CLA-2 RR:CR:GC 966872 RSD
TARIFF NO. 8504.31.40
David R. Stepp, Esq.
Katten Muchin Zavis Roseman
2029 Century Park East
Suite 2600
Los Angeles, California 90067
RE: Power Transformers
Dear Mr. Stepp:
This is in response to your letter dated September 30, 2003, on behalf of Pulse, a Technitrol Company (“Pulse”), concerning the tariff classification of two types of power transformers under the Harmonized Tariff Schedule of the United States (HTSUS). The National Commodity Specialist Division forwarded your letter to our office. We have received a sample of one of the transformers.
FACTS:
Pulse’s Power Division imports two basic types of transformers, identified as Type I and Type II transformers. Pulse’s customers sell both transformer types as power supplies for end uses in data processing, telecommunications, or other similar applications. Both type of transformers perform the same function of taking an input voltage and current and decreasing the voltage levels and correspondingly increasing the output levels.
The Type I products are non-planar devices with a maximum power output of 100 watts. This product incorporates flyback power supply topology meaning that the design of their core includes a small amount of an air-gap on the internal leg of the E-core shape. The purpose of the air-gap is to store a small amount of energy in the gap for discharge after the power switch has been turned off. The construction of this product consists of multiple wires that constitute the primary and secondary windings. These windings are formed around the SMT bobbin and the E-core. They are configured to receive a standard telecom input voltage of 36-72 volts and provide a standard telecom output voltage of 12 volts.
Type II transformers are used in power supply applications as well as in applications where the input voltage, typically a rectified AC voltage of 150-180 volts DC, is decreased to 24-48 volts DC. The Type II transformer typically carries higher currents than the Type I transformer, so copper foil is incorporated to keep the DC resistance as low as possible. Because the Type I device has higher voltage potentials between primary and secondary windings, margin tapes are used to create a physical barrier between the two sets of windings. The barrier between the windings provides protection against a short.
Companies offer the Pulse products in their product lines of high-performance DC-DC switching power supplies and power modules for markets in the United States and throughout the world. End-use customers sell the power supplies to support consumer applications in workstations, servers and desktop computers. In addition, the transformers are used in telecommunications equipment, the latest generation of integrated circuits (DSP, FPGA, ASIC), microprocessor-powered applications (LANs/WANs), and other data processing equipment.
ISSUE:
Whether the power transformers are classified in subheading 8504.31.20, HTSUS, as: other transformers having power handling capacity not exceeding 1kVA: unrated or in subheading 8504.31.40, HTSUS, as: other transformers: having a power handling capacity less than 1kVA.
LAW AND ANALYSIS:
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 may then be applied.
The Harmonized Commodity Description And Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system. Customs believes the EN’s should always be consulted. See T.D. 89 80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The HTSUS provisions under consideration are as follows:
8504 Electrical transformers, static converts (for example, rectifiers) and inductors; parts thereof:
Other transformers:
8504.31 Having a power handling capacity not exceeding
1 kVA:
8504.31.20 Unrated
Other:
8504.31.40 Having a power handling capacity
less than 1 kVA
* * * * * * * * * *
EN 85.04 states:
Electrical transformers are apparatus which, without having any moving parts, transform, by means of induction and using a preset or adjustable system, an alternating current into another alternating current of different voltage, impedance, etc. These usually consist of two or more coils of insulated wire wound on laminated iron cores, although in some cases (e.g., radio-frequency transformers) there may be no magnetic core, or the core may be of agglomerated iron dust, ferrite, etc. An AC in one coil (the primary circuit) induces an AC usually at different values of current and voltage in the others (the secondary circuit). In certain cases (auto transformers) there is only a single coil, part of the winding of which is common to the primary and secondary circuits. In shell type transformers, there is a shell of laminated iron round the transformer.
Certain transformers are designed for particular purposes, e.g., matching transformers for matching the impedance of one circuit with that of another, and instrument transformers (current or voltage transformers, combined instrument transformers) used to step down or step up voltages or currents to the level of the connected equipment, e.g., measuring instruments, electricity meters or protective relays.
