CLA–2 OT:RR:CTF:TCM H169057 AMM
Mr. Gregory John Breault
Import/Export Compliance Manager
Gamesa Wind
400 Gamesa Drive
Fairhills, PA 19030
RE: Reconsideration of New York Ruling Letter N090476; Classification of a wind turbine “Front Frame” from China
Dear Mr. Breault,
This is in reference to New York Ruling Letter (NY) N090476, dated January 26, 2010, issued to you on behalf of Gamesa Wind, regarding the classification by U.S. Customs and Border Protection (CBP) of a wind turbine components identified as a “Front Frame” or “Mainframe,” under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed NY N090476, and found it to be incorrect with respect to the classification of the Front Frame. For the reasons set forth below, we are revoking that ruling.
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 and revocation of treatment relating to the tariff classification of the instant “Front Frame” was published on July 23, 2014, in the Customs Bulletin, Volume 48, Number 29. In that notice, CBP proposed that the instant product was classified in heading 8412, HTSUS. No comments were received on this proposal.
FACTS:
In NY N090476, CBP described the instant merchandise in the following manner:
This item is a cast iron further machined piece that acts as the base/floor of a wind turbine generator set. The “Mainframe” is mounted within the nacelle housing of a wind turbine. This base unit, attaches to the upper most portion of the tower via its “rotation center”. Within the nacelle housing the mainframe (front frame) supports the gear box, main shaft assembly, yaw motors, support columns, rotation counter, and rotor locking system. It also attaches to a rear frame assembly that is used to support the generator and control cabinets.
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In NY N090476, CBP classified the instant merchandise under heading 8503, HTSUS, specifically under subheading 8503.00.95, HTSUS, which provides for: “Parts suitable for use solely or principally with the machines of heading 8501 or 8502: Other: Other”.
ISSUE:
What is the proper classification of the instant Front Frame under the HTSUS?
LAW AND ANALYSIS:
The 2014 HTSUS provisions at issue are:
8412 Other engines and motors, and parts thereof:
8412.90 Other:
8412.90.90 Other
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8503 Parts suitable for use solely or principally with the machines of heading 8501 or 8502:
Other:
8503.00.95 Other
Note 2 to Section XVI (which covers Chapters 84 and 85), HTSUS, states, in pertinent part:
Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate.
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The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), constitute the official interpretation of the Harmonized System at the international level. While neither 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 the headings. It is CBP’s practice to consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to heading 84.12 states, in pertinent part:
(D) WIND ENGINES (WINDMILLS)
This group includes all power units (wind engines or wind turbines), which directly convert into mechanical energy the action of the wind on the blades (often of variable pitch) of a propeller or rotor.
Usually mounted on a fairly tall metal pylon, the propellers or rotors have an arm perpendicular to their plane, forming a vane, or some similar device for orientating the apparatus according to the direction of the wind. The motive force is generally transmitted by reduction gearing through a vertical shaft to the power take-off shaft at ground level. Some wind motors (“depression motors”) have hollow blades in which a pressure reduction is developed by rotation, and is transmitted to the ground by airtight conduits to drive a small reaction turbine.
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Electric generator units composed of wind motors mounted integrally with an electric generator (including those for operation in aircraft slipstreams) are excluded (heading 85.02).
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The EN to heading 85.02 states, in pertinent part:
(I) 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 (see the General Explanatory Note to Section XVI), 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 the machines of this heading are classified in heading 85.03.
In NY N090476, CBP classified a “Front Frame.” It is a cast iron further machined piece that acts as the base/floor of a wind turbine generator set, and is mounted within the nacelle housing of a wind turbine. It supports the weight of the gear box, main shaft assembly, yaw motors, support columns, rotation counter, and rotor locking system. It also attaches to a rear frame assembly that supports the weight of the generator. CBP classified this item under heading 8503, HTSUS, which provides for “Parts suitable for use solely or principally with machines of heading 8501 or 8502”.
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, 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.” Bauerhin, 110 F.3d at 778 (quoting Willoughby Camera, 21 C.C.P.A. 322, 324). The second, set forth in United States v. Pompeo, 43 C.C.P.A. 9 (1955), states that an imported item “dedicated solely for use” with another article is a part of that article provided that, “when applied to that use,” the article will not function without it. Pompeo, 43 C.C.P.A. 9, 14. Under either line of cases, an imported item is not a part if it is “a separate and distinct commercial entity.” ABB, Inc. v. United States, 28 Ct. Int’l Trade 1444, 1452-53 (2004); Bauerhin, 100 F. 3d at 1452-32. “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.” Mitsubishi Electronics America v. United States, 19 CIT 378, 383 n.3 (Ct. Int’l. Trade 1995).
