CLA-2 CO:R:C:M 955270 KCC

District Director
U.S. Customs Service
300 South Ferry Street
Terminal Island
Los Angeles, California 90731

RE: Protest 2720-93-100872; magnetic head sliders; thin film and composite sliders; 8543.80.90; Note 1(b), Chapter 84; Note 1, Chapter 69; ceramic; fired after shaping; General EN to Chapter 69; GRI 3(b); composite good; essential character; EN Rule 3(b); HRLs 082097; 086584; 089869, 950623; sensors; General EN (A) to Chapter 84; parts prevails over basket provision; United States v. David E. Porter; Ideal Toy Corporation v. United States

Dear District Director:

This pertains to Protest 2720-93-100872, regarding the tariff classification of magnetic head sliders under the Harmonized Tariff Schedule of the United States (HTSUS). Samples were submitted for our examination. Information presented in an additional submission dated January 24, 1994, and at a meeting on June 28, 1994, was considered in rendering this decision.

FACTS:

The articles under consideration are magnetic head sliders, i.e., thin film sliders and composite sliders. There is no dispute that the magnetic head sliders are principally used with Automatic Data Processing Machines (ADP) to read and write from a magnetic disk. The completed magnetic head sliders may either be sold as a finished product or may be mounted on a load beam/support assembly and sold as a "slider/flexure assembly."

In thin film sliders, the slider body consists of a mixture of ceramic materials, such as aluminum oxide and titanium carbide. The active sensors or transducer elements are deposited onto one end of the slider body using semiconductor manufacturing processes. The processes used to manufacture the thin film sliders are similar to those used in semiconductor wafer manufacturing. Approximately two to three hundred discrete steps are performed, such as sputtering, ion milling, precession electroplating, and photolithography. These techniques are used to deposit thousands of sensors on a circular puck, composed of the ceramic material described above (currently three to six inches in diameter), which has a value of between $88.00 to $100.00. After the sensors are deposited, the puck, now known as a wafer, is worth approximately $20,000.00. The wafer then undergoes several machining steps which slice the wafer into individual sliders. The sliders are subsequently lapped and ground to precision tolerances. The completed thin film sliders are then ready for use in ADP machines.

Composite sliders are composed of a ceramic slider body into which a magnetic core has been bonded with epoxy and glass. The ceramic slider body is a mixture of ceramics, including titanate and calcium oxide. The magnetic core is made from a different type of ceramic material, magnetically sensitive ferrite. The ferrite magnetic core is formed to specific shapes and dimensions, i.e., "C" and "I" shapes. A proprietary mixture of various metals including iron, silicon, aluminum and glass are vacuum-deposited in the gaps between the "C" and "I" shaped ferrite core. The ferrite core is then inserted into a U-shaped vertical slot in the slider body by means of epoxy and glass materials. The composite sliders are transformed into complete magnetic head sliders by a coil which is wound around the ferrite core.

Upon importation, the entries of the magnetic head sliders were liquidated starting on April 30, 1993, under subheading 8543.80.90, HTSUS, as other electrical machines and apparatus, not specified or included elsewhere. The protestant contends that the magnetic head sliders are properly classified under subheading 8473.30.40, HTSUS, as parts and accessories of machines of heading 8471, not incorporating a cathode ray tube.

The competing subheadings are as follows:

8473.30.40 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 8469 to 8472...Parts and accessories of the machines of heading 8471...Not incorporating a cathode ray tube.

8543.80.90 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof...Other machines and apparatus...Other....

ISSUE:

Are the magnetic head sliders classified as parts and accessories of machines of heading 8471, not incorporating a cathode ray tube under subheading 8473.30.40, HTSUS, or as other electrical machines and apparatus, not specified or included elsewhere under subheading 8543.80.90, HTSUS?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes...."

To be classified under subheading 8473.30.40, HTSUS, the magnetic head sliders must not be excluded by Note 1(b), Chapter 84, HTSUS, which states that Chapter 84, HTSUS, does not include:

Appliances or machinery (for example, pumps) or parts thereof, of ceramic material (chapter 69).