…
The power-handling capacity of a transformer is the kilovolt-ampere (kVA) output based on continual use at the rated secondary voltage (or amperage, when applicable) and at the rated frequency without exceeding the rated temperature limitations.
In HQ 951711, dated May 29, 1992, Customs addressed the question of whether a transformer is classified as “rated” or “unrated.” We stated:
Customs has long held that transformers may not be regarded as unrated if they are of a class or kind which are rated or are for uses in power circuits where the capacities of the transformers must be known even if they are not included on any labels. Currently, signal transformers and current transformers (that work as circuit breakers or large power transformers) are the only types of transformers that have been found by Customs and the Courts to be unrated.
According to your submission “These transformers perform the same function: they take an input voltage and current and transform the voltage levels down and correspondingly increase the current levels.”
Since the Type I and Type II transformers transform voltage levels down, they are step-down transformers. Consequently, the subject transformers are not signal or current transformers, the kind of transformers that are considered unrated and that have been held to be classified in subheading 8504.31.20, HTSUS.
You indicate that the Type I and Type II transformers in this case have the same general physical characteristics as transformers that Customs has previously ruled as unrated and classified in subheading 8504.31.20, HTSUS. In support of this position, you cite several rulings in which Customs held that the transformers at issue were unrated and were classified in subheading 8504.31.20: NY A88229 dated October 31, 1996; NY 858551, December 11, 1990; NY F81470 dated January 14, 2000; NY 894080, dated January 31, 1994; NY H82710 dated July 3, 2001; and NY F89738 dated August 10, 2000. These rulings concerned pulse transformers, data transformers, voice transformers, push pull transformers, and sound transformers. Although the transformers that were the subject of the cited rulings may have some of the same general physical characteristics as the transformers under consideration, they were not the same kind of transformers that are the subject of this case because they had different applications. In this case, the Type I and Type II transformers are step-down transformers used in power circuits for which a rating is required for proper usage.
You also cite United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied 429 U.S. 979. The court in Carborundum set forth criteria for determining whether imported merchandise was of a particular class or kind. The factors considered by the court included: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels, class or kind of trade in which the merchandise moves; (4) the environment of sale, which include accompanying accessories and the manner in which the merchandise is marketed; (5) the use, if any, in the same manner as the merchandise which defines the class or kind of merchandise; and (6) the economic practicality and recognition in the trade of using the imported merchandise in a particular manner. See id. at 377.
You contend that Pulse’s customers do not have expectations as to the specific ratings of the transformers because they do not provide the company with any manufacturing specifications relating to power ratings for their custom-made products. You also claim that Pulse deals directly with its customers. Moreover, although the Pulse specification sheets indicate broad ranges of the products’ power capabilities, its customers dictate the final product configurations that do not include power specifications. However, you have not provided any substantiation for these assertions regarding Pulse’s customers’ expectations regarding the power ratings for the transformers. In contrast, we note that the data sheet that was submitted for the Type I transformer clearly specifies that it has a power rating of “50 W.” It also indicates the input voltage and output voltage for the product. (See HQ 081407 dated May 23, 1990 regarding input and output rating for transformers. ) Consequently, we conclude that the transformers under consideration are “rated.” Therefore, they are classified in subheading 8504.31.40, HTSUS as: “Electrical transformers..: Other transformers: Having a power handling capacity not exceeding l kVA: Other: Having power handling capacity less than 1 kVa.” This determination is consistent with NY 854957 dated August 3, 1990, and NY J86155 dated July 11, 2003, which classified step-down transformers with a power handling capacity less than 1 kVA in subheading 8504.31.40, HTSUS.
HOLDING:
The Type I and Type II power transformers described above are classified in subheading 8504.31.40 as: “Electrical transformers..: Other transformers: Having a power handling capacity not exceeding 1 kVA: Other: Having a power handling capacity less than 1 kVA.”
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division