CLA-2 OT:RR:CTF:EMAIN H250623 SK
Port Director
U.S. Customs and Border Protection
Port of Houston (Airport)
2350 N. Sam Houston Pkwy E. #900
Houston, TX 77032-3100
Attn: Charles G. Perez, Port Director
RE: Application for Further Review of Protest Number 5309-13-100341; Tariff classification of a “thruster overhaul kit”
Dear Port Director:
This is in response to an Application for Further Review (AFR) of Protest No. 5309-13-100341, timely filed on September 16, 2013. The AFR concerns U.S. Customs and Border Protection’s (CBP) classification of a thruster overhaul kit under the Harmonized Tariff Schedule of the United States (HTSUS).
One entry of the subject merchandise was entered on July 5, 2012, under subheading 8479.90.94, HTSUS, which provides for other parts of machines or mechanical appliances. The entry was liquidated on May 31, 2013, under subheading 8484.20.00, HTSUS, as mechanical seals.
FACTS:
The subject article is an overhaul kit consisting of all components necessary to overhaul six azimuth thrusters. The kit includes a propeller shaft seal, O-rings, spherical roller bearings, bolts, sealings, steel balls, V-rings, screws, etc. The components are packaged together as a kit.
ISSUE:
Whether the subject thruster overhaul kit is classified in subheading 8479.90, HTSUS, as other parts of machines or mechanical appliances or in subheading 8484.20, HTSUS, as a mechanical seal.
LAW AND ANALYSIS:
This matter is protestable under 19 U.S.C. 1514(a)(2) as a decision on classification. The protest was timely filed on September 16, 2013, within 180 days of liquidation, pursuant to 19 U.S.C. 1514(c)(3). Further Review of Protest 5309-13-100341 is properly accorded pursuant to 19 CFR § 174.24(a), as the protestant has alleged that the decision against which the protest was filed is inconsistent with CBP rulings with respect to substantially similar merchandise. Specifically, protestant argues that CBP has classified substantially similar merchandise in subheading 8479.90, HTSUS. AFR was forwarded for our consideration.
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will 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 will then be applied in order.
GRI 3 provides, in pertinent part:
When, by application of rule 2(b) or for any other reason, good are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
* * *
(b) 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… .
The HTSUS provisions under consideration are as follows:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
8479.90 Parts
8484 Gaskets and similar joints of metal sheeting combined with other material or of two or more layers of metal; sets or assortments of gaskets and similar joints, dissimilar in composition, put up in pouches, envelopes or similar packings; mechanical seals:
8484.20 Mechanical seals
Note 2 to Section XVI, to which Chapter 84 belongs, states, in pertinent part:
Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts
of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 84.79 or 85.43) are to be classified with the machines of that kind or in heading 84.09, 84.31, 84.48, 84.66, 84.73, 85.03, 85.22, 85.29 or 85.38 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 85.17 and 85.25 to 85.28 are to be classified in heading 85.17….
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), constitute the official interpretation of the Harmonized System 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 the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to GRI 3(b) provide, in pertinent part:
(VII) In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(VIII) The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
The EN to Section XVI provide, in pertinent part:
(II) PARTS
(Section Note 2)
In general, parts which are suitable for use solely or principally with particular machines or apparatus (including those of heading 84.79 or heading 85.43), or with a group of machines or apparatus falling in the same heading, are classified in the same heading as those machines or apparatus subject, of course, to the exclusions mentioned in Part (I) above.
* * *
The above rules do not apply to parts which in themselves constitute an article covered by a heading of this Section (other than headings 84.87 and 85.48); these are in all cases classified in their own appropriate heading even if specially designed to work as part of a specific machine. This applies in particular to:
* * *
(7) Gaskets and similar joints of heading 84.84.
* * *
* * * * *
EN 84.79 provides, in pertinent part: This heading is restricted to machinery having individual functions, which:
* * *
(b) Is not covered more specifically by a heading in any other Chapter of the Nomenclature... .
