CLA-2: OT:RR:CTF:TCM H192319 TNA
Mr. Jan De Beer
Frost, Brown, Todd, LLC
250 West Main Street, Suite 2800
Lexington, KY 40507-1749
RE: Reconsideration of NY N180158; Classification of Separator Machines
Dear Mr. De Beer:
This letter is in response to your request, dated October 11, 2011, on behalf of your client, Steinert US, LLC (“Steinert”), for reconsideration of New York Ruling Letter (“NY”) N180158, dated September 9, 2011, which classified separator machines under subheading 8479.89.98, Harmonized Tariff Schedule of the United States (“HTSUS”), as “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other.” We have reviewed NY N180158 and found it to be correct. For the reasons set forth below, we hereby affirm NY N180158.
FACTS:
The subject merchandise consists of four separator machines: 1) MTE Electromagnetic Drum Separator (“MTE”); 2) MTP Permanent Magnetic Drum Separator (“MTP”); 3) UME Electromagnetic Suspension Separator (“UME”); and 4) UMP Permanent Suspension Magnet (“UMP”) Separator. All four models use magnets to separate and recover ferrous or non-ferrous metals from municipal waste, coal, shredded material, and/or other materials.
In its original ruling request, Steinert submitted that the primary function of the “MTE” and the “MTP” separator machines was the separation of ferrous from non-ferrous materials. The “MTE” and the “MTP” drums are available in either axial or radial pole versions. The “MTE” radial pole incorporates ANOFOL field coils within the drum to create a potent holding force. The “MTP” version uses permanent magnets and can also be made with ordinary magnets or neodymium iron boron magnets. The “MTE” and the “MTP” separator machines can be “overfed” or underfed”. The “overfed” drum sits at the end and below the material moving on a conveyor belt. The substances that are being sorted are dropped onto the drum and the ferrous materials are then attracted to the drum’s magnetized portion. The non-ferrous materials fall off the conveyor belt while the ferrous materials are properly deposited and separated.
The “underfed” drum sits at the end of a conveyor belt with the belt feeding the substances to be sorted into an overhead drum. The drum rotates in the opposite direction from the conveyor belt which enables the non-ferrous materials to fall off the belt and the ferrous materials to be attracted to the drum. The drum stops rotating when the magnetic core ends and the metal is deposited in the proper location. This design enables proper separation and the ferrous materials to be reused in various capacities.
The “UME” and “UMP” separator machines use heavy duty suspended magnets that collect ferrous products from bulk material using a conveyor belt to collect and separate the iron. In both models, a powerful magnet is suspended longitudinally above a conventional conveyor belt that is moving the materials to be sorted. This creates a magnetic field that attracts the ferrous materials from the material flow, the strength of which removes the iron articles from the conveyor belts despite the high speeds of the conveyor belts and the significant depth of bulk material being sorted. The ferrous materials that are attracted to the magnet are transported via a circular, magnetized belt with the help of carrier bars to a separate deposit location.
In NY N180158, U.S. Customs and Border Protection (“CBP”) classified the separator machines under subheading 8479.89.98, Harmonized Tariff Schedule of the United States (“HTSUS”), as “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other.”
ISSUE:
Whether the subject separator machines are classified in heading 8474, HTSUS, as “Machinery for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances, in solid (including powder or paste) form,” or in heading 8479, HTSUS, as “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter”?
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 may then be applied.
The headings at issue are as follows:
8474 Machinery for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances, in solid (including powder or paste) form; machinery for agglomerating, shaping or molding solid mineral fuels, ceramic paste, unhardened cements, plastering materials or other mineral products in powder or paste form; machines for forming foundry molds of sand; parts thereof:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Note 3 to Section XV, HTSUS, provides, in pertinent part, the following:
Throughout the schedule, the expression “base metals” means: iron and steel, copper, nickel, aluminum, lead, zinc, tin, tungsten (wolfram), molybdenum, tantalum, magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony, manganese, beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium (columbium), rhenium and thallium.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system. CBP believes the EN’s should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The EN to heading 8474, HTSUS, states, in pertinent part, that:
This heading covers:
(I) Machinery of a kind used, mainly in the extractive industries, for the treatment (sorting, screening, separating, washing, crushing, grinding, mixing or kneading) of solid mineral products (in general the products of Section V of the Nomenclature) such as earth (including earth colours), clay, stone, ores, mineral fuels, mineral fertilisers, slag cement or concrete….
