CLA-2 OT: RR: CTF: TCM: H258774 ERB

Port Director
Port of Los Angeles International Airport
U.S. Customs and Border Protection
11099 S. La Cienega Blvd.,
Los Angeles, CA 90045

Attn: Steven Durschlag, Import Specialist

RE: Application for Further Review of Protest Number 2720-14-100828; Tariff classification of a pneumatic cylinder actuator and pneumatic positioner

Dear Port Director:

This is in response to the Application for Further Review (AFR) of Protest Number 2720-14-100828, dated August 19, 2014, filed by Unitrans International Logistics, on behalf of its client Control Components, Inc. (CCI). The AFR concerns U.S. Customs and Border Protection’s (CBP) classification of one entry of a double-acting pneumatic cylinder actuator system that was imported with an electro-pneumatic positioner, under the Harmonized Tariff Schedule of the United States (HTSUS). No samples were submitted for inspection.

FACTS:

The subject merchandise was entered on September 23, 2013. CBP liquidated the subject entry on March 20, 2014, classifying the goods in subheading 8481.80.90, HTSUS, which provides for, “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other.” CCI filed this AFR on August 19, 2014, arguing that the goods are properly classified under subheading 8412.31.00, HTSUS, which provides for, “Other engines and motors, and parts thereof: Pneumatic power engines and motors: Linear acting (cylinders)”.

The subject merchandise is a pneumatic cylinder actuator and electro-pneumatic positioner. The articles have various uses but generally speaking they are components of control valve systems used in the oil and gas industry, nuclear or fossil power plants. An actuator is a type of motor responsible for moving or controlling a mechanism or system. Pneumatic, in this context, means the motor is powered by compressed or pressurized air. “Cylinder” in this context, specifically a pneumatic cylinder, is where the power of the compressed gas produces a force in a reciprocating linear motion. The electro-pneumatic positioner attaches to the pneumatic cylinder actuator. The positioner converts a DC input signal into a pneumatic output for positioning and control of the valves, which are a separate component and are not included in this Protest, nor are they imported with the subject actuator and positioner.

ISSUE:

Whether the subject pneumatic cylinder actuator and electro-pneumatic positioner is classified together as a pneumatic powered motor of heading 8412, HTSUS, or whether it is classified together as a valve, of heading 8481, HTSUS, or whether the actuator and positioner are classified separately.

LAW AND ANALYSIS:

Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a), as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429 § 22103(2) (b)(ii), (iii)(codified as amended at 19 U.S.C. § 1514(c)(3)(2006)).

Further Review of Protest Number 2720-14-100828 is properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(b), because the protest involves questions of law or fact which have not been ruled upon by the Commissioner or Customs or his designee or by the Customs Courts. Specifically, the application of Note 4 to Section XVI, which covers Chapter 84, to pneumatic cylinder actuators and electro pneumatic positioners.

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). 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 may then be applied.

The HTSUS provisions under consideration are the following:

8412 Other engines and motors, and parts thereof:

8412.31 Pneumatic power engines and motors:

8412.31.00 Linear acting (cylinders)

*** 8481 Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof:

8481.80 Other appliances: 8481.80.90 Other

Note 4 to Section XVI which includes Chapter 84 states the following

Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.

Note 5 to Section XVI which includes Chapter 84 states the following

For purposes of these notes, the expression “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 85.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTS and are thus useful in ascertaining the proper classification of merchandise. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The EN to Section XVI, which includes Chapter 84, subsection (VII) Functional Units states the following, in relevant part:

This Note applies when a machine (including a combination of machines) consists of separate components which are intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or, more frequently, Chapter 85. The whole then falls to be classified in the heading appropriate to that function, whether the various components (for convenience or other reasons) remain separate or are interconnected by piping (carrying air, compressed gas, oil, etc.), by devices used to transmit power, by electric cables or by other devices.

For the purposes of this Note, the expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus exclude machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole.

The EN to 84.12, subsection (C), regards the Pneumatic Power Engines and Motors, which are provided for therein. It states, in relevant part:

These engines use an external source of compressed air (or other gases) and, in principle, resemble a steam piston engine or, in some cases, a steam turbine. …

This group also includes:

(2) Pneumatic cylinders consisting, for example, of a brass or steel barrel and a piston operated by compressed air applied on one side (single-acting) or on both sides (double-acting) of the piston, the energy of the gas under pressure being converted into a linear motion. These cylinders are used on machine-tools, construction machinery, steering mechanisms, etc.

(3) Pneumatic valve actuators, presented separately consisting of a metal casing containing a piston which, by means of a pin perpendicular to the piston rod, converts the linear motion caused by the action of a compressed gas into a rotary motion in order to operate a plug valve or other appliance with a rotating mechanism.

