CLA-2 OT: RR: CTF: TCM H257793
Port Director
Port of New York/Newark
U.S. Customs and Border Protection
1100 Raymond Boulevard, Suite 402
Newark, NJ 07102
Attn: Violet Grygorcewicz, Import Specialist
RE: Application for Further Review of Protest Number 4601-14-100087; Tariff classification of Rewind Line Machines
Dear Port Director:
This is in reference to the Application for Further Review (AFR) of Protest Number 4601-14-100087, timely filed on January 15, 2014 by counsel on behalf of its client, Windak AB (Windak). The AFR concerns U.S. Customs and Border Protection’s (CBP) tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of rewind line machines. In arriving at our conclusion, this office took into account information, including product brochures and videos, presented at its meeting with counsel on December 10, 2015.
FACTS:
One entry of the subject merchandise is at issue. Windak entered the merchandise on December 11, 2012, classified under subheading 8479.81.00, HTSUS, 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: For treating metal, including electric wire coil winders.” CBP notified Windak via Notice of Action (CF 29) on July 3, 2013, that the goods were misclassified and initiated a rate advance. CBP subsequently liquidated the subject merchandise on July 19, 2013, classified under subheading 8479.89.98, HTSUS, 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: Other.”
Windak argues in the instant AFR that the goods were properly classified as entered. In its meeting with this office, Windak also argued that in the alternative, the goods are classified in subheading 8428.90.02, HTSUS, which provides for, “Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics): Other machinery: Other.”
The subject merchandise is three machines that work together to unspool and respool flexible bulk wire or cable. Very large spools of the flexible bulk wire or cable are loaded onto the first machine, called the payoff (labelled in the submission and product information provided to this office as OW26, or Tire Driven Payoffs). The payoff has pintels which are inserted into the hollow middle of the spools in order to support the spool. The payoff then raises the spool up to allow it to unspool. As the flexible bulk wire or cable is loaded into the machine and the unspooling starts, tires keep the flexible bulk wire or cable guided in the desired direction. The machines operate by motor, and off-winds the flexible bulk wire or cable from the payoff into the second machine, called the central rewind station (RW60, also labelled to as the ReWinder). The central rewind station holds and guides the flexible bulk wire or cable through rails or channels, in a fixed location, and also cuts the cable in a fully enclosed and safe environment. Cutting wire in an environment other than the described could result in the wire end flying out and causing damage or injury. The flexible bulk wire or cable is finally guided through the second machine and into the third and final machine called the take-up (UW26 also called an up-winder). The take-up is where the wire or cable is respooled onto multiple, smaller spools. Once a small spool is filled, the central rewind station will cut the flexible bulk wire or cable, as noted. Another smaller spool is loaded onto the take-up machine, and the process starts again.
ISSUE:
Whether a three unit machine which unspools and respools flexible bulk wire or cable is classified as other lifting machinery under subheading 8428.90.02, HTSUS, or under subheading 8479.81.00, HTSUS, which provides for machines that treat metal, including electric wire coil-winders, or if it is classified in subheading 8479.89.98, HTSUS, as other machines, not elsewhere specified.
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, within 180 days of liquidation for entries made on or after December 18, 2004. 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 4601-14-100087 is properly accorded to the 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 another ruling of the Commissioner of Customs. Specifically, Windak argues that New York Ruling Letter (NY) 859751, dated February 11, 1991, which classified armature and stator manufacturing machines (specifically an automatic armature winder) in subheading 8479.81.00, HTSUS, is inconsistent with CBP’s rate advance and liquidation of the subject merchandise.
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.
The subject merchandise is a machine with an individual function, pursuant to Note 4 to Section XVI, 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. Heading 8428, provides for other lifting, handling, loading or unloading machinery. The difference between subheading 8479.81, HTSUS, and subheading 8479.89, HTSUS, is whether or not the subject merchandise is a machine for treating metal, or if it is something other than this machine.
As our analysis involves a dispute at the 6-digit level of the HTSUS, GRI 6 is implicated. GRI 6 states:
For legal purposes, the classification of goods in the subheading 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 purposes of this rule, the relative section, chapter, and subchapter notes also apply, unless the context otherwise requires.
The HTSUS subheadings at issue are the following:
8428 Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics):
8428.90 Other machinery:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Other machines and mechanical appliances:
8479.81.00 For treating metal, including electric wire coil-winders
8479.89 Other:
8479.89.98 Other:
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 EN 84.28 provides the following, in relevant part:
With the exception of the lifting and handling machinery of headings 84.25 to 84.27, this heading covers a wide range of machinery for the mechanical handling of materials, goods, etc. (lifting, conveying, loading, unloading, etc.). They remain here even if specialised for a particular industry, for agriculture, metallurgy, etc. This heading is not limited to lifting or handling equipment for solid materials but also includes such machinery for liquids or gases. But the heading excludes liquid elevators of the type falling in heading 84.13, and floating docks, coffer dams and similar marine lifting and re floating appliances operating solely by hydrostatic buoyancy (heading 89.05 or 89.07).
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The heading covers lifting or handling machines usually based on pulley, winch or jacking systems, and often including large proportions of static structural steelwork, etc.
These static structural elements (e.g., pylons specialised for teleferics, etc.) are classified in this heading when they are presented as parts of a more or less complete handling machine.
The EN 84.79 provides the following, in relevant part:
The many and varied machines covered by this heading include inter alia:
(II) MACHINERY FOR CERTAIN INDUSTRIES
This group includes:
(E) Machinery for treating metals, including electric wire coil-winders, e.g.:
(7) Electric wire coil-winders (e.g., for motors, transformers or inductors).
