CLA-2 OT: RR: CTF: TCM H251210 APP
Assistant Port Director, Trade Compliance
Port of Norfolk
U.S. Customs and Border Protection
101 East Main Street
Norfolk, VA 23510
Attn: Sandra Love-Arrington, Entry Specialist
RE: Application for Further Review of Protest Number 1401-14-100011; Tariff classification of coating line for coating various substrates with pre-melted adhesive
Dear Assistant Port Director:
This is in reference to your memorandum of February 25, 2014, in which you forwarded the Application for Further Review (AFR) of Protest Number 1401-14-100011, timely filed on January 7, 2014, on behalf of Trioplast, Inc. (protestant). The AFR concerns U.S. Customs and Border Protection’s (CBP) tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a coating stand manufactured by Nordson Engineering consisting of two unwinding machines, one lamination stand, and one rewinder machine, which are part of a system that coats various substrates with hot adhesive.
FACTS:
On May 14, 2013, the importer of record, Trioplast, Inc., entered the subject merchandise free of duty under subheading 8419.89.10, HTSUS, which provides for “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Other machinery, plant or equipment: Other: For making paper pulp, paper or paperboard.” On November 15, 2013, CBP liquidated the merchandise, classifying it under subheading 8420.10.10, HTSUS, dutiable at 3.5 percent ad valorem, which provides for “Calendering or other rolling machines, other than for metals or glass, and cylinders therefor; parts thereof: Calendering or other rolling machines: Textile calendering or rolling machines.” Protestant argues in the instant AFR that the goods were properly classified as entered and relies upon Headquarters Ruling Letter (HQ) 968123, dated May 1, 2006, as justification for classification in heading 8419, HTSUS.
In its AFR application, protestant describes the subject merchandise as follows:
Trioplast Inc, imports in the United States, coating stands. This line is able to coat many kinds of substrate as paper, tissue, viscose. The full line is composed of 4 elements (unwinder 1 and unwinder 2 lamination stand, and rewinder). The 4 elements are connected by electrical and signal wire, and is not possible to use one without the other. No added support or device is used between the elements.
(emphasis added).
According to the brochures submitted with this AFR, the line uses the Nordson Porous Coat System, which “allows converters to apply discrete, random and open patterns of hot melt adhesive to substrates in narrow- or wide-web applications.” “[T]hin, breathable coatings of polyester/polyamide resins, PURs, PSAs, EVAs and reactive PURs can be applied to the surface of a wide variety of webs, including woven and knit fabrics, nonwovens, open-weave goods, scrims, foams, papers and films.” (emphasis added). The porous coat system “applies pre-melted resin directly from the die onto the web. The resin stays on the surface of the web and flows or wets onto the fibers.” (emphasis added).
ISSUE:
Whether the subject coating stand full line used to coat and laminate substrates of various materials with hot melt adhesive is classified under heading 8419, as a machine for the treatment of materials by a process involving a change of temperature, other than machinery of a kind used for domestic purposes; or under heading 8420, as a calendering or other rolling machine; or under heading 8451, as machinery for coating or impregnating textile yarns, fabrics or made up textile articles; or under heading 8479, as a machine having an individual function, not specified or included elsewhere in this chapter.
LAW AND ANALYSIS:
CBP first notes that the matter is protestable under 19 U.S.C. § 1514(a)(2), as a matter on classification. The AFR was timely filed on January 7, 2014, within 180 days of liquidation of the entry on November 15, 2013. See 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 Number 1401-14-100011 is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed involves questions of law or fact, which have not been ruled upon by the Commissioner of Customs or his designee, or by the courts.
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). GRI 1 requires that classification be determined first according to the terms of the heading of tariff schedule and any relative section or chapter notes, and unless otherwise required, according to the remaining GRIs taken in their appropriate order.
GRI 6 states, in pertinent part that:
[T]he classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purpose of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
The subject merchandise is a machine with an individual function, pursuant to Note 4 to Section XVI, HTSUS, which covers Chapter 84. Note 4 states:
Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.
