OT:RR:CTF:EMAIN H314738 SKK
TARIFF NO.’s: 8479.89.94; 8505.19.00
Center Director
Machinery Center of Excellence and Expertise U.S. Customs and Border Protection Laredo Field Office 109 Shiloh Drive, Suite 300 Laredo, TX 78045
ATTN: William Rosado, Import Specialist.
RE: Application for Further Review of Protest No. 0417-19-100044; Classification of overband separators and permanent suspension magnets; Magnetic separating machinery for metals.
Dear Center Director:
This letter pertains to an Application for Further Review (“AFR”) of Protest Number 0417-19-100044, filed on behalf of Bunting Magnetics Co. (“Bunting” or “Protestant”) on May 8, 2019. The Protest and AFR concern U.S. Customs and Border Protection’s (“CBP”) classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of “overband separators” and “permanent suspension magnets,” also referred to as magnetic separators.
Citing to several CBP Form 29 Notices of Action on allegedly similar products, Protestant also submits that the subject merchandise is entitled to “treatment” pursuant to §177.12(c) of Title 19 of the Code of Federal Regulations (19 C.F.R. §177.12(c)).
The AFR was forwarded for our consideration. No samples were provided for examination. In the protest submission, counsel for Bunting submitted a request for an oral discussion of the issues germane to this protest. However, in response to outreach on three separate occasions between July 30, 2024 and September 6, 2024, neither counsel nor Bunting confirmed their interest in a discussion or replied to schedule one.
FACTS:
The articles at issue are described as “overband separators” and “permanent suspension magnets.”
Overband seperators
The subject overband separators are machines that attract metals from bulk material streams. In use they may be positioned either directly over and perpendicular to a material stream conveyor belt or mounted at the end of the material stream conveyor belt for in-line applications. As a material stream passes near the overband separator, its magnets attract metals from the material stream and its circular conveyor belt moves the metals to a separate discharge area away from the original material stream. The subject overband separators incorporate a circular conveyor belt that runs over a magnet (permanent or electro-magnet) that is mounted in a heavy-duty steel frame. The conveyor belt runs on two crowned pulleys and is driven by an electric or hydraulic motor.
Electro-Magnet Overband Separator Permanent Magnet Overband Separator
Permanent Suspension Magnets
The subject permanent suspension magnets are also used to attract metals from material streams. They differ from the subject overband seperators in that they do not incorporate a motorized conveyor system. They hang by chains over conveyor belts and can be suspended either horizontally or inclined over the end of a conveyor. Extracted metal is held against the face of the permanent suspension magnet until it is manually cleared. Permanent suspension magnets are used primarily in aggregate mining (not coal) and recycling (concrete) industries. See below:
Four entries of the subject merchandise were filed between October 14, 2017 and November 28, 2017. The subject overband separators and all but one permanent suspension magnet were entered under heading 8474, HTSUS, specifically subheading 8474.10.00, HTSUS, which provides for “[M]achines for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances, …: parts thereof: Sorting, screening, separating or washing machines.” One permanent suspension magnet was entered under heading 8505, HTSUS, specifically subheading 8505.11.00, HTSUS, which provides for “[E]lectromagnets; permanent magnets and articles intended to become permanent magnets after magnetization: electromagnetic or permanent magnet chucks, clamps and similar holding devices; electromagnetic couplings, clutches and brakes; electromagnetic lifting heads; parts thereof: Permanent magnets and articles intended to become permanent magnets after magnetization: Of metal.”
ISSUE:
What is the proper classification of the subject overband separators and permanent suspension magnets under the HTSUS?
LAW AND ANALYSIS:
As an initial matter, it is noted that this matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The Protest was timely filed on May 8, 2019, within 180 days of liquidation, pursuant to 19 U.S.C. § 1514(c)(3).
Further review of the Protest is warranted pursuant to 19 C.F.R. § 174.24(c), as it involves matters previously ruled upon by CBP where the Protestant alleges facts or legal arguments that were not considered at the time of the original ruling.
Classification
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. If 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 may then be applied.
The 2017 HTSUS headings under consideration are as follows:
8428 Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics).
8474 Machinery for sorting, screening, separating, washing, crushing, grinding, mixing or kneading earth, stone, ores or other mineral substances, in solid (including powder or paste) form; machinery for agglomerating, shaping or molding solid mineral fuels, ceramic paste, unhardened cements, plastering materials or other mineral products in powder or paste form; machines for forming foundry molds of sand; parts thereof.
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof.
8505 Electromagnets; permanent magnets and articles intended to become permanent magnets after magnetization; electromagnetic or permanent magnet chucks, clamps and similar holding devices; electromagnetic couplings, clutches and brakes; electromagnetic lifting heads; parts thereof.
