CLA-2 OT:RR:CTF:EMAIN H291447 PF
Port Director
Port of Champlain U.S. Customs and Border Protection 237 West Service Road Champlain, NY 12919
Attn: Jodie Lynn Basmajian, Senior Import Specialist
Re: Protest and Application for Further Review No: 1704-2017-101555; Classification of a VIN Marking Machine
Dear Port Director:
The following is our decision as to Protest and Application for Further Review No. 1704-2017-101555, which was filed on September 28, 2017 on behalf of Borries Marking System (“protestant” or “Borries”). The protest pertains to the classification of a VIN marking machine under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The subject merchandise was entered by protestant between May 23, 2016 and December 3, 2016. On June 30, 2017 and July 7, 2017, CBP at the Port of Charlotte liquidated the entries under subheading 8462.99.80, HTSUS, which provides for “Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above: Other: Other: Other.”
On September 28, 2017, protestant filed a protest and AFR regarding the tariff classification of the subject merchandise and claiming that the correct classification of the subject merchandise should be in subheading 8479.81.00, HTSUS, which provides for “Machine and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: For treating metal, including electric wire coil-winders.”
In reaching the determination set forth below, we have taken into consideration the protest, supplemental information provided on November 15, 2017 and October 18, 2018 and arguments presented during a September 19, 2018 teleconference.
FACTS:
The subject VIN marking machine is a machine designed for marking solid surfaces and is principally used on metals. The VIN marking machine includes a mechanical scribe marking head with a pneumatic clamp mechanism and microprocessor. Each machine mechanically scribes a VIN number into the workpiece. The VIN marking machine acts like a plotter, with two motor driven axis to form the VIN characters. Product literature submitted by the protestant notes that the scribe marking method uses a diamond or solid carbide tip that is pressed into the metal workpiece surface and then drawn through the material. The VIN marking machine works by providing a constant, pressurized impact and relative motion between the tool tip and work surface. A patent which describes scribing systems, notes that the Borries scriber marking system works by “provid[ing] a constant pressurized impact and relative motion between tool tip and work suface.”
There are nine models of the VIN marking machine at issue, but all of the marking machines function with the same technology and differ in size. The protestant notes that the VIN marking machine marks workpieces for purposes such as “designating, coding and identifying products for organization in manufacturing, quality assurance, product liability, and protection against plagiarism.” Protestant’s website describes the technology of the VIN marking machine as having “high flexibility for the stamped texts, character heights and widths, and stamping depth. Because of the low force needed, solid, hollow and sensitive parts can also be stamped.” In addition, the protestant provided a chart, marked as Exhibit 7 of the protest, which indicates the amount of material displacement for a given marking method (including scribe, stylus, or dot matrix marking) on a type of material.
ISSUE:
Whether the VIN marking machine is properly classified as a machine tool or press for working metal of heading 8462, HTSUS, or as a machine and mechanical appliance having individual functions, not specified or included elsewhere of heading 8479, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a) (2) as decisions on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)). Further Review of Protests No. 3004-17-100339 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because the decision against which the protest was filed is alleged to involve matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts, but facts are alleged or legal arguments presented which were not considered at the time of the original ruling.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The 2017 HTSUS subheadings under consideration are as follows:
8462 Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof
Protestant argues that the subject merchandise is classified in heading 8479, HTSUS, specifically, subheading 8479.81.00, HTSUS, as “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: For treating metal, including electric wire coil-winders.”
Heading 8479, HTSUS, provides for merchandise “not specified or included elsewhere” in Chapter 84. EN 84.79 indicates that heading 8479, HTSUS is a “basket” provision that is intended to cover merchandise that cannot be classified more specifically in any other heading of Chapter 84. According to the Court of International Trade (“CIT”), “[c]lassification of imported merchandise in a basket provision is appropriate only when there is no tariff category that covers the merchandise more specifically.” Apex Universal, Inc. v. United States, 22 C.I.T. 465 (1998).
