CLA-2 RR:CR:TE 966982 TMF
Port Director
Customs and Border Protection
Lincoln/Juarez Bridge
Administrative Building #2
Laredo, Texas 78040
RE: Protest No. 2304-03-100186; Classification of gas train assemblies; Additional U.S. Rule of Interpretation 1(c)
Dear Sir:
This is in reply to your memorandum dated December 18, 2003, forwarding Application for Further Review of Protest (AFR) 2304-03-100186, to this office for a decision. The protest and AFR were timely filed on behalf of Marshall Gas Controls, by their counsel, Katten Muchin Zavis Rosenman, LLP on September 19, 2003.
The protest and AFR is against your port’s decision denying North American Free Trade Agreement (NAFTA) preference to and reclassification of certain gas train assemblies in subheading 8481.80.9050, of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other appliances: Other, other: Other.”
FACTS:
The merchandise was entered on January 5, 2000. The instant protest is against Customs and Border Protection’s (CBP) classification and liquidation on July 25, 2003 of one entry of LP (low pressure) regulators, identified as style numbers T150-03#20271B, 150#20265B, and 150-03#20320 within subheading 8481.80.9050, HTSUS. The subject merchandise consists of gas train assemblies for LP gas fueled outdoor cooking appliances (barbeque grills). It is comprised of the following:
a connector for attachment of the assembly to the fuel supply (LP gas cylinder)
a dual outlet low pressure LP gas regulator
two lengths of thermal plastic hose
burner control valves
The gas train assembly is used to connect the gas grill burners to an LP tank. The pressure regulator reduces prevailing tank pressure to a suitable working pressure for the gas grill. The burner control valves provide adjustable flow of gas from the tank to the grill burners. The appliance-side connector allows the gas train assembly to be connected to an LP tank and provides a safety shut-off feature when used in conjunction with the tank fitting.
The protestant asserts that the merchandise is classifiable as either “other automatic regulating or controlling instruments and apparatus” in subheading 9032.89.60, HTSUS, or as “parts” of barbeques and cookers in subheading 7321.90.60, HTSUS. The protestant also believes that the merchandise is eligible for NAFTA preference as the goods meet the tariff shift requirements in General Note 12(t), HTSUS, under either heading 9032 or 7321.
ISSUE:
What is the correct classification of the subject gas train assemblies under the HTSUS?
Whether the merchandise qualifies for NAFTA preference?
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes. When goods cannot be classified solely on the basis of GRI 1 and if the headings or notes do not require otherwise, the remaining GRIs 2 through 6 may be applied.
Additionally, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) are the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The protestant asserts that the merchandise is classifiable as “other automatic regulating or controlling instruments and apparatus” in heading 9032, HTSUS, or as “parts of barbeques or cookers” in heading 7321, HTSUS. CBP classified the goods in heading 8481, HTSUS.
Heading 8481, HTSUS, covers taps, cocks, valves and similar appliances, used on or in pipes, tanks, vats or the like to regulate the flow (for supply, discharge, etc.), of fluids (liquid, viscous or gaseous), or, in certain cases, of solids (e.g., sand). This heading includes such devices designed to regulate the pressure of the flow velocity of a liquid or a gas. See EN 84.81.
In consideration of heading 8481, HTSUS, we must first determine whether the gas train assembly is included in any of the headings of Chapters 84 or 85, HTSUS. If the assembly falls within the common meaning of “valves,” it must be classified under heading 8481, HTSUS, the eo nomine provision for valves. A valve is any of various devices that regulate the flow of gases, liquids, or loose materials through structures, such as piping, or through apertures by opening, closing, or obstructing ports or passageways. See American Heritage Dictionary, 1982.
