OT:RR:CTF:TCM H260251 APP
Assistant Port Director, Trade Compliance
101 East Main Street
Norfolk, VA 23510
Attn: Sandra Love-Arrington, Entry Specialist
RE: Application for Further Review of Protest No. 1401-14-100228; classification of reversing valve assembly with electric drive unit, portable air motor actuator, butterfly stack damper valve and manually operated chain hoist
Dear Assistant Port Director:
This is in response to the Application for Further Review (“AFR”) of Protest Number 1401-14-100228, filed on behalf of Guardian Industries Corp. (“protestant”). At issue is the tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of a reversing valve assembly with electric drive unit, portable air motor actuator, butterfly stack damper valve and manually operated chain hoist, which are components of an exhaust damper assembly that is used in float glass production furnaces.
On October 5, 2013, protestant filed an entry consisting of a reversing valve assembly with electric drive unit, portable air motor actuator, butterfly stack damper valve, and a reversing valve assembly manual chain hoist as “Industrial or laboratory electric furnaces and ovens (including those functioning by induction or dielectric loss); other industrial or laboratory equipment for the heat treatment of materials by induction or dielectric loss; parts thereof: Parts: Other” under subheading 8514.90.80, HTSUS. On May 9, 2014, U.S. Customs and Border Protection (“CBP”) in Norfolk, Virginia liquidated the entry under subheading 8481.80.90, HTSUS, which provides for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other appliances: Other.” On October 14, 2014, protestant timely filed a protest and AFR regarding the tariff classification of the subject merchandise claiming that the correct classification of the subject merchandise should be in subheading 8481.90.90, HTSUS, which provides for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Parts: Other.” On May 11, 2017, we had a conference call with protestant’s counsel. Our response is set forth below.
FACTS:
The merchandise at issue in its condition as imported consists of a reversing valve assembly with electric drive unit, portable air motor actuator, butterfly stack damper valve, and a manually operated chain hoist. All were included in the shipment. The reversing valve assembly is a pair of sliding gates (also referred to as blades) connected by a chain driven by an electric motor. If the electric motor fails, a pneumatic actuator motor serves as a back-up control. If the electric motor and the pneumatic actuator motor for the reverse valve assembly fail to function, a reversing valve assembly manual chain hoist is used as a back up to open and close the sliding gates. The butterfly stack damper valve is a pressure control damper installed in the exhaust flue between the reversal valve assembly and the chimney that is utilized to control the pressure within the chimney.
Protestant describes the subject merchandise as follows:
The imported products contained in the subject entry are components used to form an exhaust damper assembly for float glass production furnaces. Float glass is produced by first melting various raw materials in a [sic] large furnaces and “floating” the resulting molten glass ribbon on a bed of liquid tin.
The imported goods form part of an exhaust damper assembly which is installed in the exhaust flues emanating from furnace used in the float glass production line. While the complete exhaust damper assembly is also referred to as the “reversing valve assembly,” the imported goods comprise the “gate” mechanism that, once installed, will slide up and down within the housing contained in the “reversing valve assembly” which is installed in the exit of the flues just prior to the connection to the furnace chimney. When one of the imported gates is in the open position, the other gate is closed. The two gates “reverse” position as necessary for the different sides of the furnace to allow the airborne waste generated by the combustion to flow out of the furnace, through the complete reversing assembly (containing the imported goods), and into the chimney. The movement of the imported gates in the complete assembly also allows for the entry of clear air into the furnace for the continued combustion necessary for the melting of the raw materials.
The general description from the Operation and Maintenance Manual provided by protestant states that:
. . . Each valve installation consists basically of two slide valves, one combustion air inlet box supplied by others, a chain-and-sprocket arrangement and one electric drive unit.
The double deck slide valves are installed into the flues at an angle of 15° from the vertical.
Each valve has a lower opening for the flue gas passage, and an upper opening for the combustion air entrance.
The upper openings of both valves are connected to each other by a combustion air inlet box respectively by a C.A. supply duct work (supplied by others).
The valve shut off blades are connected to each other by means of a roller type chain, and thereby, the blades counterbalance each other. The shut-off blades are suspended and driven from sprockets which are situated on top of the valve bonnets.
