CLA–2 OT:RR:CTF:TCM H278990 SKK
Assistant Center Director
Center of Excellence and Expertise - Consumer Products and Mass Merchandising
U.S. Customs and Border Protection
610 S. Canal Street, Room 300
Chicago, IL 60607
ATTN: Juana Kundak, Supervisory Import Specialist
RE: Request for Internal Advice; classification of Keurig K2.0 series brewing system.
Dear Assistant Director: This letter is in response to your request for Internal Advice (IA), dated July 20, 2016, made pursuant to § 177.11 of title 19 of the Code of Federal Regulations (19 CFR 177.11). The IA request was initiated by counsel on May 2, 2016, on behalf of Keurig Green Mountain, Inc. (“Keurig”), and concerns the tariff classification under the Harmonized Tariff System of the United States (HTSUS) of an at-home brewing system.
FACTS:
The Keurig at-home brewer at issue is identified as the K2.0 series (“Keurig K2.0”). Counsel submits that the subject brewer is engineered and designed to provide multiple brew rates for an expanded product line which includes, in addition to coffee and tea, hot cocoa, sweetened beverages, hot cider, lemonade, and soups. The Keurig K2.0 is compatible with a line-up of K-Cup packs, sold separately, which contain beverage and soup options. Counsel further submits that the Keurig K2.0 is designed to create “over 100 different brewing experiences for a variety of beverages” by offering various brew cycles. The Keurig K2.0 uses a piston pump and an air pump to allow for customized brew cycles for different beverages. As the Keurig K2.0 does not use a probe in its hot water tank to determine brew size, the hot water tank is smaller than in earlier models. No sample was submitted to this office for examination.
ISSUE:
Whether the Keurig 2.0 brewing system is classifiable under subheading 8516.71, HTSUS, as “other electrothermic appliances: coffee or tea makers,” or under subheading 8516.79, 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 is 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 is 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: 8516.71: Other electrothermic appliances: 8516.71.00: Coffee or tea makers. . . .
8516.79: Other… .
There is no issue as to whether the subject Keurig K2.0 series brewing system is classifiable under heading 8516, HTSUS, which provides for, in pertinent part, “other electrothermic appliances of a kind used for domestic purposes.” As the subject merchandise uses electricity to heat water, and is designed and marketed as a household brewing system, classification is proper within this heading. The determinative classification issue is at the 6-digit subheading level. Specifically, whether the Keurig K2.0 brewing system is classifiable under subheading 8516.71, HTSUS, as “other electrothermic appliances: coffee or tea makers,” or under subheading 8516.79, HTSUS, as “other electrothermic appliances: other.”
As an initial matter, it is noted that CBP has previously issued several rulings to Keurig regarding the classification of earlier models of its brewing systems. In New York Ruling Letter (NY) N233651, dated October 16, 2012, CBP classified several models of Keurig single-cup home brewing systems under subheading 8516.71, HTSUS. As with the Keurig K2.0 model at issue, the at-home brewing systems the subject of NY N233651 were designed to be used with K-Cups and featured two pumps: a water pump for transferring water from the reservoir to the heating area and an air pump which forces water through the K-Cup. In Headquarters Ruling Letter (HQ) H259317, dated October 13, 2015, CBP issued an IA concerning the classification of six styles of Keurig home brewing systems. The brewing systems were of various dimensions and reservoir sizes, and possessed different features such as cup size, auto on-off functions and removable drip trays. However all were compatible with coffee, tea, hot chocolate, lemonade, and soup K-Cups. In HQ H259317, CBP classified the subject merchandise as other electrothermic coffee or tea makers under subheading 8516.71, HSTUS, and noted that the articles at issue “appear to be the same type of machines and function in the same manner as the … models in NY ruling N233651.”
