CLA-2 RR:TC:MM 957929 LTO
Ms. Gail T. Cumins
Sharretts, Paley, Carter and Blauvelt, P.C.
67th Broad Street
New York, New York 10004
RE: Split-system air conditioners; indoor evaporator unit;
outdoor condenser unit;
GRI 2(a); section XVI, note 2, 4; unfinished; functional
unit; HQs 087077, 957130, 958018
Dear Ms. Cumins:
This is in response to your letter of March 29, 1995, to the
Customs Service,
New York office, requesting the classification of split-system
air conditioners and individual components thereof under the
Harmonized Tariff Schedule of the United States (HTSUS):. Your
letter was forwarded to this office for response.
FACTS:
The split-system air conditioners in question consist of an
indoor evaporator unit and outdoor condenser unit. The indoor
unit includes the evaporator (indoor heat exchanger), one or more
centrifugal blowers and microprocessor-based controls. The
outdoor unit includes the condenser (outdoor heat exchanger),
fans, compressors and refrigerant-filled accumulator. Some of
these air conditioners can also function as a
heat pump.
ISSUE:
1. Whether the split-system air conditioners are classifiable,
according to note 4 to section XVI, HTSUS, as other air-conditioning machines, comprising a motor-driven fan
and elements for changing the temperature and humidity,
incorporating a refrigerating
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unit and/or a valve for reversal of the cooling heat cycle, under
subheading 8415.81.00, HTSUS (if they can function as a heat
pump), or subheading 8415.82.00, HTSUS (if they cannot).
2. Whether the indoor and outdoor units for split-system air
conditioners, when imported separately, are classifiable as parts
of air-conditioning machines under subheading 8415.90.80, HTSUS.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part, that "for legal purposes,
classification shall be determined according to the terms of the
headings and any relative section or chapter notes . . . ."
In HQ 957130, dated November 9, 1994, a condenser unit and
evaporator unit for a split-system air conditioning machine were
classified, according to note 4 to section XVI, HTSUS
("functional units"), under subheading 8415.83.00, HTSUS, which
provides for air conditioning machines, comprising a motor-driven
fan and elements for changing the temperature and humidity, not
incorporating refrigerating units. Pursuant to section 625(c)( 1
), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by
section 623 of Title VI (Customs Modernization) of the North
American Free Trade Agreement Implementation Act, Pub. L. No.
103-182, 107 Stat. 2057, 2186 (1993), notice of the modification
of HQ 957130 was published on October 25, 1995, in the Customs
Bulletin, Volume 29, Number 43.
In HQ 958018, dated October 6, 1995, which modified HQ
957130, we stated that the evaporator unit and condenser unit
were components of a system designed to include a compressor, and
could not function without it. This system, when complete, forms
a note 4 to section XVI, HTSUS, "functional unit" ("[w]here a
machine (including a combination of machines) consists of
individual components... 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 evaporator
unit and condenser unit, when imported separately, are not
described by the terms of heading 8415, HTSUS, as neither, by
itself, is capable of "changing the temperature and humidity."
Moreover, the units cannot be classified according to GRI 2(a) as
"unfinished" air conditioning machines. See HQ 087077, dated
March 27, 1991 (wherein we stated that there are no HTSUS legal
notes or Explanatory Notes that provide for "unfinished"
functional units). Finally, because they are not "goods included"
in any chapter 84 or 85 heading, we held that the units were
classifiable as parts of air-conditioning machines under
subheading 8415.90.80, HTSUS. See section XVI, note 2(a)(b),
HTSUS.
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After reviewing our file on this matter, we have determined
that HQ 958018 is dispositive on the classification of the indoor
evaporator and outdoor compressor units in question. The split-system air conditioners that can function as heat pumps are
classifiable under subheading 8415.81.00, HTSUS, while those that
cannot are classifiable under subheading 8415.82.00, HTSUS. When
imported separately, the indoor and outdoor units are
classifiable, as parts, under subheading 8415.90.80, HTSUS.
Copies of the final modification notice (of HQ 957130), along
with HQ 958018,
are enclosed.
HOLDING:
The split-system air conditioners, which can function as
heat pumps, are classifiable under subheading 8415.81.00, HTSUS,
which provides for other air-conditioning machines, comprising a
motor-driven fan and elements for changing the temperature and
humidity, incorporating a refrigerating unit and a valve for
reversal of the cooling/heat cycle. The corresponding rate of
duty for articles of this subheading is 2% ad valorem.
The split-system air conditioners, which cannot function as
heat pumps, are classifiable under subheading 8415.82.00, HTSUS,
which provides for other air-conditioning machines, comprising a
motor-driven fan and elements for changing the temperature and
humidity, incorporating a refrigerating unit. The corresponding
rate of duty for articles of this subheading is 2.2% ad valorem.
The indoor and outdoor units for the split-system air
conditioners, when imported separately, are classifiable under
subheading 8415.90.80, HTSUS, which provides for parts of air-conditioning machines. The corresponding rate of duty for
articles of this subheading is 2% ad valorem.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division
Enclosures