Certain machines of the kind normally used for the treatment of mineral products can, as a secondary use, also treat non mineral products (e.g., wood or bone); such machines remain in this heading. However, the heading does not extend to machinery specially designed for carrying out similar operations on non mineral materials (e.g., for sorting or screening wood chips; for grinding wood flour; for grinding or mixing chemicals or organic colouring materials; for grinding bone, ivory, etc.; for agglomerating or moulding cork powder).
(I) MACHINES REFERRED TO IN CATEGORY (I) ABOVE (MACHINES MAINLY FOR THE EXTRACTIVE INDUSTRIES)
…
The heading also covers sorting or separating machines incorporating magnetic or electrical devices (e.g., electrostatic separating machines), and machines using electronic or photoelectric detecting devices, for example, sorting equipment for uranium or thorium ore, operating by radioactivity measurement.
The EN to heading 8479, HTSUS, states, in pertinent part, that:
This heading is restricted to machinery having individual functions, which:
(a) Is not excluded from this Chapter by the operation of any
Section or Chapter Note.
and (b) Is not covered more specifically by a heading in any other
Chapter of the Nomenclature.
and (c) Cannot be classified in any other particular heading of this
Chapter since :
(i) No other heading covers it by reference to its method of
functioning, description or type.
and (ii) No other heading covers it by reference to its use or to the
industry in which it is employed.
or (iii) It could fall equally well into two (or more) other such
headings (general purpose machines)….
For this purpose the following are to be regarded as having “individual functions”:
(A) Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other machine or appliance….
Insofar as heading 8479, HTSUS, covers machines not specified elsewhere, if the subject merchandise is described by the terms of heading 8474, HTSUS, it is classified there. In your request for reconsideration, you argue that the subject separator machines are described by the terms of heading 8474, HTSUS, as machinery for sorting mineral substances. You argue that the essential character and overriding purpose of the subject merchandise is to sort and separate ferrous and non-ferrous materials from other minerals using advanced magnetic technology. You note that the subject separator machines are marketed to industries involved in recycling, scrap operations and mining.
By raising the purpose, actual use, and marketing of the subject merchandise, you seem to argue that heading 8474, HTSUS, is a principal use provision. Thus, you argue that because the subject machines are principally used in the manner of the class or kind of machines used to separate or sort mineral products, they are described by the terms of heading 8474, HTSUS. In response, we examine whether heading 8474, HTSUS, fits the definition of a principal use provision.
A principal use provision is generally indicated by the terms of the heading or subheading, and the phrase “of a kind used for…” typically characterizes “principal use” provisions.” See Pomeroy Collection, Ltd. v. United States, 32 C.I.T. 526, citing Len-Ron Mfg. Co. v. United States, 334 F.3d at 1313, n.7. However, it is largely acknowledged that a heading may be found to be a use provision even when this phrase does not appear in the heading text. See Len-Ron Mfg. Co. v. United States, 24 C.I.T. at 965 n.32, aff’d by Len-Ron Mfg. Co., 334 F.3d 1304. Furthermore, “principal use” is defined as the use “which exceeds any other single use of the article.” Minnetonka Brands v. United States, 24 C.I.T. 645.
In the present case, heading 8474, HTSUS, does not contain the phrase “of a kind used for…” However, this phrase appears in EN 84.74, whose text, although not legally binding, is persuasive. Furthermore, the text of heading 8474, HTSUS, in providing for “machinery for sorting, screening, separating… ores or other mineral substances,” implies use in that the machines classified therein are used for the named processes. Thus, we agree that heading 8474, HTSUS, is a use provision, and our analysis follows.
While Additional U.S. Rule of Interpretation 1(a), HTSUS, provides general criteria to discern an article’s principal use, it does not provide specific criteria for individual tariff provisions. The courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (1976). See also Lenox Collections v. United States, 19 CIT 345, 347 (1995).
In terms of the subject merchandise’s physical characteristics, the subject separator machines extract specific items from large amounts of municipal waste and other materials. They do this by way of powerful and specialized magnetic technology. Magnets attract metal objects, not mineral objects. Thus, the physical characteristics of the subject merchandise do not support finding that the merchandise belongs to the same class or kind as machines that separate or sort minerals.
In terms of use in the same manner as merchandise which defines the class, the subject separator machines are used in recycling and scrap operations by using magnets to extract metal objects from the municipal waste and other materials that pass through them. Because these magnets do not extract any other materials but metal objects rather than mineral objects, this factor does support finding that the subject separator machines belong to the class or kind of machines used for the sorting of mineral products.
