OT:RR:CTF:EMAIN H329714 PF
TARIFF NOs.: 3917.29.00; 7326.90.86
Center Director
Base Metals Center of Excellence and Expertise
U.S. Customs and Border Protection
Port of Minneapolis, MN
5600 W. American Blvd., Suite 760
Bloomington, MN 55437
Attn: Mark Marrano, Import Specialist
RE: Protest and Application for Further Review No: 3501-22-103123; Classification of Neck Tubes and Canisters
Dear Center Director:
The following is our decision as to Protest and Application for Further Review No. 3501-22-103123, which was filed on December 21, 2022 by MVE Biological Solutions U.S., Inc. (“protestant”). The protest pertains to the classification of canisters and neck tubes used in a Dewars Tank under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The subject merchandise was entered by protestant on July 30, 2021 and liquidated on June 24, 2022. U.S. Customs and Border Protection (“CBP”) liquidated the cannisters under heading 7326, HTSUS, which provides for “Other articles of iron or steel” and the tubes under heading 3917, HTSUS, which provides for “Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics.” On December 21, 2022, 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 a part within heading 8418, HTSUS, which provides for “Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps, other than the air conditioning machines of heading 8415; parts thereof.”
FACTS:
The Protestant describes the Dewars tank as a double-walled, vacuum insulated vessel, which uses liquid nitrogen, for the storage and transfer of biological samples. According to the Protestant, the neck tubes are used as structural components joining the inner and outer vessel and securely holding the specimen-filled containers. The neck tube is a rigid product designed to withstand stress caused by the extreme temperature of the liquid nitrogen. The neck tubs are composed of fiberglass-reinforced epoxy, which is a rigid plastic. Further, the neck tube is in a straight standard shape, much like a length of plumbing pipe.
The Protestant states that the canisters are stainless steel vessels with a long handle and a perforated bottom disc. The perforated bottom facilitates the canister’s submersion and extraction out of the liquid nitrogen filled Dewars tank. The canisters are used for the insertion, storage and removal of the biological samples being stored in the Dewars tank. The long handle is laminated in order to minimize any heat transfer that would negatively affect the biological sample. In use, the canisters are supported by the neck tube. As designed, the canisters are used for the purpose of securely holding in place and the safe retrieval of the biological samples from the Dewars tank.
The follow image of the subject merchandise (neck tubes and canisters) were provided by the Protestant:
ISSUES:
Whether the neck tubes are classifiable in heading 3917, HTSUS, as tubes of plastic or in heading 8418, as parts of refrigerating equipment.
Whether the canisters are classifiable in heading 7326, HTSUS, as other articles of steel or in heading 8418, as parts of refrigerating equipment.
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 Protest No. 3501-22-103123 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a previous CBP decision concerning substantially similar merchandise.
The 2021 HTSUS headings under consideration are as follows:
3917 Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics:
7326 Other articles of iron or steel:
8418 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps, other than the air conditioning machines of heading 8415; parts thereof:
Section XV, Note 1, states, in pertinent part:
This section does not cover:
(f) Articles of section XVI (machinery, mechanical appliances and electrical goods)….
Section XVI, Note 1, states, in pertinent part,
This section does not cover:
(g) Parts of general use, as defined in note 2 to section XV, of base metal (section XV), or similar goods of plastics (chapter 39)….
Section XV, Note 2, states, in relevant part:
Throughout the tariff schedule, the expression “parts of general use means:
Articles of heading 7307, 7312, 7315, 7317 or 7318 and similar articles of other base metals….”
Note 1 to Chapter 39, HTSUS, defines “plastics” as:
[T]hose materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticizer) by molding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence.
Throughout the tariff schedule, any reference to “plastics” also includes vulcanized fiber. The expression, however, does not apply to materials regarded as textile materials of section XI.
Note 2 to Chapter 39 provides, in pertinent part:
This Chapter does not cover:
(s) Articles of section XVI (machine and mechanical or electrical appliances);
Note 8 to chapter 39 states, in relevant part:
8. For the purposes of heading 3917, the expression “tubes, pipes and hoses” means hollow products, whether semimanufactures or finished products, of a kind generally used for conveying, conducting or distributing gases or liquids (for example, ribbed garden hose, perforated tubes)….