Both shut-off blades are arranged such that the blade on one of the valves is in lower end position, i.e. closed position, whilst the blade on the opposite valve is in upper end position, i.e. in open position.
The blade being in lower end position shuts off the flue gas passage and allows the combustion air to be directed to the firing side of the furnace, whilst the blade being in upper end position allows the flue gas flow from the non-firing side of furnace to be directed to the chimney.
The opposite movement of the blades (i.e. the change-over of valves) is accomplished by means of an electric drive via transmission chain and sprockets.
The electric drive mechanism of the reversing valves is initiated from the sequence control arrangements of the furnace firing system.
If required, e.g. in emergency cases, the valves can be operated manually by means of either a handwheel or an air motor which can be engaged with the electric drive mechanism.
According to protestant’s December 23, 2013 written response to the Request for Information (CBP Form 28) of November 14, 2013, the imported merchandise is “part of the pressure control damper system, which is utilized to keep the pressure constant in the furnace by opening and closing the imported flow control gates. The subject parts comprise a pair of gates which act as a reversal damper for the float glass production line. As different parts of the various furnaces operate at different times during the production process, the gates open and closed by an electric motor based upon which section of the float glass production line is in operation.”
ISSUE:
Whether the reversing valve assembly with electric drive unit and portable air motor actuator and manually operated chain hoist is classified as other non-hand operated appliance under subheading 8481.80.90, HTSUS or as a valve part under subheading 8481.90.90, HTSUS.
LAW AND ANALYSIS:
The matter is protestable under 19 U.S.C. § 1514(a). The protest was timely filed, within 180 days of liquidation for the involved entry (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 1401-14-100228 is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of CBP or his designee, or with a decision made by CBP with respect to the same or substantially similar merchandise.
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”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. 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 order. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
GRI 2(a) states that:
Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
GRI 6 states, in pertinent part that:
[T]he classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purpose of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
The HTSUS subheadings under consideration are as follows:
8481 Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof:
8481.80 Other appliances:
8481.80.90 Other
8481.90 Parts:
8481.90.90 Other
Chapter 84 is in Section XVI of the HTSUS. Notes 2(a) to Section XVI, HTSUS, states that:
2. Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
There is no dispute that the reversing valve assembly is classified in heading 8481, HTSUS because this heading provides eo nomine for valves and similar appliances. Rather, the issue is the proper classification at the subheading level. As a result, GRI 6 applies.
In understanding the language of the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed.
Reg. 35127 (August 23, 1989).
The ENs to GRI 2(a) provide, in relevant part, that:
(V) The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.
(VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule.
(VII) For the purposes of this Rule, “articles presented unassembled or disassembled” means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved.
No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to any further working operation for completion into the finished state. Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately.
The ENs to Section XVI, Note 2, HTSUS provide that:
The above rules do not apply to parts which in themselves constitute an article covered by a heading of this Section (other than headings 84.87 and 85.48); these are in all cases classified in their own appropriate heading even if specially designed to work as part of a specific machine. This applies in particular to: . . . .
(4) Taps, cocks, valves, etc. (heading 84.81).
The relevant ENs to heading 8481, HTSUS, provide, in pertinent part:
This heading covers taps, cocks, valves and similar appliances, used on or in pipes, tanks, vats or the like to regulate the flow (for supply, discharge, etc.), of fluids (liquid, viscous or gaseous), or, in certain cases, of solids (e.g., sand). The heading includes such devices designed to regulate the pressure or the flow velocity of a liquid or a gas.
The appliances regulate the flow by opening or closing an aperture (e.g., gate, disc, ball, plug, needle or diaphragm). They may be operated by hand (by means of a key, wheel, press button, etc.), or by a motor, solenoid, clock movement, etc., or by an automatic device such as a spring, counterweight, float lever, thermostatic element or pressure capsule . . . .