Counsel for Keurig submits that the subject K2.0 brewing systems are distinguishable from those at issue in NY N233651 and HQ H259317 in that new technology offers various brew cycles specific to the different beverage types offered by Keurig. Specifically, Keurig K2.0 brewing systems use two pumps, a piston pump and an air pump, to push and pull water at different rates. The pump technology was developed to support an expanded product line (i.e., additional types of K-Cups) and facilitate a better brew for non-coffee beverages. Counsel submits that the new type of brew cycle allows individual processes for the optimal delivery of different beverages and soups and “underscores the use of the brewer for much more than just coffee.” As such, counsel maintains the view that the Keurig K2.0 is not described by subheading 8516.71, HTSUS, an eo nomine provision that provides for coffee or tea makers, and classification is appropriate under subheading 8516.79, HTSUS, as “other electrothermic appliances: other.”
In support of classification of the Keurig 2.0 under subheading 8516.79, HTSUS, which provides for “other electrothermic appliances; other,” Keurig cites to HQ H965863, dated December 3, 2002. HQ H965863 concerned the classification of two articles: a hot water dispenser and a commercial coffee maker. Neither article was deemed classifiable under subheading 8516.71, HTSUS. In the case of the first article, it was determined to be a hot water dispenser and not a coffee maker. As the second article was commercial grade, it did not fall within the scope of heading 8516, HTSUS, which provides for, in pertinent part, “other electrothermic appliances of a kind used for domestic purposes.” In further support of classification of the subject merchandise under subheading 8516.79, HTSUS, counsel cites to several NY rulings in which CBP classified different types of products that heat water for beverages under this provision. See NY L84959, dated June 14, 2005 (hot plate), NY D88135, dated February 16, 1999
(electric kettle) and NY 894612, dated February 25, 1994 (electric kettle). The Keurig 2.0 at issue in this IA is distinguishable from the articles at issue in HQ H965863 in that it is for household use and it dispenses coffee and tea, and from the above-cited NY rulings in that it dispenses brewed coffee. Accordingly, these rulings do not provide the basis for classification of the Keurig K2.0.
As subheading 8516.71, HTSUS, is an eo nomine provision, and generally includes all forms of the named articles, the determinative issue is whether the subject Keurig K2.0 brewing system is a form of coffee or tea maker. In this regard, we note that the manufacturer’s website, located at http://www.keurig.com/keurig-2.0-coffee-makers, describes the 2.0 series brewing systems as “coffee makers” and markets them for home use. The manufacturer’s website demonstrates that while the subject merchandise can brew many types of beverages and soups, the vast majority of K-Cups intended for use with the Keurig 2.0 series are for coffee and tea. The “new technology” espoused by counsel, provided by enhanced pumping mechanisms, permits for more precise and adaptable brewing cycles, but does not serve to change the subject article’s basic function as a coffee maker. The fact that it also can dispense other beverages expands on that function, but does not preclude the article from being prima facie classifiable as a coffee maker of subheading 8516.71, HTSUS.
Based on the foregoing, this office finds that the articles at issue in NY N233651 and HQ H259317 are substantially identical to the Keurig K2.0 series brewing system at issue and serve as the basis for classification under subheading 8516.71, HTSUS, as “other electrothermic appliances: coffee or tea makers.”
HOLDING:
By application of GRIs 1 and 6, the Keurig K2.0 series brewing system is classified under subheading 8516.71.00, HTSUS, which provides for “[E]lectric 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: Coffee or tea makers… .” The 2017 column one general rate of duty is 3.7%.
This ruling is being issued under the provisions of Part 177 of Title 19 to the Code of Federal Regulations (19 CFR part 177).
Duty rates are provided for the internal advice applicant’s 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.
You are directed to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date the Office of Trade, Regulations and Rulings, will make the public version of the decision available to CBP personnel and to the public on the CBP Home Page at www.cbp.gov, by means of the Freedom of Information Act, and by other methods of public distribution.
Sincerely,
Myles B. Harmon, Director Commercial and Trade Facilitation Division