Note 2 to Section XVI (Chapters 84-85) states, in pertinent part, that:
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 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
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;
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 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517 …
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN to heading 3917 states, in pertinent part:
This heading also includes fittings of plastics for tubes, pipes and hoses (for example, joints, elbows, flanges).
The EN to heading 7307, which covers “tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel”, provides:
This heading covers fittings of iron or steel, mainly used for connecting the bores of two tubes together, or for connecting a tube to some other apparatus, or for closing the tube aperture. This heading does not however cover articles used for installing pipes and tubes but which do not form an integral part of the bore (e.g., hangers, stays and similar supports which merely fix or support the tubes and pipes on walls, clamping or tightening bands or collars (hose clips) used for clamping flexible tubing or hose to rigid piping, taps, connecting pieces, etc.) (heading 73.25 or 73.26).
The connection is obtained:
by screwing, when using cast iron or steel threaded fittings;
or by welding, when using butt welding or socket welding steel fittings. In the case of butt welding, the ends of the fittings and of the tubes are square cut or chamfered;
or by contact, when using removable steel fittings.
This heading therefore includes flat flanges and flanges with forged collars, elbows and bends and return bends, reducers, tees, crosses, caps and plugs, lap joint stub ends, fittings for tubular railings and structural elements, off sets, multi branch pieces, couplings or sleeves, clean out traps, nipples, unions, clamps and collars.
Explanatory Note (C) to Section XV provides:
In general, identifiable parts of articles are classified as such parts in their appropriate headings in the Nomenclature…
However, parts of general use (as defined in Note 2 to this section) presented separately are not considered as parts of articles, but are classified in the headings of this Section appropriate to them. This would apply, for example, in the case of bolts specialised for central heating radiators or springs specialized for motor cars. The bolts would be classified in heading 73.18 (as bolts) and not in heading 73.22 (as parts of central heating radiators). The springs would be classified in heading 73.20 (as springs) and not in heading 87.08 (as parts of motor vehicles).”
The General ENs to Chapter 73 state, in relevant part, that: This Chapter covers a certain number of specific articles in headings 73.01 to 73.24, and in headings 73.25 and 73.26 a group of articles not specified or included in Chapter 82 or 83 and not falling in other Chapters of the Nomenclature, of iron (including cast iron as defined in Note 1 to this Chapter) or steel. The EN to heading 7326 provides, in pertinent part: This heading covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating other than articles included in the preceding headings of this Chapter or covered by Note 1 to Section XV or included in Chapter 82 or 83 or more specifically covered elsewhere in the Nomenclature.
The EN to heading 8418 provides, in pertinent part:
The refrigerators and refrigerating equipment of this heading are in the main machines or assemblies of apparatus for the production, in a continuous cycle of operations, of low temperatures (in the region of 0 °C or less) at the active cooling element, by the absorption of the latent heat of evaporation of liquefied gases (e.g., ammonia, halogenated hydrocarbons), of volatile liquids or, in the case of certain marine types, of water.
* * *
The refrigerators of this heading are of two main types:
(A) COMPRESSION TYPE REFRIGERATORS
Their essential elements are:
The compressor which receives expanded gas from the evaporator and delivers it under pressure to
The condenser or liquefier where the gas is cooled and liquefied, and
The evaporator, the active cooling element, consisting of a tubular system in which the condensed refrigerant, released through an expansion valve, evaporates rapidly with the absorption of heat from the surrounding air or, in the case of large cooling installations, from brine or a solution of calcium chloride kept in circulation around the evaporator coils.
In the marine type there is no compressor and condenser in the refrigerant (water or brine) circuit, but the evaporation is induced by a vacuum produced by an ejector pump working with a steam condenser. The latter condenses and disposes of the vapours produced, which are not returned to the system.
(B) ABSORPTIONTYPE REFRIGERATORS
In these the compressor is replaced by a “generator” in which a strong aqueous solution of ammonia is heated (by gas, oil or electric element), the gas being driven off and accumulating under pressure in the condenser. The cycle of condensation followed by expansion and cooling in the evaporator continues as in the compressor type, the expanded gas being re-dissolved in the weakened solution, either in a separate absorber which feeds the generator by simple pressure effect or through a pump, or in the generator itself which, in certain types, functions as the absorber on cooling during periods when the heat is withdrawn.
