CLA-2 OT:RR:CTF:TCM W968275 JER
Port of Chicago,
U.S. Customs and Border Protection
610 S. Canal St., Rm 306
Chicago, IL 60607
RE: Application for Further Review of Protest No. 3901-2005-100623; machinery used in syringe finishing line
Dear Port Director:
This is our decision regarding the Application for Further Review (“AFR”) of Protest No. 3901-2005-100623, timely filed on behalf of Baxter Healthcare Corporation (“Baxter”), concerning the classification of a group of different machines used in a syringe finishing line under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The subject merchandise was entered on September 8, 2004, under heading 8422, HTSUS, specifically, subheading 8422.30.91, HTSUS. On April 8, 2005, the Port liquidated the subject syringe finishing line machines under heading 8479, HTSUS, specifically, subheading 8479.89.98, HTSUS.
The subject machines, which are manufactured by Inova Pharma Systems (“Inova”), are described as a group of “syringe finishing line machines.” They consist of one SH-230 Denester (“Denester”), two SP-900 Accumulators/Buffers (“Accumulators”), one EKK-182 Labeling and Plunger Rod Insertion Machine (“Labeler with Plunger Rod Inserter”), one CM-18 Backstop Machine (“Backstop”) and four Syringe Transport Systems (“Conveyors”).
The machines are described as follows:
Denester – (1) removes nests of syringes from tubs of various sizes, (2) removes syringes from the nests, and (3) transfers the syringes to the next downstream machine.
Conveyors – transfer conveyors are used to transport the syringes between the machines in the line.
Accumulator – syringes are fed into the accumulator where they can accumulate should there be a system stoppage further downstream. The accumulator serves as a collection and sorting area to accumulate the syringes for the next step in the processing.
Labeler with Plunger Rod Inserter – this machinery is fed plunger rods from a rotary feeder and syringes from upstream equipment. It inserts Plunger Rods into the syringes. During this process the plunger rod is lowered into the barrel of the syringe where by rotation and linear motion the plunger rod is mated into the threads of the stopper. Through the use of a hot-stamp printer, roll-fed labels with batch specific information are printed and then applied to the syringes. From the Labeler, the syringes go to an Accumulator.
Backstop – applies optional backstops to the flanges of the syringes. The backstop serves to prohibit removal of the stopper from the barrel. Before entering the Backstop Machine, the syringes are filled, stoppered, fitted with a plunger and labeled. After the “backstop” the syringes are either conveyed to a reject station or routed out of the machine.
Whether the group of syringe finishing line machines are classifiable under heading 8422, HTSUS, as a machine for filling, closing, sealing or labeling bottles, …or other containers, or under heading 8479, HTSUS, as machines and mechanical appliances having individual functions, not specified or included elsewhere in Chapter 84, HTSUS, and whether the Conveyors, Denester and Accumulator are classified as other lifting, handling, loading or unloading machinery under heading 8428, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed on July 6, 2005, within 90 days of liquidation.
Further Review of Protest No. 3901-2005-100623 was properly accorded to protestant pursuant to 19 C.F.R. §174.24 because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee. Specifically, protestant alleges the action of the Port is inconsistent with New York Ruling Letter(s) (“NY”) A85179, dated July 23, 1996, NY G84376, dated December 4, 2000 and NY 878579, dated October 16, 1992, in which CBP found that packaging and filling machines were classified in heading 8422, HTSUS.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that 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 2 through 6 may then be applied in order.
The 2004 HTSUS provisions under consideration are as follows:
8422 Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof:
8422.30 Machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; machinery for aerating beverages:
8422.30.9120 Labeling machines
Machinery for filling, closing, sealing, capsuling or labeling bottles, cans or similar containers:
Machines for filling, whether or not capable of performing other operations:
Machines which perform only the following operations: capping, lidding, sealing or closing:
8428 Other lifting, handling, loading or unlading machinery (for example, elevators, escalators, conveyors, teleferics):
Other continuous-action elevators and conveyors, for goods or materials:
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Other machines and mechanical appliances:
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
Protestant asserts that the subject group of syringe finishing line machines both labels and packages syringes and therefore meets the terms of heading 8422, HTSUS, specifically, subheading 8422.30.9140, HTSUS, as other machinery for filling, closing, sealing or labeling bottles, cans, boxes or other containers. The protestant further contends that EN 84.22 supports the classification of this merchandise under heading 8422, HTSUS, because the blister packaging phase prepares the completed pre-filled syringes in a manner by which they are normally distributed and sold in commerce. In support of this position, protestant cites NY A85179, dated June 23, 1996, wherein CBP classified food packaging machinery consisting of tray denesters, conveyors, vision systems, indexing systems and other machinery in heading 8422, HTSUS. The machinery of NY A85179 filled the trays and loaded them into cardboard boxes where they were packaged into various sized units. As a result, the machinery was classified in heading 8422, HTSUS, because its principal function was to fill trays and package the trays into boxes.
