CLA-2 RR:CR:GC 960816 PH
Port Director of Customs
18011K Cross Beam Drive
Charlotte, NC 28217
RE: Protest 1512-97-100177; Automatic Gusset Line Closer; sewing
machines; lifting, handling, loading or unloading machines;
stretching; incomplete functional unit; parts of functional
unit; principal function; GRIs 2(a); 3(c); Note 4, Section
XVI; Note 3, Section XVI; EN 84.28; HQs 087077; 950218;
957326; 961003
Dear Port Director:
This is our decision on protest 1512-97-100177, against your
classification under the Harmonized Tariff Schedule of the United
States (HTSUS) of machines used to make up automatic gusset line
closer machines.
FACTS:
The merchandise is invoiced as "ONE PICK UP AND ORIENTATION
SET WITH CONTROL KEY BOARD" and "ONE TURRET UNIT WITH CONTROL
CABINET AND ACCESSORIES AS MACHINE AUTOMATIC GUSSET". The
importer states that these articles are two of the four machines
which make up an "Automatic Gusset Line Closer" (AGLC) machine
used to make pantyhose. The first article, also called a
"Schadok Lifting and Handling Device", lifts fabric blanks from
the supply reservoir of tubular fabric blanks, orients the
blanks, and transports them to the second article (also called a
"Loader"). The Loader positions the blanks and removes creases
and pleats from them, after which the other two machines in the
AGLC perform sewing functions.
The merchandise was entered in 14 entries between April and
December, 1993, as other sewing machines, automatic units, in
subheading 8452.21.90, HTSUS. The entries were liquidated on
January 31, 1997, with classification as other machines and
mechanical appliances having individual functions, not specified
or include elsewhere, in subheading 8479.89.90, HTSUS.
The importer's counsel filed this protest with Customs on
April 30, 1997, against the classification of the merchandise.
Citing Harmonized Commodity Description and Coding System
Explanatory Note (EN) 84.79, the protestant contends that the
machines are precluded from classification under heading 8479,
HTSUS, because they can be properly classified in another more
specific heading of Chapter 84, HTSUS, namely heading 8428 or
8452, HTSUS. The protestant also contends that the machines are
used exclusively as components for the AGLCs and that their
principal functions are the lifting, handling, and loading
functions specifically provided for in subheading 8428, HTSUS.
Alternatively, the protestant argues that the machines, when
combined with the other two machines making up the AGLCs,
contribute together to the clearly defined function performed by
sewing machines, and that the four machines are interdependent on
one another. Therefore, under Note 4, Section XVI, HTSUS, the
machines should be classified as sewing machines in heading 8452,
HTSUS. In this alternative argument, the protestant contends
that the machines would be classified as parts of sewing machines
in subheading 8452.90.00, HTSUS.
The subheadings under consideration are as follows:
8428.90.00: Other lifting, handling, loading or unloading
machinery (for example, elevators, escalators,
conveyors, teleferics): ... Other machinery.
The 1993 general column one rate of duty for goods classifiable
under this provision is 2% ad valorem.
8452.21.90: Sewing machines, ...; furniture, bases and covers
specially designed for sewing machines; sewing
machine needles; parts thereof: ... Other sewing
machines: Automatic units: ... Other.
The 1993 general column one rate of duty for goods classifiable
under this provision is 2.5% ad valorem.
8452.90.00: Sewing machines, ...; furniture, bases and covers
specially designed for sewing machines sewing
machine needles; parts thereof: ... Other parts of
sewing machines.
The 1993 general column one rate of duty for goods classifiable
under this provision is 2.5% ad valorem.
8479.89.90: Machines and mechanical appliances having
individual functions, not specified or included
elsewhere in this chapter; parts thereof: ...
Other machines and mechanical appliances: ...
Other: ... Other.
The 1993 general column one rate of duty for goods classifiable
under this provision is 3.7% ad valorem.
ISSUE:
Whether the Schadok Lifting and Handling Devices and the
Loaders, two of the four machines making up Automatic Gusset Line
Closer machines, are classifiable as other lifting, handling,
loading or unloading machinery in subheading 8428.90.00, HTSUS,
other sewing machines in subheading 8452.21.90, HTSUS, other
parts of sewing machines in subheading 8452.90.00, HTSUS, or
other machines and mechanical appliances in subheading
8479.89.90, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the protest was timely filed (i.e.,
within 90 days after but not before the notice of liquidation;
see 19 U.S.C. 1514(c)(3)(A)) and the matter protested is
protestable (see 19 U.S.C. 1514(a)(2) and (5)).