As such, classification in heading Chapter 84, HTSUS, is not in dispute. The HTSUS (2013) subheadings at issue are the following:
8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof:
8420 Calendering or other rolling machines, other than for metals or glass, and cylinders therefor; parts thereof:
8451 Machinery (other than machines of heading 8450) for washing, cleaning, wringing, drying, ironing, pressing (including fusing presses), bleaching, dyeing, dressing, finishing, coating or impregnating textile yarns, fabrics or made up textile articles and machines for applying the paste to the base fabric or other support used in the manufacture of floor coverings such as linoleum; machines for reeling, unreeling, folding, cutting or pinking textile fabrics; parts thereof:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Note 2 to Chapter 84, HTSUS, provides, in relevant part, that:
2. Subject to the operation of Note 3 to Section XVI and subject to Note 9 to this chapter, a machine or appliance which answers to a description in one or more of the headings 8401 to 8424, or heading 8486 and at the same time to a description in one or more of the headings 8425 to 8480 is to be classified under the appropriate heading of the former group or under heading 8486, as the case may be, and not the latter group.
Heading 8419 does not, however, cover: . . .
(d) Machinery for the heat treatment of textile yarns, fabrics or made up textile articles (heading 8451); or
(e) Machinery or plant, designed for mechanical operation, in which a change of temperature, even if necessary, is subsidiary.
Note 7 to Chapter 84, HTSUS, states, in relevant part, that, “Subject to note 2 to this chapter and note 3 to section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the content otherwise requires, to be classified in heading 8479.”
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are generally indicative of the proper interpretation of these headings. See T.D. -80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The general EN to Section XVI, which covers Chapter 84, states the following in relevant part:
(VII) FUNCTIONAL UNITS (Section Note 4)
This note applies when a machine (including a combination of machines) consists of separate components which are intended to contribute together to a clearly defined function covered by one of the headings of Chapter 84 or, more frequently, Chapter 85. The whole then falls to be classified in the heading appropriate to that function, whether the various components (for convenience or other reasons) remain separate or are interconnected by piping (carrying air, compressed gas, oil, etc.), by devices used to transmit power, by electric cables or by other devices.
For the purposes of this Note, the expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do to contribute to the function of the whole.
The EN 84.19 provides the following, in relevant part:
With these exceptions, the heading covers machinery and plant designed to submit materials (solid, liquid or gaseous) to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature change (e.g., heating, cooking, roasting, distilling, rectifying, sterilising, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling processes). But the heading excludes machinery and plant in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant, e.g., machines for coating biscuits, etc., with chocolate, and conches (heading 84.38), washing machines (heading 84.50 or 84.51), machines for spreading and tamping bituminous road surfacing materials (heading 84.79).
The EN 84.20 provides the following, in relevant part:
With the exception of metal rolling or metal working machines of heading 84.55, 84.62 or 84.63 and of glass working machines of heading 84.75, this heading covers calendering or other rolling machines, whether specialised to a particular industry or not.
These machines consist essentially of two or more parallel cylinders or rollers revolving with their surfaces in more or less close contact so as to perform the following operations, either by pressure of the cylinders alone or by pressure combined with friction, heat or moisture:
….
(4) The bonding of fabrics.
The EN 84.51 provides the following, in relevant part:
This heading covers a wide variety of machines which are used : . . .
(III) For the reeling, unreeling, folding, cutting or pinking of textile fabrics.
Many of the machines of this heading are nothing more than vats, tanks, troughs or other containers, fitted with simple mechanical features such as rollers for leading in the yarn or fabric or for squeezing out excess liquid, stirring paddles, etc. Such machines are used for a variety of washing, bleaching, dyeing, cleaning, etc., operations, or for finishing operations involving coating or impregnating (e.g., with size or with waterproofing, crease resisting, fireproofing, moth proofing, rot proofing, etc., compounds). To fall in the heading, the apparatus must have such mechanical features and must be clearly intended for treating textiles . . . .
(B) BLEACHING OR DYEING MACHINERY
These include J-boxes used in bleaching or other wet finishing operations; they consist essentially of a vertical two-armed container, shaped like a letter J, fitted with internal steam jets and with rollers to guide the cloth. The fabric, previously impregnated by passing through a bath of bleaching liquor, enters the longer arm where it remains for the time required for the bleaching to take effect, and in due course emerges from the smaller arm.
