CLA-2 OT:RR:CTF:EMAIN H246157 LOR
Port Director
U.S. Customs and Border Protection
Port of New Orleans
423 Canal Street
New Orleans, LA 70130
ATTN: Ralph Reimer, Senior Import Specialist
RE: Application for Further Review of Protest No. 2002-13-100034; Blanket Controllers
Dear Port Director:
This is our decision regarding an Application for Further Review (AFR) of Protest No. 2002-13-100034, timely filed on July 17, 2013, by counsel on behalf of Kehoe Component Sales, Inc. The Protest and AFR concern the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of twenty-two (22) blanket control devices (“blanket controllers”) used with electronically heated bedding. Review of this AFR was placed on hold in light of litigation that was pending when the subject protest was submitted. This decision takes into consideration two documents Protestant provided to U.S. Customs and Border Protection (CBP), several email and telephone communications between Protestant and CBP, and a meeting between Protestant and CBP. The first document is dated December 22, 2015 and entitled “Supplement to Protest re: Classification of Bedding Controllers”. On June 26, 2018, Protestant submitted a second document entitled “Kehoe Component Sales Inc. Supplement to Protest re. Classification of Bedding Controllers” along with three samples of the subject merchandise. We regret the delay in responding.
FACTS:
The blanket controllers, which are imported separately from the articles (blankets or throws) that they attach to, provide electricity to the blanket heating wire, but do not receive or measure temperature. The blanket controllers do not measure the ambient temperature of the room or the blanket. The user selects a heat setting by turning a knob or pushing a button (switch), causing the blanket controller to send voltage (electricity) through the resistor wire (fuse). The blanket controllers have a microcontroller that directs heat to the heating elements inside the blanket. The blanket controllers do not contain relays or thermostats. When the blanket controller is connected to a 120VAC, 60Hz power source, and turned on, electricity flows through the circuitry to the blanket. When the user adjusts the heat setting, amount of voltage increases or decreases causing the blanket to heat. The blankets or throws do not transmit information to the blanket controllers.
The features of the imported blanket controllers vary by model. All blanket controllers contain a heat selection feature (a switch), which permits the user to adjust the heat setting from low to high. All blanket controllers contain an Auto-Off feature which starts a shut process when the blanket is turned on, and causes the blanket controller to shut down after a given period of time. Some blanket controllers, such as the DesignSmart model, allow the user to select from 10 heat temperature settings ranging from low to high and to set “off” times at 2-hours, 6-hours, and 10-hours. The DesignSmart model also contains a preheat feature which heats the bed for a period of 30 minutes, following which the blanket controller returns to the user’s original heat selection. Other blanket controllers have dual controls which allow the user to select different heat settings and auto off times. The ChoiceTouch model contains many of the same features as the DesignSmart model, but also includes a clock feature. Once the time settings have been entered, the blanket controller will “remember” them unless the AC power is disconnected.
The blanket controllers were entered between March 25, 2012 and December 2, 2012 under subheading 9032.10.00, HTSUS, as automatic, regulating or controlling instruments - thermostats. Following examination, and review of the documentation and answers that Kehoe submitted in response to CBP’s request for information, CBP rate advanced and subsequently liquidated the entries between March 29, 2013 and April 5, 2013 under subheading 8537.10.90, which provides for other panels, consoles or boards, equipped with two or more apparatus of heading 8535 or 8536, for electrical control or the distribution of electricity, including those incorporating instruments or apparatus of Chapter 90, HTSUS.
Images of the samples that Protestant submitted to CBP appear below:
Protestant claims that the blanket controllers are properly classified in under subheading 9032.89.60, HTSUS, as other regulating devices. Protestant’s submission included entry documentation, copies of schematics, and an owner’s manual for one of its products.
ISSUE:
Whether the blanket controllers are properly classified under heading 8537, which provides for Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517, or heading 9032, HTSUS, which provides for automatic regulating or controlling instruments and apparatus; parts and accessories thereof: Other instruments and apparatus.
LAW & ANALYSIS:
Initially, we note that this matter is protestable under 19 U.S.C. § 1514(a) (2) as a decision on classification. The protest was timely filed on July 17, 2013, within 180-days of liquidation of the entry. See, 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. 0201-13-100006 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24. Specifically, further review is justified under 19 C.F.R. § 172.24(a) because Protestant alleges that the liquidation decision is inconsistent with Headquarters Ruling Letter (“HQ”) H004652, dated, dated October 10, 2007, which involves the classification of substantially similar merchandise and the U.S. Court of International Trade (“CIT)’s holding in Whirlpool Corp. v. United States, 505 F. Supp. 2d 1358, 1362 (Ct. Int’l Trade 2007).
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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 GRI 2 through 6 may be applied in order.