The Protestant further contends that these machines are used collectively to “label, arrange, connect and package pre-filled syringes” and therefore concludes that the group of machinery works as a functional unit. Note 4 to Section XVI, HTSUS (2004), states that:
Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission, devices, by electric cables or other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.
In their condition as imported, the instant machinery does not include machines which fill or package the syringes. As the submission points out, the syringes are pre-filled prior to being loaded into the Denester and the machine which performs the blister packaging is not included in the entry at issue. Hence, unlike the rulings asserted by the Protestant, we find that the subject machinery does not fill or package syringes within the meaning of heading 8422, HTSUS.
However, classification in heading 8422, HTSUS, is not limited to machinery which fills or packages. As EN 84.22 explains, this heading includes:
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(3) Bottle or jar closing, corking or capping machines; can closers and sealers (including those closing by soldering).
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(5) Labeling machines, including those which also print, cut and gum the labels.
According to the submission, roll-fed labels are printed with batch specific information using a hot-stamp printer. Thereafter, the labels are applied using a wrap belt to spin the syringe and press the label around the barrel of the syringe. The act of labeling is a function which is described in EN 84.22 and is among the functions enumerated eo nomine in the terms of heading 8422, HTSUS. As such, we find that the function carried out by the “Labeler” meets the terms of heading 8422, HTSUS.
Further, the pre-filled syringes are closed or sealed by stoppers which are inserted prior to the pre-filled syringes entering the subject group of machines. As the submission explains, the plunger rods are lowered into the barrel of the syringe where by rotation and linear motion, the plunger rods are mated into the threads of the stopper. Thus, the Plunger Rod Inserter reinforces the closing and sealing operation performed by the stoppers which are already in the barrel of the syringe and are not at issue in the present decision. Because the instant Plunger Rod Inserter acts to further seal and close the pre-filled syringes, we find that the Plunger Rod Inserter meets the terms of heading 8422, HTSUS. See e.g., NY K86998, dated June 17, 2004 (which noted that by a closing operation, “stoppers” were inserted into the syringes, once filled, to seal a predetermined amount contained within the syringe).
Based on the facts presented, we find that the Labeler with Plunger Rod Inserter serves two functions: closing or sealing (84.22) and labeling (84.22). The “Plunger Rod Inserter” acts to complete the assembly of the syringe and seal the contents therein by inserting the plunger rod into the stopper. The “Labeler” performs a labeling function by actually labeling the syringes. As previously stated, the Labeler both prints and applies labels with “batch specific” information onto the syringes without which the pharmaceutical contents of the pre-filled syringes could not be identified by the ultimate purchaser. The “Plunger Rod Inserter” provides the mechanical function of inserting the plunger rod which completes the closing and sealing operation performed by the stoppers. As such, this composite machine provides a clearly defined function covered by heading 8422, HTSUS.
Similarly, the Backstop Machine performs a closing or sealing function as the “backstop”, once clipped onto the flange of the syringe, prohibits the removal of the stopper from the barrel thereby reinforcing the stopper’s function of closing or sealing the syringe. As previously noted, in NY K86998, CBP held that “stoppers” which were inserted into pre-filled syringes, performed a closing or sealing function within the meaning of heading 8422, HTSUS. Therefore, we find that the function carried out by the “Backstop” meets the terms of heading 8422, HTSUS.
We must also consider whether syringes can be deemed bottles, cans, boxes, bags or other containers within the meaning of heading 8422, HTSUS. To fully discern whether the subject syringe is a “container” within the meaning of heading 8422, HTSUS, we refer to the cannon of construction known as ejusdem generis, which means literally, “of the same class or kind.” With respect to classification cases, “ejusdem generis requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms.” Nissho-Iwai American Corp. v. United States (Nissho), 10 CIT 154, 156 (1986). Likewise, the Court in Totes, Incorporated v. United States, 69 F. 3d 495, 498, (Fed. Cir. 1995), noted that "the essential characteristics and purpose of [the containers of heading 4202, HTSUS] are to... organize, store, protect and carry various items."
