HQ 0955235 - Modification of NY 860833; Expansion Unit for Laptop Computers; Docking Station; Automatic Data Processing machines; ADP machines; Control or Adapter Units; Legal Note 5(B) to Chapter 84; EN 84.71(I)(D)(4); 8471.99.90 - United States International Trade Commision Rulings

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HQ 955235

October 26, 1993

CLA-2 CO:R:C:M 955235 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.99.15

Mr. Marty Langtry
Castelazo & Associates
5420 West 104th Street
Los Angeles, CA 90045

RE: Modification of NY 860833; Expansion Unit for Laptop Computers; Docking Station; Automatic Data Processing machines; ADP machines; Control or Adapter Units; Legal Note 5(B) to Chapter 84; EN 84.71(I)(D)(4); 8471.99.90

Dear Mr. Langtry:

This is in reference to a ruling issued to you (on behalf of Epson America) by the Area Director of Customs in New York on March 1, 1991 (NY 860833), concerning the classification of a Notebook computer and docking station from Taiwan. We have recently reviewed the classification of expansion units or docking stations for laptop computers and, for the following reasons, find that NY 860833 must be modified in regards to expansion units for laptop computers under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The subject merchandise is an expansion unit (docking station) which is designed to enhance the functions of a laptop computer, and thus convert it into a functional desktop computer. The docking station is basically an expansion chassis that allows the laptop computer to mate with the station unit without any major reconfiguration. The station unit incorporates the following components: a mounting bay for additional and removable hard disk drives; two AT compatible 16/8-BIT expansion slots; an external display connector; a keyboard or numeric keyboard connector; and supplies power for the laptop computer.

In NY 860833, Customs held that the expansion unit was classifiable under subheading 8471.99.90, HTSUS, as other units of automatic data processing (ADP) machines. Goods classifiable under this provision have a general, column one rate of duty of 3.7 percent ad valorem.

ISSUE:

Whether expansion units or docking stations for laptop computers are classifiable as control or adapter units of ADPs or as other units of ADPs under the HTSUS?

LAW AND ANALYSIS:

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

According to the information provided, the expansion unit provides connectors for display monitors, a keyboard, and for internal storage devices. These capabilities are designed to enhance the use of a laptop computer.

Legal Note 5(B) to Chapter 84 defines units of ADP machines as follows:

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 the 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;

(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 (code or signals) which can be used by the system).

The expansion unit meets the definition of Legal Note 5(B) because it connects to the laptop computer's central processing unit (CPU) and it is able to accept or deliver data in a form which can be used by the system.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the Customs Cooperation Council's official interpretation of the HTSUS. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. EN 84.71(I)(D), page 1299, describes separately presented ADP units as follows:

This heading also covers separately presented constituent units of data processing systems. Constituent units are those defined in Parts (A) and (B) above as being parts of a complete system.

Apart from central processing units and input and output units, examples of such units include:

(4) Control and adapter units such as those to effect interconnection of the central processing unit to other digital data processing machines, or to groups of input or output units which may comprise visual display units, remote terminals, etc.

The expansion unit interconnects the CPU of the laptop computer with input and output units as well as increased data processing and storage capabilities. Based upon EN 84.71(I)(D), we find that the expansion unit meets the definition of "control" or "adaption" functions. Therefore, the expansion unit should be classified under subheading 8471.99.15, HTSUS, as control and adapter units for ADP machines.

Based upon the above analysis, we find that subheading 8471.99.15, HTSUS, is a more specific description of the merchandise because it adapts a laptop computer for use with other ADP units. Therefore, the holding in NY 860833 concerning expansion units should be modified accordingly.

HOLDING:

The expansion units or docking stations are classifiable under subheading 8471.99.15, HTSUS, as control or adapter units for ADP machines. Goods classifiable under this provision have a general, column one free rate of duty.

EFFECT ON OTHER RULINGS:

NY 860833, dated March 1, 1991, no longer reflects the position of Customs and is hereby modified pursuant to section 177.9(d) of the Customs Regulations [19 CFR 177.9(d)].

Sincerely,

John Durant, Director
Commercial Rulings Division

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