CLA-2 RR:CR:GC 961408 JAS

Sean Murray, Esq.
Miller & Company P.C.
4929 Main Street
Kansas City, MO 64112

RE: HQ 952442 Revoked; Dies and Roll Shells for Animal Feed Pelletizing Machinery; Parts of Machine for Making Animal Feed Pellets; Agricultural Machinery; Heading 8436, Machinery for the Industrial Preparation of Food or Drink; Section XVI, Note 2

Dear Mr. Murray:

HQ 952422, dated October 5, 1992, issued in response to Internal Advice 46/92 initiated at the Customs port of Chicago, held that certain dies and roll shells of UK origin used on pelletizing machines were classifiable in subheading 8438.90.90, Harmonized Tariff Schedule of the United States (HTSUS), as machinery for the industrial preparation or manufacture of food or drink.

In a letter, dated February 18, 1998, you requested reconsideration of HQ 952442, and claimed that the merchandise was properly classified in a provision of HTS heading 8436 as parts of agricultural or horticultural machinery. You presented additional facts and legal arguments in a submission, dated June 10, 1998, and at a meeting in our office on August 24, 1998, which you confirmed in a submission of the same date. We have reviewed HQ 952442 and agree that it is incorrect.

Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of HQ 952442 was published on - 2 -

October 21, 1998, in the Customs Bulletin, Volume 32, Number 42. You submitted a comment in favor of the proposed revocation.


The dies and roll shells are integral, constituent component parts of a pelletizer, a machine that compresses animal feed into pellets. Essentially, a conditioner machine mixes the animal feed and medicaments under steam to increase the moisture level or sometimes with molasses and feeds it into the pelletizer. The roll shells or rolls push the feed through holes in the dies. Heat and friction from this process compress the mass into individual pellets. Different-sized dies are used depending on the animal to be fed or for the same animal at different stages of its growth. To reduce degradation in the product due to temperature shock, the hot, newly-formed pellets are then dropped into a counterflow cooler which draws in outside air by fan and gradually cools the pellets to ambient temperature. You indicated at the August 24, 1998, meeting that the pelletizer is mounted on a subfloor slightly above the counterflow cooler and that the newly-formed pellets drop down a connecting duct into the cooler. Occasionally, due to space constraints, when the cooler is located a sufficient distance from the pelletizer, a conveyor transports the pellets to the cooler. There are no other wires or cables that connect the two machines. The pelletizer is said to be the approximate size of a farm tractor or large riding mower, and the counterflow cooler proportionally smaller. As the dies and roll shells are parts of a larger machine or apparatus, it is the classification of the pelletizer that is the central issue to be decided.

You contend that the pelletizer is a good of heading 8436 because the making of animal food pellets bears a sufficient relationship to the raising of livestock for food or clothing as to be a legitimate agricultural pursuit. You note that some pelletizers are used overseas to compress garbage, and that between 2-5% of these machines are used in the U.S. to compress wood pellets for use as fuel in stoves. Nevertheless, based on a survey of entities that produce pelleted animal feed in this country, you conclude that the principal use of pelletizers in the U.S. is to make animal food pellets. Alternatively, you claim the pelletizer is provided for in heading 9817.00.50, HTSUS, as machinery to be used for agricultural purposes. You - 3 -

contend further that HQ 952442 was based in large part on information provided orally by a representative of the client that was inaccurate. The provisions under consideration are as follows:

8436 Other agricultural, horticultural ... machinery; parts thereof:

8436.10.00 Machinery for preparing animal feeds Parts:

8436.99.00 Of machinery for preparing animal feeds * * * *

8438 Machinery n.s.i.e., for the industrial preparation or manufacture of food or drink; parts thereof:

8438.90 Parts:

8438.90.90 Other * * * *

9817.00.50 Machinery, equipment and implements to be used for agricultural or horticultural purposes


Whether a pelletizer for making animal food pellets is agricultural machinery of heading 8436.


Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section - 4 -

or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

Section XVI, Note 2, HTSUS, states in part that goods which are identifiable parts of machines or apparatus of chapters 84 or 85 are classifiable with the machine or apparatus with which they are solely or principally used.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. Though not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

Relevant ENs at p. 1317 state in part that heading 84.36, a principal use provision, covers machinery of a type used on farms (including agricultural schools, co-operatives or testing stations), in forestry, market gardens, or poultry-keeping or bee-keeping farms or the like. However, the heading excludes machines clearly of a kind designed for industrial use. The ENs provide no specific guidance on the scope of the term industrial and standard dictionary definitions of the term are likewise not useful. The cited ENs do, however, suggest that pelletizers shown to be solely or principally used on farms and co-operatives that presumably produce food pellets for their own animals are encompassed by heading 84.36. Principal use, in this context, is that use which exceeds any other single use of the goods.

To support the principal use argument, you have submitted a research study done in 1997 by a company that analyzes business trends. This study examined 199 manufacturers of pelleted animal feed in the United States during 1996, to include commercial, cooperative and integrated operations. Commercial feed companies make pellets for sale to others and not to feed their own animals. Integrated feed companies make pellets for their own use, that is, to feed their own animals. Farm cooperatives make pellets for the exclusive use of their members. The study found that together these companies accounted for 78% of the pelleted animal feed produced in the United States during 1996, the remaining 22% presumably being imported. The study further found that integrated operations produced 76% of the pelleted feed while commercial operations produced 18% and cooperatives produced 7%. From these statistics, the study concluded that accounting for the 12% of the 1996 pellet production that was - 5 -

presumably imported, 65% of pelleted animal feed was produced in the United States in 1996 by integrated and cooperatively owned feed mills.

Studies or surveys of this kind, like affidavits and similar testimonials, are normally of little probative value except to the extent that information they contain serves to corroborate evidence already in the record or such information is otherwise independently verifiable. In administrative proceedings, however, particularly where there is no other evidence available and there is no reason to believe the information in the study is flawed, incomplete or is otherwise unreliable, Customs has considerable latitude in evaluating that information.

We note the lack of explanation of why only 199 manufacturers were surveyed, why 12% of the total pelleted feed production in 1996 is unaccounted for, and why the survey included only feed produced for farm-type animals and not for household pets and non-food uses. This is particularly significant when a class or kind issue may be involved. Nevertheless, we consider the referenced survey to be the best evidence available, if not the only evidence, on the principal use of the subject pelletizers, particularly where the evidence on which HQ 952442 was predicated is claimed to be incorrect. For this reason, we conclude that the pelletizers in issue, as described, are of a class or kind principally used on farms or co-operatives to produce animal food pellets for their own animals. These machines are provided for in heading 8436. For this reason, we will omit any discussion of heading 9718.50.00, HTSUS. HOLDING:

Under the authority of GRI 1 and Section XVI, Note 2(b), HTSUS, because of their special design and function with respect to pelletizing machines, the dies and roll shells under consideration are provided for in heading 8436. They are classifiable in subheading 8436.99.00, HTSUS. HQ 952442, dated October 5, 1992, is revoked.

- 6 -

In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)). This decision is predicated on the evidence that is available to us at this time. As additional evidence of the principal use of the subject pelletizers becomes available, we may have occasion to reconsider the matter.


John Durant, Director
Commercial Rulings Division