“The unit’s essential characteristic is to function as an integral part of a very large computing system. Headings 8471 or 8473 are considered far more appropriate that 9406. HMRC’s view that it has been “designed” to house servers is consistent with a classification under 8473.”
“Prefabricated buildings” (a) Note 4 to chapter 94 explains that, for the purposes of heading 94.06, ‘prefabricated buildings’ means “buildings which are finished in the factory or put up as elements, presented together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings.” (b) The HSEN under heading 94.06 explains that the heading “covers prefabricated buildings, also known as ‘industrialised buildings’, of all materials.”
“Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included.” “8471 49 00 - - Other, presented in the form of systems 8471 60 Input or output units, whether or not containing storage units in the same housing, such as keyboards 8471 90 00 – Other” (a) “5(A) For the purposes of heading 8471, the expression ‘automatic data-processing machines’ means machines, capable of (i) storing the processing program or programs and at least the data immediately necessary for the execution of the program; (ii) being freely programmed in accordance with the requirements of the user; (iii) performing arithmetical computation specified by the user; and (iv) executing, without human intervention, a processing program which requires them to modified their execution, by logical decision during the processing run.” (b) Note 5(B) to chapter 84 provides that “automatic data processing machines may be in the form of systems consisting of a variable number of separate units.” (c) Note 5(C) provides that: “Subject to paragraph (D) and (E) below, a unit is to be regarded as being part of an automatic data-processing system if it meets all of the following conditions: (i) it is of a kind solely or principally used in an automatic data-processing system; (ii) it is connectable to the central processing unit either directly or through one or more units; and (iii) it is able to accept and deliver data in a form (codes or signals) which can be used by the system.” (d) Note 5(E) provides that: “Machines incorporating or working in conjunction with an automatic data-processing machine and performing a specific function other than data-processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.” 14(2) The subheading notes in relation to 8471 49 (“other, presented in the form of systems”) at Note 1 provide: “For the purposes of subheading 8472 49 the term ‘systems’ means automatic data-processing machines whose units satisfy the conditions laid down in Note 5(C) to Chapter 84 and which comprise at least a central processing unit, one input unit (for example a keyboard or a scanner), and one output unit (for example, a visual display unit or a printer).” 14(3)The general notes to Chapter 8471 provide that the chapter covers machinery and mechanical apparatus. In relation to the conditions laid down in Note 5(A) to the Chapter under the heading ‘Automatic Data-Processing Machines’ (see above) it provides that: “Thus, machines which operate only on fixed programs, i.e. programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs”; “These machines have storage capability and also stored programs which can be changed from job to job”; “The data input is usually automatic … There may also be arrangements for named input by means of keyboards or the input may be furnished directly by certain instruments (e.g. measuring instruments)”; “The input data are converted by the input units into signals which can be used by the machine, and stored in the storage units”; and “Automatic data-processing machines may comprise in the same housing, the central processing unit, an input unit (e.g. a keyboard or a scanner) and an output unit (e.g. a visual display unit), or may consist of a number of interconnected separate units. In the later case, the units from a ‘system’ when it comprises at least the central processing unit, an input unit and an output unit … The interconnections may be made by wired or wireless means.” 14(4) In relation to data-processing machines a separate note provides that heading 8471 excludes machines … incorporating or working in conjunction with an automatic data-processing machine and performing a specific function. 15. Heading 84.73 relates to: “Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines of headings 84.69 to 84.72.” 15(1) Heading 84.73 30 relates to “Parts and accessories of the machines of heading 8471: 8473 30 20 - - Electronic assemblies 8473 30 80 - - Other” 15(2)The HSENs to this heading describe accessories a: “the accessories covered by this heading are interchangeable parts or devices designed to adapt a machine for a particular operation, or to perform a particular service relative to the main function of the machine, or to increase its range of operations.”
“In relation to other decisions, the powers of an appeal tribunal on an appeal under this section shall also include power to quash or vary any decision and power to substitute their own decision for any decision quashed on appeal.”
“(6) On an appeal under this section the burden of proof as to [matters inapplicable to this appeal] shall lie upon the Commissioners; but it shall otherwise be for the appellant to show that the grounds on which any such appeal is brought have been established,.”
