OT:RR:CTF:TCM H222091 PTM
TARIFF NO: 8543.70.96
Port Director, Service Port- Atlanta
U.S. Customs and Border Protection
157 Tradeport Drive Atlanta, GA 30354
Attn: Tara Schwickrath, Import Specialist
Re: Application for Further Review of Protest No. 1704-12-100072; Tariff classification of a powertrain control module; Revocation of NY A80052, NY B81443 and HQ 954950 by operation of law.
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 1704-12-100072, timely filed on February 15, 2012, on behalf of Delphi Automotive Systems, LLC (“Delphi” or “Protestant”). The AFR concerns the classification of a powertrain control module under the Harmonized Tariff Schedule of the United States (“HTSUS”). Our response follows.
FACTS:
The subject merchandise is a powertrain control module (“PCM”), which is generically defined as the computer that controls the engine and transmission of a motor vehicle. The subject merchandise consists primarily of two modules that incorporate and integrate the functionalities of both an engine control module (“ECM”) and a transmission control module (“TCM”).
The ECM automatically controls various operations of a motor vehicle’s engine including fuel injection, exhaust recirculation, manifold pressure, throttle position, engine temperature, airflow, inlet air temperature, and crankshaft position. The ECM’s automatic control requires no user intervention. It operates by monitoring signals and inputs from various sensors and switches, comparing these signals to their desired values, and controlling various operations to bring them to their desired values based on these signals and inputs. The TCM operations relating to the transmission of the vehicle. It automatically controls the vehicle’s transmission to increase fuel economy, reduce emissions, contribute to smooth vehicle acceleration and enhance the vehicle’s ability to start in cold weather. The ECM and the TCM work in tandem to measure multiple events that occur within the vehicle’s system and make adjustments accordingly to ensure optimal operation.
The subject merchandise entered on March 26, 2011, under subheading 9032.89.60, HTSUS, which provides for “Automatic regulating or controlling instruments and apparatus; parts and accessories thereof: Other instruments and apparatus: Other: Other.” The port liquidated the merchandise on September 9, 2011, in subheading 8543.70.96, 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.” The importer filed this protest and AFR on February 15, 2012, claiming classification as entered.
ISSUE:
What is the tariff classification of the powertrain control modules?
LAW AND ANALYSIS:
Initially, we note that this matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed on February 15, 2012, within 180 days of liquidation pursuant to 19 U.S.C. §1514(c)(3).
Further Review of Protest No. 1704-12-100072 is properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(a) because the protested decision is alleged to be inconsistent with the ruling of the Commissioner of CBP or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise. Specifically, the Protestant argues that the port’s classification of the subject merchandise in heading 8543, HTSUS, is contrary to multiple rulings in which CBP has classified similar merchandise in heading 9032, HTSUS. Protestant cites NY A80052, dated March 6, 1996, NY B81443, dated February 3, 1997, and HQ 9549540, dated December 23, 1993, in support of its position.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). 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. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs 1 through 5.
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither 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 HTSUS headings under consideration are the following:
8543: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
* * *
9032: Automatic regulating or controlling instruments and apparatus; parts and accessories thereof:
Note 1 to Section XVI, HTSUS, of which heading 8543, HTSUS, is a part, states, in pertinent part, the following:
This section does not cover:…
(m) Articles of chapter 90
Note 7 to Chapter 90, HTSUS, states, in pertinent part, the following:
Heading 9032 applies only to:
(a) Instruments and apparatus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or not their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value; and
(b) Automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on an electrical phenomenon varying according to the factor to be controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value.
Thus, if an article is classified in chapter 90, it may not be classified in heading 8543 HTSUS. Consequently, the critical inquiry is whether the PCM at issue is described by heading 9032 HTSUS. The EN to heading 9032, HTSUS, states, in pertinent part, the following:
In accordance with Note 7 to this Chapter, this heading covers :
(A) Instruments and apparatus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or not their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilised against disturbances, by constantly or periodically measuring its actual value; and
(B) Automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non electrical quantities, the operation of which depends on an electrical phenomenon varying according to the factor to be controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilised against disturbances, by constantly or periodically measuring its actual value. ….
An automatic regulator within the meaning of Note 7 (b) to this Chapter consists of the devices described in (A), (B) and (C) above, whether assembled together as a single entity or in accordance with Note 3 to this Chapter, a functional unit.
