CLA-2 OT:RR:CTF:EMAIN H242777 DSR
Port Director
U.S. Customs and Border Protection
Port Huron Port
526 Water Street, Room 301
Port Huron, MI 48060-5471
ATTN: Stephanie Demmer, Import Specialist
RE: Classification of various solar kits; Application for Further Review of Protest Number 3801-12-100771; notice and comment requirements of 19 U.S.C. §1625(c); Treatment claim under 19 C.F.R. §177.12(c)(1)
Dear Port Director:
This is in response to the Application for Further Review (AFR) of Protest
3801-12-100771, dated December 13, 2012, and filed on behalf of Sunforce Products, Inc., (Protestant), in response to the classification of various solar panel kits under the Harmonized Tariff Schedule of the United States (HTSUS). The kits were entered in 2011 and 2012, and liquidated between June 15, 2012 and August 21, 2012. Protestant timely filed the protest on December 13, 2012.
On July 24, 2008, U.S. Customs and Border Protection (“CBP”) – the Port of Champlain – issued a CBP Form 28 (“CF-28”) Request for Information to Protestant relating to a single entry of a solar panel kit. CBP reviewed the information provided by Protestant and liquidated the entry as entered in subheading 8541.40.60, HTSUS, which provides for solar cells assembled into modules or made up into panels. Protestant alleges that it continued to use subheading 8541.40.60, HTSUS, for subsequent imports of such solar panels and kits, as well as for similar solar panels and kits, based upon having received “CBP’s approval regarding the classification of these goods and consistent with the company’s historic classification practice.”
In addition, on December 30, 2009, the Port of Champlain issued a CF-28 concerning the classification of “various solar products” on a line of a single entry dated December 11, 2009. The entry line included nine separate part numbers, including three items previously reviewed by CBP pursuant to the 2008 request, supra. CBP reviewed the information provided by Protestant and liquidated the entry as entered in subheading 8541.40.60, HTSUS.
Protestant asserts that it continued to use subheading 8541.40.60, HTSUS, for subsequent imports of such solar panels and kits, as well as substantially similar solar panels and kits between 2011 and 2012. The table below summarizes the entry dates, liquidation dates and HTSUS numbers that Protestant assigned at entry to the items that are the subject of this protest:
Entry Date
Liquidation Date
Port of Entry
HTSUS subheading
9/15/2011
7/27/2012
3802
8541.40.60
9/7/2011
7/20/2012
3802
8541.40.60
8/5/2011
6/15/2012
3802
8541.40.60
4/25/2012
8/3/2012
3802
8541.40.60
4/27/2012
8/3/2012
3802
8541.40.60
5/18/2012
8/3/2012
3802
8541.40.60
6/15/2012
7/23/2012
3802
8501.31.80
7/26/2012
8/21/2012
3802
8501.31.80
7/30/2012
8/21/2012
3802
8501.31.80
Upon liquidation, U.S. Customs and Border Protection (CBP) classified all of the items as electric generators under subheading 8501.31.80, HTSUS. We note that Protestant alleges that it classified the last three entries listed under subheading 8501.31.80, HTSUS, in accordance with CBP’s guidance.
Protestant describes the items as “solar panels, which are sometimes referred to battery maintainers, trickle chargers or battery chargers … all designed solely to supply power to a battery, which can then be used to provide power to another, primary device.” Protestant states that each panel includes a backflow, or blocking, diode that allows the electric current to flow in one direction, thus preventing the current from flowing from the battery to the solar panel, and although some of the larger panels, e.g., those over 15W, include such a diode, a separate charge controller is typically used to protect the battery and the panel from overcharging or undercharging.
The subject items are “goods put up in sets for retail sale” per GRI 3(b) and are goods of different headings particular for use in charging a vehicle battery. The included solar panels provide the essential character of the sets. Therefore, the sets must be classified according to the classification of the solar panels.
