CLA-2 OT:RR:CTF:TCM H023502 RM
Port Director
U.S. Customs and Border Protection
610 W. Ash Street Suite 1005 San Diego, CA 92101
RE: Classification of Wind Turbine Blades; Protest No. 2506-08-100005
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 2506-08-100005, timely filed by counsel, on behalf of GE Wind Energy, LLC (“GE”), concerning classification of blades for GE wind turbines under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
This protest concerns propeller blades designed for GE Wind-Turbine Generator Systems. The blades capture wind energy and transfer that energy to a wind turbine. The turbine, in turn, converts wind energy into torque, which then drives a generator that produces electrical energy. The blades are manufactured from fiberglass epoxy resin. Three blades are used on each wind turbine.
The merchandise was entered on September 27, 2006, under heading 8503, HTSUS, as parts of wind-powered electric generating sets, and liquidated as entered The merchandise was liquidated as entered on August 10, 2007. Protestant filed the instant protest and AFR on January 14, 2008, claiming classification under heading 8412, HTSUS, as parts of other engines and motors.
ISSUE:
Whether the blades are classified as parts of generator sets under heading 8503, HTSUS, or as parts of wind turbines under heading 8412, HTSUS?
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for all involved entries (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).
Further Review of Protest No. 2506-08-100005 was properly accorded to protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to substantially similar merchandise.
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 2 through 6 may then be applied in order.
The HTSUS headings under consideration are as follows:
8412 Other engines and motors, and parts thereof:
8412.90 Parts:
8412.90.90 Other …
8412.90.9080 Other …
* * *
8503.00 Parts suitable for use solely or principally with the machines of heading 8501 or 8502:
8503.00.95 Other …
8503.00.95.45 Parts of generators …
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Heading 8412, HTSUS, covers “[o]ther engines and motors.” The ENs to heading 8412, HTSUS, state, in part:
This heading includes reaction engines (other than turbo-jets), pneumatic power engines and motors, wind engines (windmills), spring-operated or weight-operated motors, etc.
Heading 8503, HTSUS, provides for “[p]arts suitable for use solely or principally with the machines of heading 8501 or 8502.” The ENs to heading 8502, HTSUS, state, in part:
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI) this heading covers parts of the machines of the two proceeding headings.
Heading 8502, HTSUS, provides for: “[e]lectric generating sets and rotary converters.” Wind-powered generating sets are specifically provided for in subheading 8502.31.00, HTSUS. The ENs to heading 8502, HTSUS, state, in part:
ELECTRIC GENERATING SETS
The expression “generating sets” applies to the combination of an electric generator and any prime mover other than an electric motor (e.g., hydraulic turbines, steam turbines, wind engines, reciprocating steam engines, internal combustion engines). Generating sets consisting of the generator and its prime mover which are mounted (or designed to be mounted) together as one unit or on a common base) are classified here provided they are presented together (even if packed separately for convenience of transport).
PARTS
Subject to the general provisions regarding the classification of parts (see the General Explanatory
Note to Section XVI), parts of machines of this heading are classified in heading 85.03
(Emphasis in original)
Protestant contends that the wind turbine blades are properly classified under heading 8412, specifically subheading 8412.90.9080, HTSUS, as parts of other engines and motors. In support of this position, protestant cites to New York Ruling Letter (“NY”) N007816, dated March 28, 2007, in which CBP classified similar merchandise under subheading 8412.90.9080, HTSUS.
The courts have considered the nature of "parts" under the HTSUS and two distinct though not inconsistent tests have resulted. (See Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997) ("We conclude that these cases are not inconsistent and must be read together." At 779)). The first, articulated in United States v. Willoughby Camera Stores, 21 C.C.P.A. 322 (1933) requires a determination of whether the imported item is "an integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article." At 324. The second line of cases, which evolved from United States v. Antonio Pompeo, 43 CCPA 9, C.D. 1669 (1955), hold that a device may be a part of an article even though its use is optional and the article will function without it, if the device is dedicated solely for use upon the article, and, once installed, the article will not operate without it.
The blades at issue capture the wind energy used to propel the wind turbine to which they are attached. Without them, the wind turbines cannot function. Moreover, the blades are dedicated for use solely with the wind turbines, and have no independent function. Accordingly, we conclude that the blades are integral, constituent and component parts of wind turbines, satisfying the definition of the term “part.” Wind turbine engines are classified in heading 8412, HTSUS.
Subject to certain exceptions that are not relevant here, goods that are identifiable as parts of machines or apparatus of Chapter 84 or Chapter 85 are classified in accordance with Section XVI, Note 2, HTSUS. See Nidec Corporation v. United States, 861 F. Supp. 136 (Ct. Int’l Trade 1994), aff'd. 68 F. 3d 1333 (Fed. Cir.1995). Parts which are goods included in any of the headings of Chapters 84 and 85 are classified in their respective headings. See Note 2(a). Other parts, if suitable for use solely or principally with a particular machine or with a number of machines of the same heading, are classified with the machines of that kind. See Note 2(b). In this case, as no heading in the HTSUS describes the blades, they are classified by application of Note 2(b) to Section XVI, HTSUS, as “parts” suitable for use solely or principally for wind engines.
With regard to your contention that the blades are more specifically provided for as parts of the wind-powered generators under heading 8503, HTSUS, we are guided by the Court of International Trade Decision, Mitsubishi Electronics America v. United States, 19 Court Int’l Trade 378 (1995). In that case, the Court stated that:
[A] subpart of a particular part of an article is more specifically provided for as a part of the part than as a part of the whole. C.F. Liebert v. United States, 60 Cust. Ct. 677, 686-87, 287 F. Supp. 1008, 1014 (1968) (holding that parts of clutches which are parts of winches are more specifically provided for as parts of clutches than as parts of winches).
(Emphasis added)
Accordingly, we find that the blades are not provided for under heading 8503, HTSUS, as parts of the wind-powered generator set because they are more specifically provided for in heading 8412, HTSUS, as parts of parts, i.e., parts of wind turbines. This conclusion is in keeping with NY N007816, dated March 28, 2007, and NY M80880, dated April 17, 2006, in which CBP classified blades for wind turbines under heading 8412, HTSUS.
HOLDING:
Under the authority of GRI 1 and Section XVI, Note 2(b), the blades for GE wind turbines are classified under heading 8412, specifically subheading 8412.90.9080, HTSUS, which provides for: “[o]ther engines and motors, and parts thereof: [p]arts: [o]ther: [o]ther.” The 2006 column one, general rate of duty is: “[f]ree.”
The protest should be GRANTED. In accordance with the Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the Customs Form 19, 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 International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division