In certain dry types the ammonia gas is absorbed by a solid (e.g., calcium chloride or silica-gel) instead of being in solution.
* * *
This heading also includes refrigerating equipment operating by vaporisation of liquefied gas in an enclosed space and consisting generally of one or more liquefied-gas tanks, a thermostat, an electro-magnetic valve, a control box and electric switches and a perforated spreader tube. These components are classified here if presented together.
The protestant alleges that the neck tubes and canisters are parts within heading 8418, HTSUS, because they are specifically designed for and solely used in MVE Dewars tanks. However, if the merchandise falls under the definition of “parts of general use” set forth in Note 2 to Section XV, then it cannot be classified under Section XVI per Note 1(g) to Section XVI, supra. This is the case with the neck tubes. As described above and based on the evidence on the record, the subject neck tubes are composed of plastics and are of straight standard shape, much like a length of plumbing pipe. They are goods of plastics similar to goods covered by heading 7307, HTSUS. As goods that fall under the scope of heading 7307, HTSUS, are included in the definition of parts of general use per Note 2(a) to Section XV, the neck tubes are considered parts of general use excluded from classification under heading 8418, HTSUS. They are properly classified under heading 3917, HTSUS, as tubes of plastics.
Protestant relies on CBP rulings, including New York Ruling (“NY”) F84117, dated March 27, 2000, NY N254848, dated July 22, 2014, and NY N139378, dated January 13, 2011, in support of its argument that the neck tubes are not a “parts of general use.” Essentially, protestant argues that since certain products identified as “tubes” were classified outside of Section XV, then the subject neck tubes should not be considered “parts of general use” under Note 2 to Section XV. We disagree with this implication. While the rulings cited do in fact identify certain parts as “tubes”, they do not describe the physical characteristics of the merchandise at issue in sufficient detail to extrapolate classification principles beyond the classification of the exact merchandise described on the four corners of the rulings. See 19 C.F.R. § 177.9.
With respect to the canisters, and assuming arguendo that the instant neck tubes are not “parts of general use”, we note that if the subject merchandise is properly classified under heading 8418, HTSUS, it cannot be classified under headings 3917 or 7326, HTSUS. See Note 1(f) to Section XV, HTSUS and Note 2(s) to Chapter 39, HTSUS.
Initially, we note that the protestant’s argument that the neck tubes and canisters are parts of goods of heading 8418, HTSUS, is predicated on the notion that the Dewars tank into which they’re installed is itself a good of heading 8418, HTSUS. Based on the information provided, we note that the Dewars tank does not incorporate any components that complete a refrigerating or chilling process. The double-walled, aluminum tank consists of a reservoir for liquid nitrogen, a neck that minimizes the seepage of nitrogen and a chemical vacuum retention system that maintains the insulation within the tank. Furthermore, there is no indication that a continuous cycle of refrigerating or chilling operations occurs within the tank, and the cooling maintained in the tank lasts for a short distance and occurs when liquid nitrogen is introduced and absorbed. Lastly, there is no indication that heat is continuously removed as the liquid is circulated through mechanical components, such as a compressor or heat exchange unit. As such, we find that the Dewars tank is not prima facie classifiable under heading 8418, HTSUS, as “refrigerating equipment”, and the subject merchandise therefore cannot be properly classified as “parts” of heading 8418, HTSUS.
Nevertheless, the term “part” is not defined in the HTSUS. In the absence of a statutory definition, the courts have fashioned two distinct but reconcilable tests for determining whether a particular item qualifies as a part for tariff classification purposes. See Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997). Under the first test, articulated in United States v. Willoughby Camera Stores, 21 C.C.P.A. 322 (1933), an imported item qualifies as a part only if can be described as an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 779. Pursuant to the second test, set forth in United States v. Pompeo, 43 C.C.P.A. 9 (1955), a good is a “part” if it is “dedicated solely for use” with a particular article and, “when applied to that use…meets the Willoughby test.” Bauerhin, 110 F.3d at 779 (citing Pompeo, 43 C.C.P.A. at 14); Ludvig Svensson, Inc. v. United States, 63 F. Supp. 2d 1171, 1178 (Ct. Int'l Trade 1999) (holding that a purported part must satisfy both the Willoughby and Pompeo tests). An item is not a part if it is “a separate and distinct commercial entity.” Bauerhin, 110 F.3d at.779.