“A BladeRoom unit is a machine designed to function as a modular data centre and this satisfies the far more specific definition of an automatic data-processing machine or part of a system thereof as contained in heading 8471 and the notes thereto. · A BladeRoom is designed as a data centre to house IT infrastructure and to provide, via complex automatic processes, the optimum working environment for the IT to function; · It performs its function without any human presence. In the industry this is referred to as a “lights out” data centre; · It is monitored remotely; · The only time humans are required to enter a functioning BladeRoom room is for maintenance purposes. For example: (i) There are no toilets, sinks or other such amenities; (ii) There are no work desks; (iii) There are no relaxation areas; (iv) The fire suppression system employed is “Argonite”
“Goods description: BladeRoom modular data centre, comprising 10 modules to be assembled on-site. Each module is approximately 4.5 metres x 15.2 metres. The modules are: · Two ‘air optimiser’ (AO) units, located at each end of the assembled centre. The air optimiser provides filtered, temperature and humidity-controlled air to the ‘cold corridor’. Air compressors, to be mounted on the data centres roof, are imported with the other modules. · Two ‘power management’ (PM) units, located adjacent to the air optimisers near each end of the assembled centre. The powered management units include switchboard equipment to monitor and supply power to the data centre, as well control of the fire suppression system. · Six ‘information technology’ (IT) units. The IT units have a ‘cold corridor’ at one end, a ‘hot corridor’ at the other, and IT aisles to hold wrapped computers. Each IT room has a cold aisle, accessible from the cold corridor, faced on both sides with the rear of the racks. Cool air flows from the AO to the cold corridor, through adjustable louvers to the cold aisles, then through the racks, where the now warm air is expelled via the hot aisles and corridor. The BladeRoom as imported includes pipes and cabling that only need to be coupled to be functional. The BladeRoom as imported does not include power supply; this is supplied externally. The operation of the BladeRoom can be remotely controlled; the BladeRoom as imported does not include any office space. Identification of goods: Prefabricated building to house a datacentre. Headings considered: 8415 “Air conditioning machines …” 8471 “Automatic data processing machines and units thereof; …” 8537 … 9406 “Prefabricated buildings”
“20. Since the product at issue is composed of different materials and neither of the two subheadings mentioned above is more specific than the other, the sole provision to which recourse may be had for the purpose of classifying the goods is general rule 3(b) (see, to that effect Case 253/87 Sportex [1988] ECR 3351 , para.7). Under that general rule, in carrying out the tariff classification of goods it is necessary to identify, from among the materials of which they are composed, the one which gives them their essential character. This may be done by determining whether the goods would retain their characteristic properties if one or other of the constituents were removed from them … … 23. Even if an ink cartridge, such as that at issue in the main proceedings, is constructed in such a way that the printer does not function in the absence of that cartridge, the fact remains that the ink contained in the cartridge is the most important factor for the purpose of using the goods at issue. In fact, the ink cartridge is not inserted in the printer in order to make the printer itself function but specifically to supply it with ink. Therefore, the ink must be regarded as determining the essential character of an ink cartridge, such as that at issue in the main proceedings.”
“22. While, as Ikegami submits, the machine in question in the main proceedings cannot simultaneously record sound and pictures or record and reproduce moving images, that fact, assuming it to be true, is no obstacle to holding that the machine, which is equipped with components which can store and reproduce both sounds and pictures, performs a function going beyond automatic data processing.”
“30. In that connection, it should be observed that the word ‘part’, within the meaning of CN heading 8473, implies a ‘whole’ for the operation of which the part is essential … and this is not so in the case of the cartridge at issue in the main proceeding. While it is true that, without an ink-cartridge, a printer is not able to carry out its intended functions, the fact remains that the mechanical and electronic functioning of the printer in itself is not in any way dependent on such a cartridge. The inability of the printer, in the absence of an ink-cartridge, to transcribe onto paper the work produced with the aid of a computer is caused by lack of ink rather than a malfunctioning of the printer. 31. For these reasons an ink-cartridge such as that at issue in the main proceedings, which, in view of its characteristics as described by Turban International in its written observations, plays no particular role in the actual mechanical functioning of the printer, cannot be regarded as ‘part’ of a printer within the meaning of CB heading 8473. 32. Equally, such a cartridge cannot be classified under heading 8473 as an ‘accessory’ of the printers in question. While the cartridges are interchangeable, they are not designed to adapt the printers for a particular operation, or to perform a particular service relate to their main function, or to increase their range of operations, within the meaning of the HS explanatory note relating to heading 8473. Such cartridges merely enable ESC printers to fulfil their usual function, namely, the transcription onto paper of work produced with the aid of a computer.”
“36. Neither the urine drainage bag for catheters nor the drainage bag for dialysers is indispensible for the functioning of those instruments or apparatus. It is apparent that catheters do not depend on the presence of a urine drainage bag in order to function and, similarly, that dialysers do not depend on the presence of a drainage bag in order to carry out dialysis, since the process of cleansing blood is complete at the time when the bag is used, that bag serving only to collect the liquid drained … 37. The latter finding cannot be called into question by the fact that dialysers worked only when a bag is attached. In that regard, suffice it to state, as the European Commission points out, that, were it not for the security mechanism with which the apparatus is fitted, the dialysis process could be carried out without a bag, that security mechanism being the sole link between the apparatus and the bag … 38. Likewise, those bags do not enable the instruments and apparatus to be adapted to a particular operation, nor do they increase their range of operations, or enable them to perform a particular service connected with their main function. A drainage bag attached to a catheter has the sole purpose of collecting liquid drained after the catheter itself has fulfilled its own function, which is to drain the urine present in the bladder. For its part, a drainage bag for a dialyser does not enable that apparatus to perform operations other than that for which it is designed, namely that of cleansing blood.”
“19. In order to answer question 1, it should be recalled that it is settled case-law that, in the interests of legal certainty, for ease of verification the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of the CN … 20. In addition the intended use of a product may constitute an objective criterion for classification if it is inherent in the product, and that inherent character must be capable of being assessed on the basis of the product’s objective characteristics and properties …”