CLA–2 OT:RR:CTF:TCM H230153 AMM
Port Director
Service Port – Raleigh-Durham
2400 Terminal Blvd
RDU Airport, Terminal 2 Lower Level
Morrisville, NC 27560
Attn: Donnamarie Hue
RE: Application for Further Review of Protest No. 1512-12-100031; Tariff Classification of a Light Emitting Diode Downlight
Dear Port Director,
This letter is in reply to Protest, and Application for Further Review (AFR), number 1512-12-100031, dated February 28, 2012, filed on behalf of Cree Inc. (Protestant), against U.S. Customs and Border Protection’s (CBP) classification and subsequent liquidation by the Service Port of Raleigh-Durham (the Port), of one entry of Light-Emitting Diode (LED) Downlights, identified by Product No. LMR04-0700-40F8-2010EW. A sample was submitted to this office for review.
FACTS:
This Protest pertains to one entry of LED Downlights, entered under heading 8539, HTSUS, which took place on October 19, 2010, and was liquidated on September 2, 2011. The Port liquidated the merchandise under heading 9405, HTSUS, which provides in pertinent part for “Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; …”. Protestant asserts that the instant products are properly classified under heading 8539, HTSUS, and submitted facts and arguments in support. The Port denied the Protest and granted AFR.
According to technical specifications submitted by the Protestant, the Cree Downlight module LMR4 products are constructed with a durable machined aluminum housing and come complete with an integrated thermal management system. They are intended for both indoor and outdoor applications. The standard product configuration consists of the module with the mounting plate attached. Product No. LMR04-0700-40F8-2010EW features a neutral white colored light, a color temperature of 4000K, nominal luminous flux of 700 lumens, and an input voltage of 230V. A sample was sent to this office for review. The module does not include an Edison-type screw base or a standard two-pin connector base. Instead, two copper wires extend from the back of the base for connection to a power source. Further review of the sample revealed that the module contains eight (8) LEDs.
The instant product is pictured below:
Product No. LMR04-0700-40F8-2010EW
ISSUE:
Whether the instant LED Downlight is classified as a lamp of heading 8539, HTSUS, an electrical apparatus of heading 8543, HTSUS, or as lamps and lighting fittings of heading 9405, 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 and the rate and amount of duties chargeable. The protest was timely filed on February 28, 2012, within 180 days of liquidation, pursuant to 19 U.S.C. §1514(c)(3).
Further review of Protest No. 1512-12-100031 was properly accorded to protestant pursuant to 19 C.F.R. §174.24. Specifically, in accordance with Section 174.24(a), 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 the same or substantially similar merchandise. Protestant asserts that the instant goods are properly classified under heading 8539, HTSUS, in accordance with New York Ruling Letter (NY) N020620.
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 2012 HTSUS provisions under consideration are as follows:
8539 Electrical filament or discharge lamps, including sealed beam lamp units and ultraviolet or infrared lamps; arc lamps; parts thereof:
Discharge lamps, other than ultraviolet lamps:
8539.39.00 Other
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8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
8543.70 Other machines and apparatus:
8543.70.70 Electric luminescent lamps
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9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:
Other electric -lamps and lighting fittings:
Of base metal:
9405.40.60 Other
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9405.40.80 Other
Note 1 to Chapter 94, HTSUS, states, in part: “This chapter does not cover: … (f) Lamps or lighting fittings of chapter 85 …”.
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).
EN 84.79 states, in pertinent part:
For this purpose the following are to be regarded as having “individual functions”:
(A) Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other machine or appliance.
* * *
(B) Mechanical devices which cannot perform their function unless they are mounted on another machine or appliance, or are incorporated in a more complex entity, provided that this function:
(i) is distinct from that which is performed by the machine or appliance whereon they are to be mounted, or by the entity wherein they are to be incorporated, and
(ii) does not play an integral and inseparable part in the operation of such machine, appliance or entity.
* * *
EN 85.39 states, in pertinent part:
Electric light lamps consist of glass or quartz containers, of various shapes, containing the necessary elements for converting electrical energy into light rays (including infra red or ultra violet rays). The heading covers all electric light lamps, whether or not specially designed for particular uses (including flashlight discharge lamps). The heading covers filament lamps, gas or vapour discharge lamps and arc lamps.
* * *
EN 85.43 states, in pertinent part:
This heading covers all electrical appliances and apparatus, not falling in any other heading of this Chapter, nor covered more specifically by a heading of any other Chapter of the Nomenclature, nor excluded by the operation of a Legal Note to Section XVI or to this Chapter.
* * *
The electrical appliances and apparatus of this heading must have individual functions. The introductory provisions of Explanatory Note to heading 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of this heading.
