HQ 089330: "Direct Access Storage Device"; 13.34cm Hard Disk Automatic Data Processing (ADP) Machine Storage Device; Articles Assembled Abroad in Whole or in Part of Fabricated Components, the Product of the United States

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 089330

                        October 7, 1991

CLA-2 CO:R:C:M  089330 MBR

CATEGORY:  Classification

TARIFF NO.:  8471.93.40; 9802.00.80

Mr. Jeffery E. Brown
Intertrans Corporation
250 Lee Burbank Highway
Revere, Massachusetts 02151

RE:  "Direct Access Storage Device"; 13.34cm Hard Disk Automatic
     Data Processing (ADP) Machine Storage Device; Articles
     Assembled Abroad in Whole or in Part of Fabricated
     Components, the Product of the United States

Dear Mr. Brown:

     This is in reply to your letter of December 5, 1990, on
behalf of the EMC Corporation, requesting classification of the
model SL/932-EXP "Direct Access Storage Device" for an ADP
machine, and the applicability of subheading 9802.00.80, under
the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA).

FACTS:

     The SL/932-EXP "Direct Access Storage Device" is imported in
a cabinet and incorporates its own fan cooling and power supply.
The SL/932-EXP contains two 5 1/4" 855.8 Megabyte drives and a
controller board.  After importation, it is frequently mounted in
a rack with other similar hard drives and controllers.  Up to ten
of these units can be configured in EMC's SL/309 rack.  The
instant merchandise is comparable to and compatible with IBM's
9332 "Direct Access Storage Subsystem."  In fact, your literature
states that: "EMC's 600MB SL/932-XP DASD subsystem takes
advantage of significant improvements in the design of the
controller to provide faster performance than IBM's 9332."

     Your submissions state that the disk storage subsystem is
assembled in Ireland from U.S.-origin and foreign components.
You have submitted a list of all of the U.S.-origin parts, and
you stated by telephone how these components are assembled into
the final product.   Assembly is as follows:

     1.  Labels; assembled by self-adhesive
     2.  Jumper; assembled by snaps
     3.  Fan guard; assembled by screws
     4.  Receptacle; assembled by snaps
     5.  Filter; assembled by screws
     6.  Front panel board; assembled by snaps
     7.  Front panel interface; assembled by screwing into front
         panel
     8.  Resistor pack; assembled by screws
     9.  Connectors; assembled by clipping molded plastic
         receptacle on one end
     10. LEDs; assembled by fitting into certain holes by
         soldering
     11. Switches; assembled by screws
     12. Controller front panel; assembled by screws
     13. Power supply; assembled by screws
     14. Hinge assembly; assembled by screws
     15. Membrane switch; assembled by snapping in receptacle
     16. Hinge; assembled by screws
     17. Plastic control panel; assembled by snaps.

ISSUES:

     What is the classification of model SL/932 "Direct Access
Storage Device" hard disk drive under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA)?

     Whether the disk storage subsystems assembled in Ireland
from U.S.-origin and foreign components are entitled to a partial
duty exemption under subheading 9802.00.80, HTSUSA, when returned
to the United States?

LAW AND ANALYSIS:

     The General Rules of Interpretation (GRI's) to the HTSUSA
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...

     In HQ 085946, dated January 2, 1990, we addressed the
classification of similar merchandise called the IBM 9335 "Direct
Access Storage Device."  In that ruling we stated that:

     The determination of a unit's state of completion is made by
     determining the state of the unit itself and not the final
     "completed systems" in which they will ultimately function.
     They are fully assembled, have cooling apparatus and their
     own power sources.  To make them fully functional one need
     only plug them in.  In fact, it is clear that the only
     purpose of rack-mounting the units together is for the
     convenience of proximity in connecting them together with
     cables and, perhaps, space consolidation.  Thus, it is our
     view that these units are complete.

     Whether separate or joined, each is complete in and of
     itself and each is a distinct and separate commercial
     entity.  The most that can be said is that they may (or may
     not) be used together with another particular type of unit
     of a data processing system, one as support for the other.
     It does not make them, for tariff classification purposes, a
     "part" of the ultimate automatic data processing system.
     United States v. Willoughby Camera Stores, Inc., 21 CCPA
     322, T.D. 46075 (1933).

