CLA-2 OT:RR:CTF:TCM H251036 DSR
Port Director, Port of Charlotte
1901 Crossbeam Drive
Charlotte, NC 28217-2823
ATTN: Laurie Pazzo, Senior Import Specialist
RE: Application for Further Review of Protest No. 1512-2013-100079; classification of solar modules
Dear Port Director:
This is in response to the Application for Further Review (“AFR”) of Protest 1512-2013-100079, dated January 9, 2014, filed by Hanwha Solar One USA, Inc. (“Protestant”), in response to your classification of a two models of solar modules under the Harmonized Tariff Schedule of the United States (HTSUS). The articles were entered on September 28, 2012, and liquidated on June 21, 2013.
FACTS:
The items concerned are referred to as “Solar Modules” (Part numbers HSL60P6-PA-0-240T and HSL60P6-PA-0-245T). Protestant describes the modules as follows:
Hanwha’s solar module is comprised of 60 polycrystalline silicon photovoltaic (“PV”) cells and a junction box. The cells are arranged in six, 10-cell strings, and are encapsulated between a sheet of tempered glass and a polymer backing. The junction box is attached to the rear of the module and houses terminals to connect the string of cells together, cables and connectors for external wiring, and six bypass diodes. The purpose of the diodes is to protect the cells from overheating when shaded. The bypass diode does not supply power to an external load and the module does not contain an integrated power modulator or inverter that converts direct current (DC) to alternating current (AC) for use by a utility grid. The module must be connected to an external inverter, not manufactured or offered by Hanwha, in order to convert the DC current produced by the module to AC for grid consumption.
ISSUE:
Whether the solar modules in question are classified under heading 8501, HTSUS, as electric motors and generators, or under heading 8541, HTSUS, as photosensitive semiconductor devices.
LAW AND ANALYSIS:
Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a) (2) as decisions on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (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 No. 1512-2013-100079 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a), which provides that further review should be accorded to a protest against a decision that is alleged to be inconsistent with a CBP ruling, or with a decision made by CBP with respect to the same or substantially similar merchandise.
Classification under the HTSUS is determined 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 2012 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:
* * *
8501.31.80 Generators.
* * *
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:
* * * *
Note 2 to Chapter 85, HTSUS, provides, in pertinent part, that “[h]eadings 8501 to 8504 do not apply to goods described in heading 8511, 8512, 8540, 8541 or 8542.”
EN 85.01 describes the scope 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 fiber 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 Note 2 to Chapter 85, merchandise falling under the scope of heading 8541, HTSUS, as a photosensitive semiconductor device, cannot be classified under heading 8501, HTSUS. However, photovoltaic devices designed to supply power directly (e.g., the electrical current flows in only one direction) to an external load are not mere photosensitive semiconductor devices (i.e. photovoltaic cells or panels) of heading 8541, HTSUS. Rather, such devices are properly classified in heading 8501, HTSUS, as generators. See also HQ H255441 (August 30, 2016) (classifying solar battery chargers equipped with items such as battery terminal clamps, accessory adapters or battery shoes under heading 8501, HTSUS); compare HQ H084604 (May 3, 2010) (classifying modules that could only connect to other solar modules in order to create a larger solar under heading 8541, HTSUS); and compare HQ H250768 (December 2, 2016) (classifying another solar module equipped with a junction box with connectors that also is designed only to connect to other solar modules in a series or in parallel under heading 8541, HTSUS).
The evidence before us shows that each of the subject solar modules features a junction box attached to its rear, which houses terminals to connect the string of cells together and cables and connectors for external wiring. Like the modules in question in HQ H084604 and HQ H250768, supra, the subject modules are not able to supply power in one direction to external devices or structures. Likewise, devices are not generators enabled to provide power directly to external loads in the manner clarified by the ENs. The differentiating factor between devices of heading 8501, HTSUS, and heading 8541, HTSUS, is that generators of heading 8501 are outfitted with control circuitry, however simple (e.g., a blocking diode, an inverter, etc.), that ensures the single direction of the current. Therefore, we find that the subject modules are photosensitive semiconductor devices described by heading 8541, HTSUS.
HOLDING:
The Protest is GRANTED. By application of GRI 1, the subject module is classified under heading 8541, specifically in subheading 8541.40.60, which provides for: "Electric motors and generators (excluding generating sets) …: Other DC motors; DC generators: Of an output not exceeding 750 W: Generators." The 2012, column one, general rate of duty is free.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
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.
Sincerely,
for Craig T. Clark, Director
Commercial and Trade Facilitation Division