The Dewars tank is described as a double-walled, vacuum insulated vessel, which uses liquid nitrogen, for the storage and transfer of biological samples. The neck tubes are used as structural components joining the inner and outer vessel and securely holding the specimen filled containers. The neck tube is a rigid product designed to withstand stress caused by the extreme temperature of the liquid nitrogen. The neck tubes are composed of fiberglass reinforced epoxy, which is a rigid plastic. Further, the neck tube is in a straight standard shape, much like a length of plumbing pipe. While the reinforcement may allow for a stronger pipe, the neck tube is still a plastic tube/pipe.
The protestant maintains that the neck tubes are manufactured to the exact specifications for use in their Dewars tanks. However, notwithstanding the fact that the neck tubes are imported at the size required for a particular Dewars tank, we note that the neck tube lack identifiable features or functions which would dedicate their use solely for a Dewars tank, nor, more importantly, integral to the operations of refrigerating or freezing equipment of heading 8418, HTSUS. Therefore, the neck tube is not a part of the Dewars tank and is not classified in heading 8418, HTSUS.
As the neck tube is not classified under heading 8418, HTSUS, Note 2(s) to Chapter 39, HTSUS is inapplicable. The subject neck tubes are composed of fiberglass reinforced epoxy and heading 3917, HTSUS, provides for rigid tubes. Therefore, the subject neck tubes are classifiable in subheading 3917.29.00, HTSUS, which provides for “Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics: Tubes, pipes and hoses, rigid: Of other plastics.”
The canisters are described as stainless-steel vessels with a long handle and a perforated bottom disc. The perforated bottom facilitates the canister’s submersion and extraction out of the liquid nitrogen filled Dewars tank. The canisters are used for the insertion, storage and removal of the biological samples being stored in the Dewars tank. The long handle is laminated in order to minimize any heat transfer that would negatively affect the biological sample. In use, the canisters are supported by the neck tube. As designed, the canisters are used for the purpose of securely holding in place and the safe retrieval of the biological samples from the Dewars tank.
The Protestant maintains that the canisters are an “integral, constituent, component part” of the Dewars tank and should be classified in heading 8418, HTSUS. The canisters are made of steel and lack features or functions that would dedicate their use solely for use with a Dewars tank. Therefore, the canisters are not a part of the Dewars tank and are not classified in heading 8418, HTSUS, and must therefore be classified according to its constituent material.
As the steel canisters are not covered by another provision in Chapter 73, they are properly classified, as liquidated, in heading 7326, HTSUS. This is supported by EN 73.26, which states, in relevant part, that the heading covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating other than articles included in the preceding headings of this Chapter or covered by Note 1 to Section XV or included in Chapter 82 or 83 or more specifically covered elsewhere in the Nomenclature. Accordingly, the subject canisters are classifiable under heading 7326, HTSUS.
HOLDING:
By application of GRI 1 (Note 2 to Section XV), the neck tubes, are classified in heading 3917. By application of GRI 6, the neck tubes are classified in subheading 3917.29.00, HTSUS, which provides for “Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics: Tubes, pipes and hoses, rigid: Of other plastics.” The 2021 general column one, rate of duty is 3.1% ad valorem.
By application of GRI 1, the canisters, are classified in heading 7326, HTSUS. By application of GRI 6, the canisters are classified in subheading 7326.90.86, HTSUS, which provides for “Other articles of iron or steel: Other…Other.” The 2021 general column one, rate of duty is 2.9% ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3917.29.0050, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.02, in addition to subheading 3917.29.0050, HTSUS, listed above.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 7326.90.86, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, the importer must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 7326.90.86, HTSUS.
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/.
Since the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to DENY the Protest in full.
You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division