CLA-2 OT: RR: TCM H255092 DSR
Port Director, Port of Boston
U.S. Customs & Border Protection
10 Causeway Street, Room 611
Boston, MA 02222
Attn: James Knight, Supervisory Import Specialist
RE: Application for Further Review of Protest Number 0401-14-100051; Tariff classification of stainless steel flexible hoses
Dear Port Director:
This letter is in reply to the Application for Further Review (AFR) of Protest Number 0401-14-100051, timely filed on May 29, 2014, by counsel on behalf of FlexHead Industries, Inc. (FlexHead). The Protest is against U.S. Customs and Border Protection’s (CBP) classification of stainless steel flexible hoses under subheading 8307.10.30 of the Harmonized Tariff Schedule of the United States (HTSUS). A sample was provided to this office in February 2015 as well as additional information via email dated April 7, 2015. This office met with FlexHead and Counsel on November 19, 2015. This office received further information in a supplement dated April 22, 2016, as well as a second sample from FlexHead in May 2016. Our response follows.
FACTS:
This AFR regards one entry of the subject merchandise into the Port of Boston. FlexHead imported the goods on March 26, 2013 classified under subheading 8424.90.90, HTSUS, which provides for, “Mechanical appliances…for projecting, dispersing or spraying liquids or powders; …; parts thereof: Parts: Other.” CBP liquidated the subject merchandise on February 20, 2014, under subheading 8307.10.30, which provides for, “Flexible tubing of base metal, with or without fittings: Of iron or steel: With fittings.” CBP also notified FlexHead via a Notice of Action, (CBP Form 29), dated February 20, 2014 that other entries of the same goods had been reclassified and rate advanced under subheading 8307.10.30, HTSUS.
The subject merchandise is, in its condition as imported, one item composed of three parts. There is a stainless steel corrugated flexible tube, covered by stainless steel braided mesh. The tube and mesh are welded together with a fitting on each end. The steel mesh protects the inner tubing from damage and assists the steel tubing in maintaining flexibility for placement. The components are numbered H24H, 24S50-1 and H24S50EW/3. The flexible hoses are used in fire sprinkler systems. However, the sprinkler head and connector assemblies are added or connected after importation. Each assembly differs in size and construction in order to match the specifications of the specific fire sprinkler system in which it will be used. Other components, such as stainless steel pipes or elbow pipes, are added to the end of the assemblies post-importation depending upon the location or characteristics of the particular assembly. The end fittings incorporate groove fittings or spuds which have been sized or threaded for specific applications. In some cases, the fittings are blank to allow for modification as needed.
ISSUE:
Whether the subject flexible hoses are classified as “flexible tubing” under heading 8307, HTSUS, or whether they are considered “parts” of certain “mechanical appliances” under heading 8424, 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. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. 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 Number 0401-14-100051 is properly accorded to FlexHead pursuant to 19 C.F.R. § 174.24(b) because the issue involves questions of fact that have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Specifically, FlexHead argues that the appropriate tariff classification of FlexHead’s flexible connector assemblies is a novel issue.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs). GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes, and unless otherwise required, according to the remaining GRIs taken in their appropriate order. The HTSUS headings and subheadings under consideration are as follows:
8307 Flexible tubing of base metal, with or without fittings:
8307.10 Of iron or steel:
8307.10.30 With fittings
***
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:
8424.90 Parts
Articles classifiable in chapter 83 are excluded from classification in chapter 84 by operation of Note 1(k) to Section XVI. Similarly, articles classifiable in chapter 84 are excluded from classification in Chapter 83 by operation of Note 1(f).
Note 2(b) to Section XVI, which includes chapter 84, governs the classification of parts of machines of that section. Specifically it states the following in relevant part:
Subject to note 1 to this section [cited], note 1 to chapter 84 [cited] … parts of machines…are to be classified according to the following rules:
(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, … are to be classified with the machines of that kind…
Note 5 to Section XVI states the following:
For the purposes of these notes, the expression “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 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 Harmonized System, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to 83.07 states, in relevant part:
This heading also excludes:
(b) Flexible tubing made into the form of machinery or vehicle parts, etc., e.g. by assembly with other materials (Sections XVI and XVII).
