HQ H169835
August 25. 2015
CLA-2 OT:RR:CTF:TCM H169835 CkG
TARIFF NO: 8419.89.95
Mr. Frederick Waite
Vorys, Sater, Seymour and Pease, LLP
1909 K St. NW
Suite 900
Washington, DC 20006-1152
Re: Reconsideration of NY N148635; classification of a magnesium powder plant
Dear Mr. Waite:
This is in reference to your request for reconsideration of New York Ruling Letter (NY) N148635, dated February 17, 2011, concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a magnesium powder plant. We have reviewed NY N148635 and find that the classification of the magnesium powder plant in heading 8419, HTSUS, was correct.
The merchandise at issue, the magnesium powder plant, is a system for the production of magnesium powder pellets. The primary purpose of the system is served by the magnesium ore being heated and melted in a furnace chamber and then forced, by blowers, through a nozzle into a chamber of cooling gas where the small particles which pass through the nozzle are cooled and form round or oval beads as a result of the cooling and magnesium’s surface tension. The process begins when ingots of magnesium are loaded into a preheating furnace where the metal is heated and then mechanically fed into a melting furnace. Once the magnesium is melted, it is moved to the holding furnace, where it is refined and cleaned. The refined, liquid magnesium is then moved into the tundish furnace where it is fed into an atomizing nozzle which disperses a stream of liquid magnesium into the atomizing (gas-cooled) chamber. The atomized droplets of magnesium solidify and are cooled in the atomizing chamber. The magnesium powder is then separated from the gas stream by a cyclone separator. Finally, the magnesium powder is collected in batch containers that are connected to the lower part of the cooling chamber.
You contend that NY N148635 incorrectly classified the magnesium powder plant in heading 8419, HTSUS, and that it should be classified in heading 8454, HTSUS.
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 provisions under consideration are as follows:
8419: Machinery, plant or laboratory equipment, whether or not electrically heated (excluding
furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing,
condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof.
8424: Mechanical appliances (whether or not hand operated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines; parts thereof:
8454: Converters, ladles, ingot molds and casting machines, of a kind used in metallurgy
or in metal foundries, and parts thereof:
* * * *
Note 3 to Section XVI, HTSUS, provides, in pertinent part, that:
Unless the context otherwise requires, … machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
Note 4 to Section XVI, HTSUS, provides:
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.
Note 2 to Chapter 84, HTSUS, provides as follows:
2. Subject to the operation of Note 3 to Section XVI and subject to Note 9 to this chapter, a machine or appliance which answers to a description in one or more of the headings 8401 to 8424, or heading 8486 and at the same time to a description in one or more of the headings 8425 to 8480 is to be classified under the appropriate heading of the former group or under heading 8486, as the case may be, and not the latter group.
Heading 8419 does not, however, cover:
…
(e) Machinery or plant, designed for mechanical operation, in which a change of temperature, even if necessary, is subsidiary.
…
* * * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS. 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.
The Explanatory Notes to Section XVI provide, in pertinent part, as follows:
(VI) MULTI FUNCTION MACHINES AND COMPOSITE MACHINES (Section Note 3)
In general, multi-function machines are classified according to the principal function of the machine.
Multi-function machines are, for example, machine-tools for working metal using interchangeable tools, which enable them to carry out different machining operations (e.g., milling, boring, lapping).
Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3(c); such is the case, for example, in respect of multi function machines potentially classifiable in several of the headings 84.25 to 84.30, in several of the headings 84.58 to 84.63 or in several of the headings 84.69 to 84.72.
Composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI, are also classified according to the principal function of the composite machine.
The following are examples of such composite machines: printing machines with a subsidiary machine for holding the paper (heading 84.43); a cardboard box making machine combined with an auxiliary machine for printing a name or simple design (heading 84.41); industrial furnaces combined with lifting or handling machinery (heading 84.17 or 85.14); cigarette making machinery combined with subsidiary packaging machinery (heading 84.78).
For the purposes of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other, or mounted on a common base or frame or in a common housing.
…
Note 3 to Section XVI need not be invoked when the composite machine is covered as such by a particular heading, for example, some types of air conditioning machines (heading 84.15).
