Data processing system classification: connected equipment treated as a unit of the system and allowed exemption.

Imported DCA equipment was not established with sufficient certainty as a complete data processing machine under Chapter 84, but the manufacturer's literature showed it formed part of a broader network processing system. Applying Note 5B to Chapter 84, a unit connectable to the central processing unit and specifically designed to form part of such a system is treated as part of the complete data processing system. On that basis, the equipment was classified as a unit of a data processing system under Chapter 84.74 and qualified for exemption under Notification 506/88, even though the broader claim to independent machine classification was rejected.

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Issues: Whether the imported DCA equipment was classifiable as a data processing machine or, alternatively, as a unit of such a machine, and whether it was entitled to the benefit of Notification 506/88.

Analysis: The equipment was not shown with sufficient certainty to satisfy the parameters of a complete data processing machine under Chapter 84. The manufacturer's literature indicated that it formed part of a family of network processors and could communicate through different protocols, supporting the view that it functioned as a component of a larger system. Applying Note 5B to Chapter 84, a unit connectable to the central processing unit, directly or through other units, and specifically designed to form part of such a system, is to be treated as part of the complete data processing system. The equipment satisfied these requirements, as it was connected to the central processing unit and formed part of the system linking the central computer and member establishments.

Conclusion: The equipment was held to be a unit of a data processing system falling under Chapter 84.74 and was eligible for the exemption under Notification 506/88.

Final Conclusion: The appeal succeeded only to the extent that the imported equipment was recognized as qualifying for exemption as part of a data processing system, while the broader claim to classification as an independent data processing machine was not accepted.

Ratio Decidendi: A unit connectable to the central processing unit and specifically designed to form part of a data processing system is classifiable as part of that system and may qualify for the related exemption even if it is not itself a complete data processing machine.

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