The EN to 84.24 notes that this heading covers machines and appliances for projecting, dispersing or spraying steam, liquids or solid materials in the form of a jet, a dispersion or a spray.
Under “PARTS” it also states:
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), the heading includes parts for the appliances and machines of this heading. Parts falling in this heading thus include, inter alia, reservoirs for sprayers, spray nozzles, lances and turbulent sprayer heads not of a kind described in heading 84.81.
Heading 8307, HTSUS is an eo nomine provision, i.e., it describes a commodity by a specific name, usually one common in commerce. Absent limiting language or indicia of contrary legislative intent, such a provision covers all forms of the article. See National Advanced Sys. v. United States, 26 F.3d 1107, 1111 (Fed. Cir. 1994). Heading 8424, HTSUS covers “parts” of mechanical appliances for projecting, dispersing or spraying liquids. The scope of either heading is limited insofar as each chapter has exclusionary language in the chapter notes. Articles classifiable in chapter 83 are excluded from classification in chapter 84 by operation of Note 1(k) to Section XVI. Similarly, articles classifiable in chapter 84 such as machinery and mechanical appliances and parts thereof are excluded from classification in chapter 83 by operation of Note 1(f). Thus, the crux of the analysis here is whether the assemblies, in their imported condition, are articles of chapter 83.
In its April 22, 2016 submission, FlexHead argues that the EN 83.07(b) supports its position, where it states, “This heading also excludes … (b) Flexible tubing made into the form of machinery or vehicle parts, etc., e.g., by assembly with other materials (Section XVI and XVII)”. See EN 83.07(b). Specifically, FlexHead argues that as the flexible hosing at issue is assembled with wire mesh and brackets, among other things, then it satisfies this exclusionary language and is not classified in heading 8307, HTSUS. However, this exclusion is to be read in the context of the language of heading 8307, HTSUS, itself. The heading text states that goods are classified therein if they are “flexible tubing of base metal, with or without fittings.” (Emphasis added). Therefore, the cited segment of the ENs, “by assembly with other materials” means flexible tubing of base metal assembled with materials other than fittings. (Emphasis added) Put simply, if the subject merchandise is properly classified in heading 8424, HTSUS, then it is described as assembled with components other than fittings which is sufficiently advanced in condition so as to be a machinery part, and thus is beyond the scope of heading 8307, HTSUS. However, that is not the case here. Furthermore, this exclusionary language refers to goods in its condition as imported. The subject merchandise is not in its condition as imported assembled with other materials, such as stainless steel pipes or elbow pipes. Those pieces are added post-importation depending upon the use of the particular assembly. Therefore, the subject flexible hoses and connector assemblies are fully described by the heading text of 8307, HTSUS, and it comports with the clarifications for articles classified therein, found in the EN 83.07, insofar as it is flexible tubing, reinforced or equipped with one or more braided sleeves of wire or metal strip.
Also in its April 22, 2016 supplemental submission, FlexHead argues that both headings at issue equally describe the subject merchandise. They argue that though the Port of Baltimore relied on GRI 3(a), which states, “The heading which provides the most specific description shall be preferred to headings providing a more general description,” and Additional U.S. Rule of Interpretation 1(c), which states, in relevant part, “…a provision for “parts” … shall not prevail over a specific provision for such part,” our office ought to factor the function of the subject merchandise into its analysis, to determine which of the headings is correct. However, doing so conflates “use provisions” and eo nomine provisions of the tariff. Furthermore, this side-steps the very clear chapter notes and corresponding ENs which direct that if a product is classified in chapter 83, then it is not classified in Chapter 84 by operation of Note 1(k) to Section XVI. The subject merchandise is classifiable pursuant to GRI 1 as flexible tubing of base metal, with or without fittings. Note 1(k) to Section XVI operates to limit its classification elsewhere, specifically, Chapter 84. Analysis pursuant to GRI 3(a) is unnecessary.
FlexHead argues that the assemblies are designed, manufactured, and subsequently tested to industry standards for fire sprinkler systems. Specifically, FlexHead points to Factory Mutual (FM), and Underwriter’s Laboratories (UL) standards. This means the subject merchandise is seismically qualified pursuant to the American Society of Civil Engineers (ASCE) standard 156, for such goods. However true, FM and UL certification and testing is not on its own outcome determinative as to whether an import is considered a “part” for tariff classification purposes.
