CLA–2 OT:RR:CTF:TCM H243592 CKG
RE: Internal Advice; Classification of Keurig coffee brewer
Port Director
U.S. Customs and Border Protection
Port of Boston
10 Causeway Street - Room 603
Boston, MA 02222
ATTN: James Knight
Supervisory Import Specialist
Dear Port Director:
This letter is in reply to your request for internal advice of May 20, 2013,
initiated by counsel on behalf of Keurig, Inc., pertaining to the tariff classification of Keurig model B140 coffee brewer. Specifically, you request our views on the importer’s claims that the B140 is classified in heading 8419, HTSUS, as a machine for the treatment of materials by a process involving a change of temperature.
FACTS:
The Keurig B140 Commercial Brewing System measures 13.3” x 9.5” x 11.4”, carries a UL Commercial rating, a 48 oz water reservoir, and an auto-off feature that turns the brewer off after 2 hours of non-use. It can accommodate three cup sizes, and offers a removable drip tray to accommodate travel mugs. It is rated for 10,000 brews over an estimated lifespan of five years. It is sold through Keurig Authorized Dealers. The B140 is not compatible with the MY K-CUP accessory.
ISSUE:
Whether the Keurig B140 brewer is classified in heading 8419, HTSUS, as machinery for the treatment of materials by a process involving a change of temperature, other than machinery or plant of a kind used for domestic purposes, or in heading 8516, HTSUS, as other electrothermic appliances of a kind used for domestic purposes.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of
Interpretation (GRI). GRI 1 provides that classification 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.
The HTSUS provisions under consideration are as follows:
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
Other machinery, plant or equipment:
8419.81 For making hot drinks or for cooking or heating food
8419.81.90 Other. . .
.
* * * * *
8516 Electric instantaneous or storage water heaters and immersion heaters; electric space
heating apparatus and soil heating apparatus; electrothermic hairdressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric flatirons; other electrothermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading 8545; parts thereof
Other electrothermic appliances:
8516.71.00 Coffee or tea makers. . .
* * * * *
Additional U.S. Rule of Interpretation 1(a) provides:
In the absence of special language or context which otherwise requires—
a tariff classification controlled by use (other than actual use) is to be
determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use;
* * * * *
The Harmonized Commodity Description and Coding System Explanatory
Notes (ENs), constitute the official interpretation of the Harmonized System at the international level. While neither 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 the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 84.19 provides, in relevant part, as follows:
The following are examples of machinery and plant which, subject to the provisions referred to above, are covered by Part (I) of this Explanatory Note :
…
(17) Specialised heating or cooking apparatus which are not normally used in the
household (e.g., counter type coffee percolators, tea or milk urns, steam kettles, etc., used in restaurants, canteens, etc.; steam heated cookers, hot plates, warming cupboards, drying cabinets, etc.; deep fat friers).
EN 85.16 provides, in relevant part, as follows:
(E) OTHER ELECTRO THERMIC APPLIANCES OF A KIND USED FOR
DOMESTIC PURPOSES
This group includes all electro thermic machines and appliances provided they are normally used in the household. Certain of these have been referred to in previous parts of this Explanatory Note (e.g., electric fires, geysers, hair dryers, smoothing irons, etc.). Others include :
…
(3) Coffee or tea makers (including percolators).
This group excludes :
(c) Counter type coffee percolators, tea or milk urns, sauté pans and chip pans
used, for example, in chip shops and other thermo electric appliances which are not normally used in the household (heading 84.19, etc.).
* * * * *
Headings 8419 and 8516 both provide for, inter alia, electrothermic devices (i.e., devices which produce heat via electric current) such as coffee makers. A coffee maker is classified in heading 8419 or 8516 based on whether it is “of a kind used” for domestic purposes/in the household (heading 8516) or commercially (heading 8419). The language “of a kind used for” denotes a principal use provision. Thus, in order to determine whether the instant coffee brewer is of a kind used for domestic purposes, we must determine the principal use of the class or kind of goods to which the imported merchandise belongs at the time of importation. See Additional U.S. Rule of Interpretation 1(a).