Therefore, the magnetic head sliders must not be composed of the type of ceramic material classifiable under Chapter 69, HTSUS. Note 1, Chapter 69, HTSUS, states that:

This chapter applies only to ceramic products which have been fired after shaping.

The protestant contends that the magnetic head sliders are not ceramic pursuant to Note 1, Chapter 69, HTSUS, because they have been shaped after firing. As evidence, the protestant states that the ceramic material which makes up the slider bodies is first in a liquid/paste form which is poured into a cylinder mold. This cylinder mold is fired. Thereafter, the cylinder ceramic material is cut into thin circular pucks onto which sensor elements are deposited. Therefore, the protestant contends that the ceramic material is shaped after firing.

The protestant fails to take into consideration that the ceramic material in liquid/paste form is initially shaped in the cylinder mold before firing. In understanding the language of the HTSUS, Harmonized Commodity Description and Coding System (HCDCS) Explanatory Notes (ENs) may be consulted. The ENs, although not dispositive, provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See, T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). General EN to Chapter 69, HTSUS, describes the manufacturing process of ceramic products, in pertinent part, as follows:

(ii) Shaping

The prepared powder or paste is then shaped as nearly as possible to the desired form.

This is done by extrusion (through an extrusion die), pressing, moulding, casting or hand-shaping, followed in some cases by some degree of machining....

(v) Finishing

The finishing processes depend on the intended use of the ceramic product. Sometimes machine finishing to a high degree of precision is necessary. Finishing may also include marking, metallising or impregnation.

The ceramic material at issue is shaped before firing and then subjected to a finishing process. The shaping process involves pouring the liquid ceramic into the mold. After firing, the ceramic cylinder is subject to high degree precision machining, i.e., finishing process, which involves slicing the ceramic cylinder into thin pucks. Although the slicing process appears to be an extensive operation, it is, in fact, a precision machining operation which determines the width of the slider body excluding the deposited sensors. Therefore, we are of the opinion that this is the type of operation contemplated by Note 1, Chapter 69, HTSUS.

To be excluded from Chapter 84, HTSUS, the magnetic head sliders must be of ceramic material. The magnetic head sliders are composed of ceramics and electrical sensors. When, by application of GRI 2, HTSUS, goods are prima facie classifiable under two or more headings, GRI 3, HTSUS, is applicable. In this case, classification is determined by application of GRI 3(b), HTSUS, which provides:

Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

EN Rule 3(b)(IX)(pg. 4) states that:

For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts (emphasis in original).

We are of the opinion that the magnetic head sliders are composite goods because the components are adapted one to the other, mutually complementary, and together form a whole which would not normally be offered for sale in separate parts. Therefore, we need to determine which component imparts the essential character.

In general, essential character has been construed to mean the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article. In addition, EN Rule 3(b) (pg. 4), provides further factors which help determine the essential character of goods. Factors such as bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods are to be utilized, though the importance of certain factors will vary between different kinds of goods.

Although not identical to the magnetic head sliders at issue, we note that Headquarters Ruling Letter (HRLs) 082097 dated March 14, 1989, HRL 086584 dated March 1, 1990, and HRL 089869 dated October 16, 1991, which was affirmed in HRL 950623 dated December 23, 1991, dealt with the classification of similar articles. HRL 082097 and HRL 086584 classified "flexure arms" which contained magnetic head sliders under subheading 8473.30.40, HTSUS, and in item 676.54, Tariff Schedules of the United States (TSUS)(the precursor tariff provision to subheading 8473.30.40, HTSUS). HRL 089869, which was affirmed in HRL 950623, classified the ferrite core which is inserted into a composite slider housing under subheading 8543.80.90, HTSUS, as other electrical apparatus, having individual functions not specified or included elsewhere in this chapter. The ferrite core of these rulings is the "C" and "I" shaped bars which are sputtered with metallic material and glass and then bonded in glass so that non-magnetically permeable gaps are created at the contact points between the two bars. As the above rulings do not deal with the classification of magnetic head sliders as independent articles, we do not find them persuasive.

