HQ 086575: National Advanced Systems v. United States, Court No. 88-01- 00015; additional instruction processors

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 086575

                         March 16, 1990

CLA-2 CO:R:C:G  086575  JMH

CATEGORY:  Classification

TARIFF NO.:  676.15, 676.30, 676.54

Mr. Daniel A. Pinkus
Assistant Chief Counsel
International Trade Litigation
Room 258
26 Federal Plaza
New York, NY  10278

RE:  National Advanced Systems v. United States, Court No. 88-01-
     00015; additional instruction processors

Dear Mr. Pinkus:

     This is in response to your February 20, 1990, request for
the classification of "additional instruction processors" (AIP)
under the Tariff Schedules of the United States (TSUS).  The
classification of the AIPs is the subject of National Advanced
Systems v. United States, Court No. 8-01-00015.

FACTS:

     The article in question, the additional instruction
processor, is part of the AS/XL computer mainframe system.  This
system is manufactured by Hitachi Ltd. of Japan and imported by
National Advanced Systems.  The basic AS/XL system, a
uniprocessor system, is of modular design and consists of an
instruction processor, a storage control unit, an input/output
processor, and a multifunctional service processor.  The basic
system has the capability to become a multiprocessor system by
the inclusion of additional instruction processors (AIPs).

     The AIP is a separately housed component.  It contains a
buffer control and translation lookaside buffer, along with
instruction, execution high-speed arithmetic, high-speed decimal
arithmetic, and high-speed decimal units.  The AIP translates
virtual addresses to absolute addresses, prefetches instructions,
provides the execution unit with instruction fields to be
processed, and updates the program counter, instruction pointers
and other instruction control functions.  Operating concurrently,
the execution unit performs the arithmetic and logical operations
specified by the instruction unit.
                               -2-


     The AIP was classified by the San Francisco district under
item 676.15, TSUS, "[a]ccounting, computing, and other data-
processing machines..."  The importer, believing that the
appropriate classification is within item 676.54, TSUS, as
"[p]arts of automatic data-processing machines..." or within
item 676.30, TSUS, as "[o]ffice machines not specially provided
for...", filed Protest No. 28097-000581.  The protest was denied.
National Advanced Systems has filed suit within the Court of
International Trade.

ISSUE:

     Whether the AIP should be classified within item 676.15,
TSUS, as "[a]ccounting, computing, and other data-processing
machines...", or within item 676.54, TSUS, as"[p]arts of
automatic data-processing machines and units thereof..."

LAW AND ANALYSIS:

     Item 676.15, TSUS, describes "[a]ccounting, computing,and
other data-processing machines..."  Main frame systems such as
the AS/XL normally consist of various modules--centrol processing
units, storage units, controllers, power units and a console.
When imported as one system, this office has determined that the
predominant element is the central processing unit.  See
Headquarter's Ruling Letter 076092, dated June 3, 1985.  The
central processing unit provides the arithmetic, logic and
control functions which are the core of the system.  HQ 076092
determined that the processor unit provided the arithmetic
functions which satisfied the "calculating mechanism" requirement
of item 676.15.  See Schedule 6, Part 4, Subpart G, headnote
2(b), TSUS.  The system was classified as an entirety within item
676.15, TSUS, since the nature of the system was determined by
the processor unit.

     The importer and the literature both state that the AIP
performs the same functions that the existing processor performs
in the basic system.  The literature discusses the dyadic, three
and four processor concepts.  Apparently two or more AIPs can
perform concurrent executions, and if one AIP fails the system
can continue operating by disconnecting the failed AIP and
relying on the others.  Thus, the AIP acts as both an enhancement
unit and an actual processor unit.

     It is the opinion of this office that the AIP is the control
processing unit of the AS/XL system.  The AIP performs such
functions as translating addresses, executing commands, updating
the program counter, control functions and the arithmetic and
logic operations.  Thus, the AIP performs the most basic
functions of a data processing machine--control, arithmetic, and
logic.  Since the AIP performs these critical functions it cannot
                               -3-


be merely a part.  The definition of a "data processing machine"
is met.  Therefore, the appropriate classification of the AIP is
under item 676.15.

     The importer argues that since an AIP cannot function on
its own it cannot be a data processing machine within item
676.15, but must be a "part" within item 676.54, TSUS.  This
point was resolved in Headquarters Ruling Letter 554581, dated
July 2, 1987 (HQ 554581).  That an article "requires the
attachment of another article in order to be capable of
performing its function does not render [it] 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)."  HQ 554581, p. 14.

