CLA-2 OT:RR:CTF:TCM W968282 JPJ
Mark N. Bravin, Esq.
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
RE: AutoMate 800 system; Reconsideration of NY R01603
Dear Mr. Bravin:
This is in reply to your letter dated May 23, 2006, on behalf of your client, Beckman Coulter, Inc. (“Beckman Coulter”), in which you requested reconsideration of NY R01603, with respect to the classification of the AutoMate 800 system, which was issued to Beckman Coulter on March 18, 2005. In NY R01603, the AutoMate 800 was found to be classifiable in heading 8479, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:”. In reaching our decision herein, we have also considered your supplemental submission dated October 20, 2006, which provided a product marketing DVD and additional arguments made at a tele-conference with a member of my staff on July 2, 2009. Our decision follows.
FACTS:
The AutoMate 800 is an automated Sample Processing System. According to the Automate Sample Processing System Instructions for Use, System Overview (“system overview”), the AutoMate is an automation system that automatically prepares and conveys blood sample tubes for diagnostic testing and analysis on various clinical instruments. See also Beckman Coulter sales brochure BR-10238C. It does not perform any testing or analysis itself.
The AutoMate system contains an automated track that connects to input and output trays, a centrifuge, serem level detection, and a decapper. The AutoMate 800 model also contains an aliquotter. The automated sample preparation process is described as follows:
The Patient sample requests from the Laboratory Information System (LIS) are downloaded to the AutoMate Control Software.
Patient sample tubes are loaded on the AutoMate by the user to be centrifuged, decapped, aliquoted [sic] (800 model only), and sorted. The samples are sorted to either generic or Personality Trays to be processed on other instruments.
The system overview also includes a description of the specific AutoMate system hardware, as follows:
AutoMate Computer is on a computer cart located next to the hardware
Input/Output modules
Centrifuge
Serum Volume Detection and Decapper
Aliquotter (AutoMate 800).
A patient blood sample tube typically arrives at a lab labeled with a barcode identifying the patient and is loaded by the user in the AutoMate system.
The AutoMate 800’s series of conveyor belts and track system are described in the system overview as follows:
The track system uses a series of conveyor belts and sample tube carriers to move sample tubes through the AutoMate (refer to Figure 2.17). The sample tubes are selected in the Input/Output module and put into the sample tube carriers. The sample tube carriers move the sample tube along the track to the Centrifuge, Serum Level Detection, Decapper, Aliquot (if necessary), and the Output modules (emphasis added). When the sample tube carriers are unloaded at the Output modules, they are sent to the back of the system along the Return Lane to the Input/Output module. All sample movement on the AutoMate system is performed automatically by the transfer belt system and transfer arms.
Pneumatic System
The AutoMate uses a compressed air system to control the movement of sample tube carriers, gripper fingers, and diverters on the system.
Depending upon the testing to be performed, the blood may be centrifuged to separate the serum from the red blood cells. Other testing may require that the cap be removed from the top of the tube or that the sample be split into portions so that each portion may be sent to two or more different laboratory testing instruments.
A portion of a sample taken from the original sample is called an aliquot. A serum level detector confirms that the sample contains sufficient volume for aliquotting. The serum level detection device is described in the system overview as follows:
The Serum Level Detection device measures the fluid volume in a sample tube. The device, for a specified sample, calculates if the sample contains enough volume to be used for aliquoting [sic]. The device also detects if there is a cap and sends the information to the AutoMate Control software.
The aliquotter then splits the sample and transfers the portion(s) of the blood to another tube(s). When tubes and aliquots are put into output trays, they are organized so that all of the tubes/aliquots on a given tray go to a specific downstream laboratory test/analysis instrument or test area. The trays are moved through the AutoMate 800 system via a conveyor belt. The tube holder, P/N 2910052, is used to carry a tube from place to place in the system. The holder is made of a high density polyethylene except for an outer metal collar and a spring mechanism inside to hold the tube straight.
ISSUE:
Whether the AutoMate 800 system is classified in heading 8428, HTSUS, as “Other lifting, handling, loading or unloading machinery”; in heading 8479, HTSUS, as “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:”; or, in heading 9026, as “Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases (for example, flow meters, level gauges, manometers, heat meters), excluding instruments and apparatus of heading 9014, 9015, 9028, or 9032; parts and accessories thereof”.
LAW AND ANALYSIS:
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 may then be applied.
