CLA-2 CO:R:C:G 086126 MBR

TARIFF NO.:

Mr. Neil Yeschin
All Nations Forwarding
248-06 Rockaway Boulevard
Jamaica, N.Y. 11422

RE: Software and interactive workstation for a laser photoplotting system

Dear Mr. Yeschin:

This is in reply to your letter of November 2, 1989 on behalf of Testerion Laboratories, Inc., of Cucamonga, California requesting classification of software and an interactive workstation for a laser photoplotting system, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The DISC Interactive Editing System is a phototool editing system working on DISC Plotting Format data. This data is displayed on the GT920 workstation. It features fully interactive manipulation of printed circuit board (PCB) layout so that the preparation of the phototool can be executed entirely on the color screen. This system can only run DISC software, restricting it to PCB and graphic arts applications. The interactive workstation GT920 includes:

1. A GT920 graphic display subsystem, based on a 32 bit processor architecture, equipped with a 6 MB memory

2. A BARCO CDCT 6351 color monitor

3. A microsoft mouse

4. A VT320 alphanumeric terminal

5. System software presented with the system

ISSUE:

What is the classification of an interactive workstation for a laser photoplotter, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)?

What is the classification of software (floppy disk) if it is imported with the photoplotter system, under the HTSUSA?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

In Apple Computer, Inc. v. U.S., ___ CIT ___, Slip Op. 90-14 [(Feb.13, 1990) the 60 day period of appeal has not yet run], the Court noted a similarity between pen plotters and dot matrix printers and found the function or use of a pen plotter to differ from the use of traditional "drafting machines," and held that, under TSUS, the Apple computer x-y pen plotter was classifiable as "[o]ffice machines not specifically provided for." The Court stated that: "it is clear that, while traditional 'drafting machines' are used by designers to assist in the creation of hand drawn designs, the Apple plotter serves as a printer for designs created by the designer on a computer. Hence, the Apple plotter and traditional drafting machines have clearly different functions or uses." Id. at 18. The Court further cited Data Prods. Corp. v. United States, 4 CIT 234, 558 F. Supp. 124 (1982). The court in Data Products, found "that the sole function of a line printer is to print matter." Id. at 237, 558 F. Supp. at 126. The court also found that line printers are "invariably utilized in conjunction with data processing equipment and are, therefore, distinguishable from printing machinery which is used primarily in the graphic arts." Id. at 237, 558 F. Supp. at 127. The court determined that "[l]ine printers are thus clearly equipment used peripherally to data processing machines." Id. at 239, 558 F. Supp. at 128. Hence, the court held that, since data processing machines are properly classified as office machines, "the importations were properly classified as parts of office machines...." Id.

Furthermore, the court in Apple found distinct similarities between the Apple plotters, dot matrix printers and the line printers in Data Products. It was determined that, like the line printers, the Apple plotter can only be used in conjunction with a computer, that both devices serve to print designs or information entered into a computer, that the plotter is not doing anything more than reacting to a whole series of commands and that both the plotter and dot matrix printers are 'serial devices' with similar design and construction. In support of this analysis, the references we consulted defined a "plotter" as "a digital computer output device...." SEE BYTE MAGAZINE, page 176 (December, 1988), DATAPRO RESEARCH CORP., (January 1986). Thus, whereas a computer operated lathe is still a lathe, plotters are themselves nothing more than high technology, high resolution, computer output devices.

In the instant case, laser photoplotters have distinct similarities to laser printers. Both devices contain a processing element to convert the data received into a raster format, both contain media transport and control mechanisms and both use a laser to create a raster image from raster data. The laser printer creates the image on a selenium drum which is transferred to the medium (a piece of paper) using toner. The photoplotter creates the image directly on the medium (a piece of unexposed film).

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) under heading 84.71, page 1299, state: "[t]his heading covers...(1) [a]dditional input and output units (punched card and punched tape units, printers, graph plotters, input-output terminals, etc.)."

Therefore, it is Customs position that the laser photoplotter is classifiable under subheading 8471.92.65, HTSUSA, which provides for: "[a]utomatic data processing machines..: [o]ther: [i]nput or output units: [o]ther: [p]rinter units: [a]ssembled units...."

Since the laser photoplotter is simply an output unit, the functional unit concept of Legal Note 4 to section XVI would not apply and the constituent elements of the workstation are therefore classifiable under their appropriate provisions for ADP machines.

In reference to software for this system, subheading 8524.90.40, HTSUSA, provides for: "[r]ecords, tapes and other recorded media...: [o]ther: [o]ther." The Harmonized Commodity Description and Coding System Explanatory Notes to heading 8524, page 1373, state:

This heading covers:

(8) Media on which phenomena other than sound or image have been recorded (e.g., magnetic tapes, disks packs, diskettes and cassettes for machines of headings 84.69 to 84.72).

Furthermore, Legal Note 6 to chapter 85 states:

Records, tapes and other media of heading 8523 or 8524 remain classified in those headings, whether or not they are entered with the apparatus for which they are intended.

Therefore, floppy diskettes are classifiable under subheading 8524.90.40, HTSUSA, whether or not they are entered with the apparatus for which they are intended.

HOLDING:

The laser photoplotter is classifiable under subheading 8471.92.65, HTSUSA, which provides for: "[a]utomatic data processing machines..: [o]ther: [i]nput or output units: [o]ther: [p]rinter units: [a]ssembled units...." The rate of duty is 3.7% ad valorem.

The GT920 graphic display subsystem is classifiable under subheading 8471.91.00, HTSUSA which provides for: "[a]utomatic data processing machines and units thereof; [o]ther: [d]igital processing units...: [w]ith cathode-ray tube: [c]olor." The rate of duty is 3.9% ad valorem.

The BARCO CDCT 6531 color monitor is classifiable under subheading 8471.92.40, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof; [o]ther: [i]nput or output units...: [o]ther: [o]ther with cathode-ray tube: [c]olor." The rate of duty is 3.7% ad valorem.

The microsoft mouse is classifiable under subheading 8471.92.90, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof; [o]ther: [i]nput or output units...: [o]ther: [o]ther: [o]ther: [o]ther: [o]ther." The rate of duty is 3.7% ad valorem.

The VT320 alphanumeric terminal is classifiable under subheading 8471.92.10, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof; [o]ther: [i]nput or output units...: [c]ombined input/output units: [o]ther." The rate of duty is 3.7% ad valorem.

Floppy diskettes, even if imported with the photoplotter system, are classifiable under subheading 8524.90.40, HTSUSA, which provides for: "[r]ecords, tapes and other recorded media...: [o]ther: [o]ther . The rate of duty is 9.7 cents per square meter of recording surface.

EFFECT ON OTHER RULINGS:

In HQ 085069, November 8, 1989, we held that the MIVA 25 photoplotter was classifiable under subheading 9017.20.80, HTSUSA, which provides for other drawing instruments. In light of the recent Court of International Trade decision, and for the reasons stated above, we now conclude that the MIVA 25 is properly classifiable under 8471.92.65, HTSUSA, which provides for: "[a]utomatic data processing machines..: [o]ther: [i]nput or

output units: [o]ther: [p]rinter units: [a]ssembled units...." The rate of duty is 3.7% ad valorem. Ruling HQ 085069, November 8, 1989, is modified under authority of section 177.9(d), Customs Regulations.


Sincerely,

John Durant, Director
Commercial Rulings Division