     The fact that each unit at issue requires the attachment of
     another article in order to be capable of performing its
     function does not render each of them a "part," in that
     there is no requirement that a machine must be "self-
     activating."  Nord Light, Inc. v. United States, 49 CCPA 12,
     C.A.D. 786 (1961).  Although incapable of functioning unless
     placed in configuration with certain other devices, they
     nevertheless are, in and of themselves, peripheral machines
     used in conjunction with data processing machines,
     specifically provided for....Westinghouse Electric
     International Co. v. United States, 28 Cust. Ct. 209, C.D.
     1411 (1952), cited with approval by Fairchild Camera &
     Instrument Corp., Inter-Maritime Forwarding Co., Inc. v.
     United States, 53 CCPA 122, 126, C.A.D. 887 (1966).
     Furthermore, the fact that they are designed to share a
     common "rack-mounting" does not mandate their
     classification as a part.  General Electric Company v.
     United States, 2 CIT 84 (1981).

     The instant merchandise meets the chapter 84 Legal Note
5.(B) definition of a "unit" of an ADP system.  The SL/932-EXP
"Direct Access Storage Device" is imported in a housing and
incorporates its own fan cooling and power supply.  Subheading
8471.93.30, HTSUSA, provides for: "[s]torage units, whether or
not entered with the rest of a system: [o]ther: [n]ot assembled
in cabinets, and without attached external power supply."  The
instant merchandise has an "attached external power supply," even
though after importation, these "Direct Access Storage Devices"
may be mounted in a rack enclosure in the final system
configuration.  Therefore, we agree with the importer's
suggested classification under subheading 8471.93.40, HTSUSA,
since the instant merchandise incorporates an "external power
supply," and does not have a disk diameter exceeding 21cm.

     Subheading 9802.00.80, HTSUSA, provides a partial duty
exemption for:

     (a)rticles assembled abroad in whole or in part of
     fabricated components, the product of the United
     States which (a) were exported in condition ready for
     assembly without further fabrication, (b) have not lost
     their physical identity in such articles by change in
     form, shape, or otherwise, and (c) have not been advanced
     in value or improved in condition abroad except by being
     assembled and except by operations incidental to the
     assembly process, such as cleaning, lubricating, and
     painting.

     All three requirements of subheading 9802.00.80, HTSUSA,
must be satisfied before a component may receive a duty
allowance.  An article entered under this tariff provision is
subject to duty upon the full cost or value of the imported
assembled article, less the cost or value of the U.S. components
assembled therein, upon compliance with the documentary
requirements of section 10.24, Customs Regulations (19 CFR
10.24).

     Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
provides that the assembly operation performed abroad may consist
of any method used to join or fit together solid components, such
as welding, soldering, riveting, force fitting, gluing,
laminating, sewing, or the use of fasteners.

     Operations incidental to the assembly process are not
considered further fabrication operations, as they are of a minor
nature and cannot always be provided for in advance of the
assembly operations.  However, any significant process, operation
or treatment whose primary purpose is the fabrication,
completion, physical or chemical improvement of a component
precludes the application of the exemption under HTSUSA
subheading 9802.00.80 to that component.  See, 19 CFR 16(c).

     Those operations to be performed in Ireland which result in
securely joining components together by screwing, snapping,
clipping, gluing, taping, soldering, and force fitting, are
considered acceptable assembly operations pursuant to 19 CFR
10.16(a).  See, Headquarters Ruling Letters 555553 of April 11,
1990, 555564 of May 1, 1990 and 555765 of November 8, 1990.  We
consider attaching self-adhesive labels to be analogous to gluing
and taping operations which, as previously stated, are acceptable
assembly operations.

HOLDING:

     The EMC Corporation SL/932 "Direct Access Storage Device"
13.34cm hard disk drive for ADP machines, incorporating an
external power supply, is classifiable under subheading
8471.93.40, HTSUSA, which provides for: "[a]utomatic data
processing machines and units thereof: [s]torage units, whether
or not entered with the rest of a system: [o]ther: [o]ther."  The
rate of duty is 3.7% ad valorem.

     Those operations to be performed in Ireland which result in
securely joining components together by screwing, snapping,
clipping, gluing, taping, soldering, and force fitting, are
considered acceptable assembly operations pursuant to 19 CFR
10.16(a).

                              Sincerely,




                              John Durant, Director
                              Commercial Rulings Division