EN 84.84 provides, in pertinent part, as follows:
(C) MECHANICAL SEALS
Mechanical seals (e.g., sliding-ring seals and spring-ring seals) constitute mechanical assemblies which form a leak proof joint between flat, rotating surfaces to prevent high-pressure leakage in the machine or apparatus on which they are mounted, resisting the pressure and stress exerted on them by moving components or due to vibrations, etc.
The structure of these seals is generally fairly complex. They comprise:
(i) fixed parts which, when the seal is placed, become integral with the machine or apparatus; and
(ii) movable parts: rotating elements, spring elements, etc.
It is specifically on account of these movable parts that the articles are called “mechanical seals”.
These seals act as anti-vibration devices, bearings, actual seals and, in some cases, as unions. These seals have numerous applications, including in pumps, compressors, mixers, agitators and turbines; they are produced from a variety of materials and in various configurations.
As an initial matter, we note that both the protestant and CBP agree that the subject thruster overhaul kit is classifiable as a set pursuant to GRI 3(b). Further, there is no dispute that the propeller shaft seal component (referenced “PROP. SHAFT SEAL UPGR”) imparts the essential character to the set. In this regard we note that the propeller shaft seal performs a crucial function in relation to the use of the goods (providing a seal) and its value in relation to the other kit components is significantly higher. See EN (X) to GRI 3(b). Consequently, in accordance with GRI 3(b), the thruster overhaul kit will be classified as if it consisted only of the propeller shaft seal.
Likewise, we are in agreement with the protestant that as a legal matter, if the subject propeller shaft seal is classifiable as a mechanical seal of heading 8484, it must be classified under that provision per Note 2(a) to Section XVI, HTSUS, as opposed to being classified as a part of a good of heading 8479, HTSUS, by operation of Note 2(b) to Section XVI, HTSUS. The determinative issue, therefore, is whether the subject propeller shaft seal is classified in heading 8484, HTSUS, which eo nomine provides for, in pertinent part, mechanical seals.
As stated in the technical manual submitted by the Protestant, and set forth in pertinent part below, the subject seal is of the “radial face type” and the seal function is provided by:
… continuous rubbing contact between a rotating Manatex fiber face and a stationary silicon carbide seat. This contact is sustained by spring pressure…A back up water excluding feature is provided by two high quality lip seal rings mounted within the static seat housing and a stainless steel liner (part of the body assembly) rotating with the shaft and propeller. Between the face seal and the lip seals, inside the oil-filled sealed chamber, is fitted a radial pulsation damper assembly designed to absorb and reduce operationally induced pressure pulses and spikes that can have a detrimental effect on sealing performance.
The subject merchandise’s technical description depicts a mechanical assembly that forms a leak proof joint between flat and rotating surfaces. This is consistent with the description of mechanical seals covered by heading 8424, HTSUS, as described by EN 84.84. We further note that “radial face” type shaft seals are a type of mechanical seal. See “Radial Face-Type Mechanical Shaft Seals: Developments by Crane Packing Ltd., in Fluid Sealing Techniques" https://doi.org/10.1108/eb052924 (site last visited 3 July, 2018).
Protestant argues that the subject propeller shaft seal is not a mechanical seal and
therefore classification in heading 8484, HTSUS, is not proper. In support of this argument, protestant notes the following differences between a mechanical seal and the subject propeller shaft seal:
Mechanical seals are designed for high-pressure leakage while the propeller shaft seal is designed for low pressure (i.e., equalized internally by oil pumped from a header tank above sea level which allows the seals to operate at approximately 1 PSI;
Mechanical seals are designed for higher speed of around 9,000 RPM while the propeller shaft seal is designed for lower speeds of around 120 RPM, and;
Mechanical seals are mass produced general parts for multiple engines while the propeller shaft seal is designed for a specific thruster.
