CLA-2 OT:RR:CTF:TCM H252413 GA
Mr. Robert J. Leo
Meeks, Sheppard, Leo & Pillsbury
570 Lexington Avenue, 44th Floor
New York, NY 10022
RE: Reconsideration of NY N248590: Classification of EcoFresh Total Energy Recovery Wheel MS100 Series (“Energy Recovery Wheel”)
Dear Mr. Leo:
This is in response to your request for reconsideration of New York Ruling Letter (NY) N248590, dated January 9, 2014, issued to you on behalf of Desiccant Rotors International, Inc. concerning the tariff classification of EcoFresh Total Energy Recovery Wheel MS 100 Series (“Energy Recovery Wheel”) under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). In that ruling, U.S. Customs and Border Protection (CBP) classified the subject product in subheading 8479.89.6500, HTSUSA, which provides for: “Machines and Mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Electromechanical appliances with self-contained electric motor: Other.” We have reviewed NY N248590 and find it to be correct. For the reasons set forth below, we hereby affirm NY N248590.
In NY N248590, CBP identified the instant product as follows: “The Eco Fresh Total Energy Recovery Wheel MS 100 Series is a heat wheel device composed of components such as the exchange media rotor, the framework that houses the rotor, a drive motor and a drive belt. Generally, the device is installed inside an air conditioning unit and is positioned so that by using a counter flow pattern, stale air from the conditioned space is exhausted through one half-moon section while outdoor air is drawn in through the other half moon section. The wheel is rotated slowly during this process, i.e., 20 – 25 rpm. Sensible heat is transferred as the metallic substrate rotates while latent heat is transferred as the desiccant picks up moisture from the moist air stream and releases it into the drier air stream. This process results in equal sensible and latent heat/energy recovery. The device is designed for industrial/commercial use rather than for domestic use.”
Classification under the HTSUSA 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 relevant HTSUSA provisions under consideration are: subheading 8479.89.6500, HTSUSA, which provides for: “Machines and Mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Electromechanical appliances with self-contained electric motor: Other,” subheading 8419.50.5000, HTSUSA, which provides for, “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces ovens, and other equipment of heading 8415), 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: Heat exchange units: Other:” and subheading 8479.89.1000, HTSUSA, which provides for, “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Electromechanical appliances with self-contained electric motor: Air humidifiers or dehumidifiers.”
In your reconsideration letter dated February 5, 2014, you asked that the product be classified in subheading 8419.50.5000, HTSUSA, as a “Heat exchange unit” or alternatively, 8479.89.1000, HTSUSA, as an “Air humidifier” or “dehumidifier.”
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, the ENs provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Note 84.19 states: “With these exceptions, 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 (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, e.g., machines for coating biscuits, etc., with chocolate, and conches (heading 84.38), washing machines (heading 84.50 or 84.51), machines for spreading and tamping bituminous road-surfacing materials (heading 84.79).”
As described in your ruling request and also advertised on the importer’s website (www.driamerica.com), the Energy Recovery Wheel consists of components, which function to recover energy (sensible as well as latent), control humidity and save energy. Since in addition to serving as a heat exchange unit, the Energy Recovery Wheel also functions as a humidifier/dehumidifier and energy saver, its functionality extends beyond the heat exchange unit specified in heading 8419. Therefore, the Energy Recovery Wheel cannot be classified as a “Heat exchange unit” in subheading 8419.50.5000, HTSUSA.
Additionally, the Energy Recovery Wheel performs more than one function, heat exchanging, dehumidifying or energy recovering, but it is unclear which of these functions are to be considered as primary or secondary. The multiple functions of the product appears in more than one heading, which merit equal consideration. By application of GRI 3(c), the product is classified in the heading that comes last in numerical order among the equally meriting consideration – 8479, HTSUS and not 8419, HTSUS.
You, alternatively, assert the product should be classified in the more specific subheading 8479.89.1000, HTSUSA, which provides for, “Air humidifiers or dehumidifiers,” because the Energy Recovery Wheel by its operation (increasing or controlling the water vapor in a room or building) meets the common definition of a humidifier. You assert that classifying the product in subheading 8479.89.6500, HTSUSA, as opposed to 8479.89.1000, HTSUSA, by operation of GRI 3(c) is an incorrect application of GRI 3(c), as applied in NY N248590. You argue that subheading 8479.89.6500, HTSUSA, is a more general provision which covers “other” articles not specifically mentioned. CBP acknowledges the fact that the language of subheading 8479.89.1000, HTSUSA, is more specific than subheading 8479.89.6500, HTSUSA, which uses the term “other.” However, the product under consideration does not only perform a humidifying/dehumidifying function. The instant product performs multiple functions, neither of which can be considered subsidiary to the other. Since the instant product does not only serve as a humidifier/dehumidifier, it does not fit the specific limiting provision in subheading 8479.89.1000, HTSUSA. Therefore, it is properly classified in subheading 8479.89.6500, HTSUSA, which provides for, “other” articles having functions which are not specified or included elsewhere.
Finally, you assert HQ 958473 should not apply because the function of the Energy Recovery Wheel is different from the heat recovery ventilator model described in that ruling. You argue that HQ 958473 describes a complete ventilator system, including the “heat exchanger” unit (analogous to the Energy Recovery Wheel), along with other equipment including fans/blowers, filters, humidistat, sensors and possibly other controllers, intended for use in “premises ... without an existing ventilation system.” You state, CBP described the “heat recovery ventilator” as “apparatus designed for homes and small buildings to evacuate stale air from a room and replace it with an equal volume of fresh air.” You argue that the instant product by itself does not operate like the “heat exchanger” in HQ 958473. You assert that unlike the ventilating machines and systems in that ruling, the instant product will be imported separately. Further, you state that the Energy Recovery Wheel acts solely as the heat exchange unit and must be mounted in air conditioning equipment that forces air through the Energy Recovery Wheel so that the heat/humidity of the two air streams can be exchanged. However, as discussed above, the instant product performs other functions beyond serving as a heat exchange unit. Therefore, whether or not the Energy Recovery Wheel is imported separately and employed in an air conditioning unit is inconsequential to its classification.
By application of GRI 1 and 3(c), the Energy Recovery Wheel is classified in heading 8479, HTSUS. It is specifically classified under subheading 8479.89.6500, HTSUSA, which provides for: “Machines and Mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Electromechanical appliances with self-contained electric motor: Other.” The column one, general rate of duty is 2.8 percent ad valorem.
NY N248590, dated January 9, 2014, is hereby AFFIRMED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division