Note 3 to Section XVI (Chapters 84 and 85), HTSUS, provides:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
The Harmonized Commodity Description and Coding System Explanatory Notes
(“EN’s”) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are useful in ascertaining the classification of merchandise under the system. CBP believes the EN’s should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The EN to 84.74 provides, in pertinent part: This heading covers: (I) Machinery of a kind used, mainly in the extractive industries, for the treatment (sorting, screening, separating, washing, crushing, grinding, mixing or kneading) of solid mineral products (in general the products of Section V of the Nomenclature) such as earth (including earth colours), clay, stone, ores, mineral fuels, mineral fertilisers, slag cement or concrete….
Certain machines of the kind normally used for the treatment of mineral products can, as a secondary use, also treat non-mineral products (e.g., wood or bone); such machines remain in this heading. However, the heading does not extend to machinery specially designed for carrying out similar operations on non-mineral materials (e.g., for sorting or screening wood chips; for grinding wood flour; for grinding or mixing chemicals or organic colouring materials; for grinding bone, ivory, etc.; for agglomerating or moulding cork powder).
The EN to 84.28 provides, in pertinent 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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(II) CONTINUOUS ACTION MACHINES
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(C) Conveyors are used for moving goods, usually in a horizontal direction, sometimes over very long distances (in mines, quarries, etc.). They include:
(1) Conveyors operated by continuously moving carrying or pushing elements, e.g., bucket, tray or pan type conveyors; scraper or screw conveyors (in which the materials are forced along a trough by a push plate or worm respectively); band, belt, apron, slat, chain, etc., conveyors.
(2) Conveyors consisting of a train of motor driven rollers (e.g., as used for feeding steel into cogging mills). The heading also covers roller conveyors, not power driven, usually mounted on bearings (e.g., horizontal roller runways for manoeuvring crates, etc., and gravity roller conveyors), but it excludes similar equipment without rollers, e.g., straight, curved or spiral sliding chutes (heading 73.08, 73.25 or 73.26 according to type).
(3) Vibrator or shaker conveyors operated by vibratory or reciprocating movements of the trough supporting the goods.
The EN to 85.05 provides, in pertinent part:
This heading covers electro magnets, those electro magnet operated appliances specially listed in the heading, permanent magnets and permanent magnet work holders.
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The heading does not cover:
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(b) Electro magnets, permanent magnets or magnetic devices of this heading, when presented with machines, apparatus, toys, games, etc., of which they are designed to form part (classified with those machines, apparatus, etc.).
Overband separators
Protestant submits that the subject overband separators are properly classified under subheading 8474.90.00, HTSUS. Heading 8474, HTSUS, provides for machines for use in the extractive industries for the treatment (such as separating) of solid mineral products (i.e., stone, ores, and concrete). The subject separators are used to remove ferrous material from bulk materials and do not treat solid mineral products. Accordingly, classification is not proper in heading 8474, HTSUS.
Alternatively, Protestant suggests that the subject overband separators are properly classified under heading 8428, HTSUS, as the heading provides for “conveyors” and therefore all forms thereof are included in this heading. Protestant states that the subject overband separators have the physical attributes and functionality of a conveyor as they have “a continuously moving belt that moves goods in a horizontal direction.” As the subject overband separators are comprised of a conveyor system and a magnet component, each of which performs a different function, classification is based on the component that imparts the primary function to the machine pursuant to Note 3 to Section XVI, supra. The primary function of an overband separator is to separate ferrous and non-ferrous materials using magnetic technology. This is supported by information available on Bunting’s website (see https://buntingmagnetics.com/industry-blog/electromax-overband-magnetic-separators-for-superior-mining-protection/ (site last visited 16 September, 2024). While the subject overband separators do incorporate a conveyance system, the conveyance system performs the subsidiary function of moving metals that have already been separated from the material stream to a discharge area. Therefore, the subject merchandise is not classified under heading 8428, HTSUS, as a conveyor belt. We further do not find Protestant’s reliance on NY I85451 (Sept. 13, 2002), NY N269355 (Nov. 4, 2015), and NY R03487 (Mar.24, 2006) in support of classification under heading 8428, HTSUS, to be persuasive. NY I85451 involved a conveyor system whose sole function was to transport metal sheet blanks. NY N269355 described a deviator/bypass that contained a pneumatic cylinder which powered an internal blade to move the product in a desired direction. Classification under heading 8428, HTSUS, was based upon the deviator mechanically handling a product, as stated in the ruling: “The deviator is a machine in and of itself whose function is to handle a product in such a way as to turn the product aside from the main conveyor toward another direction.” Finally, the article at issue in NY R03487 was a complete conveying and stacking system. Therefore, the articles at issue in the cited rulings are not similar to the instant merchandise.