The EN 84.81 states the following, in relevant part:

This heading covers taps, cocks, valves and similar appliances, used on or in pipes, tanks, vats or the like to regulate the flow (for supply, discharge, etc.), of fluids (liquid, viscous or gaseous), or, in certain cases, of solids (e.g., sand). The heading includes such devices designed to regulate the pressure or the flow velocity of a liquid or a gas.

We note at the outset that GRI 1 requires that classification be determined first according to the terms of the heading of the tariff schedule and any relative section of chapter notes. The subject actuators and subject positioners are both articles of Chapter 84. Therefore, Note 4 to Section XVI, which covers Chapter 84 controls our analysis here. Section Note 4 requires that the goods be classified as a whole if they are separate machines which are intended to contribute together to a clearly defined function covered by one of the headings of Chapter 84 or 85. The phrase in Section Note 4, HTSUS, “intended to contribute together to a clearly defined function,” is clarified by EN (VII) to Section Note 4, which states in relevant part:

[T]he expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole.

Additionally, the courts have provided guidance on the application of Section Note 4, and specifically, have considered what goods, when imported together, compose a “functional unit” as it is understood in the EN (VIII) to Note 4. In Dell Products LP v. United States, 714 F. Supp. 2d 1252, 1258 (C.I.T. 2010), aff’d 642 F.3d 1055 (Fed. Cir. 2011), the Court of International Trade (CIT) concluded that spare batteries were not part of the “functional unit” and thus, were not classifiable under heading 8471, HTSUS, pursuant to Note 4 to Section XVI, because they were not essential to the portable computing function of a notebook computer. Id at 1259. That said, the CIT distinguished between spare batteries and primary batteries which were encased in the computer in its condition as imported, and which served as the primary power source and contributes to the functioning of the unit as a whole. See also HQ H245902, dated January 28, 2015, (where CBP applied the Dell Products framework to find that Bluetooth wireless earphones were not essential to the functional unit as a whole; citing EN (VII), Section Note 4); and see HQ H238488, dated June 25, 2014.

Here, the “clearly defined function” of the two machines is that the electro-pneumatic positioner provides power to the pneumatic cylinder actuator which, in turn, operates to open and close the valves they are attached to after entry. The role of each component is clear, and neither component can fulfill its function without the other. Together, they are a “functional unit.”

Moreover, the EN (VII) to Section XVI, specifically describes an example in which two machines of Chapter 84 are combined to form a “functional unit” pursuant to Note 4 to Section XVI.

Therein it states:

The following are examples of functional units of this type within the meaning of Note 4 to this Section:

Hydraulic systems consisting of a hydraulic power unit (comprising essentially a hydraulic pump, an electric motor, control valves and an oil tank), hydraulic cylinders and the pipes or hoses needed to connect the cylinders to the hydraulic power unit (heading 84.12).

Similar to the example of a hydraulic system, which includes separate components like a pump, motor, control valves and an oil tank, the subject merchandise instead uses compressed air (pneumatic) to power the motors which controls valves. The actuator and the positioner are not, of themselves, the valves. The two are mounted upon one another and together they perform the mechanical function of the unit which is to power the pneumatic movement which forces the valves to open and close. Thus, by operation of Note 4 to Section XVI, classification of this combination of machines falls in the heading appropriate to the machine’s function, which is found in Chapter 84.

In the context of Note 4 to Section XVI, the next task for CBP is to determine where the whole product falls to be classified, in accordance with its function. The function of the subject merchandise is as a motor, which powers the opening and closing of valves, as previously stated. The text of heading 8412, HTSUS, which provides for motors, describes this function. This also comports with the language of the EN 84.12, which provides for pneumatic power engines and motors, specifically pneumatic cylinders and pneumatic valve actuators.

Further, CBP has consistently classified goods substantially similar to the subject merchandise in heading 8412, HTSUS. See NY 860040, dated February 19, 1991 (classifying hydraulic and pneumatic cylinders and actuators in heading 8412, HTSUS); NY 871551, dated March 20, 1992 (classifying pneumatic linear thrusters, which are pneumatic cylinder-driven actuators in subheading 8412.31.00, HTSUS, which provides for pneumatic power engine and motors: linear acting (cylinders), other than tie-rod type).

HOLDING:

By application of GRI 1, pursuant to Note 4 to Section XVI, which covers chapter 84, the subject merchandise is classified in heading 8412, HTSUS. Specifically, the pneumatic cylinder actuator and electro-pneumatic positioner are classified in subheading 8412.31.0080, HTSUSA (Annotated), which provides for, “Other engines and motors, and parts thereof: Pneumatic power engines and motors: Linear acting (cylinders): Other.” The column one, general rate of duty is free.

You are instructed to GRANT the protest.

In accordance with sections IV and VI of the CBP Protest/Petition Processing Handbook, 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 re-liquidation 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 of 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.


Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division