CLA-2 RR: CR: GC 965993 DBS
Mr. Robert E. Burke, Esq.
Barnes, Richardson & Colburn
303 East Wacker Dr., Suite 1100
Chicago, IL 60601
RE: Revocation of NY E89795; axial cooling fan; GRI 2(a)
Dear Mr. Burke:
This is in response to your letter dated October 16, 2002, requesting reconsideration of NY E89795, which was issued to your client, Ventilatoren Sirocco Howden, on December 8, 1999, classifying a fan assembly in subheading 8414.90.10, Harmonized Tariff Schedule of the United States (HTSUS), as parts of fans. We have reviewed NY E89795, the supplemental information and arguments provided in your letters of January 6 and January 8, 2003, and the discussion from the teleconference conducted with you and your client’s representatives on January 8, 2003. We have found the ruling to be incorrect.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of the above identified ruling was published on February 12, 2003, in the Customs Bulletin, Volume 37, Number 7. No comments were received in response to the notice.
FACTS:
The product at issue was described in NY E89795 as a “fan assembly” for an industrial axial cooling fan, and was classified as parts
of a fan. It consists of a matching set of a steel hub, a set of fasteners (consisting of aluminum support blocks and U-bolts) and a number of reinforced polyester fan blades. The components will be shipped unassembled due to the very large size of the good once assembled. The fan assemblies are custom-made for use in heat exchanger systems. Once assembled and mounted to an existing motor or gearbox, the fan cools condensers in large gas-fueled electric power generation units.
Your client stated that the assembly is generally imported without a drive shaft because in most cases the custom-made assembly is designed to be mounted onto an existing driving shaft mechanism (gearbox) which is the output shaft for the motor. The assembly may be attached to the mating drive shaft via a coupling flange, which is included with the imported assembly as needed. You furnished Customs with advertising materials from other companies within the cooling fan industry to further illustrate this point and demonstrate trade custom.
ISSUE:
Whether the imported fan assembly is classifiable as a part of a fan in subheading 8414.90.10, HTSUS, or an incomplete or unassembled fan, classifiable as a fan in subheading 8414.59.60, HTSUS, according to GRI 2(a).
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 may then be applied.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
8414 Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof:
Fans:
8414.59 Other:
Other:
8414.59.60 Other.
* * *
8414.90 Parts
8414.90.10 Of fans.
When the subheadings, rather than the headings, are at issue, GRI 6 is applied. GRI 6 provides that, “for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to [rules 1 through 5] on the understanding that only subheadings at the same level are comparable for the purposes of this rule and the relative section and chapter notes also apply, unless the context otherwise requires.”
An article is to be classified according to its condition as imported. See XTC Products, Inc. v. United States, 771 F.Supp. 401, 405 (1991). While the blades, hub and fasteners may individually constitute parts of a fan, these components are imported unassembled, but together. GRI 2(a) provides that goods imported in an unassembled condition are to be classified as the assembled article. Further, the ENs to Section XVI state, in part, the following:
(V) UNASSEMBLED MACHINES
(See General Interpretive Rule 2 (a))
For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine … presented unassembled (see also in this connection the General Explanatory Notes to Chapters 84 and 85). However, unassembled components in excess of the number required for a complete machine or for an incomplete machine having the characteristics of a complete machine, are classified in their own heading.
The unassembled components are shipped as such due to size, and are not in excess of those required for the complete machine. Thus, an assembly is not classifiable as parts but as the complete machine. See NY F82265, dated February 24, 2000. However, the instant assembly is not imported with a drive shaft or motor. Thus, we must determine whether the assembly is an incomplete machine.
The ENs to heading 8414, HTSUS, which describe fans, state, in pertinent part, as follows:
These machines, which may or may not be fitted with integral motors, are designed either for delivering large volumes of air or other gases at relatively low pressure or merely for creating a movement of the surrounding air (emphasis added).
Those of the first kind may act as air extractors or as blowers (e.g., industrial blowers used in wind tunnels). They consist of a propeller or blade-type impeller revolving in a casing or conduit, and function on the principle of rotary or centrifugal compressors.
The second type are of more simple construction, and consist merely of a driven fan rotating in free air….
It is clear from the ENs that a fan may be imported sans motor and still be a fan for tariff purposes. However, fans are machines. For a fan to perform its function as a machine for delivering large volumes of air or moving surrounding air, it must be able to rotate the fan blades. This import lacks the mechanism to rotate the blades. Rather, the imported pieces are assembled and attached to an existing gearbox and/or motor, which contains the drive shaft (discussed below). Since the import does not contain such a mechanism, it is not classifiable according to GRI 1 as a complete fan, and we turn again to GRI 2(a).
In addition to unassembled or disassembled goods, GRI 2(a) covers unfinished or incomplete goods. It states as follows:
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. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
We must now determine whether the assembly imparts the essential character of a complete fan. The ENs to GRI 2(a) direct us to the General ENs to Section XVI, HTSUS, which provide, in pertinent part, as follows:
(IV) INCOMPLETE MACHINES
(See General Interpretative Rule 2 (a))
Throughout the Section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine). Thus a machine lacking only a flywheel, a bed plate, calender rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading providing for parts. Similarly a machine or apparatus normally incorporating an electric motor (e.g., electro-mechanical hand tools of heading 85.08) is classified in the same heading as the corresponding complete machine even if presented without that motor.
The instant assembly lacks only a shaft and a motor to be a complete fan. We have already concluded that the ENs do not require that a fan of heading 8414, HTSUS, be fitted with an integral motor. The ENs to Section XVI regarding GRI 2(a) reiterate this by stating that a machine or apparatus normally incorporating a motor may be classified as the complete machine without the motor. You have demonstrated that in the large industrial cooling fan industry, “fans” do not often incorporate their own drive shaft because it is a part of the motor or gearbox. As the shaft is a part of the motor, and the motor is not required for classification purposes, we can only conclude that, in this case, the shaft and motor are not “main essential features” for purposes of tariff classification.
The massive hub and blades, which are imported ready for assembly with fasteners, comprise the main essential features of an industrial cooling fan. In fact, it is the blade size, curvature, and the quantity of blades that makes each of these types of fans suited for their intended purpose, as they are specially designed to deliver or move air in such a way that they cool the industrial machinery to which they attach.
We note EN(VI) to GRI 2(a) states that the rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of the rule. As we have determined that the imported merchandise is classifiable as a complete fan by virtue of the first part of GRI 2(a), applied, mutatis mutandis, through GRI 6, the instant assembly is an incomplete, unassembled fan of subheading 8414.59, HTSUS.
For the reasons above, we find NY E89795 to be incorrect.
HOLDING:
The fan assembly is classifiable in subheading 8414.59.60, HTSUS, which
provides for “Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof: fans: other: other: other.”
EFFECT ON OTHER RULINGS:
NY E89795, dated December 8, 1999, is hereby REVOKED. In accordance with 19 U.S.C 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division