CLA-2-84:OT:RR:NC:N1:102
Aaron Marx
Crowell & Moring, LLP
1001 Pennsylvania Ave
Washington, D.C. 20004
RE: The tariff classification of incomplete heat exchange coolers from China
Dear Mr. Marx:
In your letter dated January 15, 2020, you requested a tariff classification ruling on behalf of your client, Hayden Industrial Products and Hydraulics Technology, Inc.
The merchandise under consideration is incomplete VSG 2401 Feed After Coolers. The complete cooler consist of fans, hail guards, motors and a series of enclosed aluminum tubes. The tubes receive high temperature fluid and provide a means for cool air to pass over the tubes. The fans cool the fluid flowing through the tubes. Hail guards, which are referred to as an accessory of the coolers, are components that protect the the fins and the heat transfer tubes from the elements, and the motors provide power to the heat exchange unit.
You have requested a ruling as to the tariff classification of incomplete VSG 2401 Feed After Coolers under the following three scenarios: (A) a Cooler that consists of tubes and fans, but at time of importation does not include the motors or hail guards; (B) the Cooler when imported without the motors or fans; and (C) the Cooler when imported without the motors, fans, or hail guards.
In regards to the Cooler in scenario A, ruling H276289, dated November 29, 2016, discusses an industrial heat exchanger consisting of axial fans that are mounted above or below the finned bundles. The fans move air over the finned tubes in a cross flow pass, which then cools the fluids traveling through the finned tubes. The heat exchanger utilizes fan cooled air as a cooling medium that dissipates heat released from a particular process and as such, the complete heat exchanger was determined to be a heat exchanger provided for within subheading 8419.50.
However, it is noted that at the time of importation the Cooler in scenario A does not include the motors or hail guards, the latter of which are accessories. While neither legally binding nor dispositive, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level, and provide important classification guidance in situations such as this.
Specifically, Explanatory Note IV to Section XVI explains that throughout this Section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine). Thus, a machine lacking only a flywheel, a bed plate, calender rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading provided for parts. Similarly a machine or apparatus normally incorporating an electric motor (e.g., electro mechanical hand tools of heading 8467) is classified in the same heading as the corresponding complete machine even if presented without that motor.
Accordingly, the applicable subheading for the VSG 2401 Feed After Cooler in scenario A will be 8419.50.5000, Harmonized Tariff Schedule of the United States (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 waterheaters, nonelectric; parts thereof: Heat exchange units: Other. The rate of duty will be Free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8419.50.5000, HTSUS, unless specifically excluded, are subject to an 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 8419.50.5000, HTSUS, listed above.
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 trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, 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.
The articles in question may be eligible for an exclusion from the Section 301 tariffs, however, that determination will be made independently of this prospective tariff classification ruling. For further information regarding specific entry issues, please contact your assigned CBP Center of Excellence & Expertise office prior to importation of the goods.
In regards to the classification of the Coolers in scenarios B and C, we need more information to make a classification determination. Such information includes explaining how the tubes will be imported. Will the tubes be imported in bundles or individually? Will a specific quantity of tubes that corresponds to only the cooler be imported? Will the tubes be imported so that they only interconnect with each other and the structure they will be installed in? After importation, will the tubes undergo any type of modifications?
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