On June 10, 2010, the CIT issued its decision in Dell Products LP v. United States, a dispute involving the proper classification of Dell secondary batteries manufactured for use with Dell notebook computers. The secondary battery at issue was a power source for certain Dell notebook computers in addition to the primary battery source that was encased in, and included with, the computer. The primary and the secondary batteries could not be used at the same time by the same computer.
Dell claimed that the secondary batteries should have been classified within the duty-free HTSUS subheading 8471.30.00 as “automatic data processing machines.” CBP disagreed with Dell’s classification and liquidated the batteries as “other storage batteries” within HTSUS subheading 8507.80.80, dutiable at 3.4 percent ad valorem. The CIT ultimately granted summary judgment in favor of the US Government.
In reaching its decision, the CIT considered whether the secondary batteries were “functional units.” It relied on the ENs to Section 4 of the HTSUS, which provide that “only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole” are covered by the expression “intended to contribute together to a clearly defined function.” The CIT found that the secondary battery was not essential to the performance of the computer because the computer had functionality with only the primary battery.