.40.95, HTSUS. See PD E81236 (May 21, 1999), and PD E81235 (May 21, 1999); see also NY D88101 (March 11, 1999) and NY D88623 (March 24, 1999).

The importer argues that subheading 8504.40.95, HTSUS, only concerns rectifiers and rectifying apparatus, which is limited to articles which convert power to DC. See EN 85.04 (II)(A). The importer argues that subheading 8504.40.95, HTSUS is, therefore, not applicable to the instant UPS, which convert power to AC. The importer is correct that rectifiers are objects which convert power to DC, and that the subject UPS are not rectifiers. However, rectifiers only comprise part of subheading 8504.40.95, HTSUS. We note that for statistical purposes this subheading also includes “inverters” (subheading 8504.40.9570, HTSUS) and “other” (subheading 8504.40.9580, HTSUS), both of which are not included in the subheading portion for “Rectifiers and rectifying apparatus”. See PD E81236 (May 21, 1999), and PD E81235 (May 21, 1999) (Customs specifically stated in two rulings similar to this matter, that the correct classification of UPS which were capable of use by ADP machines, telecommunications apparatus and other types of equipment was in subheading 8504.40.9580, HTSUS, and that “[t]hey are not rectifying type power supplies.”)

HOLDING:

In accordance with GRI 6 and the above discussion, the uninterruptible power supplies imported for Best Power, models UT310, UT315, UT320, UT330, UT340, UT360, UT380, UT3010, UT3120, UT3160, and UT3220 are classified in subheading 8504.40.95, HTSUS, as electrical transformers, static converters and inductors, static converters, other.

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, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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