Taps, cocks, valves, etc., remain in this heading even if specialized for use on a particular machine or apparatus, or on a vehicle or aircraft. However, certain machinery parts which incorporate a complete valve, or which regulate the flow of a fluid inside a machine although not forming a complete valve in themselves, are classified as parts of the relative machines, for example, inlet or exhaust valves for internal combustion engines (heading 84.09), slide valves for steam engines (heading 84.12), suction or pressure valves for air or other gas compressors (heading 84.14), pulsators for milking machines (heading 84.34) and non automatic greasing nipples (heading 84.87) . . . .
PARTS
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the appliances of this heading are also classified here.
Protestant asserts that the subject merchandise is not a “complete valve” and that it satisfies the commercial definition of “parts of valves,” and as such is classified under subheading 8481.90.90, HTSUS. Protestant states that the entered reversing valve assembly with electric drive unit, portable air motor actuator, butterfly stack damper valve, and manually operated chain hoist were shipped disassembled in three containers and arrived together under one bill of lading and that once delivered they were assembled into a furnace structure. According to protestant, the imported gates are not a finished item and “must be installed along with the other items to efficiently and properly function; specifically the imported gates must be combined with the housing support structures in the reversing valve assembly by way of fasteners, conduit, refractory components, and wiring before they are able to modify the flow into and out of the furnace and chimney.”
Protestant states that the American National Standards Institute (“ANSI”) defines a valve in ANSI/ISA-75.05.01-2000 (R2005) as a “device used for the control of fluid flow. It consists of a fluid retaining assembly, one or more ports between end openings and a movable closure member which opens, restricts or closes the port(s).” (emphasis added). According to protestant, the imported gates “do not contain or form a ‘retaining assembly’ such as a valve body for ‘retaining’ the air and/or airborne waste particles” and “once installed in the housing for mounting into the furnace and chimney, modify the rate of flow into and out of the furnace and chimney” and as such do not meet the common or commercial definition of a valve and are not appropriately classified under subheading 8481.80.90, HTSUS.
Protestant claims that the imported merchandise functions in the same manner as the gate used to restrict the flow of fluid through a gate valve classified in New York Ruling Letter (“NY”) I83719, dated July 15, 2002. Protestant states that identical to the damper doors used as a “closure mechanism” for “controlling the flow of air” into and out of the passenger compartment of a motor vehicle in NY F80523, dated Feb. 10, 2000, the imported gates are a “closure merchanism” for “controlling the flow of air” into and out the furnace and chimney. Protestant asserts that just as the thermostat control element used to control water temperature in a tempering valve in NY J87843, dated Sept. 3, 2003, the imported gates are mounted within a “valve” and are used to control the flow through a valve. Protestant argues that Headquarters Ruling Letter (“HQ”) 963015, dated May 3, 2000, which determined that a complete furnace chimney damper was a complete valve under subheading 8481.80, HTSUS, is not applicable here.
We note that under Note 2(a) to Section XVI, HTSUS, parts which are also goods, are in all cases to be classified in their own respective heading. As the ENs to Section XVI explain, the rules governing parts suitable solely or principally with a particular machine or apparatus are inapplicable where a good is covered by a heading of this Section. Even where an article is designed to work solely or principally as a part of a machine, a provision for parts does not prevail over a specific provision for such parts. See Nidec Corp. v. United States, 18 CIT 821, 861 F. Supp. 136 (1994), aff'd, 68 F.3d 1333 (Fed. Cir. 1995) (holding that a part, which in itself constitutes an article covered by a heading of Section XVI, HTSUS, is in all cases classified as such even though it also could be classified as part of a specific machine).
Applying Note 2(a) to Section XVI, HTSUS at the subheading level, a good that is described as a good of a subheading under heading 8481, HTSUS would be classified in that subheading and not as a part of a subheading of heading 8481 providing for parts. Subheading 8481.80, HTSUS covers appliances of heading 8481, HTSUS, used to regulate the flow velocity of fluids by opening or closing an aperture such as a gate. This is consistent with the ANSI/ISA standard cited by the protestant, which describes the essential character of valves as devices used to control fluid flow. Accordingly, even if incomplete and/or unassembled, self-operating regulating valves for controlling flow that themselves form a complete valve are classified in subheading 8481.80, HTSUS.
