OT:RR:CTF:TCM H257923 PTM
TARIFF NO: 8419.50.50
U.S. Customs and Border Protection
Service Port of Charleston
200 East Bay Street
Charleston, SC 29401
RE: Application for Further Review of Protest 1601-14-100102; Tariff Classification of an Exhaust Gas Recirculation Cooler.
Dear Port Director,
This is in response to the protest and application for further review (“AFR”) filed on behalf of Paccar Inc. (“Paccar”). The protest concerns the tariff classification of an exhaust gas recirculation cooler under the Harmonized Tariff Schedule of the United States (“HTSUS”). Our response follows.
Between January 9, 2013 and October 30, 2013, Paccar imported thirty-six entries of merchandise through the CBP Port of Charleston. The entry documents describe the merchandise as “engine parts” and stated classification under subheading 8708.99.8180. Associated invoices describe the merchandise as “COOLER-EXHAUST/COOLANT.” In response to a CBP Request for Information, on September 11, 2013, Paccar responded with a letter describing the merchandise as an exhaust gas recirculation cooler (“EGR cooler”), and provided diagrams of the product. The letter describes the EGR cooler as a product designed for use with a diesel compression-ignition internal combustion engine installed in commercial trucks. The EGR cooler functions as a heat exchanger that consists of a welded stainless steel housing, winglet tubes, an inlet and outlet for coolant and exhaust gas. Hot exhaust enters the EGR cooler exhaust inlet, travels through parallel tubes that contain coolant. The EGR cooler acts to cool exhaust gas prior to re-entering the engine, which reduces combustion temperature and emissions.
On January 9, 2014, CBP issued a notice of action stating that the EGR cooler should be classified under subheading 8419.89.9585 HTSUS for one entry. On February 6, 2014, CBP issued a second notice of action applying the same action to the remaining entries that are the subject of this protest. The entries liquidated between February 7, 2014 and February 28, 2014. The instant protest was filed on June 10, 2014. Paccar asserts that the EGR coolers should be classified under subheading 8419.50.50000 HTSUS.
What is the tariff classification of the exhaust gas recirculation coolers?
LAW AND ANALYSIS:
Initially, we note that this matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed on June 10, 2014, within 180 days of liquidation for each of the entries pursuant to 19 U.S.C. §1514(c)(3).
Further Review of Protest No. 1601-14-100102 is properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(a) because the protested decision is alleged to be inconsistent with the ruling of the Commissioner of CBP or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise. Specifically, the Protestant argues that the port’s classification of the subject merchandise in subheading 8419.89, HTSUS, is contrary to several rulings in which CBP has classified similar merchandise in sub-heading 8419.50, HTSUS. Specifically, Paccar states that the classification is inconsistent with New York Ruling (“NY”) N056454 (Apr. 21, 2009).
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs 1 through 5.
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs 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. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS subheadings under consideration are as follows:
8419: Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof:
8419.50 Heat exchange units:
* * *
The EN for heading 84.19 provides:
[t]he heading covers machinery and plant designed to submit materials (solid, liquid or gaseous) to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature change (e.g., heating, cooking, roasting, distilling, rectifying, sterilising, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling processes).
* * *
(I) HEATING OR COOLING PLANT AND MACHINERY
This group covers plant of general use in many industries for the simple treatment of materials by heating, boiling, cooking, concentration, evaporation, vaporisation, cooling, etc. They include :
* * *
(B) Heat exchange units in which a hot fluid (hot gas, steam or hot liquid) and a cold fluid are made to traverse parallel paths, but usually in opposite directions, separated by thin metal walls in such a manner that the one fluid is cooled and the other heated. These units are usually of the three following types, viz., in the form of :
(i) Concentric tube systems : one fluid flows in the annular interval, the other in the central tube.
(ii) A tubular system for the one fluid, enclosed in a chamber through which flows the other fluid.
or (iii) Two parallel series of interconnected narrow chambers formed of baffle plates.
Thus, the EN explains that heading 84.19 covers machinery designed to submit materials to a heating or cooling process. Further, it covers heat exchange units that heat or cool materials by passing them on traverse parallel paths through tubes or parallel chambers.
At GRI 1, there is no dispute that the instant merchandise is classified in heading 8419 HTSUS. The issue arises at the six-digit level. Consequently, we begin analysis using GRI 6. GRI 6 states:
For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
At the six-digit level, the primary consideration is whether the EGR coolers are heat exchange units. The term “heat exchange unit” is not defined in the text of the HTSUS. However, the EN to heading 84.19 provides guidance, stating that the heading covers “[h]eat exchange units in which a hot fluid (hot gas, steam or hot liquid) and a cold fluid are made to traverse parallel paths, but usually in opposite directions, separated by thin metal walls in such a manner that the one fluid is cooled and the other heated.”
The EGR cooler consists of a welded stainless steel housing, winglet tubes, an inlet and outlet for coolant and exhaust gas. Hot exhaust enters the EGR cooler exhaust inlet, travels through parallel tubes that contain coolant. The EGR cooler acts to cool exhaust gas prior to re-entering the engine, which reduces combustion temperature and emissions. Because the EGR cooler cools exhaust via parallel traverse tubes, it fits within the definition of a “heat exchange unit” as described by EN 84.19.
CBP has previously classified similar merchandise in subheading 8419.50. In HQ H065720 (Feb. 1, 2010), we classified a “Thermo Star auxiliary vehicle heater unit,” described as an auxiliary heating system used to heat and regulate heated coolant flow to a truck's cab, engine and fuel tank, under subheading 8419.50 HTSUS. The Thermo Star auxiliary vehicle heater operates by drawing fuel from the vehicle’s tank into the combustion chamber. Simultaneously, the pump circulates cold engine coolant into the combustion chamber, where a heat exchanger heats it. The hot coolant is circulated back through the vehicle’s engine and HVAC heat exchanger. A blower circulates air over the HVAC heat exchanger, where it is then warmed, and the heated air is blown into the passenger compartment. See also HQ H065718 (Feb. 1, 2010), (classifying an auxiliary vehicle heater unit in subheading 8419.50 HTSUS). The EGR cooler that is the subject of this protest operates similarly, although it cools engine gas as opposed to heating fluid. In N056454 (April 21, 2009), CBP classified three air and oil cooling heat exchangers under sub-heading 8419.50 HTSUS. In that ruling, CBP described the composition and function of the part at issue as follows:
Part 82930 is made of cast iron with copper tubes and brass fins. Warm air from a diesel engine’s exhaust passes over and through the water cooled tubes and fins and is returned to the engine’s air intakes.
The EGR cooler operates similarly inasmuch as it passes gas through tubes to change the temperature before the gas is returned to the engine. Based on the foregoing, we find that the EGR cooler is a heat exchange unit within the meaning of subheading 8419.50 HTSUS.
By application of GRI 1, the exhaust gas recirculation cooler is classified under heading 8419 HTSUS. By application of GRI 6, it is specifically provided for in subheading 8419.50.5000 HTSUS, which provides for “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Heat exchange units: Other.” You are instructed to GRANT the protest.
The column one, general rate of duty is free. Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division