CLA-2-84:OT:RR:NC:N1:103
Steven Michael Stolarz
LTI Holdings, Inc. (dba Boyd Corporation)
2424 N. Federal Highway, Suite 318 Boca Raton, FL 33431
RE: The tariff classification of a Coolant Distribution Unit from Mexico
Dear Mr. Stolarz:
In your letter dated January 30, 2024, you requested a tariff classification ruling.
The merchandise under consideration is referred to as a Coolant Distribution Unit (CDU), model number CDU1350G1, which is a system designed to control the temperature of components in electrical equipment. The CDU is housed within a floor-standing cabinet that is separated into two sections, identified in your submission as a controller section and a mechanical section. The controller section consists of a controller board, power supply, pump inverter drives, and EMC filters. Directly behind and below the controller section is the mechanical section, whose main components are a reservoir tank, expansion vessel, valves, sensors, pumps, and plate heat exchangers.
The function of the CDU is to monitor and change the temperature of a process fluid flowing in a continuous loop. During operation, the pumps circulate fluid to plates that are positioned adjacent to heat-generating components, such as memory modules, networking chips, high-power CPU and GPU chips, etc. The fluid absorbs heat from the plates, returns to the CDU where it enters the heat exchanger unit, and transfers its heat to chilled facility water running in a separate loop. Alternatively, the system can be configured for indirect cooling, such as sending cooled water to rear door heat exchangers mounted in data center racks. The controller monitors the temperature of the returning fluid and controls the flow of the liquid by regulating the valves and adjusting the speed of the pumps.
In your letter, you suggest the applicable subheading for the CDU should be 9032.89.6030, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Automatic regulating or controlling instruments and apparatus; parts and accessories thereof: Other instruments and apparatus: Other: Other: Process control instruments and apparatus: Complete systems.” We disagree. The unit is designed to change the temperature of a fluid returning from heat-generating components of electrical equipment. While the automatic controller does provide control over the unit, it is only one piece of the overall system. The overall system combines the controller with the mechanical equipment that actually changes the temperature of the fluid.
As such, the applicable subheading for the Coolant Distribution Unit, model number CDU1350G1, as described above, will be 8419.89.9585, HTSUS, 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: Other: Other: Other: Other: For other materials.” The rate of duty will be 4.2% ad valorem.
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 at https://hts.usitc.gov/current.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Paul Huang at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division