It should be noted that multi purpose machines (e.g., machine tools capable of working metals and other materials or eyeletting machines used equally well in the paper, textile, leather, plastics, etc., industries) are to be classified according to the provisions of Note 7 to Chapter 84.
(VII) FUNCTIONAL UNITS (Section Note 4)
This Note applies when a machine (including a combination of machines) consists of separate components which are intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or, more frequently, Chapter 85. The whole then falls to be classified in the heading appropriate to that function, whether the various components (for convenience or other reasons) remain separate or are interconnected by piping (carrying air, compressed gas, oil, etc.), by devices used to transmit power, by electric cables or by other devices.
For the purposes of this Note, the expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole.
….
It should be noted that component parts not complying with the terms of Note 4 to Section XVI fall in their own appropriate headings.
* * * *
Explanatory Note 84.19 provides, in pertinent part:
The heading covers machinery and plant designed to submit materials … to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature change (e.g., heating, cooking, roasting, distilling, rectifying, sterilising, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling processes). But the heading excludes machinery and plant in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant [.]
* * * *
EN 84.24 provides, in pertinent part:
This heading covers machines and appliances for projecting, dispersing or spraying steam, liquids or solid materials (e.g., sand, powders, granules, grit or metallic abrasives) in the form of a jet, a dispersion (whether or not in drips) or a spray.
* * * *
EN 84.54 provides as follows:
(D) CASTING MACHINES OF A KIND USED IN METALLURGY OR IN METAL
FOUNDRIES
This group includes :
Machines (generally incorporating a conveyor belt or chain) for the successive filling, cooling and emptying of the moulds. These sometimes incorporate devices for shaking or tapping the moulds to facilitate the even setting of the molten metal.
Machines for casting under pressure. These consist essentially of two adjustable plates to which are fixed the two halves of the mould. The liquid metal from a reservoir is forced into the mould, either by the direct action of compressed air on the free surface of liquid metal in the reservoir, or by the insertion of a piston into a closed reservoir full of the liquid metal. In some cases these machines incorporate cooling devices, to accelerate solidification of the metal, and arrangements for separating the cast article from the mould. They are mainly used for casting small non ferrous metal articles.
However, the heading does not cover machines for moulding metal powders under pressure, by sintering, (heading 84.62).
Centrifugal casting machines in which the molten metal is led into a cylindrical mould rotating at high speed; the metal is thrown on to the sides of the mould and solidifies in the form of a pipe.
Continuous casting machines. In these, steel is conveyed from the ladle in a distributor which feeds the different casting flow lines. These flow lines include :
(a) an ingot mould, without bottom, with its cooling devices;
(b) outside the ingot mould a system for atomising water in order to cool
the cast metal;
(c) a group of conveyor rollers allowing the regular extraction of the
solidified metal; and
(d) a system of cutting off machines, followed by an evacuation device.
The moulds to be used with the machines of this group fall usually in heading 68.15, 69.03 or 84.80.
* * * * *
You argue that the magnesium powder plant at issue in NY N148635 was incorrectly classified in heading 8419, HTSUS, as machinery, plant or laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature, because the process involving a change in temperature is subsidiary to the atomizing function of the machine, and therefore the magnesium powder plant is excluded from heading 8419, HTSUS, by Note 2(e) to Chapter 84. You maintain that the machine is correctly classified in heading 8454, HTSUS, as a casting machine.
Heading 8454 provides for casting machines. You argue that the powder plant is classified in heading 8454 because a change in temperature is inherent in the casting process, and thus heading 8454 captures the product in its entirety at GRI 1, pursuant to Note 4 to Section XVI, as opposed to heading 8419, which describes only part of the function of the machine as a whole. However, we note that casting machines do not ordinarily melt the metal themselves—they pour already molten metal into molds. The instant machine does not utilize molds or otherwise cast the molten metal into a specific shape—i.e.., an ingot, billet, etc. Instead, the end result is aluminum powder. You argue that the fact that this process does not use a mold does not preclude it from being considered a casting machine, because moldless casting represents an advancement in casting technology. Our research, however, indicates that casting, by definition, utilizes a mold. For example, the Merriam-Webster online dictionary defines “casting” as “something made from material that hardens in a mold”, or “something cast in a mold”, or more specifically, “Pouring of molten metal into a mold, where it solidifies into the shape of the mold.” See http://www.merriam-webster.com/dictionary/casting. The Encyclopedia Britannica online similarly describes casting as "in the metal and plastics industry, the process whereby molten material is poured or forced into a mold and allowed to harden. See http://www.britannica.com/EBchecked/topic/98624/casting. Founding, in turn, is defined as “the process of pouring molten metal into a cavity that has been molded according to a pattern of the desired shape. When the metal solidifies, the result is a casting—a metal object conforming to that shape.” http://www.britannica.com/EBchecked/topic/214781/founding.
