CLA-2-84:OT:RR:NC:N2:220
Kim Campbell
mkmarin trade services inc./TOtrade Inc.
15 Allstate Parkway
Markham, Ontario, L3R5B4
Canada
RE: The tariff classification of a water feature controller, industrial PC, and programming kit from Canada
Dear Ms. Campbell:
In your letter dated September 13, 2022, you requested a tariff classification ruling on behalf of your client, Crystal Fountains Inc.
The first item under consideration is identified as the WLCC Basic – DMX/RMD Show Controller with Water Features (WLCC Basic), which consists of a polycarbonate enclosure having multiple circuit breakers, switches, receptacles, terminal blocks, an industrial personal computer (PC), a front panel user interface, and an AC/DC converter. The function of the WLCC Basic is to electrically control the visual features and operation of commercial fountains by providing programming control to sequence the operation of lights and water fountain nozzles through specialized software.
The second item under consideration is identified as the KARBON 300, which is described as an industrial PC consisting of the motherboard, a 1.6 GHz processor, integrated graphics, 8 GB memory, Ethernet, and multiple interface connections, such as display port, USB, CAN Bus, Digital I/O, RS-232/422 com ports, and a 3-pin power block. The KARBON 300 is capable of running numerous operating systems, as specified by the end user, such as Windows or Linux, for example, and you state that the users are not prevented from adding and/or removing software of their choosing.
The third item under consideration is identified as the Water Feature Diagnostic Kit (Kit), Item Number ELPKIT11, which is described a retail packaged kit containing programming and diagnostic tools, adapters, and cables. Based on the information provided, the Kit is used to manage and troubleshoot water feature control systems by performing programming updates, device management, network management, firmware update and configuration, and data logging.
In your request, you suggest that the WLCC Basic is classifiable under subheading 8471.41.0150, Harmonized Tariff Schedule of the United States (HTSUS). We disagree. As described previously, the WLCC Basic is comprised of numerous electrical control apparatus of heading 8536, to include circuit breakers, receptacles, switches, and more. However, your information also describes the KARBON 300 industrial PC is part of the WLCC Basic. In our opinion, the WLCC Basic is primarily performing an electrical control and/or electrical distribution function and not a data processing function, where the industrial PC is functioning as the sequencing and controller for the system. As such, heading 8471, HTSUS, is not applicable.
Also in your request, you suggest that the KARBON 300 is classifiable under subheading 8473.30.5100, HTSUS. We disagree. As imported separately, the KARBON 300 is a machine that is accurately described as an automatic data processing (ADP) machine. The KARBON 300 exhibits all the physical features of an ADP machine, and based on the information provided, does not impose limitations on the user by preventing them from adding and/or removing applications or operating systems of their choosing. As a standalone machine at importation, the KARBON 300 satisfies the prerequisites of Note 6 (A) to Chapter 84, HTSUS. As such, the parts provision under heading 8473, HTSUS, is not applicable.
Lastly, you suggest the Kit is classifiable under subheading 9031.80.8085, HTSUS, which provides for “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other instruments, appliances and machines: Other: Other.” We disagree. While the Kit does perform a diagnostics function that provides device and network health checks, system tests, and diagnostic mapping that may be covered by heading 9031, HTSUS, the device also has essential features that are beyond the capabilities of 9031, HTSUS, such as device management (product search, identification, addressing, and system mapping) and advanced product management (product firmware updates, configuration, and data inspection). These features are not covered by heading 9031, HTSUS, and are critical for the operation of the device. Accordingly, subheading 9031.80.8085, HTSUS, is not applicable.
Regarding the classification of the Kit, Explanatory Notes to the Harmonized Tariff System, although not legally binding, provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. Explanatory Note X to GRI 3 (b) provides that the term "goods put up in sets for retail sale" means goods that; (a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without re-packing. Goods classifiable under GRI 3 (b) are classified as if they consisted of the material or component which gives them their essential character, which may be determined by the nature of the material or component, its bulk, quantity, weight, or value, or by the role of a constituent material in relation to the use of the article. It is the decision of this office that the Kit will be classified as a set for tariff classification purposes in accordance with GRI 3(b), where the essential character is imparted by the troubleshooting/programming apparatus having the primary function of system processing, mapping, and device management. As these are functions not specified elsewhere, classification within heading 8543, HTSUS, is appropriate.
The applicable subheading for the WLCC Basic – DMX/RMD Show Controller with Water Features will be 8537.10.9160, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity, …: For a voltage not exceeding 1,000 V: Other: Other: Programmable controllers.” The general rate of duty will be 2.7 percent ad valorem.
The applicable subheading for the KARBON 300 will be 8471.50.0150, HTSUS, which provides for “Automatic data processing machines and units thereof… Processing units other than those of subheading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units: Other.” The general rate of duty will be Free.
The applicable subheading for the Water Feature Diagnostic Kit, Item Number ELPKIT11 will be 8543.70.9860, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other: Other.” The general rate of duty will be 2.6% 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 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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division