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HQ 962315




February 7, 2000

CLA-2 RR:CR:GC 962315 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8523.20.00

Mr. Dipan Karumsi
Allyn International Services Inc.
P.O. Box 60577
Ft. Myers, FL 33906-6577

RE: Jaz Disk Cartridges; Zip Disk Cartridges; Prepared Unrecorded Media; Other Recorded Media; Headings 8523 and 8524; HQ 953880; NY D82831; NY C81051, Revoked

Dear Mr. Karumsi:

This is in reference to your letter dated October 29, 1998, on behalf of Iomega Corporation, concerning the tariff classification of disk cartridges under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed NY ruling C81051, dated November 14, 1997, and have determined that it is in error. Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI, a notice was published on January 5, 2000, in the Customs Bulletin, Volume 34, Number 1, proposing to revoke NY C81051. No comments were received in response to this notice. Therefore, this ruling revokes NY C81051 and sets forth the correct classification for the Jaz Disk Cartridges.

FACTS:

The merchandise consist of three disk cartridges, the Iomega Jaz Disk, model PC1GB, a Jaz Disk with 2 gigabytes (GB) of storage, and the Zip Disk. These disks or cartridges use hard disk technology and the recordings are stored magnetically on dual aluminum substrate "cookies." The cartridges will be fully formatted for use with IBM compatible or Macintosh computers. Both Jaz Disks contain an executable file application entitled "50JAZ," a display program that visually informs the consumer of applicable uses of the cartridge. The Jaz Disk, model PC1GB, also contains a text file entitled "USWARRANTY" which details the product warranty information for the benefit of the consumer. The Jaz Disks can only be used with the Iomega Jaz Drive.

The Zip Disk consists of a plastic housing and contains recorded media made of mylar coated plastic similar to a 3.5 inch diskette but with a storage capacity of 100 megabytes. The Zip Disk is formatted for use with IBM or Macintosh compatible machines. In addition to the formatting, the Zip Disk also contains an executable file application entitled "50Zip", a display program that visually informs the consumer of the applicable function of the disk cartridge. The Zip Disk can only be used with the Iomega Zip Drive.

In NY C81051, dated November 14, 1997, Customs determined that the Jaz Disk, model PC1GB, which contained two files, “50JAZ” and “USWARRANTY”, was classifiable under subheading 8524.99.90 (now 8524.99.40), HTSUS, as other recorded media. In NY D82831, dated October 2, 1998, Customs determined that the Zip Disk and the Jaz Disk, with 2 GB of storage capacity, are used by consumers to record data. Customs concluded that these disks are classifiable under subheading 8523.20.00, HTSUS, as prepared unrecorded media.

ISSUE:

Are Jaz and Zip Disk Cartridges classifiable as prepared unrecorded media under heading 8523, HTSUS, or as other recorded media under heading 8524, 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 shall be determined according to the terms of the headings and any relative section or chapter notes.

The 1999 subheadings under consideration are as follows:

8523.20.00: Prepared unrecorded media for sound recording or similar recording of other phenomena, other than products of chapter 37: [m]agnetic discs.....

8524.99.40: Records, tapes and other recorded media for sound or other similarly recorded phenomena, including matrices and masters for the production of records, but excluding products of chapter 37: [o]ther: [o]ther: [o]ther. . . .

Both provisions have a column one, general rate of duty of free.

All of the above products are removable disk cartridges that allow the end-users to maintain storage of files on a variety of computer systems. Customs has previously addressed the scope of headings 8523 and 8524 as it relates to disk drives and removable, interchangeable disk cartridges in HQ 953880, dated February 28, 1994. In HQ 953880, Customs dealt with the classification of SyQuest disk cartridges and noted the following:

Unlike conventional hard disks, which are permanently fixed in the disk drive assembly, the disk cartridges may be removed from one SyQuest drive and inserted into another. The instant disk cartridges are similar to 3.5-inch disks in that they merely consist of a magnetic disk in a hard plastic enclosure, a disk hub, and a spring access door.

The SQ400 hard disk cartridge has a total storage capacity of approximately 55 megabytes. The product is offered for sale, however, as having a user storage capacity of only 44 megabytes because the disk operating system utilizes approximately 10 megabytes of storage space.

The SQ800 removable hard disk cartridge has a total storage capacity of approximately 101 megabytes. However, the product is offered for sale as having a user storage capacity of 88 megabytes because the disk operating system utilizes approximately 13 megabytes.

In HQ 953880, SyQuest argued that the formatting, error mapping, etc., which prepares the disk to receive user data, merits a change in classification from prepared unrecorded media to recorded media. However, Customs concluded that all of the recorded data had one purpose, and that is to prepare the unrecorded media to store user data. Furthermore, the formatting, error mapping, etc., did not change the commercial identity of the disk cartridges as prepared unrecorded media. "The tariff schedules are written in the language of commerce, and the terms used are to be given their commercial or common meaning." See Ameliotex, Inc. v. United States, 65 CCPA 22, 25, C.A.D. 1200, 565 F.2d 674, 677 (1977); Esco Mfg. Co. v. United States, 63 CCPA 71, 73 C.A.D. 1167, 530 F.2d 949, 951 (1976). Customs further stated that: “[t]he fact that the instant disk cartridges may have more complex or substantial preparations than 3.5 inch disks or floppy disks is due solely to the fact that these disk cartridges are designed to store a larger amount of user data.” See Simmon Omega, Inc. v. United States, 83 Cust. Ct. 14, C.D. 4815 (1979), and Trans-Atlantic Co. v. United States, 471 F. 2d 1397, 60 CCPA 100, C.A.D. 1088 (1973), in which the courts have held that technological advancements and "improvement in the design of an article does not militate against its continuing to be a form of the named articles. "

We have reviewed the sales literature of the Jaz and Zip Disks and find that none of the advertisements on the Iomega website home page lists the executable application file as a feature. Instead, the information discusses how the user can use the disk cartridges to store large quantities of information files whether it is software, audio files, video files, graphics, etc. In HQ 953880, Customs stated that “blank” disks sold having been prepared with formatting does not change the disks’ commercial identity or classification to recorded media. Based upon the analysis of HQ 953880, an examination of the merchandise and the sales literature, we find that the commercial identity of the Jaz disks and the Zip Disks is that of prepared unrecorded media, classifiable under heading 8523, HTSUS. Therefore, we find that Customs classification in NY C81051 for these types of devices is incorrect and should be revoked.

HOLDING:

The Iomega Jaz and Zip Disk Cartridges are classifiable under subheading 8523.20.00, HTSUS, which provides for: “[p]repared unrecorded media for sound recording or similar recording of other phenomena, other than products of chapter 37: [m]agnetic discs.....” The general, column one rate of duty is free.

In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

John Durant, Director
Commercial Rulings Division

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