(III) MISCELLANEOUS MACHINERY
This group includes:
(18) Coiling machines for flexible cables or tubes (e.g. for textile or metal cables or ropes, electric cables, lead pipes).
Pursuant to the tariff text, machines classified in subheading 8479.81.00, HTSUS, are designed for treating metal. Examples of processes used to treat metal include scouring, pickling, tin-plating and de-sanding. The machines classified therein may or may not include a coil winding component, as the tariff text allows, but regardless, they must be for treating metal. For example, in NY G85305, dated December 20, 2000, Customs classified machinery which receives a coil of steel strip, transports the coil to an unwinder where the strip is threaded into the pickling equipment, coated with oil, and then re-coiled, in subheading 8479.81.00, HTSUS. Similarly, in NY R05096, dated November 17, 2006, CBP classified “The Automatic Basket Spinning Galvanizing Line”, which is designed to coat metal materials with zinc for corrosion-protection purposes. The galvanizing line consisted of pre-treatment tanks, dipping units, gas furnace, a spinning device, tunnel drier and other necessary equipment. As it was shipped in a single unit, it was properly classified together in subheading 8479.81.00, HTSUS, as a machine that treated metals, and included an electric wire coiling device. This analysis also comports with the EN to 84.79 (II)(E) which reiterates that machinery classified therein is “for treating metals”.
The subject machines do not “treat” the flexible bulk wire or cable at all. Rather, they uncoil and recoil flexible bulk wire or cable. They take spooled flexible bulk wire or cable, unspool it, respool it, and when the desired amount is unspooled, they cut it. CBP has consistently classified spooling or winding machines such as these, in subheading 8479.89, HTSUS. See HQ 086736, dated June 7, 1990, where CBP classified tandem coilers used in coiling aluminum strip under subheading 8479.89, HTSUS; HQ 963154, dated February 3, 2000, where CBP held that machines that “wind or coil two pieces of carbon coated foil” were classified under subheading 8479.89, HTSUS; HQ 965122, dated July 10, 2002, where CBP classified articles that uncoil wire from a spool under subheading 8479.89, HTSUS. Similarly, in NY 875624, dated July 23, 1992, we held that an uncoiler that “basically feeds the steel coil into the roll leveler” was classified under subheading 8479.89, HTSUS.
Windak points to NY 859751, dated February 11, 1991 to support its claim, however, this ruling actually supports CBP’s position here. In NY 859751 the Models DAW and MAW automatic armature winders utilize winding arms to wind an insulated copper wire around the armature shaft on the inside of the stack slots and hook the wire to tangs located on the commutator ring at the end of the armature shaft. During this process, the wires are coated with a resin to protect them from dirt and wear. In other words, the wire is being “treated” with resin while it is being coiled and/or uncoiled. Classification in subheading 8479.81.00, HTSUS, is thus correct. This merchandise and analysis was identical to that in NY 859750, and NY 859754, both dated February 14, 1991.
The EN 84.79(E)(7), which Windak points to, refers to a specific type of coiling machine used in the production of electric items such as motors and transformers. With the coilers of subheading 8479.81, HTSUS, electric wire is wound around a specific part of an electric article so as to complete the manufacture of that electric article. Such coilers work exclusively with electric wire, and are distinguishable from coiling/winding/spooling machines which are basically for putting flexible bulk wire into a ready form for sale or storage purposes.
Windak suggests in the alternative that the subject machines are classified in heading 8428, HTSUS, which provides for lifting, handling, loading or unloading machinery. In information provided to this office and in videos shown to this office, the machines do have a lifting component, which hoists the giant spools of flexible bulk wire or cable via pintels inserted into either side of the spools. But the purpose of the lifting component of this unit is to accommodate and support the enormous spools. The spools loaded into the payoff are so large and so heavy, that they cannot be placed onto the pintels by human strength alone. As such, the payoff unit must raise the spool so that it can unspool and the wire can proceed from the payoff into the rewinder and on to the up-winder. The machines do not lift the spools for the purpose of moving them or relocating them to an alternate or secondary location.
The ENs describe three main types of complex machines which are classified in heading 84.28 as lifting, handling, loading or unloading machinery. They are (I) Intermittent Action Machines, (II) Continuous Action Machines, and (III) Other Special Lifting or Handling Machinery. The ENs state that a wide range of machinery is classified therein, however, the unifying characteristic is that they are machinery that moves things from one location to another, or, they are machines that have the sole purpose of lifting something to an alternate site. For example, lifts and skip hoists lift bulk material up a ramp or vertical shaft. They are used for raising coal from mines, for hoisting ores, limestone, fuel, etc., into blast furnaces, lime kilns, etc. See EN (I) (A) and (B). Teleferics are for lifting people. See EN (I) (C) and (D). Elevators, escalators and conveyors, lift people and products from one place to another. See EN (II) (A), (B), (C), and (D). Mechanical ladders or mechanical loaders move things such as coal, ores, excavated earth, pebbles, sand or other bulk materials. See EN (III) (C) and (F). Dollies lift and lower movie cameras. See EN (III)(G). The subject respooling machine has a hoisting component, but it does not move the spools from one location to another. The lifting component is subsidiary to the machine’s clearly defined function as respooling machinery.
The machinery units are not classified in heading 8428, HTSUS. Moreover, as stated above, CBP has consistently classified respooling or winding machines in subheading 8479.89.98, HTSUS.
HOLDING:
By operation of GRI 1, the subject merchandise is specifically provided for in subheading 8479.89.9899, HTSUSA (Annotated), 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: Other.” The column one rate of duty is 2.5% ad valorem. The Protest should be DENIED.
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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web 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