The tariff classification of incomplete data processing server units from Japan.

NY L84615 May 25, 2005 CLA-2-85:RR:NC:1:110 L84615 CATEGORY: Classification TARIFF NO.: 8473.30.5000 Mr. Steven W. Baker Steven W. Baker and Associates One Sutter Street, Suite 1004 San Francisco, CA 94104-4919 RE: The tariff classification of incomplete data processing server units from Japan. Dear Mr. Baker: In your letter dated April 25, 2005, on behalf or your client Hitachi America, Ltd. you requested a tariff classification ruling. The merchandise under consideration is two automatic data processing (ADP) system base server units. From the information you provided, the “LER Base Server” unit and the “SF4 Base Server” unit will be imported partially complete. Upon importation, the LER Base Server is a metal-framed housing with the following components installed: power supply, PCI (Peripheral Component Interconnect) an expansion bus commonly used in personal computers (PCs), system board assembly (motherboard), OP panel assembly, DASD (Direct Access Storage Device) backplane, non-removable DRAMS (Random Access Memory), fans and cables. The SF4 Base Server will be imported with the system board (motherboard), I/O Controller, I/O Slots, power supply, DASD backplane, PCI divider with lens, printed circuit boards (PCBs), non-removable DRAMS, fans and cables. Neither server will have a CPU (Central Processing Unit) installed. Each server will contain BIOS on flash memory chips on the motherboard. After importation, the units will function as servers upon installation of additional components such as the CPU and operating system. As per information provided, the CPU boards will be imported separately from the base server units. Classification of products as ADP machines must meet the criteria in Legal Note 5(A)(a) to Chapter 84, HTSUS, which states: For purposes of heading 8471, the expression "automatic data processing machines" means: Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and, (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run… As per information submitted, the finished servers meet the requirements of this note. Customs has consistently held that the CPU is the heart of an ADP system, because it performs the critical processing functions of a computer. Because the subject base server units are not imported with their CPU boards, they do not possess the essential character of a finished ADP machine as defined in Legal Note 5(A)(a). We also find that, in their imported condition, the two base server units do not possess the essential character of any of their constituent components. The applicable subheading for the LER and SF4 Base Server Units, imported separately from their CPUs, will be 8473.30.5000, Harmonized Tariff Schedule of the United States (HTS), which provides for “Parts and accessories…suitable for use solely or principally with machines of heading 8469 to 8472: Parts and accessories of the machines of heading 8471: Not incorporating a cathode ray tube: Other.” The general rate of duty will be free. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Eileen S. Kaplan at 646-733-3016. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division