Because a syringe is able to “contain” fluids, it has the additional function of storing, protecting and carrying the contents therein. CBP has previously treated a syringe as a “container” within the meaning of heading 8422, HTSUS. In NY K86998, (cited above), CBP classified an automatic filling and closing machine under heading 8422, HTSUS, because the machine filled a syringe with a predetermined amount of product and then by a closing operation, inserted a stopper into the syringe. In the instant case, pre-filled syringes are a modern innovation used to package and deliver predetermined dosages of pharmaceutical drugs and diluents. In this context, the subject pre-filled syringes are “containers” and therefore ejusdem generis to the bottles, cans, boxes, bags or other containers enumerated in heading 8422, HTSUS.
CBP has made a distinction between machines which label boxes, bottles, cans and similar containers from machines which label the actual product. In Headquarters Ruling Letter (“HQ”) 963032, dated July 24, 2000, concerning the classification of a produce labeling machine, we stated the following:
In deciding if the subject articles are provided for eo nomine as labeling machines, Customs may consider the use of the merchandise. United States v. Quon Quon Co., 46 CCPA 70, 73, C.A.D. 699 (1959). Heading 8422, HTSUS, specifically limits this provision to machines used to label bottles, cans, boxes, bags, jars, tubes and similar containers. This heading does not include a labeling machine which labels the product rather than its container. The produce labeling machine labels the individual piece of fruit, not the container and, therefore, does not fall within the “use” provision of heading 8422, HTSUS.
In the instant case, the Labeler with Plunger Rod Inserter is used to label pre-filled syringes which contain a pharmaceutical substance. Based on these facts, the pharmaceutical substance is the product while the syringe is the container. In keeping with the rationale used in HQ 963032, the subject “Labeler” does not label the actual pharmaceutical product contained in the syringe but instead labels its container (i.e., the syringe). Hence, the labeling function and the closing/sealing function of the subject machinery fall within the meaning of heading 8422, HTSUS, and are consistent with the decision in HQ 963032.
The three remaining machines (Denester, Accumulator and Conveyors) facilitate the labeling, closing and sealing functions by transporting, sorting or gathering the syringes. The Denester, Accumulator and Conveyors while not answering to a description provided for in heading 8422, HTSUS, contribute together to performance of the function specific to the functional unit as a whole. General EN (VII) Functional Units, Section XVI, provides in pertinent part, that:
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For the purposes of this Note, the expression “intended to contribute together to a clearly defined function” covers only machines and combination of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole.
In the instant case, the Denester, Accumulator and the Conveyors contribute together to facilitate functions of the Labeler with Plunger Rod Inserter and the Backstop. Accordingly, the combination of machines contribute together to perform a clearly defined function of heading 8422, HTSUS, and are therefore classifiable as a functional unit within the meaning of Note 4 to Section XVI. See NY 886927, dated June 18, 1993, in which CBP classified individual machines which simultaneously sealed, printed and labeled packages under heading 8422, HTSUS; see also HQ 963651, dated October, 11, 2000, wherein CBP found that a folding machine and a bagging machine both contributed to the clearly defined function of packing or wrapping within the meaning of Note 4 to Section XVI.
By application of GRI 1 and Note 4 to Section XVI, HTSUS, the group of machinery (which includes: the Labeler with Plunger Rod Inserter, the Denester, Accumulator, Conveyors and the Backstop) are classifiable in heading 8422, HTSUS. They are specifically classified in subheading 8422.30.9170, HTSUSA, which provides for: “…[m]achinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers…parts thereof: Machinery for filing, closing, sealing or labeling bottles, cans, boxes, bags or other containers; …: Other: Other: Machinery for filling, closing, sealing, capsuling or labeling bottles, cans or similar containers: Other.” The 2004 column one, general rate of duty was Free.
Since reclassification of the merchandise as indicated above would result in a lower duty rate, you are instructed to Allow the Protest in Full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter.
No later than 60 days from the date of this letter, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP homepage on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division