CLA-2 RR:TC:MM 958641 JAS
Port Director of Customs
610 S. Canal Street
Chicago, IL 60607
RE: PRD 3901-95-101028; Components of Foam Surround
Manufacturing System; Machinery for Making Paper
Cones for Loudspeakers; Cone Molding Machine
With Trimmer, Conveyor With Drying Oven, Urethane Foam
Forming Machine
and Attaching Machine; Heading 8441, Machinery For
Making Up Paper Pulp,
Paper or Paperboard, Heading 8479, Machines Having
Individual Functions Not
Elsewhere Specified or Included; Functional Unit,
Combinations of Machines
That Contribute to a Clearly Defined Function, Section
XVI, Note 4
Dear Port Director:
This is our decision on Protest 3901-95-101028, filed
against your classification of machinery made in Japan used in
the manufacture of paper cones for loudspeakers. The entry under
protest was liquidated on February 3, 1995, and this protest
timely filed on May 4, 1995.
FACTS:
In a letter, dated January 15, 1996, counsel for the
protestant provided a blueprint of the machine layout, together
with specifications provided by the manufacturer. No product
literature was provided. The specifications describe the
functions of each machine or component that, together, comprise
the foam surround cone manufacturing system. In a subsequent
letter, dated March 28, 1996, counsel provided a video tape, with
appropriate narration, depicting the machines in operation and
each stage of the cone manufacturing process.
The four (4) machines in issue are the LMT-106-2, LKO-106-2, LFS-106-2 and the LAS-106-2. The LMT-106-2 is a cone
molding machine which forms a paper cone from pulp slurry,
presses the cone under heat into its final shape and density, and
trims excess paper from the cone's inner and outer edges. The
cone is then transferred to - 2 -
the LKO-106-2 machine which meters out an unspecified material
into which it dips the
apex of the cone to stiffen the neck. The cone enters a dryer
which forms both the stiffening agent and a previously applied
glue. The LSF-106-2 is a machine at the other end of the
production line that utilizes heated press dies to form urethane
surround material into a ring. Finally, the LAS-106-2 uses a
heated head to attach the formed ring onto the outer periphery of
the paper cone to make a finished loudspeaker cone. The cone
then undergoes resonance frequency testing in machinery that is
not a part of the entry under protest.
These components were entered under a provision in heading
8441, Harmonized Tariff Schedule of the United States (HTSUS), as
machinery for making up pulp. paper or paperboard. Counsel for
the protestant maintains that the four components are a composite
machine under Section XVI, Note 3, HTSUS, whose principal
function is to make up paper. Your office maintains that the two
machines which form the paper cone (the LMT-106-2 and the LKO-106-2) are a functional unit provided for under a provision in
heading 8441 for other machinery for making up paper, and that
the LFS-106-2 and LAS-106-2 constitute a separate functional unit
that performs an assembly function. Their being no HTS heading
for machines of this type, they are provided for in heading 8479,
as machines having individual functions, not specified or
included elsewhere in chapter 84.
The provisions under consideration are as follows:
8441 Other machinery for making up paper
pulp, paper or paperboard,
including cutting machines of all kinds, and parts thereof:
8441.40.00 Machines for molding
articles in paper pulp, paper or
paperboard...1.2 percent ad valorem
8441.80.00 Other machinery...1.2
percent ad valorem
* * * *
8477 Machinery for working rubber or plastics or
for the manufacture of products from these
materials, not specified or included elsewhere
in [chapter 84]; parts thereof:
Other machinery for molding or
otherwise forming:
8477.59.00 Other...3.6 percent ad
valorem
* * * *
- 3 -
8479 Machines and mechanical appliances
having individual
functions, not specified or included elsewhere in [chapter
84];
parts thereof:
8479.89 Other:
8479.89.90 (now 95) Other...3.2 percent ad valorem
ISSUE:
Whether the four machines, imported together, or any of
them, constitute a functional unit for tariff purposes.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance
with the General Rules of Interpretation (GRIs). GRI 1 states in
part that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6.
Section XVI, Note 4, HTSUS, states, in relevant part, that
where a combination of machines, whether separate or
interconnected by piping, by transmission devices, by electric
cables or by other devices, is 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.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized System. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes
the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg.
35127, 35128 (Aug. 23, 1989).
Counsel's argument that the four machines, as described, are
a composite machine under Section XVI, Note 3, HTSUS, is not
compelling because, among other reasons, composite machines must
be "fitted together to form a whole." As explained on p. 1133 of
the ENs machines are taken to be fitted together to form a whole
when incorporated one in the other or mounted one on the other,
or mounted on common base or frame or in a common housing. The
blueprint, manufacturer's specifications and other data are not
helpful in resolving this issue. The video depicts the four
machines in operation. They are floor mounted and operate side-by-side. There is a - 4 -
certain degree of functional interrelationship among the four
machines for purposes of Note 4, but there is no clear indication
that they are fitted together to form a whole within the cited
ENs.
We agree with your office that the LMT-106-2 and the LKO-106-2 are a functional unit the components of which contribute to
the function of making up paper. As these machines do more than
mold articles in paper, they are provided for as other machinery
of heading 8441. We do not agree, however, that the LFS-106-2
and the LAS-106-2 comprise a functional unit, as there is no HTS
heading for machines that perform an assembly function. The LSF-106-2 performs a plastics forming operation appropriate to
machines of heading 8477.
HOLDING:
Under the authority of GRI 1, the LMT-106-2 and LKO-106-2
are provided for in heading 8441. They are classifiable in
subheading 8441.80.00, HTSUS. The protest should be DENIED as to
these machines.
The LFS-106-2 forms urethane, a plastics material, into a
ring, Under the authority of GRI 1, this machine is provided for
in heading 8477. It is classifiable in subheading 8477.59.00,
HTSUS. Since the rate of duty under this provision is more than
the liquidated rate, the protest should be DENIED as to this
machine.
Under the authority of GRI 1, the LAS-106-2 is provided for
in heading 8479. It is classifiable in subheading 8479.89.90
(now 95), HTSUS. The protest should be DENIED as to this
machine.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, you should mail this decision, together with the
Customs Form 19, to the protestant no later than 60 days from the
date of this letter. Any reliquidation of the entry or entries
in accordance with the decision must be accomplished prior to
mailing the decision. Sixty days from the date of the decision
the Office of Regulations and Rulings will take steps to make the
decision available to Customs personnel via the Customs Rulings
Module in ACS and to the public via the Diskette Subscription
Service, the Freedom of Information Act and other public access
channels.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division