CLA-2 CO:R:C:M 088648 DWS
District Director of Customs
Federal Building, Room 198
N.W. Broadway and Glisan Streets
Portland, OR 97209
RE: Capacitor Voltage Transformer; Protest No. 2904-0-000003
Dear Sir:
This is our decision on Application for Further Review of
Protest No. 2904-0-000003, dated January 11, 1990, concerning
your action in classifying and assessing duty on capacitor
voltage transformers under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA).
FACTS:
The subject merchandise consists of capacitor voltage
transformers imported from Switzerland. The transformer is
composed of a capacitor voltage divider (CVD) and a transformer
unit. The transformer unit includes a transformer, a tuning
reactor, and a damping burden for ferroresonance suppression.
The inductance of the tuning reactor is adjusted at the factory
to resonate with the equivalent capacitance of the capacitor
voltage divider at the rated frequency to obtain a correct phase
and ratio relationship between the primary voltage and the
secondary voltage. The capacitor voltage transformer is used in
place of inductive transformers in very high voltage situations
for metering, protection relaying and synchronizing, and for
power line coupling applications.
ISSUE:
What is the proper classification of the capacitor voltage
transformer under the HTSUSA?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1 provides that classification is determined
according to the terms of the headings and any relative chapter
or section notes.
The merchandise was entered under subheading 8504.21.00,
HTSUSA, which provides for: "[l]iquid dielectric transformers:
[h]aving a power handling capacity not exceeding 650 kVA."
However, the merchandise was liquidated under subheading
8543.90.80, HTSUSA, which provides for: "[e]lectrical machines
and apparatus, having individual functions, not specified or
included elsewhere in this chapter; parts thereof: [p]arts:
[o]ther."
Webster's Third New International Dictionary, Merriam-
Webster Inc., Springfield, Mass., 1986, defines the following
terms:
Transformer: A device employing the principle of mutual
induction to convert variations of current in a primary
circuit into variations of voltage and current in a
secondary circuit and typically consisting of two separate
coils usually with different numbers of turns wound on the
same closed laminated iron core.
Capacitor: A device giving large capacitance or desired
values of capacitance usually consisting of conducting
plates or foils separated by thin layers of dielectric (as
air, paraffin paper, or mica), the plates on opposite sides
of the dielectric layers being oppositely charged by a
source of voltage and the electrical energy of the charged
system being stored in the polarized dielectric with the
capacitance proportional to the area and dielectric constant
of the dielectric layer and inversely proportional to its
thickness - called also condenser.
Capacitance: The property of an electric nonconductor that
permits the storage of energy as a result of electric
displacement when opposite surfaces of the nonconductor are
maintained at a difference of potential (as in a capacitor),
its measure being the ratio of the charge on either surface
to the potential difference between the surfaces and its
value for a capacitor being the sum of the combined values
of its several dielectric plates - called also capacity.
The protestant claims that the capacitor voltage transformer
is classifiable as a transformer under the HTSUSA. It is argued
that for GRI 3(b) purposes, the essential character of the
merchandise is the transformer unit, not the capacitor voltage
divider. We agree with this analysis. GRI 3(b) provides:
Mixtures, composite goods consisting of different materials
or made up of different components, and goods put up in sets
for retail sale, which cannot be classified by reference to
3(a), shall be classified as if they consisted of the
material or component which gives them their essential
character, insofar as this criterion is applicable.
We agree with the argument that the essential character of
the merchandise is the transformer unit. In fact, the
merchandise is called a capacitor voltage transformer. Also, as
the protestant points out, the term "dielectric" is included in
subheading 8504.21.00, HTSUSA. It is our position that, because
of the inclusion of that term in the subheading, the tariff
schedule anticipates the incorporation of the capacitor function
with the transformer unit.
We have been advised by our technical staff that the article
is an instrument transformer. According to the staff, an
instrument transformer is one that is "used to sense voltage or
current in both electronic circuits and power systems. There are
two types, potential transformers and current transformers." The
staff further stated that "[t]he fact that this particular
transformer has a voltage divider which is a resistor connected
across a voltage source in order to obtain a fraction of the
total voltage does not mitigate the fact that it is a type of
transformer. Its only purpose is to reduce the voltage to a
level where it can be handled by the magnetic unit to the
appropriate secondary voltage(s)."
In understanding the language of heading 8504, HTSUSA, the
Explanatory Notes may be utilized. The Explanatory Notes,
although not dispositive, are to be used to determine the proper
interpretation of the HTSUSA. 54 Fed. Reg. 35127, 35128
(August 23, 1989). Explanatory Note 85.04(I) (p.1338) provides
that:
Certain transformers are designed for particular purposes,
e.g., matching transformers for matching impedance of one
circuit with that of another, and instrument transformers
(current or voltage transformers, combined instrument
transformers) used to step down or step up voltages or
currents to the level of the connected equipment, e.g.,
measuring instruments, electricity meters or protective
relays.
As both the laboratory report and the Explanatory Note point
out, the subject capacitor voltage transformer is an instrument
transformer for classification purposes. It is used to regulate
and reduce the amount of voltage from the primary voltage to the
secondary voltage.
You claim that the merchandise is classifiable as a part
under subheading 8543.90.80, HTSUSA. However, it is stated in
Note 2(a) to Section XVI that "[p]arts which are goods included
in any of the headings of chapters 84 and 85 (other than headings
8485 and 8548) are in all cases to be classified in their
respective headings." It has also been claimed that the
merchandise is classifiable under subheading 9030.90.80, HTSUSA,
which provides for: "[o]ther instruments and apparatus for
measuring or checking electrical quantities; parts thereof:
[p]arts and accessories: [o]ther." Again, as applies to heading
8543, HTSUSA, Note 2(a) to Chapter 90 states that "[p]arts and
accessories which are goods included in any of the headings of
this chapter or of chapter 84, 85 or 91 (other than heading 8485,
8548 or 9033) are in all cases to be classified in their
respective headings." It is our position that if the merchandise
is considered to be a part, then under the above cited notes, it
is classifiable in its respective heading, which is heading 8504,
HTSUSA.
HOLDING:
The subject capacitor voltage transformers are classifiable
under subheading 8504.21.00, HTSUSA, which provides for:
"[l]iquid dielectric transformers: [h]aving a power handling
capacity not exceeding 650 kVA." The protest should be granted.
A copy of this decision should be attached to the Customs Form 19
and mailed to the protestant as part of the notice of action on
the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division