The HTSUS provisions under consideration are as follows:
8428 Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics):
Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
9026 Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases (for example, flowmeters, level gauges, manometers, heat meters), excluding instruments and apparatus of heading 90.14, 9015, 9028 or 9032; parts and accessories thereof:
Note 1(m) to Section XVI, HTSUS, in which Chapter 84 is located, provides, in relevant part:
This section does not cover:
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(m) Articles of chapter 90;
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Note 3 to Section XVI, HTSUS, provides:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function
Note 7 to Chapter 84, HTSUS, provides, in relevant part:
A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose.
Subject to note 2 to this chapter and note 3 to section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in heading 8479.
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The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the HTSUS at the international level. While not legally binding nor 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, 35128 (August 23, 1989).
The General ENs to Section XVI, HTSUS, provide, in relevant part:
(VI) MULTI-FUNCTION MACHINES
AND COMPOSITE MACHINES
(Section Note 3)
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Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretive Rule 3(c);. . .”.
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EN 84.28 provides, in relevant part:
With the exception of the lifting and handling machinery of headings 84.25 to 84.27, this heading covers a wide range of machinery for the mechanical handling of materials, goods, etc. (lifting, conveying, loading, unloading, etc.). They remain here even if specialised for a particular industry, for agriculture, metallurgy, etc.
EN 90.26 provides, in relevant part:
Apart from instruments or apparatus more specifically covered by other headings of the Nomenclature, such as: . . .this heading covers instruments and apparatus for measuring or checking the flow, level, pressure, kinetic energy or other process variables of liquids or gases.
In NY R01603, dated March 18, 2005, CBP determined that the AutoMate 800 is a composite machine in accordance with Section XVI, Note 3, HTSUS; that the AutoMate 800 performs three functions: centrifuging (heading 8421), uncapping (heading 8479), and aliquotting (heading 8479); that the AutoMate 800 has no principal function; and, that, in accordance with GRI 3(c), the AutoMate 800 is classifiable under the heading which occurs last in numerical order among those which merit equal consideration, or heading 8479, HTSUS, specifically subheading 8479.89.98, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter: other machines and mechanical appliances: other: other: other.” In NY R01603, CBP also held that the tube holder, separately imported, is classifiable under subheading 8479.90.94, HTSUS, which provides for other parts of machines and mechanical appliances having individual functions, not specified or included elsewhere.
There is no dispute that the AutoMate 800 is properly classifiable in accordance with Section XVI, Note 3, HTSUS, as a composite machine. However, Beckman Coulter argues that the AutoMate 800 is classified under heading 8428, HTSUS, as “Other lifting, handling, loading or unloading machinery (for example elevators, escalators, conveyors, teleferics)”, because the principal function of the AutoMate 800 is the loading and the handling of samples in the laboratory. Specifically, Beckman Coulter argues that the conveyor belts and the track system are the only essential components of the AutoMate 800, and that these same components are commonly found in other models of AutoMate machines. In support of its position, Beckman Coulter cites to the AutoMate Sample Processing System Instructions for Use System Overview (June 2006), and a case study (Beckman Coulter publication/Bulletin 9277) which speaks to the benefits of automation, and the improved efficiency and competitive advantage the Oakwood Healthcare System has realized from Beckman Coulter automation systems.
Beckman Coulter also cites NY C88238, dated July 14, 1998, which involved the classification of the Haystack™ Automated Compound Management System, described as an automated modular system for the storage, retrieval, and preparation of very large numbers of chemical compounds and dissolved samples used in pharmaceutical research. CBP held that the Haystack™ system did not perform a single, clearly defined function covered by one of the headings of chapter 84 or chapter 85, and determined that it could not be classified as a functional unit. Thus, three of the system modules described as the dry compound store, the microtube store, and the microtitre plate store were classified in heading 8428, HTSUS. The other system modules including the solubilization module, the manual (weighing) machines, the data base servers and system PCs, and the software diskettes were separately classified in their own appropriate headings.
Unlike the Haystack™ system at issue in NY C88238, the AutoMate 800 system, is not a functional unit, but a composite machine classifiable pursuant to note 3 to Section XVI, HTSUS. While NY C88238 provides support for Beckman Coulter’s heading 8428, HTSUS, classification argument, it does not advance or support Beckman Coulter’s principal function argument. We note that in arriving at our decision in NY C88238, we determined that “the main function performed by the Haystack™ system is not handling and storage but preparation of a controlled quantity of a specific compound tailored to the requirements of the requestor” (emphasis added). Additionally, it also determined that “sample preparation is not a function encompassed within the terms of heading 8428”.
