CLA-2-84:OT:RR:NC:N1:102
Mr. Richard F. O’Neill
Neville Peterson LLP
Counsellors At Law
999 Third Avenue, Suite 2525
Seattle, Washington 98104
RE: The tariff classification of agricultural dryers from China
Dear Mr. O’Neill:
In your letter dated August 14, 2019, you requested a tariff classification ruling on behalf of your client Specialty Handling LLC of Eugene, Oregon. Descriptive literature was submitted.
The merchandise under consideration is referred to as mesh-belt conveyor agricultural drying machines. The drying machines consist of various components that are permanently installed to a main housing. Due to the size of the drying machines, you state that the machines will be “imported unassembled in two containers” and will be assembled subsequent to importation into the United States. The shipments of the two containers will meet the timeframes and arrival dates outlined in 19 C.F.R. § 141.58(b)(4).
The drying machines are exclusively designed to remove moisture from agricultural harvests or crops. The removal of moisture is achieved as the product moves through the machine on a conveyor belt and heated air produced by a furnace circulates below and around the agricultural product. In some instances, the agriculture product undergoes a pre-heating process.
The applicable subheading for each mesh-belt conveyor agricultural drying machine, as described above, will be 8419.31.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Machinery, plant or laboratory equipment, whether or not electrically heated…., for the treatment of materials by a process involving a change of temperature, such as heating, cooking,… other than machinery or plant of a kind used for domestic purposes;…Dryers; For agricultural products. The general rate of duty is Free.
You also propose that the drying machines be considered for duty-free treatment as agricultural or horticultural machinery under subheading 9817.00.50, HTSUS. Subheading 9817.00.50, HTSUS, is an actual use provision. To fall within this special classification, a three-part test must be met. First, the subject merchandise must not be excluded from the heading under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. Secondly, the terms of the headings must be met in accordance with GRI 1, which provides that classification is determined according to the terms of the headings and any relative section or chapter notes. Thirdly, the article must comply with the actual use regulations under Sections 10.131 through 10.139, Customs Regulations (19 C.F.R. §§ 10.131 through 10.139).
As stated above, the merchandise is classifiable under subheading 8419.31.0000, HTSUS. This subheading is not excluded from classification in subheading 9817.00.50, HTSUS, by operation of Section XXII, chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. The second part of the test calls for the unit to be included within the terms of subheading 9817.00.50, HTSUS, as required by GRI 1. The unit must be “machinery”, “equipment” or “implements” used for “agricultural or horticultural purposes”. In this office’s opinion, the subject merchandise is “machinery” which fulfills the requirement of an agricultural pursuit. The three conditions set forth in 19 C.F.R. § 10.133 which must be met to receive duty preference for actual use are:
(a) Such use is intended at the time of importation; (b) The article is so used; and (c) Proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption. The mesh-belt conveyor agricultural drying machines described above are classifiable in subheading 9817.00.50, HTSUS, if the actual use conditions and requirements of Sections 10.131 §§ through and including 10.139, Customs Regulations, are met.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8419.31.0000, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8419.31.0000, HTSUS, listed above.
With regard to the mesh-belt conveyor agricultural drying machines classified under subheading 8419.31.0000, HTSUS, as stated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(a), HTSUS, the rates of duty imposed by heading 9903.88.01 do not apply to products for which entry is properly claimed under a heading or subheading in Chapter 98.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.
For background information regarding the Section 301 trade remedy, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 on the World Wide Web at https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. § 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Sandra Martinez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division