* * *
The heading includes, inter alia:
* * *
(16) Electro-luminescent devices, generally in strips, plates or panels, and based on electro-luminescent substances (e.g., zinc sulphide) placed between two layers of conductive material.
* * *
The General ENs to Chapter 94, state, in pertinent part:
This Chapter covers, subject to the exclusions listed in the Explanatory Notes to this Chapter:
* * *
(3) Lamps and lighting fittings and parts thereof, not elsewhere specified or included, of any material (excluding those of materials described in Note 1 to Chapter 71)
* * *
EN 94.05 states, in pertinent part:
(I) LAMPS AND LIGHTING FITTINGS, NOT ELSEWHERE SPECIFIED OR INCLUDED
Lamps and lighting fittings of this group can be constituted of any material (excluding those materials described in Note 1 to Chapter 71) and use any source of light (candles, oil, petrol, paraffin (or kerosene), gas, acetylene, electricity, etc.). Electrical lamps and lighting fittings of this heading may be equipped with lamp-holders, switches, flex and plugs, transformers, etc., or, as in the case of fluorescent strip fixtures, a starter or a ballast.
This heading covers in particular:
(1) Lamps and lighting fittings normally used for the illumination of rooms, e.g. : hanging lamps; bowl lamps; ceiling lamps; chandeliers; wall lamps; standard lamps; table lamps; bedside lamps; desk lamps; night lamps; water-tight lamps.
* * *
CBP has previously determined that a “lamp” is a device which provides an isolated source of heat or light. See Headquarters Ruling Letter (HQ) H024878, (LED module for ornaments); HQ H024876, (LED modules for promotional buttons and displays); HQ H095035, (LED light set for bike handlebars); HQ H024874, (various LED modules); HQ H042586, dated January 29, 2009 (fiber optic lamp); HQ 966952, dated August 18, 2004 (litecube); and HQ 965248, dated July 26, 2002 (bubble lights). See also The Random House College Dictionary (1973) at 752; Webster’s New Collegiate Dictionary (1979) at 639. As entered, the subject LED Downlights comprise a lamp. When properly installed and connected to a power source, they emit light. As such, we conclude that the instant LED Downlights meets the definition of “lamp” as enunciated in earlier CBP Rulings, in that they are devices which provides an isolated source of light.
If the instant LED light bulbs are lamps or lighting fittings of Chapter 85, then they are excluded from heading 9405, HTSUS by Note 1 to Chapter 94, HTSUS. Therefore, our analysis begins with headings 8539 and 8543, HTSUS.
Heading 8539, HTSUS, provides in relevant part for: “Electric filament or discharge lamps, including sealed beam lamp units and ultraviolet or infared lamps; arc lamps; …”. By its terms, the heading only covers filament, discharge, and arc lamps. See NY L82536, dated March 4, 2005 (filament lamp) and NY L87569, dated October 6, 2005 (metal halide lamp). See also EN 85.39. It does not include LED lamps, which function differently. An LED is a rectifying semiconductor device which converts electrical energy into electromagnetic radiation when current is applied. McGraw-Hill Concise Encyclopedia of Science and Technology, 5th Ed., 2005 at 1252. In contrast, a filament lamp produces light by heating a filament to incandescence by the passage of an electric current. A discharge lamp does so by sending an electric discharge through a gas or vapor producing substance. An arc lamp does so by sending a current through a gas between two electrodes. Therefore, as the instant LED Lamp is not a filament, discharge, or arc lamp, it cannot be classified under heading 8539, HTSUS.
Protestant relies on NY N020620 for the proposition that similar products are classified under heading 8539, HTSUS. In this ruling, CBP described the subject merchandise as follows:
The LR6C model is … a complete 6-inch downlight module designed to replace a standard R40 size lamp (light bulb). The LR6C fits almost all 6-inch downlight recessed lighting fixture housings commonly known as High-Hats or Can fixtures. The lamps simply screw in place of a standard light bulb and feature “Flip Clips” for a secure fit inside the can. These lamps are dimmable using most standard dimmers. The LR6C LED Lamp (bulb) is constructed of pressure-cast aluminum in the shape of an open container. The aluminum housing measures approximately 5 inches tall with a diameter of 5 inches. The open end of the housing features a 7½ inch diameter flange providing a built-in trim ring. An Edison type screw-in base is affixed to the top of the housing. Integrated within the housing are 10 LEDs, reflective and refractive optical components, and a high efficiency driver and power supply.
See NY N020620.