The 2012 HTSUS provisions under consideration are as follows:
8537. Boards, panels, consoles, desks, cabinets and other
bases, equipped with two or more apparatus of heading
8535 or 8536, for electric control or the distribution of
electricity, including those incorporating instruments or
apparatus of chapter 90, and numerical control apparatus,
other than switching apparatus of heading 8517:
8537.10 For a voltage not exceeding 1,000 V:
8537.10.90 Other
* * *
9032 Automatic regulating or controlling instruments and
apparatus; parts and accessories thereof:
Other instruments and apparatus:
9032.89 Other:
9032.89.60 Other.
* * *
Note 1(m) to Section XVI, which covers machinery and mechanical appliances, electrical equipment, and parts thereof, provides the following:
This section does not cover:
(m) Articles of chapter 90.
Chapter 90, Note 7(b), HTSUS, provides the following:
7. Heading 9032 applies only to:
Instruments and apparatus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature, whether or not their operation depends on an electrical phenomenon which varies according to the factor to be automatically controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value; and
(b) Automatic regulators of electrical quantities, and instruments or apparatus for automatically controlling non-electrical quantities the operation of which depends on an electrical phenomenon varying according to the factor to be controlled, which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value.
* * *
Additional U.S. Note 2 to Chapter 90, HTSUS, provides the following:
2. For the purposes of this chapter, the term "electrical" when used in reference to instruments, appliances, apparatus and machines, refers to those articles the operation of which depends on an electrical phenomenon which varies according to the factor to be ascertained.
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 these headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
EN 85.37, provides, in pertinent part, the following:
Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 85.35 or 85.36, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of Chapter 90, and numerical control apparatus, other than switching apparatus of heading 85.17.
These articles consist of an assembly of apparatus of the kind referred to in the two preceding headings (e.g., switches and fuses) on a board, panel, console, etc., or mounted in a cabinet, desk, etc. They usually also incorporate meters, and sometimes also subsidiary apparatus such as transformers, valves, voltage regulators, rheostats or luminous circuit diagrams.
The goods of this heading vary from small switchboards with only a few switches, fuses, etc. (e.g., for lighting installations) to complex control panels for machine-tools, rolling mills, power stations, radio stations, etc., including assemblies of several of the articles cited in the text of this heading.
The heading also covers:
(3) “Programmable controllers” which are digital apparatus using a programmable memory for the
storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines.
The heading does not cover automatic controlling apparatus of heading 90.32.
EN 90.32 provides the following, in pertinent part:
In accordance with Note 7 to this Chapter, this heading covers:
(B) Automatic regulators of electrical quantities, and instruments or apparatus for automatically
controlling non-electrical quantities, the operation of which depends on an electrical phenomenon
varying according to the factor to be controlled, which are designed to bring this factor to, and
maintain it at, a desired value, stabilised against disturbances, by constantly or periodically measuring
its actual value.
(II) AUTOMATIC REGULATORS OF ELECTRICAL QUANTITIES,AND INSTRUMENTS OR APPARATUS FOR AUTOMATICALLY CONTROLLING NON ELECTRICAL QUANTITIES THE OPERATION OF WHICH DEPENDS ON AN ELECTRICAL PHENOMENON VARYING ACCORDING
TO THE FACTOR TO BE CONTROLLED
The automatic regulators of this heading are intended for use in complete automatic control systems which are designed to bring a quantity, electrical or non electrical, to, and maintain it at, a desired value, stabilised against any disturbances, by constantly or periodically measuring its actual value. They consist essentially of the following devices :
(A) A measuring device (sensing device, converter, resistance probe, thermocouple, etc.) which determines the actual value of the variable to be controlled and converts it into a proportional electrical signal.
(B) An electrical control device which compares the measured value with the desired value and gives a signal (generally in the form of a modulated current).
(C) A starting, stopping or operating device (generally contacts, switches or circuit breakers, reversing switches or, sometimes, relay switches) which supplies current to an actuator in accordance with the signal received from the control device.
An automatic regulator within the meaning of Note 7 (b) to this Chapter consists of the devices described in (A), (B) and (C) above, whether assembled together as a single entity or in accordance with Note 3 to this Chapter, a functional unit.
*
* *
Heading 8537, HTSUS, specifically states that devices classified in the heading may incorporate apparatus of Chapter 90, HTSUS. However, if the blanket controllers are classified in heading 9032, HTSUS, in and of themselves, they are excluded from classification in heading 8537, HTSUS, by Note 1(m) to Section XVI. In HQ H004652 CBP considered whether a certain temperature control unit (TCU) to be installed in certain car seat heaters was classified under heading 9032, HTSUS, by operation of Note 7 to Chapter 90, supra. CBP found that Note 7(b) was applicable. Specifically, CBP found that the TCU was classified in heading 9032, HTSUS, because it: (1) determines the amount of the heat desired by a passenger and converts that value into an electrical signal, (2) compares the actual heat value of the seat with the desired value and generates a modulated current, and (3) supplies that modulated current to the thermistor inside the car seat heater pad, cycling "on" and "off" as needed. The TCU did not have a timing mechanism and it compared the actual heat value of the seat (using the value supplied by the thermistor in the seat’s heating pad), whereas the subject blanket controllers have a timing mechanism and do not compare the actual heat value of the blanket. Accordingly, the merchandise subject to HQ H004652 is substantially different from the instant blanket controllers.