Other machines of this group are mainly vat-type machines already referred to, adapted for dealing with particular types of textile goods (e.g., yarns in hanks or skeins or in balls, on bobbins, etc., piece goods or made up articles). The group also includes machines for dyeing or dressing textile piece goods in open width; the essential feature of these machines of that they incorporate a set of rollers for squeezing out excess liquid . . .
(E) DRESSING OR FINISHING MACHINES
This group includes: . . .
(17) Coating or impregnating machines for applying special surface coatings to yarns or fabrics, or for impregnating them with special preparations (e.g., gum, starch, size, wax, plastics, rubber or water-proofing compounds). The heading includes machines for coating fabric, paperboard, etc., in the manufacture of floor coverings such as linoleum, and also the dressing machines described in the last sentence of Part (B) above . . . .
The heading also excludes:
Auticlaves, steam-jacketed vats and other heading apparatus not identifiable as being for the heat-treatment of textiles (heading 84.19).
Calendering machines (for glossing, glazing, smoothing, embossing, moireing, etc.) and their cylinders (heading 84.20) . . . .
The EN 84.79 provides the following, in relevant part:
This heading is restricted to machinery having individual functions, which:
Is not excluded from this Chapter by the operation of any Section or Chapter Note. And
Is not covered more specifically by a heading in any other Chapter of the Nomenclature. And
Cannot be classified in any other particular heading of the Chapter . . . .
(III) MISCELLANEOUS MACHINERY
This group includes: . . .
(6) Machinery for cask tarring or coating other than spraying appliances of heading 84.24.
(7) Machines for coating welding electrodes.
(8) Machines for cleaning off or re covering gelatin inking rollers.
(9) Machines for coating photosensitive emulsions on to a backing other than those machines of heading 84.86 . . . .
(17) Machines for applying abrasives to any backing (fabrics, paper, etc.) . . . .
Note 4 to Section XVI, HTSUS, which covers machinery of Chapter 84, directs that imports of machines consisting of separate components, which will be interconnected post-importation, and are intended to contribute together to a clearly defined function, are to be classified as one functional unit, rather than separately, and according to the tariff classification that describes their clearly defined function. See Note 4 to Section XVI; EN to Section XVI, (VII) Functional Units (Section Note 4); New York Ruling Letter (NY) N265287, dated June 16, 2015. Here, based on the information provided by you, the four apparatuses are connected via rollers and electrical wires, and work in concert to apply hot melt adhesive coatings to substrates such as tissue paper and viscose. Therefore, in accordance with Note 4 to Section XVI, HTSUS, and in consideration of the ENs to that section, they will be classified together, in Chapter 84, HTSUS, which describes the clearly defined function of the functional unit.
Protestant submits that the merchandise is classified in heading 8419, HTSUS. Note 2 to Chapter 84, supra, establishes that goods falling under the scope of heading 8419, HTSUS (or heading 8420, HTSUS) shall be classified under that heading even if they also are prima facie classifiable under headings 8425, HTSUS through 8480, HTSUS. It also clarifies the scope of heading 8419. Note 2(d) states that heading 8419, HTSUS does not cover machinery “for the heat treatment of textile yarns, fabrics or made up textile articles (heading 8451).” Note 2(e) states that heading 8419, HTSUS excludes “machinery or plant, designed for mechanical operation, in which a change of temperature, even if necessary, is subsidiary.” (emphasis added). EN 84.19 further explains that subject to certain exceptions, the heading excludes machinery “in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant, e.g., machines for coating biscuits, etc., with chocolate.”
The subject coating stand does not submit materials to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature changes, as the resin is pre-melted before it is used. The heating of the impregnated/luminated material is subsidiary to the main function, which is coating or impregnating various materials unlike in HQ 968123, dated May 1, 2006, where the physical vapor deposition (PVD) apparatus performs the PVD process by evaporation and the resulting change of temperature is the main mechanical function of the machine. Accordingly, the merchandise in the instant matter is not classifiable in heading 8419, HTSUS.
