CLA-2 OT:RR:CTF:TCM H250768
Charlotte Service Port
1901 Crossbeam Drive
Charlotte, NC 28217-2823
ATTN: Laurie Pazzo, Senior Import Specialist
RE: AFR of Protest No. 1512-13-100063; Classification of solar modules
Dear Port Director:
This is in response to the Application for Further Review (“AFR”) of Protest No. 1512-13-100063, dated January 9, 2013, filed on behalf of Canadian Solar USA, Inc. (Protestant”). The AFR concerns the tariff classification of solar modules under the Harmonized Tariff Schedule of the United States (“HTSUS”). This ruling incorporates and addresses arguments and facts put forth by Protestant in the AFR, as well as those arguments and facts presented in submissions and meetings that were received or occurred on May 14, 2014; August 11, 2015; September 15, 2015; January 8, 2016; February 4, 2016; February 11, 2016; March 7, 2016; April 13, 2016; June 7, 2016; and June 24, 2016.
The Protest describes three entries maded on January 29, January 31 and April 13, 2013, and liquidated on June 21, 2013. On June 24, 2016, Protestant provided CBP with a representative sample of the subject module that is not an actual panel retained from the subject entries but, based on the information submitted, is identical in all respects to the panels associated with those entries. The sample consists of two detached junction boxes and one rectangular solar panel labeled, in part, “CanadianSolar, Model Type: CS6P-245P.” The panel measures approximately 1638 mm x 981 mm x 40 mm and is comprised of 60 (6x10) cells. Laboratory analysis of the solar panel indicates that there are three substrings serially connected. Each substring, which is connected in parallel to a diode, contains twenty photovoltaic (PV) cells (in two columns). The panel contains three diodes arranged in a junction box (attached to the rear of the panel) that are used as "bypass" diodes to protect shaded cells from overheating by diverting electrical current around such cells and through an external circuit. The connectors on the panels are designated as "MC4" or "MC4 compatible" and mechanically appear to be only able to connect solar panels with MC4 compatible connectors and not to connect such panels to any other external devices or structures. Below are images of the front and back of the solar panel:
Whether the solar module in question is classified (1) under heading 8501, HTSUS, as an electric motor and generator; or (2) under heading 8541, HTSUS, as a photosensitive semiconductor device
LAW AND ANALYSIS:
We first note that the subject July 10, 2013, protest was timely filed within 180 days after the June 21, 2013, liquidations of the underlying entries. See 19 U.S.C. § 1514(c)(3). In addition, the AFR meets the criteria of 19 C.F.R. 174.24.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods 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. 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.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System 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 2013 HTSUS provisions under consideration are as follows:
8501 Electric motors and generators (excluding generating sets) …
* * *
Other DC motors; DC generators:
* * *
8501.31 Of an output not exceeding 750 W:
* * *
* * *
8541 Diodes, transistors and similar semiconductor devices; photosensitive
semiconductor devices, including photovoltaic cells whether or not
assembled in modules or made up into panels; light-emitting diodes;
mounted piezoelectric crystals; parts thereof:
* * *
8541.40 Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes:
* * *
8541.40.60 Other diodes:
* * * *
“Headings 8501 to 8504 do not apply to goods described in heading 8511, 8512, 8540, 8541 or 8542 …” Note 2 to Chapter 85, HTSUS. EN 85.01 describes the coverage of heading 8501, HTSUS, (in pertinent part) as follows:
(II) ELECTRIC GENERATORS
Machines that produce electrical power from various energy sources (mechanical, solar, etc.) are classified here, provided they are not more specifically covered by any other heading of the Nomenclature.
The heading also covers photovoltaic generators consisting of panels of photocells combined with other apparatus, e.g., storage batteries and electronic controls (voltage regulator, inverter, etc.) and panels or modules equipped with elements, however simple (for example, diodes to control the direction of the current), which supply the power directly to, for example, a motor, an electrolyser.
In these devices, electricity is produced by means of solar cells which convert solar energy directly into electricity (photovoltaic conversion).
The heading also excludes :
(g) Solar cells whether or not assembled in modules or made up into panels but not equipped with elements, however simple, which supply the power directly to, for example, a motor, an electrolyser (heading 85.41).
EN 85.41 describes the coverage of heading 8541, HTSUS, (in pertinent part) as follows:
(B) PHOTOSENSITIVE SEMICONDUCTOR DEVICES
This group comprises photosensitive semiconductor devices in which the action of visible rays, infra-red rays or ultra-violet rays causes variations in resistivity or generates an electromotive force, by the internal photoelectric effect.
The main types of photosensitive semiconductor devices are:
(2) Photovoltaic cells, which convert light directly into electrical energy without the need for an external source of current. Photovoltaic cells based on selenium are used mainly in luxmeters and exposure meters. Those based on silicon have a higher output and are used, in particular, in control and regulating equipment, for detecting light impulses, in communication systems using fibre optics, etc.
Special categories of photovoltaic cells are :
Solar cells, silicon photovoltaic cells which convert sunlight directly into electric energy. They are usually used in groups as sources of electric power, e.g., in rockets or satellites employed in space research, for mountain rescue transmitters.
The heading also covers solar cells, whether or not assembled in modules or made up into panels. However the heading does not cover panels or modules equipped with elements, however simple, (for example, diodes to control the direction of the current), which supply the power directly to, for example, a motor, an electrolyser (heading 85.01).
Thus, per the ENs, panels or modules without elements that supply the power directly to an external load, are classified in heading 8541, HTSUS, and cannot be classified in heading 8501, HTSUS. Moreover, a solar module is not precluded from classification under heading 8541, HTSUS, simply because it contains "elements" (e.g., diodes which control the direction of the current). Those elements must also "supply power directly" to an external load, such as a motor or an electrolyser. See EN 85.41(B)(2)(i). See H084604, dated May 3, 2010 (revoking New York Ruling Letter (“NY”) N047472, dated January 9, 2009) (modules that could only connect to other solar modules in order to create a single solar panel and could not connect to external devices or an electrical grid classified in subheading 8541.40.60); see also H255441, dated August 30, 2016.
The evidence before us shows that a junction box attached to the subject module contains MC4 compatible connectors and three bypass diodes. The bypass diodes protect solar cells within the modules from overheating when they are shaded, while the connectors connect the module to other modules in a series or in parallel, and do not connect the module to any other external devices or structures. Therefore, we find that the subject module is not equipped with an element that supplies power directly to an external load, and the module is a photosensitive semiconductor device described by heading 8541, HTSUS. Pursuant to Note 2 to Chapter 85, HTSUS, as the module is described by heading 8541, HTSUS, it is precluded from classification under heading 8501, HTSUS.
The Protest is GRANTED. By application of GRI 1, the subject module is classified under heading 8541, HTSUS, specifically in subheading 8541.40.60, which provides for: "Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels …: Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up in panels …: Other diodes." The 2013, column one, general rate of duty is: Free.
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. Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make 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 other methods of public distribution.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division