A complete wind turbine is classified under heading 8502, HTSUS, as an electric generating set. See NY N099779, dated April 20, 2010; NY J84838, dated May 30, 2003; NY I83359, dated July 11, 2002. A generating set is made from a combination of a prime mover (in this case, a wind engine) and a generator. See EN(I) to 85.02; EN(D) to 84.12.
In NY N058766, dated May 26, 2009, CBP considered the classification of wind turbine nacelle assemblies without generators, imported both with and without the blade assemblies. The nacelle assemblies consisted of a housing, metal frame, gear box, shafts, brake system, yaw system, and controllers. CBP stated that “The gears, shafts, brake, and yaw drive and motor, together with the blade assembly, operate as the engine of the completed wind turbine.” In one scenario, a nacelle assembly was imported without its generator, blades, hub, and nose cone. CBP classified it under subheading 8412.90.90, HTSUS, which provides for “Other engines and motors, and parts thereof: Parts: Other”. In a second scenario, a nacelle assembly was imported without its generator, but with the blades, hub, and nose cone. CBP found that this scenario represented a complete wind engine, and classified it under subheading 8412.80.90, HTSUS, which provides for “Other engines and motors, and parts thereof: Other engines and motors: Other”.
CBP has also classified certain other individual components contained inside the nacelle housing as parts of a wind engine. See NY N112600, dated July 27, 2010 (a mechanical brake-hydraulic unit, which is a nacelle assembly component located behind the gear box as a part of a wind engine, was classified under subheading 8412.90.90, HTSUS); NY N138276, dated December 16, 2010 (a bedplate cast, used inside a nacelle assembly to support the yaw drive, brakes, rotor shaft, and gear box, as a part of a wind engine, was classified under subheading 8412.90.90, HTSUS).
Heading 8412, HTSUS, provides for “Other engines and motors, and parts thereof”. As discussed above, a complete wind turbine is composed of two components: the wind engine and the electric generator. When the electric generator is missing, the remainder of the assembly is classified as a wind engine. See NY N058766. The function of the wind engine is to capture the kinetic energy of the wind, and convert that energy into rotational mechanical energy. See EN(D) to 84.12. As discussed above, the instant Front Frame is dedicated solely for use inside the nacelle of a wind turbine, to support the weight of certain other components. These individual components work together to transmit the rotational mechanical energy from the blades to the generator. If the Front Frame were removed, there would be no support or alignment for these parts. The wind engine would no longer be able to perform its intended function, which is to convert wind energy into electricity and to supply that mechanical energy to the electric generator. The Front Frame is a “part” of a wind engine within the meaning of the term given by the courts in Bauerhin. Therefore, the Front Frame is properly classified under heading 8412, HTSUS, as a part of a wind engine. See Note 2(b) to Section XVI, HTSUS.
In NY N090476, CBP classified the instant product under heading 8503, HTSUS, as a part of a complete wind turbine. However, a complete wind turbine is comprised of two parts, the wind engine and the generator. As stated in Mitsubishi, “[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.” Mitsubishi, 19 CIT, at 383 n.3. The instant front frame is a subpart of the complete wind turbine, in that it is a part of the wind engine (which is itself a part of the wind turbine). As such, it is not provided for under heading 8503, HTSUS.
The instant front frame is properly classified under heading 8412, HTSUS, by operation of GRI 1 and Note 2(b) to Section XVI. Specifically, it is classified under subheading 8412.90.90, HTSUS, which provides for: “Other engines and motors, and parts thereof: Parts: Other”.
HOLDING:
By application of GRI 1 and Note 2(b) to Section XVI, HTSUS, the instant Front Frame is classified under heading 8412, HTSUS, specifically under subheading 8412.90.90, HTSUS, which provides for: “Other engines and motors, and parts thereof: Parts: Other”. The column one, general rate of duty is free.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
New York Ruling Letter N090476, dated January 26, 2010, is hereby REVOKED in accordance with the above analysis. 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 and Trade Facilitation Division