CLA-2 OT:RR:CTF:TCM HQ H137555 TNA
Port Director, Laredo Service Port
U.S. Customs and Border Protection
P.O. Box 3130 Laredo, TX 78044-3130
Attn: Nicole Boudreaux, Supervisory Import Specialist
RE: Internal Advice Request 10/040; classification of metal switch box assemblies
Dear Port Director:
This is in response to your request for internal advice, dated November 9, 2010, concerning the proper classification of a metal switch box assembly, imported by Square D Company (“Square D” or “the importer”) under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The subject merchandise consists of a switch box assembly, Part Number 40552-182-53, for which the importer submits a diagram. They are imported for use with Square D’s Heavy Duty Safety Switch, which is designed for commercial and industrial applications. The Heavy Duty Safety Switch is a “knife switch” that will break an electrical circuit by interrupting the current or diverting it from one conductor to another.
Part Number 40552-182-53 is the outer enclosure that houses and protects the switching mechanism. As imported, it is a metal enclosure made of 12 gauge commercial quality cold rolled steel that is painted a medium gray color to match all other Square D products. It is a complete enclosure, fully formed and painted. The cut-outs and markings necessary for final assembly with the switching equipment have already been completed by the time the assembly is imported, and no further alteration is done after importation.
The subject merchandise entered on November 25, 2008 in subheading 8538.90.80, HTSUS, which provides for “Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537: Other: Other: Other.” In February, 2009, the port initiated a NAFTA verification inquiry, during which it also questioned the classification of the subject box assemblies. The merchandise was liquidated on October 9, 2009 in subheading 7326.90.85, HTSUS, which provides for “Other articles of iron or steel: Other: Other: Other: Other.” Protest made by the importer on April 2, 2010, was denied, but the Port subsequently requested this internal advice.
ISSUE:
Whether a metal switch box assembly is classified under heading 7326, HTSUS, as other articles of iron or steel, or under heading 8538, HTSUS, as parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537, HTSUS?
LAW AND ANALYSIS:
Internal advice is provided for in 19 C.F.R. §177.11, which provides that “advice or guidance as to the interpretation or proper application of the Customs and related laws with respect to a specific Customs transaction may be requested by Customs Service field offices from the Headquarters Office at any time, whether the transaction is prospective, current, or completed.” See 19 C.F.R. §177.11(a).
Furthermore, liquidation is final. See 19 U.S.C. 1514(a). See also Fujitsu Compound Semiconductor, Inc. v. United States, 27 C.I.T. 110; 246 F. Supp. 2d 1334; 25 Int'l Trade Rep. (BNA) 1103; 2003 Ct. Intl. Trade LEXIS 5; SLIP OP. 2003-6 (Ct. Int’l Tr. 2003). The instant transaction was liquidated on October 9, 2009 and protest was denied. As such, the transaction is complete.
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, GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
7326 Other articles of iron or steel:
7326.90 Other:
Other:
7326.90.85 Other
* * * * *
8538 Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537
8538.90 Other:
Other:
8538.90.80 Other
* * * * *
Note 1 to Section XV, HTSUS, states in pertinent part, the following:
This section does not cover: …
(f) Articles of section XVI (machinery, mechanical appliances and electrical goods)
Note 2 to Section XVI, HTSUS, states the following:
Subject to note 1 to this section, note 1 to chapter 84 and to 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:
(a) 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;
(b) 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;
(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548.
Additional U.S. Rule of Interpretation 1 states, in pertinent part, the following:
In the absence of special language or context which otherwise requires—
(c) a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for “parts” or “parts and accessories” shall not prevail over a specific provision for such a part or accessory.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The EN to heading 7326, HTSUS, 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.
This heading does not cover forgings which are products falling in other headings of the Nomenclature (e.g., recognisable parts of machinery or mechanical appliances) or unfinished forgings which require further working but have the essential character of such finished products.
The EN to heading 8538, HTSUS, provides, in pertinent part:
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), this heading covers parts of the goods of the three preceding headings.
The heading includes, for example, boards for switchboards, generally of plastics or metal, without their instruments, provided they are clearly recognisable as parts of switchboards.