On February 26, 2014, CBP published the “Notice of Revocation of Ruling Letters and Revocation of Treatment Relating to the Tariff Classification of Certain Light-Emitting Diode Lamps,” in the Customs Bulletin, Vol. 48, No. 8. In HQ H135615, dated February 12, 2014, CBP revoked NY N020620, and found the product at issue to be properly classified under heading 8543, HTSUS. The effective date of the Notice was April 28, 2014.
Heading 8543, HTSUS, provides in relevant part for: “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter.” The instant product is an “electrical apparatus.” See Whirlpool Corp. v. United States, 505 F. Supp. 2d 1358, 1362 (Ct. Int’l. Trade 2007) (defining the term “apparatus” as “a group of devices, or a collection or set of materials, instruments or appliances to be used for a particular purpose or a given end.”). The definition of “individual functions” is contained in the EN to Heading 84.79. See EN 85.43.
EN(A) to heading 84.79 provides for “Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other machine or appliance.” The instant product must be connected to a power source. As such, it does not satisfy EN(A) to heading 84.79.
EN(B) to heading 84.79 provides for “Mechanical devices which cannot perform their function unless they are mounted on another machine or appliance, or are incorporated in a more complex entity, provided that this function: (i) is distinct from that which is performed by the machine or appliance whereon they are to be mounted, or by the entity wherein they are to be incorporated, and (ii) does not play an integral and inseparable part in the operation of such machine, appliance or entity.” The instant LED Downlight is designed to fit into a specific lighting fixture that mates with the mounting plate attached to the instant products’s housing. This lamp cannot perform its function of light generation unless it is connected to a power source. The lighting fixture supplies power to the instant product. As such, the instant lamp must be mounted on another machine or appliance, or incorporated into a more complex entity. However, the instant LED Downlight plays an inseparable part in the operation of the lighting fixture to which it is mounted. The lighting fixture is designed to hold the LED Downlight and to direct its light. If there is no LED Downlight installed in the lighting fixture, then the fixture does not function. As such, the LED Downlight does play an integral and inseparable part in the operation of the complete lighting fixture, and EN(B)(ii) to heading 84.79 is not satisfied.
The instant product is distinguishable from the product under consideration in HQ H135615 and NY N020620. In those rulings, CBP considered an LED light bulb with an Edison-type screw in base. That product was designed to replace any light bulb which uses this standard socket type, and was specifically designed to be interchangeable. As such, CBP determined that the product considered in HQ H135615 and NY N020620 met the definition on “individual function” under EN(B) to 85.43. The instant product is not designed to be interchangeable, because that the product must be mounted permanently by its mounting plate using screws, and the wires must be connected directly to a power source. As such, the product of HQ H135615 and NY N020620 is distinguishable from the instant LED Downlight.
Because the instant LED Downlight does not have an “individual function,” it does not meet the terms of heading 8543, HTSUS. As such, Note 1(f) to Chapter 94, HTSUS, does not operate to exclude the instant product from heading 9405, HTSUS.
Heading 9405, HTSUS, provides in relevant part for “Lamps and light fittings … not elsewhere specified or included.” Relying on the common meaning of the term, CBP has previously determined that a “lamp” is a device which provides an isolated source of heat or light. See HQ H135615; HQ H024874; HQ H042586; HQ 966952; and HQ 965248. As entered, the subject LED Downlinghts comprise the light source of a completed lighting fixture. When installed into housings adequate for their intended purpose, and connected to a power source, they emit light. See EN(I)(1) to 94.05 (which includes “ceiling lamps” as an exemplar). As such, we conclude that the LED Downlights meet the definition of “lamp” as enunciated in earlier CBP Rulings, in that it is a device which provides an isolated source of light. Therefore, as the good is a lamp not specified elsewhere in the Nomenclature, it is classified by application of GRI 1 under heading 9405, HTSUS.
With regard to classification at the subheading level, the Port liquidated the instant good under subheading 9405.40.80, HTSUS, which provides for “Lamps … not elsewhere specified or included: Other electric lamps and light fittings: Of base metal: Other: Other”. However, an examination of the sample submitted by Protestant reveals that the mounting plate and almost all of the housing is made of base metal. As such, the instant LED Downlight is properly classified under subheading 9405.40.60, HTSUS, which provides for “Lamps … not elsewhere specified or included: Other electric lamps and light fittings: Of base metal: Other”.
HOLDING:
By application of GRI 1, Product No. LMR04-0700-40F8-2010EW is classified under heading 9405, HTSUS, specifically in subheading 9405.40.60, which provides in relevant part for “Lamps … not elsewhere specified or included: Other electric lamps and light fittings: Of base metal: Other.” The column one, general rate of duty is 6% ad valorem.
Since the rate of duty under the classification indicated above is more than the liquidated rate, you are instructed to DENY the protest in full.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 Regulations and Rulings of 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.
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.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division