You submit the following articles supporting your claim that spray casting is considered a form of moldless casting: “Computational and Heat Transfer Analysis of Convergent Nozzle Used for Gas Atomization of Liquid Metals”, International Journal of Dynamics of Fluids, Volume 6, Number 2 (2012), pp.161-179); “Spray Forming” – Oxford University, available at http://users.ox.ac.uk/~pgrant/sf/sf1.htm. However, as the definition you cite from Spray Forming makes clear, spray casting refers to the production of a predetermined shape such as a billet rather than merely a powder. The excerpt from the International Journal of Dynamics of Fluids that you include in your submission, describing the gas atomization process, further distinguishes between spray casting, in which the droplets formed during the atomization process are deposited to form billets, and the quenching of the droplets to form powders. The Explanatory Notes, common definitions of “casting” and founding”, and our research on “spray casting” further confirm that metal casting in general, including moldless forms of casting such as “spray casting”, “spray forming” and “spray deposition”, involves casting of specific, solid shapes. See e.g., “Spray Forming”, supra; “Spray Forming: Alloys, Products, and Markets”, Jom, Volume 51, Number 4 (1999), available at http://www.tms.org/pubs/journals/JOM/9904/Leatham/Leatham-9904.html; https://inlportal.inl.gov/portal/server.pt/community/energy_efficiency/417/spray_forming_group/4441. Thus, even if we accepted that moldless casting represents an advancement in casting technology such that moldless casting machines would be covered by heading 8454, HTSUS, we still would not consider this specific machine to be a casting machine for the purposes of heading 8454, HTSUS, because it does not cast the metal into any specific shape or object.
Pursuant to the above discussion, the magnesium powder plant is not classified in heading 8454, HTSUS. Nor is there any other heading which captures the product in its entirety. Pursuant to Note 3 to Section XVI, composite machines performing two or more functions are to be classified as if consisting only of that component which performs the principal function. Two headings each describe a separate function of magnesium powder plant: heading 8419, HTSUS, which provides for machinery for the treatment of materials involving a change of temperature, and heading 8424, HTSUS, which provides for machines for spraying or dispersing liquids or powders.
Heading 8419, HTSUS, provides for “machinery, whether or not electrically
heated, for the treatment of materials by a process involving a change of temperature such as heating, condensing or cooling.” You contend that the powder plant does not meet the terms of the heading, and that it is excluded from classification therein by Note 2(e) to Chapter 84.
The Merriam-Webster Dictionary on-line, at www.merriam-webster.com/ dictionary, defines “treatment”, in relevant part, as:
2a: a substance or technique used in treating.
It also defines the word “treat”, in relevant part, as:
5: to act upon with some agent especially to improve or alter.
Finally, the word “material” is defined, in relevant part, as:
1a (1): relating to, derived from, or consisting of matter;
The magnesium powder plant treats (acts upon and alters) materials (the magnesium) by a process (heating and cooling) involving a “change of temperature” when the furnace raises the temperature of the magnesium ore pellets to melt them, and then again when the gas in the atomizing chamber cools the magnesium particles passing through the nozzle to condense the spray into droplets, forming magnesium powder.
The Explanatory Note (EN) to heading 84.19 states, in relevant part, as follows:
“the heading covers machinery and plant designed to submit materials (solid, liquid, or gaseous) to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature change.” (emphasis added).