In its protest, the importer argued that the subject box assembly is a part of a knife switch of heading 8536, HTSUS. Citing multiple CBP rulings, Protestant defines a “part” as “an integral, constituent component of another article, necessary to the completion of the article with which it is used, and which enables that article to function in the manner for which it was designed.” See HQ 966450, dated October 27, 2003; HQ 964886, dated January 29, 2002; HQ 962735, dated November 22, 1999; and HQ 961660, dated January 22, 1999; see also Westinghouse Trading Company v. United States, 83 Cust. Ct. 33 (1979); United States v. Mitsubishi International Corp., 60 C.C.P.A. 79 (1973). Citing EN 85.38, Square D further argues that a good is considered a “part” of a switch of heading 8636, HTSUS, if it is “clearly recognizable” as a part of that switch when imported.
Citing to its submitted engineering drawings, the importer argued that the subject switch box assembly is specifically designed for use in a switch, and that it has been worked to the point where it is clearly recognizable for that purpose when it is imported. Protestant notes that its assembly is a box that has been specifically shaped for the company’s heavy duty switches and painted the company’s signature square gray. Furthermore, Square D argues that holes and cut-outs were made in the boxes during the manufacturing process to accommodate the installation of the switch equipment and the mounting of the finished good at the user’s location. Finally, the importer cites that the Heavy Duty Safety Switch will not operate until it is properly assembled into the subject box assemblies. As a result, Square D argues that the subject box assembly is excluded from Chapter 73, HTSUS, and that the Port’s classifying them there is contrary to Note 1(f) to Section XV, HTSUS, Note 2 to Section XVI, HTSUS, and numerous court cases and CBP rulings that classify similar merchandise in heading 8538, HTSUS. See, e.g., Westinghouse, 83 Cust. Ct. 33 (1979); Mitsubishi, 60 C.C.P.A. 79 (1973). See also NY J85650, dated June 30, 2003; NY J82135, dated April 2, 2003; NY J81238, dated March 10, 2003; NY I82189, dated June 19, 2002; NY I82476, dated June 17, 2002.
In response, we note that the classification of Square D’s “knife switch” is not in dispute. See, e.g., NY G84942, dated December 15, 2000 (classifying a knife-type switch as an electrical switch in subheading 8536.50.90, HTSUS). We also agree with the definition of “parts” to which Square D cites, and further note the line of court cases from which these definitions are derived. See Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997); United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322 (1933); United States v. Pompeo, 43 C.C.P.A. 9 (1955).
However, we do not agree that the subject box assembly should be classified as parts. To the contrary, Mitsubishi and Westinghouse, which are controlling, preclude such a classification. In Mitsubishi, the court classified ceramic “housings” which served as exterior covering and insulation for lightning arresters. Mitsubishi, 60 C.C.P.A. 79. The importer argued for classification as parts of lightning arresters in subheading 685.90, TSUS, the precursor provision to subheading 8535.40, HTSUS. The court disagreed, finding that, under the rule of relative specificity, the merchandise was better described by the provision for ceramic electrical insulators and other ceramic electrical ware than by a parts provision. Id. at 84. The Westinghouse court followed this reasoning. See Westinghouse, 83 Cust. Ct. 33, 36.
In the present case, we examined the engineers’ drawings that Square D submitted in support of its protest, as well as further product specifications and diagrams submitted to the port following the initiation of this Internal Advice. These materials show large boxes that are designed to encompass the metal switches with which they are to be used. The front covers are flat, and the drawings indicate that the center of the box assemblies is simply open space. In this way, they are not unlike the ceramic housings classified in Mitsubishi and Westinghouse. The importer claims that its knife switches cannot operate without the subject housings. However, in Mitsubishi, the fact that the housings provided insulation did not prevent the court from classifying its merchandise as ceramic housings rather than parts. See Mitsubishi, 60 C.C.P.A. 79, 82. The open metal housing in the instant case appears to provide less insulation and protection than those in the Mitsubishi case, and do not appear to be necessary for the operation of the switch. As a result, even if the subject merchandise met the cited definitions of a part, classifying it as such would be contrary to precedent and Additional US Rule 1(c).
It is not in dispute that the subject merchandise is made of steel. As a result, it is classified in heading 7326, HTSUS, and specifically in subheading 7326.90.85, which provides for “Other articles of iron or steel: Other: Other: Other: Other: Other.”
HOLDING:
By application of GRI 1, the metal switch box assembly is classified in heading 7326, HTSUS. It is specifically provided for in subheading 7326.90.85, HTSUS, which provides for “Other articles of iron or steel: Other: Other: Other: Other: Other.” The applicable duty rate is 2.9% ad valorem.
You are to mail this decision to the Internal Advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on CBP’s website, located 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