The PCM incorporates both an ECM and a TCM, and essentially functions as the “brain” of a motor vehicle engine. The ECM receives signals from various measuring devices incorporated in components of a vehicle that control various functions, including fuel injection, exhaust recirculation, manifold pressure, throttle position, engine temperature, airflow, inlet air temperature, and crankshaft position. It interprets the data to determine whether the system is operating properly, and adjusts the system as necessary to ensure optimal operation. The TCM essentially performs an identical function for the transmission.
In order to meet the terms of heading 9032, HTSUS, merchandise must either automatically control the flow, level, pressure or other variables of liquids or gases, or automatically control temperature; or it must be an automatic regulator of electrical quantities, or an instrument or apparatus for automatically controlling non-electrical quantities, the operation of which depends on an electrical phenomenon varying according to the factor to be controlled. See Note 7 to Chapter 90, HTSUS; EN 90.32. The PCM at issue here does not primarily control the flow, level pressure or other variables of liquids or gasses, or automatically control temperature. Similarly, its primary function is not to control electrical quantities, or non-electrical quantities which depend on an electrical phenomena. Rather, the PCM controls various motor vehicle functions such as fuel injection, throttle position and transmission operation. Although these functions may involve control temperature or gas flow, the operations the PCM performs goes beyond the scope heading 9032. The exemplars in the ENs for 90.32 include pressure controllers (also called manstats), level regulators, humidity regulators for use in workshops and the like, thermostats for controlling atmospheric temperature, and temperature regulators for electrical heating appliances. The PCM bears no similarity to these products as it measures and regulates a wide variety of components and functions in a motor vehicle, rather than measuring and controlling a single variable such as humidity or temperature.
Prior CBP rulings have classified similar devices under heading 8543 HTSUS. In HQ 963805, CBP addressed the classification of a product alternatively described as a powertrain control module and transmission control module. The merchandise, which CBP eventually concluded was a TCM, was a computer that regulated shifting and torque converter lockup clutch in response to input received by sensors and switches. These sensors and switches were the transmission input speed sensor, transmission output speed sensor, engine coolant temperature sensor, throttle position sensor, engine speed sensor, brake switch and pressure switch manifold. The computer produced output signals that activated relays, which in turn operated electrical solenoid valves. The computer frequently reviewed the information received and compared it to information stored in its memory so as to make quick adjustments. The merchandise also governed the shifting of the transmission and controlled the transmission fluid by directing the transmission fluid to the correct passages for the correct gear and adjusting the pressure of the transmission fluid.
In HQ 963805, CBP determined that the protestant did not establish that a TCM met the definition of an automatic control apparatus of heading 9032, HTSUS. As a result, CBP classified the TCM in heading 8543, HTSUS. Delphi attempts to distinguish this ruling by arguing that the classification in this ruling is complicated by the fact that the importer in HQ 963805 used the terms “PCM” and “TCM” interchangeably but admitted that the TCM, which was the product at issue, only controlled the transmission, while the PCM at issue here controls the entire powertrain, including the engine. We disagree. The PCM here performs similar functions to the TCM classified in HQ 963805: it receives electronic signals from various measuring devices; it interprets the data provided by the signals to determine appropriate adjustments for the operation of the vehicle component, and it makes the necessary adjustments to ensure proper performance. Consequently, we find that the analysis is HQ 963805 controls the classification of the merchandise at issue here.
We note that NY A80052, NY B81443 and HQ 954950, to which Delphi cites in favor of classification in heading 9032, HTSUS, are inapplicable to the present case. These rulings, which were issued between 1993 and 1997, were issued before the current Note 7 to Chapter 90, HTSUS, was implemented. CBP has held that rulings classifying merchandise in heading 9032, HTSUS, pursuant to the prior Note 6 to Chapter 90, HTSUS, were revoked by operation of law when the current Note 7 was implemented, because the current Note 7 was an amended and renumbered version of the prior Note 6. See, e.g., HQ 967121, dated August 13, 2004. This reasoning applies to NY A80052, NY B81443 and HQ 954950, which we now also hold to be revoked by operation of law. Because we find the PCM is not classified under heading 9032 HTSUS, it is not precluded from classification under heading 8543 HTSUS pursuant to Note 1 (m) to Section XVI, HTSUS.
HOLDING:
The PCM is classified under heading 8543 HTSUS, and more specifically in subheading 8543.70.96, 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.” The column 1, general rate of duty is 2.6% ad valorem. You are instructed to DENY the protest.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
You are to mail this letter 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 this letter, the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division