The merchandise was liquidated in heading 8420, HTSUS, which provides for “Calendering Rollers.” EN 84.20 explains that “These machines consist essentially of two or more parallel cylinders or rollers revolving with their surfaces in more or less close contact so as to perform [operations such as bonding of fabrics], either by pressure of the cylinders alone or by pressure combined with friction, heat or moisture.” (emphasis added). Although the subject merchandise includes two or more rollers, the diagrams of the subject machines show that the rollers are not parallel. The rollers, together with electrical wires, connect the four apparatuses, which form a multi-purposed coating machine used to coat various substrates and the principal use is not bonding of fabrics. Therefore, the subject machines are not classifiable in heading 8420, HTSUS.
The merchandise is also not classified in heading 8451, HTSUS. Heading 8451, HTSUS, provides for, among other things, machines for “coating or impregnating textile yarns, fabrics or made up textile articles and machines for applying the paste to the base fabric or other support used in the manufacture of floor coverings such as linoleum.” (emphasis added). The EN 84.51 explains that heading 8451 covers coating or impregnating machines “for applying special surface coating to yarns and fabrics, or for impregnating them with special preparations (e.g., gum, starch, size, wax, plastics, rubber or water-proofing compounds).” (emphasis added). The heading also includes machines for coating fabric or paperboard in the manufacture of floor coverings such as linoleum. According to the description provided by protestant, the principal use of the line is with various materials and is not dedicated solely or principally for applying special surface coating to yarns and fabrics. The submitted information does not provide sufficient evidence to establish that the coating line is intended to be used primarily with textiles. The line works on a variety of substrates including viscose, tissue, and paper, so heading 8451, HTSUS is not applicable.
Finally, heading 8479, HTSUS and the EN 84.79 provide for machines and mechanical appliances having individual functions, not specified or included elsewhere in Chapter 84, HTSUS. See HQ 964969, dated Jan. 4, 2002 (sputtering targets not included in any other heading of Chapter 84 or 85 were classified in heading 8479, HTSUS). CBP has previously classified coating machines for coating various substrates in heading 8479, HTSUS. See NY 850665, dated Apr. 13, 1990 (coating machine that applied a solvent-based magnetic coating onto a continuous plastic sheet fed through the machine classified in heading 8479, HTSUS); NY H80191, dated May 18, 2001 (coating machine, which produced transparent barrier coatings on one side of continuous plastic films intended for use in advance packaging applications, classified in heading 8479, HTSUS); NY H83509, dated Aug. 7, 2001 (machine used to place a special coating onto leather upholstery applied to various sizes of automobile door panels classified in heading 8479, HTSUS); NY H80185, dated May 18, 2001 (multiweb sputter coating machine used to coat various metals and metal oxides onto one side of a continuous web substrate classified in heading 8479, HTSUS); NY B84157, dated May 1, 1997 (roll coating machine designed to place coating onto a clear plastic film base by means of sputtering classified in heading 8479, HTSUS); NY B87702, dated Aug. 13, 1997 (film applicator machine used to apply polyethylene film from a roll onto the surface of a finished sheet or board, and which could be used on a wide variety of sheet and board materials, including stainless steel, aluminum, glass, perspex, plastics and wood, classified in heading 8479, HTSUS).
The subject merchandise is not described by any other heading in Chapter 84, HTSUS. By virtue of Note 4 to Section XVI, HTSUS, the coating stand line was imported in one shipment and its four elements are connected by electrical and signal wire, and cannot be used separately. The individual function of this functional unit is coating. The coating machine is multi-purposed because it is used to coat various substrates and there is no one or principal purpose. Based on the foregoing, we find that the subject coating stand meets the terms of heading 8479, HTSUS, as merchandise not described by any other heading in Chapter 84, HTSUS.
HOLDING:
By application of GRIs 1 (Note 4 to Section XVI, HTSUS) and 6, the subject coating stand is classified in heading 8479, specifically in subheading 8479.89.98, HTSUS (2013), which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other” at the general, column one rate of duty of 2.5 percent 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 at www.usitc.gov.
You are instructed to DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance.
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 sixty (60) days from the date of this letter. Any reliquidation of the entry in accordance with this 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