Protestant asserts that the sets are classified under subheading 8541.40.60, HTSUS, based upon an interpretation of Headquarters Ruling Letter (“HQ”) H084604, dated May 3, 2010 (revoking New York Ruling Letter (“NY”) N047472, dated January 9, 2009). Here, each set’s essential character is determined by the classification of the solar panel components, and those solar panel components are equipped with apparatus (such as battery clamps and DC socket plugs) that allow the components to supply power to a vehicle’s battery. The sets are therefore excluded from heading 8541, HTSUS, and should be classified in heading 8501, HTSUS, as generators. See HQ H136116 (March 2, 2011) and HQ H255441 (August 30, 2016), classifying similar solar generators in heading 8501, HTSUS.
However, Protestant also claims that CBP was precluded from liquidating the subject articles in heading 8501, HTSUS, as opposed to heading 8541, HTSUS, because such an action runs afoul of the notice and comment requirements of 19 U.S.C. §1625(c).That provision provides that:
A proposed interpretive ruling or decision which would –
(1) modify (other than to correct a clerical error) or revoke a prior interpretive ruling or decision which has been in effect for at least 60 days; or
(2) have the effect of modifying the treatment previously accorded by the Customs Service to substantially identical transactions;
shall be published in the Customs Bulletin. The Secretary shall give interested parties an opportunity to submit, during not less than the 30-day period after the date of such publication, comments on the correctness of the proposed ruling or decision. After consideration of any comments received, the Secretary shall publish a final ruling or decision in the Customs Bulletin within 30 days after the closing of the comment period. The final ruling or decision shall become effective 60 days after the date of its publication.
Section 1625(c)(1) applies only to “prior interpretive rulings and decisions” covering merchandise identical to the merchandise that is the subject of a dispute. Such rulings or decisions cannot also be considered to be “treatment” covered by 19 U.S.C. §1625(c)(2). See Motorola, Inc. v. United States, 30 C.I.T. 1766, 1780, 462 F.Supp. 2d 1368, 1380 (2006); aff’d by Motorola Inc. v. United States, 509 F.3d 1368 (Fed. Cir. 2007) (“ ‘… a more logical reading of [19 USC 1625] is that Congress intended subsections (c)(1) and (c)(2) to have the same impact, but under different situations, the former when a prior interpretative ruling . . . has been issued, and the latter when no previous interpretative ruling or decision has been issued.’ … Reading subsection (c)(2) as including interpretative rulings … would render subsection (c)(1) redundant.” (quoting Def. Brief). Protestant has not demonstrated that CBP has issued a pertinent “prior interpretive ruling or decision” within the meaning 19 U.S.C. §1625(c)(1), and Protestant’s claim regarding that provision fails.
However, with regard to 19 U.S.C. §1625(c)(2) and Protestant’s treatment claim, Title 19 of the Code of Federal Regulations (CFR) sets forth the evidentiary standards for determining whether treatment was previously accorded to substantially similar transactions. Section 177.12(c)(1) of the regulations (19 C.F.R. 177.12(c)(1)) provides that the following rules will apply for purposes of determining whether a “treatment” was previously accorded by CBP:
(i) There must be evidence to establish that: (A) There was an actual determination by a Customs officer regarding the facts
and issues involved in the claimed treatment; (B) The Customs officer making the actual determination was responsible for the
subject matter on which the determination was made; and (C) Over a 2-year period immediately preceding the claim of treatment, Customs
consistently applied that determination on a national basis as reflected in
liquidations of entries or reconciliations or other Customs actions with respect
to all or substantially all of that person's Customs transactions involving
materially identical facts and issues. 19 C.F.R. 177(c)(1)(ii) provides that the determination will be made on a case-by-case basis and will involve an assessment of all relevant factors. In particular, CBP will focus on past transactions to determine whether there was an examination of the merchandise by CBP or the extent to which those transactions were reviewed by CBP to determine the proper application of the CBP laws and regulations. Diminished weight will be given to transactions involving small quantities or values, and no weight to informal entries or transactions processed without examination or CBP officer review.