Heading 8479, HTSUS, provides for “[M]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter.” As discussed above, the subject overband separators are not described by any other heading in Chapter 84 and they perform their individual function of separating ferrous material without the aid of any other machine or appliance. Accordingly, the subject overband separator machines are classified in heading 8479, specifically subheading 8479.89.94, HTSUS, which provides for “[M]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other."
Permanent suspension magnets
Heading 8505, HTSUS, provides for, in pertinent part, permanent magnets. As the subject permanent suspension magnets are a named exemplar of this heading, and they are not presented with a machine so as to be prohibited from classification therein by exclusionary note (b) to EN 85.05, classification is proper in heading 8505, HTSUS.
At the subheading level, 8505.11, HTSUS, provides for, in pertinent part, permanent magnets “of metal” and subheading 8505.19, HTSUS, provides for “other” permanent magnets. Bunting’s website at https://buntingmagnetics.com/product/permanent-suspension-magnets/ (site last visited 16 September, 2024) describes the subject permanent suspension magnets as made of “a ceramic material.” Ceramic magnets, otherwise known as ferrite magnets, are mainly composed of strontium carbonates or barium carbonate and iron oxide. See https://www.stanfordmagnets.com/what-you-need-to-know-about-ceramic-magnets.html (site last visited 16 September, 2024). As such, the subject permanent suspension magnets are not made “of metal” and classification is proper under subheading 8505.19.00, HTSUS.
19 C.F.R. §177.12(c) (treatment claim)
Protestant claims that an August 10, 2006 NOA issued to an unrelated third party, in which permanent cross belt magnetic overband separators were classified as parts of machines under subheading 8474.90.00, HTSUS, and permanent suspension magnets were classified under subheading 8505.11.00, HTSUS, evidences treatment by CBP, and the agency’s subsequent issuance of a September 7, 2018, NOA to Bunting constitutes a revocation of treatment as to the classification of substantially similar merchandise. Protestant argues that as CBP did not issue the change in treatment pursuant to the notice and comment procedures prescribed by 19 U.S.C. §1625(c), the September 7, 2018 NOA is null and void and the classification set forth in the August 10, 2006 NOA remains valid and applies to the subject merchandise.
Section 177.12(c) provides, in pertinent part:
(c) Treatment previously accorded to substantially identical transactions (1) General. The issuance of an interpretive ruling that has the effect of modifying or revoking the treatment previously accorded by Customs to substantially identical transactions must be in accordance with the procedures set forth in paragraph (c)(2) of this section. The following rules will apply for purposes of determining under this section whether a treatment was previously accorded by Customs to substantially identical transactions of a person:
(i) There must be evidence to establish that:
There was an actual determination by a Customs officer regarding the facts and issues involved in the claimed treatment;
The Customs officer making the actual determination was responsible for the subject matter on which the determination was made; and
Over a 2-year period immediately preceding the claim of treatment, Customs consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other Customs actions with respect to all or substantially all of that person's Customs transactions involving materially identical facts and issues;
In applying the criteria set forth in §177.12(c)(1)(i), we find that the Protestant has not submitted the requisite evidence of treatment for the 2-year period immediately preceding its May 8, 2019 treatment claim. Protestant’s reliance on the August 10, 2006 NOA fails in this regard as it falls outside of the prescribed time period. Moreover, although Protestant claims to have followed the guidance set forth in the August 10, 2006 NOA, Protestant entered the overband separators under subheading 8474.10.00, HTSUS, and not under subheading 8474.90.00, HTSUS, as set forth in the August 10, 2006 notice.
HOLDING:
By application of GRIs 1 (Note 3 to Section XVI) and 6, the subject overband separators are classified under subheading 8479.89.94, HTSUS, which provides for “[M]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other." The 2017 column one, general rate of duty was 2.5% ad valorem.
By application of GRIs 1 and 6, the subject permanent suspension magnets are classified under subheading 8505.19.00, HTSUS, which provides for “[E]lectromagnets; permanent magnets and articles intended to become permanent magnets after magnetization: electromagnetic or permanent magnet chucks, clamps and similar holding devices; electromagnetic couplings, clutches and brakes; electromagnetic lifting heads; parts thereof: Permanent magnets and articles intended to become permanent magnets after magnetization: Other.” The 2017 column one, general rate of duty was 4.9% ad valorem.
As the rates of duty under the classifications indicated above are either the same as or more than the liquidated rate, you are instructed to DENY the Protest in full.
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 online at http://www.usitc.gov/tata/hts/.
You are instructed to notify the Protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division