While we agree that for purposes of classification the lifting, loading, and unloading function of the AutoMate 800 is described by the terms of heading 8428, HTSUS, we do not agree that lifting, loading, and unloading is the merchandise’s “principal function”. The system of conveyor belts and tracks simply contribute to this function by moving the samples to, from, and between the AutoMate 800 system modules, for purposes of sample preparation.
We believe that the AutoMate 800 system, as physically configured, advertised, marketed, sold, used by an ultimate purchaser, and recognized in the trade, is a sample preparation apparatus and not merely a loading and transporting machine. See Beckman Coulter AutoMate 800 and AutoMate 600 Sample Processing Systems sales brochure (BR-10238C) (AutoMate 800 system specifications: Throughput of 300 centrifuged samples/hour, and aliquotting (1+2 aliquots) of 420 samples/hour, including 140 primary and 280 secondary tubes). See also www.clpmag.com, www.freshnews.com, and http://sec.edgar-online.com.
While you may describe the centrifuging, decapping, serum volume detection, and aliquotting functions as “optional”, these functions are in fact essential for the AutoMate 800 system to operate as intended, and are directly relevant to the classification of the AutoMate 800 system. The System Overview suggests that a consumer is able to choose among AutoMate system models precisely for it’s sample preparation features. Aliquotting, for example, is relevant to classification because the AutoMate 800 is the only AutoMate system model with an aliquotting function. The System Overview describes the aliquot module as “an important component of [the] AutoMate 800”. The AutoMate 800 system’s multiple functions embodied in the centrifugation, serum volume detection, decapping and aliquotting modules, are what give this machine its overall purpose and functionality.
As noted in NY R01603, the AutoMate 800 performs a centrifuging function which is described by heading 8421, HTSUS; an uncapping function which is described by heading 8479, HTSUS, and an aliquotting function which is also described by heading 8479. Insofar as we are unable to determine the principal function of the AutoMate 800, it is necessary to apply General Interpretive Rule 3(c). See General Explanatory Note to Section XVI, note 3.
GRI 3, provides, in relevant part:
3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
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(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
Beckman Coulter argues that if the AutoMate 800 does not have a principal function, then, pursuant to GRI 3(c), the AutoMate 800 is properly classifiable under heading 9026, HTSUS, as “instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases”. Beckman Coulter argues that because the serum level detection device performs a measuring function that is described by heading 9026, HTSUS, and heading 9026, HTSUS, is the heading which occurs last in numerical order, pursuant to GRI 3(c), the merchandise is classifiable in heading 9026, HTSUS.
The serum level detection device does not perform a function described by heading 9026, HTSUS, because unlike the exemplars in the heading text (flowmeters, level gauges, manometers, heat meters) the device is not used to, and cannot be used to, measure the process (dynamic) variables of liquids. Instead, it is a device that simply detects whether a sample tube contains an unspecified volume of liquid, or “enough volume”, for aliquotting. The purpose of the device is simply to prepare blood sample tubes, not to measure liquids. As such, the serum level detection is not a function described by heading 9026, HTSUS.
Pursuant to GRI 3(c), among the headings that equally merit consideration, heading 8479, HTSUS, occurs last in numerical order. Therefore, the AutoMate 800 system is classifiable in heading 8479, HTSUS.
We note our decision is consistent with prior rulings in which CBP has previously classified sampling machines in heading 8479, HTSUS. See HQ 087597, dated November 27, 1990 (classifying precipitation sampler and an air sampler in subheading 8479.89.90, HTSUS, and not in heading 9027, HTSUS because the machine prepared samples but performed no analysis); HQ 088242, dated November 27, 1990 (classifying a centrifugal air sampler in subheading 8479.89.90, HTSUS, and not in heading 9027, HTSUS, for the same reason); HQ 964001, dated February 12, 2001 (classifying an automated liquid sample processor machine in subheading 8479.89.97, HTSUS); HQ 965754, dated October 4, 2002 (classifying a CVS exhaust gas dilution system in subheading 8479.89.97, HTSUS).
HOLDING:
The AutoMate 800 system is classifiable in heading 8479, HTSUS, specifically, subheading 8479.89.98, HTSUS, which provides for, “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other: Other.” The 2005, general, column one rate of duty was 2.5%.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY R01603, dated March 18, 2005, is AFFIRMED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division