Counsel cites several CBP rulings to advance the claim that CBP has classified similar goods as “parts” and that these rulings should be used as precedent for classifying the subject merchandise in heading 8424, HTSUS and not in heading 8307, HTSUS. However, these rulings are distinguishable in meaningful ways.
Counsel first cites, HQ H207578, dated May 13, 2013, which classified a valve cable support under heading 8477, HTSUS, which provides for parts of machinery for working rubber or plastics. There, it was determined that a classification as an “other” article of iron or steel in heading 7326, HTSUS, was not appropriate because, “[w]hile [CBP] acknowledge[s] that the instant valve cable support is an article of iron or steel or heading 7326, HTSUS, merchandise is only classified there when it is not described elsewhere in the tariff schedule. See Note 2(a) to Section XVI…” The same rationale was used in HQ 085842, dated March 13, 1990, when a sprinkler head was classified in heading 8424, HTSUS, rather than in heading 7419, HTSUS, which provides for other assemblies of copper. These circumstances are not present in the instant case, where the subject merchandise is described by heading 8307, HTSUS.
Counsel also points to NY M83362, dated May 25, 2006, which classified a plastic brake hose with attached fittings in heading 8708, HTSUS, which provides for brake hoses of plastics, with attached fittings as parts of motor vehicles of headings 8701 to 8705. However, in that case, the merchandise was specifically provided for at the subheading level, whereas no such subheading exists in heading 8424, HTSUS, for metal flexible tubing with fittings.
Finally, in its April 22, 2016 supplemental submission, FlexHead points to HQ H229983, dated October 29, 2014, to support its argument. There, CBP classified certain aluminum sprayer leg assemblies in heading 8424, HTSUS, and not in heading 7616, HTSUS, which provides for other articles of aluminum. However, this ruling is distinguishable from FlexHead’s imports in meaningful ways. First, the analysis in that ruling was between heading 8424, HTSUS, an eo nomine provision, and heading 7616, HTSUS, a residual basket provision encompassing all articles of aluminum, which is used only when an item is not properly classifiable more specifically under some other heading. That is not the case here. FlexHead’s imports are specifically described by name is heading 8307, HTSUS. Heading 8307, HTSUS, is not a residual basket provision.
Second, as classification in Chapter 83 was not at issue, then Note 1(k) to Section XVI was not relevant. Here, the application of Note 1(k) is highly relevant, in fact, outcome determinative, because the subject merchandise’s classification in Chapter 83 is what specifically excludes it from classification in Chapter 84. Therefore, the analysis in HQ H229983 which considered classification in a residual basket provision or in a parts provision, properly found that the aluminum assemblies were classified in heading 8424, HTSUS.
By operation of Note 1(k) to Section XVI, as the goods are described by heading 8307, HTSUS, which is in Section XV, then they are excluded from classification in Section XVI, which includes chapter 84. This is consistent with previous CBP rulings on similar merchandise. See Headquarters Ruling (HQ) 954931, dated October 29, 1993 (classifying braided supply tube used in a water reduction device for urinal flush tanks under subheading 8307.10.30, HTSUS); and see New York Ruling Letter (NY) N074318, dated September 30, 2009 (classifying pre-insulated flexible stainless steel tubing without fittings that is designed for solar hot water applications and is used to connect the solar panel with the thermal storage water heater); NY M82002, dated April 12, 2006 (classifying flexible corrugated copper tubing with brass fittings that is used to connect a water heater to a PEX pipe).
HOLDING:
Pursuant to GRI 1, and by operation of Note 1(k) to Section XVI, the subject merchandise is classified under heading 8307, HTSUS. It is specifically provided for under subheading 8307.10.30, HTSUS, which provides for “Flexible tubing of base metal, with or without fittings: Of iron or steel: With Fittings.” The column one, rate of duty is 3.8%.
The Protest should be DENIED.
In accordance with Sections IV and VI of the Customs Protest/Petition Processing Handbook 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 re-liquidation 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 International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP home page, available at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division