     Item 676.54, TSUS, describes "[p]arts of automatic data-
processing machines and units thereof..."  Confusion has resulted
from "units thereof..."  As stated in HQ 554581:

     If this provision were construed to cover constituent
     units used within automatic data processing systems
     (i.e., "parts and units of automatic data processing
     machines" or "parts of automatic data processing
     machines; units thereof"), the result would be an
     enlarging of a superior provision, item 676.50, TSUS
     ("Parts of the foregoing"), by an inferior provision,
     item 676.54, TSUS, which is precluded by General
     Headnote 10(c)(i), TSUS.

The Customs Service has consistently interpreted the provision to
cover part of data processing machines and parts of units of data
processing machines.

     What the drafters intended to be covered as "parts" has
never been entirely clear.  During the drafting of HQ 554581, the
legislative history of item 676.54 was extensively researched at
all participating agencies.  A definition of what was to be
included within item, 676.54, as a "part" of an ADP was not
discovered or implied.  See HQ 554581, pp. 19-23.  The
legislative history does make clear that the ADPs of item 676.15
and the peripheral units of ADPs within item 676.30, TSUS,
"[o]ffice machines not specifically provided for...", are not
included within item 676.54.  HQ 554581, p. 20, citing S. Rep.
No. 98-308, 98th Cong., 2nd Sess. 50, reprinted in 1984 U.S.
Code Cong. & Ad. News 4910, 4959.  Furthermore, prior to the
creation of item 676.54, there was no significant difference
between the rate of duty for parts and that of ADPs.  See Tariff
Classification Study Explanatory Materials (1964), cited in HQ
554581, p. 10.


                               -4-


     The importer raised the classification within item 676.30 in
the protest, but not in the complaint.  Item 676.30 covers
peripheral units dedicated to performing functions external to a
main processor(s) of an ADP system.  Examples of peripheral
units include scanners, optical readers, keyboard units, disc
drives, video display units, printer units, and other similar
input, output, and storage devices.  A shared characteristic of
some peripheral units and ADPs is that they are free standing
machines or consoles. The legislative history indicates that such
free standing articles classified within items 676.15 and 676.30
are precluded from classification within item 676.54.

     Therefore, the best argument is that the AIP is a digital
data processing unit.  The AIP is the core of the AS/XL system.
HQ 554581 provided the following definition:

     a data processing machine is a device, or a system
     consisting of several devices in the form of modules or
     units, which is capable of accepting and storing data
     necessary to execute a program, with the additional
     capability of being freely programmed in accordance
     with the requirements of a user, and executing a
     processing program, without human intervention, which
     requires a logical decision that results in a certain
     modification of the execution during the processing
     run.  In addition, there must be a capability to
     perform one or more of the four arithmetical
     operations (i.e., addition, subtraction,
     multiplication, and division), specified by a user.  HQ
     554581, pp. 5-6.

The AIP is a data processing unit which contains the arithmetic,
logic and control functions of the AS/XL system.  From the
literature, it appears that as either an actual processor unit or
as an enhancement unit, the AIP is the heart and soul of the
AS/XL system.  It is the AIP which defines the parameters within
which the AS/XL system operates.  Therefore, the AIP is an
"...other data processing machines..." classified under item
676.15, TSUS.

     Alternatively, the AIP is classifiable as "[o]ffice
machines not specially provided for..." under item 676.30, since
the AIP is free standing and not a part of an ADP.  Classifying
the AIP within item 676.30 would not be seriously detrimental to
the classification system.

     However, this office is emphatic that the AIP is not a part
of an ADP within item 676.54.



                               -5-


     We agree with your conclusion that the AIP is not an
unfinished data processing machine, in view of that fact that
this unit is a finished, complete data processing unit.

HOLDING:

     The Additional Instruction Processor is a digital data
processing unit that performs the control functions of an ADP
system.  The AIP is properly classified under item 676.15, TSUS,
as a "...other data processing machine..."  Classification within
this item occurs because of the functions the AIP performs and
the crucial nature of these functions to the AS/XL system, and
not because the AIP is an unfinished data processing machine.

     Alternatively, the AIP is classifiable as "[o]ffice
machines not specially provided for..." under item 676.30, since
the AIP is a free standing unit and is not a part of an ADP.
Classifying the AIP within item 676.30 would not be seriously
detrimental to the classification system.

     The AIP is not a part of an ADP within item 676.54.

                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division