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. 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. GRI 2(a) provides, in part, that any reference in a
heading to an article shall be taken to include a reference to
that article incomplete or unfinished, provided that, as entered,
the incomplete or unfinished article has the essential character
of the complete or finished article. GRI 3(c) provides that when
goods are prima facie classifiable under two or more headings,
goods which cannot be classified by reference to GRI 3(a) (by
reference to the heading which provides the most specific
description) or GRI 3(b) (classification of mixtures, composite
goods consisting of different materials or made up of different
components, and goods put up in sets for retail sale as if they
consisted of the material or component which gives them their
essential character) shall be classified under the heading which
occurs last in numerical order among those which equally merit
consideration.
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. Customs believes the ENs should
always be consulted. See T.D. 89-80, published in the Federal
Register August 23, 1989 (54 FR 35127, 35128).
Note 4, Section XVI, HTSUS, provides that:
Where a machine (including a combination of machines)
consists of individual components (whether separate or
interconnected by piping, by transmission devices, by
electric cables or by other devices) 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 protestant contends that the machines are parts of
sewing machines made up of the two machines imported in the
protested entries and two other machines which perform the sewing
function, so that the individual components combine to contribute
together to a clearly defined function covered by heading 8452,
HTSUS, and the whole should be classified in that heading,
pursuant to Note 4, Section XVI, HTSUS. In applying Note 4,
Section XVI, HTSUS, Customs has repeatedly noted that there are
no Legal Notes or ENs that provide for "unfinished functional
units" or "parts of functional units". The fact that several
machines, if imported together, would be classified under a
single heading as a "functional unit" does not mean that the same
would hold true if they are imported separately. (See, e.g., HQs
087077 dated March 27, 1991; 950218 dated April 17, 1992; 957326
dated July 17, 1995; and 961003 dated June 10, 1998.) This is
particularly true when, as in this case, the machines imported in
the protested entry do not include the machines which give the
complete or finished article its essential character (i.e., that
of a sewing machine) (see GRI 2(a)). When imported separately,
the machines must be individually classified and classification
in subheading 8452.21.90 or 8452.90.00, HTSUS, by virtue of Note
4, Schedule XVI, HTSUS, is precluded.
The functions of the Schadok Lifting and Handling Device are
to remove fabric blanks from a supply reservoir, orient the
blanks in a predetermined manner, and convey them to the Loader.
Each of these functions is encompassed within the language of
heading 8428, HTSUS (see also EN 84.28, according to which "...
this heading covers a wide range of machinery for the mechanical
handling of materials, goods, etc. (lifting, conveying, loading,
unloading, etc.) [and] [t]hey remain here even if specialised for
a particular industry, for agriculture, metallurgy, etc."). The
Schadok Lifting and Handling Device is classified as other
lifting, handling, loading or unloading machinery in subheading
8428.90.00, HTSUS.
The functions of the Loader are to orient the fabric blanks
received from the Schadok Lifting and Handling Device, remove
creases and pleats from the fabric blanks (by stretching them,
according to materials provided by the protestant), and position
a pair of them on another machine for slitting and sewing. Two
of these functions are basically the same as the functions of the
Schadok Lifting and Handling Device (orienting the fabric blanks
and positioning them). These functions are encompassed within
the language of heading 8428, HTSUS (see above). The third
function, removing creases and pleats by stretching, is not
encompassed within the language of heading 8428, HTSUS, nor is it
specified or included elsewhere in Chapter 84, HTSUS, other than
in the "basket" provision in heading 8479, HTSUS.
Note 3, Section XVI, HTSUS, provides, in part:
Unless the context otherwise requires ... machines adapted
for the purpose of performing two or more complementary or
alternative functions are to be classified ... as being that
machine which performs the principal function.
"Principal" is defined as "first in rank, authority,
importance, degree, etc." (Webster's New World Dictionary of
American English, 3rd Coll. Ed. (1988), 1070). We conclude that
removing creases and pleats by stretching is the most important
function of the Loader. This function, preparatory to sewing the
gusset into the pantyhose, is critical to the successful
production of pantyhose. The other two functions are subsidiary
to, or preparatory for, this function, and are actually
continuations of the functions of the Schadok Lifting and
Handling Device. Therefore, the Loaders are classified as other
machines and mechanical appliances having individual functions,
not specified or included elsewhere in Chapter 84, in subheading
8479.89.90, HTSUS (we note that if the principal function of the
Loader could not be determined, classification would remain in
subheading 8479.89.90, HTSUS (GRI Section XVI (VI) "[w]here it is
not possible to determine the principal function ... it is
necessary to apply [GRI] 3(c)")).
HOLDING:
The Schadok Lifting and Handling Devices are classified as
other lifting, handling, loading or unloading machinery in
subheading 8428.90.00, HTSUS, and the Loaders are classified as
other machines and mechanical appliances in subheading
8479.89.90, HTSUS.
The protest is GRANTED in part (as to the Schadok Lifting
and Handling Devices) and DENIED in part (as to the Loaders). In
accordance with Section 3A(11)(b) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed, with the Customs Form
19, by your office 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 take steps to
make the decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act, and other
public access channels.
Sincerely,
John Durant, Director,
Commercial Rulings Division