The subject gas train assembly is an assembly of valves that forms a new valve or “appliance” for controlling the flow of gas to a burner. We note that the appliances of heading 8481, HTSUS, regulate flow by opening or closing an aperture (e.g., gate, disc, ball, plug, needle or diaphragm). They may be operated by hand (by means of a key, wheel, press button, etc.), or by a motor, solenoid, clock movement, etc., or by an automatic device such as a spring, counterweight, float lever, thermostatic element or pressure capsule. Taps, valves, etc., incorporating such mechanisms or devices remain classified in heading 8481. See EN 84.81
The subject gas train assembly consists of:
dual outlet low pressure LP gas regulator which reduces tank pressure to a viable working pressure for the outdoor cooking appliance;
burner control valves which provide adjustable gas flow from the tank to the grill burners;
a connector that has a safety shut-off feature for attaching the assembly to the fuel supply
the plastic hoses
Based upon review of the functionality of the four parts of the gas train assembly, we believe EN 84.81 describes the subject gas train assembly, which consists of a regulator and valves that provide adjustable flow of gas from the tank to the grill burners. Further, we refer you to EN 84.81(4), which states that the heading includes inter alia: Control cocks, blow-off cocks and shut off valves, etc., for level gauges [emphasis added].
As heading 8481 provides eo nomine for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like,” based on the aforementioned reasons, we find it to be the most specific heading for classifying the instant articles.
With regard to the Protestant’s assertion that the merchandise is classifiable in heading 7321, HTSUS. Chapter 73 is a part of Section XV of the tariff. Note 1(f) to Section XV specifically excludes certain articles classifiable in Chapter 84. Note 1(f) states: “This section does not cover: Articles of section XVI (machinery, mechanical appliances and electrical goods). As section XVI covers articles of Chapter 84, any good that falls within this chapter cannot be classified in Section XV. Thus, the goods cannot be classifiable in heading 7321, HTSUS, as the Protestant asserts.
With regard to the Protestant’s argument that the merchandise is classifiable in heading 9032, we refer to Note 1(g) to Chapter 90, which states, “This chapter does not cover:...valves or other appliances of heading 8481.” Further, Note 2(a) to Chapter 90 states, in relevant part, “Subject to note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:
(a) Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8485, 8548 or 9033) are in all cases to be classified in their respective headings; [emphasis added]
Although Chapter Note 6 to Chapter 90 states that “[h]eading 9032 applies only to “instruments and apparatus for automatically controlling the flow, level pressure or other variables of liquids or gases”, this does not result in the articles’ classification in heading 9032 because Note 1(g) specifically excludes valves of heading 8481. Further, the goods are excluded from classification in heading 9032 because the articles are parts of a gas train assembly, not the actual machines, apparatus, instruments or articles of heading 9032, HTSUS. See Note 2(a) to Chapter 90, supra.
With regard to the claim of NAFTA preference, the protestant asserts in the Memorandum in Support of the Protest that provided the goods are classified in either heading 9032 or 7321, HTSUS, then “the corresponding tariff shift requirements for both of these tariff provisions are satisfied by the manufacturing operations which are performed in Mexico on the assemblies by the Company.”
However, in this instance, we have determined that neither heading 9032 nor 7321 are appropriate for classification of the subject merchandise. Rather, we have determined that heading 8481, HTSUS is the correct heading. Therefore, if we consider whether the subject gas train assembly is eligible for NAFTA preference, we refer to General Note 12(t), Chapter 84.239, HTSUS (2000), which states, in pertinent part:
Subheading rule: The underscoring of the designations in subdivision 239 pertains to goods provided for in subheadings 8481.80 for use in a motor vehicle of chapter 87.
239. (A) A change to subheadings 8481.10 through 8481.80 from any other heading; or
(B) A change to subheadings 8481.10 through 8481.80 from subheading 8481.90, whether or not there is also a change from any other heading, provided there is a regional value content of not less than:
60 percent where the transaction value method is used, or
50 percent where the net cost method is used.
In this instance, the subject gas train assembly is for use in a barbeque grill, not an automobile. Thus, Chapter rule 4, infra, does not apply and the underscoring of the designations in subdivision 239, supra, is not applicable. However, as the protestant did not provide the requisite information for purposes of evaluating the above-cited subheading rule, the request for NAFTA preference is denied.
HOLDING:
The protest should be DENIED. The subject gas train assembly is classified under subheading 8481.80.9050, HTSUSA, which provides for: “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other appliances: Other: Other: Other.” The general, column one rate of duty at the time of entry for goods classified in this subheading was 2 percent ad valorem.
In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles Harmon, Director
Commercial Rulings Division