Further, 19 C.F.R. 177.12(c)(1)(iv) provides that "(t)he evidentiary burden as regards the existence of the previous treatment is on the person claiming the treatment. …" and:
The evidence of previous treatment by Customs must include a list of all materially identical transactions by entry number (or other Customs assigned number), the quantity and value of merchandise covered by each transaction (where applicable), the ports of entry, the dates of final action by Customs, and, if known, the name and location of the Customs officer who made the determination on which the claimed treatment is based. In addition, in cases in which an entry is liquidated without any Customs review (for example, the entry is liquidated automatically as entered), the person claiming a previous treatment must be prepared to submit to Customs written or other appropriate evidence of the earlier actual determination of a Customs officer that the person relied on in preparing the entry and that is consistent with the liquidation of the entry.
Here, Protestant asserts that an “actual determination” was made by CBP regarding substantially similar transactions in 2008 and 2009 “following a review of detailed product information provided in response to specific questions made by the Port of Champlain.” In support, Protestant cites to the following actions:
On July 24, 2008, the Port of Champlain issued a CBP Form 28 (“CF-28”) Request for Information to Protestant relating to a single entry of a solar panel kit. After CBP reviewed the information provided by Protestant, the entry was liquidated as entered in subheading 8541.40.60, HTSUS, which provides for solar cells assembled into modules or made up into panels. Protestant asserts that it continued to use subheading 8541.40.60, HTSUS, for subsequent imports of such solar panels and kits, as well as similar solar panels and kits, based upon having received “CBP’s approval regarding the classification of these goods and consistent with the company’s historic classification practice.”
On December 30, 2009, the Port of Champlain issued a CF-28 concerning the classification of “various solar products” on a line of a single entry dated December 11, 2009. The entry line included nine separate part numbers, including three items previously reviewed by CBP pursuant to the 2008 request, supra. After CBP reviewed the information provided by Protestant, the entry was liquidated as entered in subheading 8541.40.60, HTSUS. Protestant asserts that it continued to use subheading 8541.40.60, HTSUS, for subsequent imports of such solar panels and kits, as well as substantially similar solar panels and kits.
Given the above, Protestant claims that CBP’s reclassification and liquidations of the subject items in 2012 violates the notice and comment requirements of 19 U.S.C. §1625(c)(2) because CBP had previously made “actual determinations” on a national basis when classifying substantially similar items imported by Protestant in subheading 8541.40.60, HTSUS, during at least the two years prior. In support, Protestant has submitted a spreadsheet that identifies over 200 entries filed from June 22, 2010 through September 12, 2011 (after CBP issued the two CF-28’s) and liquidated in subheading 8541.40.60, HTSUS. The entries contain over 3000 items that Protestant attests are substantially similar to the items that are the subject of this protest. The spreadsheet shows the model numbers and values of the merchandise, the ports of entry (Champlain, NY; Alexandria Bay, NY; and Port Huron, MI) and the dates of liquidation. Protestant has also submitted an affidavit affirming the veracity of the information presented in the spreadsheet. Protestant concludes that the aforementioned “treatment” can only be revoked or modified pursuant to the procedures outlined in 19 U.S.C. §1625(c)(2).
Given the volume of evidence submitted by Protestant (and notwithstanding that the subject items are correctly classifiable in heading 8501, HTSUS, as electric generators) we find that Protestant has shown that CBP has consistently applied the determination that the subject items were classified in subheading 8541.40.60, HTSUS, on a national basis as reflected in liquidations of entries or reconciliations or other CBP actions with respect to all or substantially all of Protestant’s CBP transactions involving materially identical facts and issues. Therefore, we find that the notice and comment requirements of 19 U.S.C. §1625(c)(2) are applicable to the matter at hand and Protestant has shown that those requirements were not met when CBP liquidated the entries that are the subject of this protest.
Protestant’s claim of treatment under 19 U.S.C. §1625(c)(2) is GRANTED and you are instructed to GRANT the protest. We have published a notice in the Customs Bulletin that revokes any treatment previously accorded Protestant’s importations of the subject merchandise, and reclassifies the subject merchandise in heading 8501, HTSUS. See Customs Bulletins and Decisions, Vol. 53, No. 31 (September 4, 2019). The effective date of the revocation is November 3, 2019 and all merchandise that is substantially identical to the merchandise described in this decision and entered after that date should be classified in heading 8501, HTSUS, as well.
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. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division