We are of the view that the subject merchandise is more specifically provided for in heading 8462, HTSUS, and therefore heading 8479, HTSUS, is not applicable to the instant merchandise. Heading 8462, HTSUS, covers “. . . presses for working metal or metal carbides, not specified above.”
The VIN marking machine is a press for working metal and is specifically provided for eo nominee in heading 8462. The VIN marking machine is a machine designed for marking metals by providing a constant pressure between the tool tip and the work surface. Product literature submitted by the protestant notes that the scribe marking method uses a diamond or solid carbide tip that is pressed into the metal workpiece surface and then drawn through the material. In addition, protestant’s website describes the technology of the VIN marking machine as having “high flexibility for the stamped texts, character heights and widths, and stamping depth. Because of the low force needed, solid, hollow and sensitive parts can also be stamped.” A patent describing the Borries scriber marking system states that the technology entails providing a constant, pressurized impact and relative motion between tool tip and work surface. Therefore, because the tip of the VIN marking machine presses into metal through the use of constant pressure, it is a type of metal-working press.
The protestant argues that the subject VIN marking machine does not meet the definition of “machine tools” because it is does not remove shape or remove metal. The scope of the term “machine-tools” has been provided by EN 84.62. Specifically, EN 84.62 states that “[i]n general machine-tools are power-driven but similar machines, worked by hand or pedal, are also covered by” heading 8462, HTSUS. Moreover, in EOS of North America, Inc. v. United States, 911 F. Supp. 2d 1311, 1333-1334 (Ct. Int’l Trade 2013), the CIT defined the tariff term “machine tool” as follows:
According to common (as well as technical) definitions, the term refers to a ‘machine’ that uses ‘tooling’ to shape solid work, either by the removal of material from, or by the deformation of, a solid piece of metal or another rigid or semi-rigid material. A ‘machine tool’ is ‘a usu[ally] power-driven machine designed for shaping solid work by tooling either by removing material (as in a lathe or milling machine) or by subjecting to deformation (as in a punch press).’ Webster's Third New International Dictionary (Unabridged) 1354 (1993). A machine tool is also defined as ‘a stationary power-driven machine for the shaping, cutting, turning, boring, drilling, grinding, or polishing of solid parts, especially metals.’ McGraw-Hill Dictionary of Engineering 340 (2d ed. 2003). ‘Machine tools’ are ‘tools used to modify the shapes of materials in specific, controlled ways, such as by drilling holes, turning diameters, grinding radii, and performing many more operations on almost any type of rigid or semi-rigid material.’ Mc-Graw Hill Encyclopedia of Engineering 660 (2d ed. 1993).
The protestant’s argument that the VIN marking machine falls outside the scope of heading 8462, HTSUS, is premised on the notion that it merely “displaces” metal, and that such an operation does not constitute “working” for the purposes of the legal text. A chart provided by the protestant, marked as exhibit 7 of the protest, confirms that there is material displacement depending on the type of marking method and material used. CBP has found that even when trace or microscopic amounts of material are removed by laser marking machines, they were considered machine tools of subheading 8456.10.80, HTSUS. See, e.g., HQ H253888, dated July 7, 2016 and NY R00499, dated July 9, 2004. Similarly in this case, even the displacement of a small amount material qualifies as “working” on metal and thereby performing a machine tool operation.
Accordingly, we find that the subject merchandise is described in heading 8462, HTSUS and specifically under subheading 8462.99.40, HTSUS, as Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above: Other: Other: Numerically controlled.” Therefore, the merchandise is not classifiable in heading 8479, HTSUS.
HOLDING:
By application of GRI 1, the VIN marking machine, is classified in heading 8462. By application of GRI 6, the VIN marking machine is classified in subheading 8462.99.40 of the 2017, HTSUS, which provides for: Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above: Other: Other: Numerically controlled.” The 2017 general column one, rate of duty is 4.4% 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/.
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 the 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, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website 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