You argue, in essence, that the heating and cooling conducted by the magnesium powder plant: (1) is not the principal cause of the transformation of materials; (2) that the magnesium powder does not result principally from the temperature change, but instead, from the atomization process; (3) that pursuant to the EN to heading 84.19, Note 2(e) to Chapter 84, and Note 3 to Section XVI, because the magnesium powder plant is not only designed for heating or cooling but also designed for spraying, it is not machinery “designed to submit materials to a heating or cooling process in order to cause a simple change of temperature”. We do not agree. First, heading 8419 only requires that the machines of that heading submit materials to a heating or cooling process in order to treat materials by a process involving a change of temperature. No additional analysis is required. It is sufficient that the magnesium powder plant treats the magnesium by heating and cooling, and that pursuant to Note 2(e) to Chapter 84, this function is not subsidiary to any other function of the plant. Nevertheless, it is our position that the heating and cooling of the magnesium is the principal cause of the transformation of the magnesium ingots into powder; therefore, the magnesium plant is not excluded from heading 8419 either based on your interpretation of EN 84.19 or based on Note 2(e) to Chapter 84.
Note 2(e) to Chapter 84 excludes from heading 8419, HTSUS, “machinery or plant, designed for mechanical operation, in which a change of temperature, even if necessary, is subsidiary.” The EN to heading 84.19 also states, in relevant part: “But the heading excludes machinery and plant in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant.” Note 2(e) to Chapter 84 does not exclude the magnesium powder plant from classification under heading 8419 because the heating and cooling are not subsidiary to any other function, nor is either the heating or cooling merely a secondary function designed to facilitate another function.
The word “subsidiary” is defined in the Oxford English Dictionary on-line at
www.oed.com, in relevant part, as:
“1a. Serving to help, assist, or supplement; furnishing assistance or
supplementary supplies; auxiliary, tributary, supplementary.
. . .
2. Subordinate, secondary.
In addition, the word “secondary” is defined, in relevant part, as:
1a. Belonging to the second class in respect of dignity or importance;
entitled to consideration only in the second place. Also, and usually, in less precise sense: Not in the first class; not chief or principal; of minor importance, subordinate,
. . .
f. Subsidiary, auxiliary; that is used only in the second resort, or that serves to assist something else.
Based on these definitions, a change of temperature is only “subsidiary” if it is “subordinate”; “secondary”; if it is “of minor importance”; if it is “used only in the second resort”; or if it “serves to assist something else”.
You claim that the change in temperature is subsidiary to the atomization function. However, the heating and cooling of the magnesium is not secondary to any other function or of minor importance; nor does it merely serve to assist the atomization process. The change in temperature, both heating and cooling, is essential to the creation of the magnesium powder. The atomization process cannot occur without the melting of the magnesium ingots. Furthermore, the atomization process itself does not create the magnesium powder; the powder is created when the cooling chamber condenses the magnesium spray into droplets. In essence, the heating and cooling of the magnesium transforms the magnesium ingots into magnesium powder with the assistance of the subsidiary atomization function. Hence, we find that the instant product is described by heading 8419, HTSUS, as a machine for the treatment of materials by a process involving a change in temperature.
The atomizing function is itself described by heading 8424, HTSUS, which provides for mechanical appliances for projecting, dispersing or spraying liquids or powders. The atomizing nozzle disperses a stream of liquid magnesium into the atomizing (gas-cooled) chamber, and is therefore a mechanical appliance for spraying liquid. Atomizers and similar sprayers have generally been classified in heading 8424, HTSUS. See e.g., NY I82227, dated June 7, 2002; NY K85630, dated May 20, 2004.
The instant merchandise is therefore partially described by two headings,
8419 and 8424. Pursuant to Note 3 to Section XVI, composite machines performing two or more functions are to be classified as if consisting only of that component which performs the principal function. It is our opinion that the change in temperature is the principal function of the magnesium powder plant. First, the magnesium is both heated (melted) in the furnace, and then cooled in the atomizing chamber. Thus, we have two separate, critical processes involving a change in temperature, and just one involving spraying/atomizing. As noted above, the atomizer is useless without the furnace which feeds the molten magnesium into the atomizer and still serves no purpose without the cooling chamber, which actually transforms the magnesium droplets into powder.
The instant magnesium powder plant was therefore correctly classified in heading 8419, HTSUS, specifically subheading 8419.89.95, HTSUS, which provides for “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof : Other machinery, plant or equipment: Other: Other: Other.” The 2015 column one, general rate of duty is 4.2 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided online at http://www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY N148635, dated February 17, 2011, is hereby affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division