Courts have provided several factors to apply when determining whether merchandise falls within a particular class or kind of good. They include: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels of trade in which the merchandise moves; (4) the environment of the sale (e.g. the manner in which the merchandise is advertised and displayed); (5) the usage of the merchandise; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use. See United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976); Lennox Collections v. United States, 20 CIT 194, 196 (1996).
An analysis of the Carborundum factors supports the importer’s claimed classification of heading 8419, HTSUS, indicating that the B140 is not principally used for domestic purposes or in the household. With respect to the physical characteristics: The B140 has a UL rating for commercial use only—not commercial and household use, as initially noted by the port (other models in the commercial brewer series, such as the B150 and the K155 Office Pro are rated for both household and commercial use). It is stated to be constructed of higher grade plastic materials than Keurig’s at-home brewers, in order to withstand higher temperatures and more frequent use. Keurig states that the B140 and its other commercial brewers use a fire-retardant grade of acrylonitrile butadiene styrene and polycarbonate plastics, in order to meet the UL commercial rating requirement. The higher grade materials are intended to compensate for the broader range of electrical service environments that are found in commercial buildings versus a home, as well as for possible power spikes from use of other equipment in a building (as opposed to the typically more stable home electrical environment). The higher grade materials are also designed to withstand heavier and more frequent use; Keurig states that the B140 is rated for 10,000 brews in its estimated five-year life expectancy, whereas at-home brewers are rated for 5000 brews over the same 5-year lifespan. The B140 also has an energy saving, auto-off/auto-on feature, which the port concluded is more typical of home brewers than commercial ones; however, we note that most of the Keurig commercial brewers, including all those in the OfficePro series, share this feature, so it is not a reliable means of distinguishing between brewers for domestic use and those for commercial use. In any case, an energy-saving mode would be just as useful in a commercial environment as in a household.
The B140 is described as a commercial/small office brewer in all marketing materials, and is marketed as a commercial brewer on amazon.com. It is rated for commercial use only, and is accompanied by clear warnings stating that it is rated only for commercial use and should not be used in the home. Unlike Keurig’s at-home brewers, the B140 is sold only through authorized dealers and is not available for purchase in stores. Only Keurig Authorized Dealers are authorized to sell the B140 and other commercial units. The at-home brewer models, on the other hand, are available for direct purchase by consumers in retail stores and online. Keurig provides a list of customers who purchased the B140 directly from Keurig. Keurig attests that these purchasers are all Keurig Authorized Dealers. Keurig further notes that its authorized dealers do not sell the at-home brewers, and that the household models are housed in separate warehouses from the commercial brewers.
In addition, the B149 and other commercial Keurig brewers are not compatible with the MY K-Cup accessory, which is available for the household models and which allows consumers to brew their own coffee by filling the MY K-Cup with ground coffee of their choosing. On the other hand, Keurig offers accessories such as carafes and K-Cup display racks for the B140 and other commercial models which are not offered for the household models.
Finally, we note that CBP has classified similar brewers designed for small commercial settings such as hotel rooms in heading 8419, HTSUS. See e.g., NY N221800, dated July 16, 2012, and NY R02079, dated June 22, 2005.
Based on the foregoing, we find that the Keurig B140 brewer is of a kind not normally used for domestic purposes and is classified in heading 8419, HTSUS.
HOLDING:
By application of GRI 1, the Keurig B140 coffeemaker is classified in heading 8419, HTSUS, specifically subheading 8419.81.90, 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: For making hot drinks or for cooking or heating food: Other.” The 2014 column one, general rate of duty is Free.
A copy of this ruling letter should be attached to the entry documents filed
at the time the goods are entered. If the documents have been filed without a copy, this
ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division