In terms of the channels of trade, environment of sale, and economic practicality of using the subject merchandise, the machines classified in heading 8474, HTSUS, are those used in the extraction industries. See EN 84.74. The term “extraction industries” has been defined as “an industry concerned with obtaining natural products, esp. non-replaceable raw materials such as coal, metallic ore, etc.” See www.oed.com. This definition is consistent with other lexicographic sources. See, e.g., Webster’s Third New International Dictionary of the English Language, Unabridged 806 (1993) (defining “extractive” as “tending to or resulting in withdrawal of natural resources by extraction with no possibility of replenishment of the resources (mining, quarrying and other extractive occupations.)”) Similarly, in prior rulings, CBP has excluded merchandise such as machines that treat concrete paving stones from heading 8474, HTSUS, because they were not used mainly in the extractive industries. See, e.g., HQ 967072, dated June 30, 2004. The subject machines are used in recycling and scrap operations. Thus, they are not marketed or sold as machines for the extraction industries. They are more akin to the machines of HQ 967072, and the economic practicality of using them in the extraction industry is small. Thus, these factors do not support finding that the subject merchandise belongs to the class or kind of machines that separate or sort minerals.
Overall, the majority of the Carborundum factors do not support finding that the subject merchandise belongs to the class or kind of machines that separate or sort minerals. The subject merchandise’s physical characteristics, its use in the same manner as merchandise which defines the class, its channels of trade, environment of sale, and the economic practicality of using the subject merchandise all lead us to conclude that the subject machines are of a different class or kind. As a result, we find that the subject separator machines are not classified in heading 8474, HTSUS.
You also argue that ferrous materials meet the definition of the phrase “other mineral substances” as it appears in heading 8474, HTSUS. In defining this term, you consulted the Mineralogical Society of America and the International Mineralogical Association to determine that “iron” is among the many naturally occurring mineral substances. As a result, you argue that the subject separator machines, because they separate or sort materials made of iron, meet the terms of heading 8474, HTSUS, and should be classified there.
While we acknowledge that your cited sources support the notion that the term “iron” can mean the mineral that is found in food, in food supplements, and is used to treat anemia, we dispute your contention that this is type of iron at issue in the present case. The subject separator machines are used solely for the purpose of extracting specific items from large amounts of municipal waste and other materials. They do this by way of powerful and specialized magnetic technology. This means that the subject machines are designed to attract and sort metal objects out of the multitude of material on the machines’ conveyor belts. “Iron” as a metal is distinguishable from the mineral “iron” that is found in food. In fact, throughout the tariff schedule, “iron” is defined as a metal. For example, Section XV, HTSUS, provides for base metals and articles of base metal. Note 3 to Section XV, HTSUS, states that “throughout the [tariff] schedule, the expression ‘base metals’ means: iron and steel, copper, nickel, aluminum…” See Note 3 to Section XV, HTSUS.
Consistent with Note 3, iron is classified as a metal of Chapter 72, HTSUS, and articles of iron are classified in Chapter 73, HTSUS. See Chapters 72 and 73, HTSUS. This classification is also consistent with the definition of “iron” found in multiple lexicographic sources. See, e.g., www.oed.com (defining “iron” as “a metal, the most abundant and useful of those used in the metallic state; very variously employed for tools, implements, machinery, constructions, and in many other applications.”). See also Webster’s College Dictionary 754 (4th Edition 2007) (defining “iron” as “a white, malleable, ductile, metallic chemical element that can be readily magnetized, rusts rapidly in moist or salty air, and is vital to plant and animal life: it is the most common and important of all metals, and its alloys, as steel, are extensively used.”)
Thus, in the present case, the term “iron” is meant as a metal, not as a mineral, and the subject separator machines cannot be said to be of the class or kind that separates minerals from municipal waste. As a result, the subject merchandise is not described by the terms of heading 8474, HTSUS, and we examine alternate headings.
Heading 8479, HTSUS, provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter.” The subject merchandise is not described by any other heading in Chapter 84, HTSUS. Furthermore, it meets the definition of having an individual function because it is mechanical device that performs it function without the aid of any other machine or appliance. See EN 84.79. As a result, the subject merchandise meets the terms of heading 8479, HTSUS, and will be classified there.
HOLDING:
Under the authority of GRI 1, the subject separator machines are classified in heading 8479, HTSUS. Specifically, they are provided for in subheading 8479.89.98, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other.” As such, the duty rate is 2.5% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY N180158, dated September 9, 2011, is AFFIRMED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division