In Whirlpool Corp., refrigerator control boxes containing two thermostats and a digital timer were imported in 1999, three years prior to the addition of Note (7)(b) to Chapter 90, HTSUS. The refrigerator control boxes were not subject to the requisites set forth at the end of Note 7(b), which after the amendment provides, “… [w]hich are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value.” Moreover, as opposed to finding that the digital timer was classified in heading 9032, HTSUS, as Protestant suggests, the CIT determined that the entire refrigerator control box was classified in heading 9032, HTSUS, noting its intended purpose as a whole “is the automatic regulation of temperature; it is the main function of the items within the control box and the most important function in relation to the purpose of the refrigerator, and therefore, that it meets the terms of Heading 9032 when viewed in conjunction with the notes to Chapter 90.” See Whirlpool Corp. at 1365.
Significantly, the court in Whirlpool Corp. found that the refrigerator control box assembly could not be classified under heading 8537, HTSUS, based on the provisions of Note 1(m) to Section XVI in reliance upon the court’s analysis in Universal Elecs. v. United States, 112 F.3d 488, 491 (Fed. Cir. 1997). In Universal Elecs., the U.S. Court of Appeals for the Federal Circuit (“CAFC”) affirmed the CIT’s determination that certain remote controls with an infrared function were “for electric control”, noting that heading 8537, HTSUS, does not explicitly require the electric control be direct and that the devices are “[f]or electric control because the infrared signal emitted by the subject imports controls the flow of electricity within the target appliance.” Thus, the court in Whirlpool Corp. found that [although] there is a control knob that allows a person to set the desired temperature in the refrigerator, the consequence of that action is too removed to fall within the court’s requirement [in Universal Elecs.] that in order for an item to fall within heading 8537, HTSUS, it “must be a part of a system in which information is input, and as a consequence, electricity causes the result to occur.” Id. at 493. Since there was no immediate exchange as existed with the remote control, the refrigerator control box was determined to be outside of the scope of heading 8537, HTSUS.
In Universal Elecs., the CAFC affirmed the CIT’s finding that:
Subheading 8537.10.00 refers to a very broad range of items. The subheading covers, among other things, foundations, which may be flat, upon which two or more electrical devices listed in heading 8536, such as switches and terminals . . . are mounted. In addition, these foundations... must be a part of a system in which information is input, and as a consequence, electricity causes the desired result to occur.
See Universal Elecs., at 494.
Moreover, the CAFC agreed with the CIT’s definitions of the noun “control” and its definition of the term “for electric control”. The CIT defined “control” as the fact of controlling, or of checking and directing action; the function of power of directing and regulating; domination, command, sway.” Oxford English Dictionary 927 (1970). The defined the term “for electric control” as "information is input, and as a consequence, electricity causes the desired result to occur." Id. at 494.
The subject blanket controllers are similar to the remote controls discussed in Universal Elecs. They are bases that serve as part of a control system “for electric control” inasmuch as users input information in the blanket controller, and, as a consequence, the electricity causes the desired result (the blanket to heat) to occur. In other words, the blanket controllers are bases, incorporating two or more apparatus of heading 8535 or 8536, HTSUS (a switch and a fuse), for electric control because the blanket controllers permit more or less voltage (electricity) to flow through the cables causing the blanket to heat. This is the sole purpose of the blanket controller.
The subject blanket controllers do not meet the requirements set forth in Note 7(b) to Chapter 90, HTSUS, because they do not contain an electrical control device which compares the measured value (heat of the blanket) to the heat setting selected by the user. Because the blanket controllers do not meet the requirements of Note 7(b) to Chapter 90, they cannot be classified in heading 9032, HTSUS. See Belimo Automation A.G. v. United States, 774 F. 3d 1362 (Fed. Cir. 2014), affirming on cross-motions for summary judgment that the actuators at issue could not be classified under HTSUS 9032, HTSUS, because they do not automatically measure the actual value of the temperature or any variable of air, as required by HTSUS Chapter 90, Note 7(a). These articles are not excluded from classification in heading 8537, HTSUS, by Note 1(m) to Section XVI, HTSUS.
Based on the foregoing, we conclude that the subject blanket controllers are bases equipped with two apparatus of heading 8536, HTSUS: a fuse and switch, for the distribution of electricity. They are part of a system in which information is input (user selects temperature, auto time off, etc.), causing the microcontroller to send voltage through the resistor wires, causing the blanket to heat to a specific temperature. The blanket controllers do not have the capability of monitoring the actual heat value of the blanket. Therefore, the blanket controllers are properly classified in heading 8537, HTSUS.
HOLDING:
By application of GRI 1, the subject blanket controllers are classified in Heading 8537, HTSUS. Specifically, they are classified in subheading 8537.10.90, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517: For a voltage not exceeding 1,000 V: Other. The 2012 column one rate of duty is 2.7%, ad valorem.
You are instructed to DENY the protest.
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 or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division