In HQ 963219, dated Feb. 5, 2001, a gas manifold system controlling the gas flow was classified under subheading 8481.80.90, HTSUS. The gas manifold assembly was an assembly of valves, actuators and control devices designed to combine the flow of gas streams from external gas cylinders and regulate the introduction of those gas streams into a reactor. In HQ 966982, dated Oct. 22, 2004, gas train assemblies for low pressure gas fueled outdoor cooking appliances were classified under subheading 8481.80.90, HTSUS. The gas train assemblies consisted of a connector for attachment of the assembly to the fuel supply (low pressure gas cylinder), a dual outlet low pressure gas regulator, and thermal plastic hose burner control valves. In NY N039234, dated Oct. 16, 2008, a diverter tub spout used in a bathtub plumbing system contained a valve mechanism/diverter that controlled the flow of water by redirecting the flow between the spout and the shower head, and as such it was classified as a complete valve in subheading 8481.80, HTSUS and not as a part of hand operated valves and check appliances under subheading 8481.90, HTSUS. In HQ 950064, dated Oct. 29, 1991, CBP classified a gate valve operated by a wide variety of actuators (electric, hydraulic, pneumatic, manual, gear box, or handwheel) under subheading 8481.80.90, HTSUS. The frame was fastened to a concrete backing and the slide (gate) was raised or lowered in order to control water flow. In NY 858894, dated Jan. 16, 1991, CBP classified a sliding gate valve, which was a component of a combustion system that was part of a solid waste resource recovery facility converting waste to energy, under subheading 8481.80.90, HTSUS. In NY A81568, dated Apr. 25, 1996, CBP classified a wafer style knifegate valve to be imported either with a manual hand wheel or a pneumatic actuator under subheading 8481.80, HTSUS.
The rulings cited by protestant are distinguishable. In NY I83719, dated July 15, 2002, the item at issue was a gate, which was part of a gate valve. The gate was just one component of the unassembled gate valve and as a result it was classified as a valve part under subheading 8481.90.90, HTSUS. In NY F80523, dated Feb. 10, 2000, the damper doors and damper actuating levers were described as components used in the manufacture of automotive heating, ventilation and cooling (“HVAC”) systems. These systems are typically comprised of a blower, heater and air conditioning coil, with thermal exchange elements encased in a plastic housing together with foam-covered damper doors and the damper actuating levers, plates and other parts necessary for the functioning of the HVAC system. Since the damper doors and damper levers could not function without these other elements, they were classified as parts of valves. In NY J87843, dated Sept. 3, 2003, the article was a thermostat control element used to control water temperature in a tempering valve. It was a part of the valve mechanism mounted within the tempering valve and as such was classified as a part of valve.
By contrast, the instant merchandise is a self-operating regulating valve that has the essential function of an appliance of subheading 8481.80, HTSUS. The valve assembly in this case is a component of an exhaust damper assembly that is used in float glass production furnaces. Counsel confirmed that the reversing valve assembly with electric drive unit, portable air motor actuator, butterfly stack damper valve, and manually operated chain hoist are the components that operate the valve assembly. Once delivered, these items are incorporated into the housing support structure in the assembly. The gates are controlled by the electric motor, or by the pneumatic motor or manually operated chain hoist, and their motion is up and down, permitting clean or waste air to flow through the complete reversing valve assembly. Therefore, the subject merchandise consists not only of the valve gates, but also the components necessary to operate the gates for the purposes of regulating the flow of gas through the gates. We find that this is precisely the essential character of an unassembled and incomplete appliance of subheading 8481.80, HTSUS.
Accordingly, we find that the merchandise, as imported, is a valve or similar appliance of subheading 8481.80.90, which provides for other appliances since no other subheading of heading 8481, HTSUS, describes this reversing valve assembly.
HOLDING:
By application of GRIs 1 (Note 2(a) to Section XVI), 2(a) and 6, the merchandise is provided for in heading 8481, HTSUS (2013), specifically in subheading 8481.80.90, HTSUS (2013) as “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other appliances: Other.” The column one, general rate of duty at the time of entry was 2% 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 sixty (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 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