CLA–2 OT:RR:CTF:TCM H259317 MES
RE: Internal Advice; Classification of Keurig models K40, K45, K65, K75, K10 mini, and
Keurig Platinum Plus brewing systems
Port Director
U.S. Customs and Border Protection
Port of Chicago
5600 Pearl Street
Rosemont, Illinois 60018
ATTN: Louise Laport,
Supervisory Import Specialist
Dear Port Director:
This letter is in reply to your request for internal advice of October 2, 2014, initiated by counsel on behalf of Keurig, Inc. (“Keurig”), pertaining to the tariff classification of certain at-home brewer models. In preparation of this ruling, consideration was also given to the substance of the meeting between Keurig and its counsel and this office taking place on August 17, 2015. We also received the supplemental submissions provided by Keurig’s counsel on August 28, 2015.
FACTS:
The K40, K45, K65, K75, K10 mini, and Keurig Platinum Plus (collectively “Keurig Brewing Systems”) are at home brewing systems of varying height, width, and depth, with varying reservoir sizes, as well as features such as choice of cup size, auto-off features, and removable drip trays. The following are images of the K45 and the K10 Mini, two of the brewing systems at issue here:
The Keurig Brewing Systems are compatible with the line-up of K-Cup packs, sold separately, which include options such as coffee, tea, hot chocolate, lemonade, and soup.
ISSUE:
Whether the Keurig Brewing Systems are properly classified under subheading 8516.71.00, HTSUS, as other electrothermic appliances: coffee or tea makers, or under subheading 8516.79.00, HTSUS, as other electrothermic appliances: other.
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 2 through 6 may then be applied in order. Under GRI 6, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
The HTSUS provisions at issue are as follows:
8516 Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electrothermic hairdressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric flatirons; other electrothermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading 8545; parts thereof:
Other electrothermic appliances:
8516.71.00 Coffee or tea makers. . .
…
8516.79.00 Other
There is no dispute that the Keurig Brewing Systems are classified under subheading 8516, HTSUS, other electrothermic appliances. Therefore, the dispute arises at the eight-digit level, and whether the Keurig Brewing Systems are classifiable as other electrothermic appliances: coffee or tea makers or as other electrothermic appliances: other. Applying GRI 6, we must determine the proper classification of the instant Keurig Brewing Systems according to the terms of the subheadings.
Keurig claims that its Keurig Brewing Systems are classified as 8516.79.00, HTSUS, as other electrothermic appliances: other (i.e., that the subject merchandise does not fall under the scope of the provision for “coffee or tea makers” of subheading 8516.71.00). For support, Keurig produced advertisements relating to the expansion of the product lines of K-cups to which its Keurig Brewing Systems are now compatible, which includes options other than coffee or tea (e.g., soup, lemonade, hot cocoa). Moreover, Keurig’s advertisements reference the Keurig Brewing Systems as being able to brew beverages other than coffee and tea (e.g., the K45 “brews a… cup of coffee, tea, hot cocoa, or iced beverage in under one minute with the touch of a button…”). In NY N233651, CBP described the brewing systems in question as “…electric coffee brewers, Model numbers B31, B40, B60 and B70… single cup brewing systems, for household use… designed to be used with the K-Cup...” NY N233651 (Oct. 16, 2012). Further, CBP described the functionality of the coffee maker at issue in that ruling as follows:
As the K-Cup is secured within the holding chamber, the cup’s foil lid and plastic bottom are punctured. Hot water is then forced through the tiny holes in the K-Cup and a single cup of coffee is dispensed.
Id. Accordingly, CBP classified the brewing system in subheading 8516.71.00, HTSUS, as coffee or tea makers. If Keurig’s merchandise is identical to the brewing systems in NY N233651, then Keurig’s merchandise would also be classified in subheading 8516.71.00, HTSUS, as coffee or tea makers.
The Port states that these “models appear to be the same type of machines and function in the same manner as the [B] models in NY ruling N233651.” In its email submission, dated July 30, 2015, counsel for Keurig confirms that the “brewers subject to this Internal Advice request are not functionally different from the previous B models, but have a significantly expanded intended use at the time of importation.” Keurig contends that its products are no longer covered by subheading 8516.71.00 by virtue of the fact that a variety of K-Cups used for beverages other than coffee and tea are now available. However, while a small percentage of non-coffee or tea related options have been introduced that may be used with the Keurig Brewing Systems at issue here, as well as with the B models from NY N233651, the merchandise itself has not been improved or amplified in any way. Accordingly, because the Keurig Brewing Systems are functionally identical to the merchandise in NY N233651, and despite the expanded line up of K-cups, based on the foregoing analysis, we find that the Keurig Brewing Systems are covered by subheading 8516.71.00, as other electrothermic appliances: coffee or tea makers.
Keurig cites HQ H965863, dated December 3, 2002, in support of classifying the Keurig Brewing Systems in subheading 8516.79.00, HTSUS. HQ H965863 concerned the classification of a hot water dispenser that could be used to make coffee. In that ruling, we held that the article was not a coffee maker because it only heated water and dispensed the water into a cup. However, the Keurig Brewing Systems at issue here are designed specifically to function with the K-cup, to puncture the top and bottom of the K-cup while forcing hot water through it, and are used predominantly to make coffee. Therefore, we find the article in HQ H965863 to be distinguishable from the Keurig Brewing Systems at issue here.
HOLDING:
By application of GRI 1 and 6, the Keurig models K40, K45, K65, K75, K10 mini, and Keurig Platinum Plus brewing systems are classified under heading 8516, HTSUS, which provides for electrothermic appliances for domestic purposes, and specifically provided for under subheading 8516.71.00, which provides for “other electrothermic appliances: coffee or tea makers.” The 2015 column one, general rate of duty is 3.7%.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/tata/hts/bychapter/index.htm.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, 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