After examining the information present, we are of the opinion that the ceramic slider body does not impart the essential character to the magnetic head sliders. The ceramic used in the magnetic head slider's body is of minor consequences in terms of what performs the magnetic head sliders function and in terms of what gives the magnetic head sliders its identity. The ceramic merely acts as a base unit to support the sensors on an air bearing above the magnetic disk. The essential character of the magnetic head sliders is imparted by the sensors. The sensors are the component entirely responsible for the ability of the magnetic head sliders to perform their sole function of reading and writing information on a magnetic disk. In the thin film sliders, the active sensor is the multi-turn coil deposited onto the slider body using semiconductor manufacturing processes. In the composite slider, the active sensor is the magnetic core composed of ferrite that is inserted into the U-shaped vertical slot in the slider body by means of epoxy and glass materials. Wire is then wrapped around the core to form the electromagnetic sensor.

As further evidence that the magnetic head sliders have lost the character of a ceramic article, we need only to look to the sophisticated and complex manufacturing processes. Both types of magnetic head sliders are manufactured using complex semiconductor type manufacturing operations, such as sputtering, ion milling, precession electroplating, and photolithography, etc. This is evidenced by the fact that the ceramic puck costs between $88.00 and $100.00, whereas the value of a completed wafer (puck with the deposited sensors) is approximately $20,000.00.

Additionally, we note that General EN (A) to Chapter 84 (pg. 1137), states that:

Since machinery or appliances (for example, pumps) of ceramic material and ceramic parts of machinery or appliances of any material (Chapter 69), laboratory glassware (heading 70.17) and machinery and appliances and parts thereof, of glass (heading 70.16 or 70.20) are excluded from this Chapter, it follows that even if a machine or mechanical appliance is covered, because of its description or nature, by a heading of this Chapter it is not to be classified therein if it has the character of an article of ceramic materials or of glass (emphasis in original).

This applies, for example, to articles of ceramic material or of glass, incorporating components of minor importance of other materials, such as stoppers, joints, taps, etc., clamping or tightening bands or collars or other fixing or supporting devices (stands, tripods, etc.).

The magnetic head slider bodies do not contain components of minor importance, such as those listed in General EN (A) to Chapter 84. The sensor components are entirely responsible for the ability of the magnetic head sliders to perform their sole function of reading and writing information on a magnetic disk. Therefore, the essential character of the magnetic head sliders cannot be the ceramic slider body.

There is no dispute that the magnetic head sliders are principally used with Automatic Data Processing Machines (ADP) to read and write from a magnetic disk. Since the magnetic head sliders are not of a ceramic material, they are not excluded from classification under Chapter 84, HTSUS. EN 84.73 (pg. 1304), states that:

Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), this heading covers parts and accessories suitable for use solely or principally with the machines of heading 84.69, 84.70, 84.71 or 84.72.

The magnetic head sliders are used in automatic data processing machines, which are classified under heading 8471, HTSUS. The protestant has provided information stating the magnetic head sliders at issue are solely used with automatic data processing machines. Therefore, we are of the opinion that the magnetic head sliders are classified under subheading 8473.30.40, HTSUS, as parts and accessories of machines of heading 8471, not incorporating a cathode ray tube.

Classification under subheading 8543.80.90, HTSUS, is inappropriate because a provision for parts prevails over one for an article "not specifically provided for," i.e., a basket provision. United States v. David E. Porter, 68 CCPA 15, C.A.D. 1259, 645 F.2d 52 (1981); Ideal Toy Corporation v. United States, 58 CCPA 9, C.A.D. 996, 433 F.2d 801 (1970). The language in subheading 8543.80.90, HTSUS, "electric machines and apparatus, having individual functions not specified or included elsewhere" is not a specific provision providing for a part or accessory, but is a basket provision. Therefore, parts and accessories of machines of heading 8471, not incorporating a cathode ray tube under subheading 8473.30.40, HTSUS, prevails over other electrical apparatus, having individual functions not specified for included elsewhere in this chapter under subheading 8543.80.90, HTSUS.

HOLDING:

The magnetic head sliders are classified under subheading 8473.30.40, HTSUS, as parts and accessories of machines of heading 8471, not incorporating a cathode ray tube.

The protest is GRANTED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed, with the Customs Form 19, by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division