Protestant states that in New York Ruling Letter (NY) N174262, dated July 28, 2011, CBP classified a radial shaft seal consisting of a rigid steel support encapsulated with elastomeric compound with a garter spring under subheading 8409.91.50, HTSUS, as a part suitable for use solely with an engine. The Protestant notes that “[J]ust as the propeller shaft seal is installed around a rotating propeller shaft, the radial shaft seal in the ruling was installed around a rotating shaft to seal engine-lubricating fluids inside an internal combustion engine. In the same way that the propeller shaft seal can only be used with a thruster, the radial shaft seal could only be used with the engine and was classified accordingly as part of an engine.” Protestant further notes that CBP rulings that classified a mechanical seal under 8484.20, HTSUS, are for seals that were specifically found to have a “range of industrial applications.” See NY N011171 dated May 23, 2007, and NY F84492, dated April 17, 2000. Protestant also alleges that CBP has ruled that classification under subheading 8479.90, HTSUS, is not appropriate when a part may be used interchangeably in a number of machines. See NY N196538, dated January 10, 2012. Protestant concludes that as the subject propeller shaft seal is designed and manufactured only for use with a thruster and can only be used with a thruster on the propeller shaft, it is properly classified under subheading 8479.90, HTSUS, as a part of a machine of heading 8479, HTSUS, and does not fall under an exception.
As regards protestant’s statement that mechanical seals are usually designed for “high-pressure leakage and higher speeds of around 9,000 RPM,” we do not find those statements supported by technical literature which indicates that “mechanical seals are well-suited for sealing [in] low and high pressures and circumferential speeds” (See https://www.ksb.com/centrifugal-pump-lexicon/shaft-seal/191452/ (site last visited 3 July, 2018)) and that such seals “operate in a diversity of pressure, velocity and temperature conditions” (See “Principal Research Areas on Mechanical Face Seals,” by B. Tournerie and J. Frene, https://pdfs.semanticscholar.org/e784/ef782a9422094d58c7081f1827eb6cea857f.pdf (site last visited 3 July, 2018)).
CBP also disagrees with protestant’s broad inference that mechanical seals of heading 8484, HTSUS, are “mass produced general parts for multiple engines,” and that the subject propeller shaft seals designed for a specific thruster cannot be mechanical seals. In this regard, we note while mechanical seals exhibit basic design principles that are applicable in many environments, there are many variations of mechanical seals and they often are engineered to a specific environment and for use with a particular machine or apparatus. See https://www.mechanicalseals.net (site last visited 3 July, 2018), which states:
In practical use, the basic rotating face mechanical seal principle is adaptable to serve a tremendous number of sealing needs: standard mechanical seals can suit most requirements-including temperatures to 500 degrees F and shaft speeds to 3600 RPM through the choice of secondary seal and the combination of seal and seat face materials which are offered. Seals can be ordered in balanced configurations to seal pressures above 200 psi, or used in a multiple for extremely high pressures or especially severe fluid services....Special mechanical seals can be furnished to meet the most demanding of industrial applications considering pressure, temperature, speed or fluid.
For this reason, we do not find that NY N011171 and NY F84492 establish precedent that mechanical seals of heading 8484, HTSUS, must be interchangeable and for general use only. In those rulings, CBP merely acknowledged that mechanical seals are used in a range of industrial applications. For this same reason, we do not consider Protestant’s argument regarding NY N196538 germane to the instant analysis.
Lastly, we do not find NY N174262 as precedential in this case in that the radial shaft seal at issue in that ruling is not substantially similar to the subject merchandise. The radial shaft seal of NY N174262 differs from the propeller shaft seal at issue because it is not a mechanical assembly and it is a rigid steel support that does not possess movable, rotating elements. It only applies pressure against the shaft to create a seal.
HOLDING:
By application of GRI 3(b) and Section XVI Note 2(a), the subject thruster repair kit is
classified in heading 8484, HTSUS, specifically subheading 8484.20.00, HTSUS, which provides for “[G]askets and similar joints of metal sheeting combined with other material or of two or more layers of metal; sets or assortments of gaskets and similar joints, dissimilar in composition, put up in pouches, envelopes or similar packings; mechanical seals: mechanical seals.”
The 2013 column one, general rate of duty is 3.9 percent 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 online at http://www.usitc.gov/tata/hts/.
You are instructed to DENY the protest. 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 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, CBP will make the decision available to CBP personnel and the public via www.cbp.gov, the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division