CLA-2 OT:RR:CTF:TCM H265017 ALS
Port Director
U.S. Customs and Border Protection
9901 Pacific Highway
Blaine, Washington 98230
RE: Application for Further Review of Protest No. 3004-15-100036; Tariff classification of certain parts of dishwashing machines; NAFTA treatment of Fisher & Paykel Appliances DishDrawer DD24 Series Dishwashers
Dear Port Director:
This letter is in reply to an Application for Further Review (“AFR”) of Protest number 3004-15-100036, filed on behalf of Fisher & Paykel Appliances, Inc. (also referred to herein as “Protestant” or “FPA”) on April 8, 2015. The Protest is against U.S. Customs and Border Protection’s (“CBP’s”) tariff classification of certain parts of dishwashing machines under subheading 8422.90.02, Harmonized Tariff Schedule of the United States (HTSUS), and subsequent denial of preferential tariff treatment for the dishwashing machines under the North American Free Trade Agreement (NAFTA).
FACTS:
The subject articles are clip tub LH/RH releases and slide LH/RH assemblies, parts that did not originate in either Canada, Mexico, or the United States (the three signatories to NAFTA), that were used as parts in the manufacture of FPA’s DishDrawer DD24 series dishwashing machines in Canada. The specific DD24 series models at issue are model ## 88620, 88623, 88624, 88626, 88630, 88632, 88635, 88637, 88641, 88643, and 88645. These parts do not themselves incorporate water containment chambers at the time of importation.
The Protestant had entered a number of the dishwashing machines under subheading 8422.11.00, HTSUS, with a NAFTA Certificate of Origin to indicate that they were eligible for NAFTA preferential tariff treatment as originating goods of Canada. Your office issued a Notice of Action to the Protestant notifying it that CBP determined the parts to be non-originating and therefore NAFTA preferential tariff treatment was denied. Specifically, the parts were determined to be goods of subheading 8422.90.02, HTSUS, and not subheading 8422.90.06, HTSUS, thereby denying a tariff shift of the parts from non-originating to originating.
ISSUES:
Are the clip tub releases and slide LH/RH assemblies that were used to manufacture Fisher & Paykel Appliances, Inc.’s DishDrawer DD24 series dishwashing machines, as noted above, properly classified under subheading 8422.90.02, HTSUS, which provides for “Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof: Parts: Of dishwashing machines: Water containment chambers for the dishwashing machines of subheading 8422.11 and other parts of dishwashing machines of the household type incorporating water containment chambers...”, or subheading 8422.90.06, HTSUS, which provides for “Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof: Parts: Of dishwashing machines: Other...”?
Are the dishwashing machines eligible for preferential tariff treatment under NAFTA?
LAW AND ANALYSIS:
Initially, we note that the Protest was timely filed on April 8, 2015, which is within 180 days of the date of the liquidation of the earliest subject entry, October 17, 2014. See 19 U.S.C. §1514(c)(3)(B). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. §1514(a)(2). Further Review of Protest No. 3004-15-100036 is properly accorded to the Protestant pursuant to 19 CFR 174.24(b).
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is determined 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 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 may then be applied. GRI 6 provides the following:
For legal purposes, the 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 purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
The following heading and subheadings of the HTSUS are under consideration in this case:
8422 Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof:
8422.90 Parts:
Of dishwashing machines:
8422.90.02 Water containment chambers for the dishwashing machines of subheading 8422.11 and other parts of dishwashing machines of the household type incorporating water containment chambers…
* * *
8422.90.06 Other…
* * * * * * * * * * * * *
The NAFTA is implemented in GN 12, HTSUS. GN 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. GN 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that:
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note;
The dishwashing machines were properly classified under 8422.11.00, HTSUS, before they were reclassified as noted above. General Note 12(t), Chapter 84, Chapter Rule 6, number 58, HTSUS (hereinafter referred to as GN 12(t)84.6.58), provides the following:
12. North American Free Trade Agreement.
(t) Change in Tariff Classification Rules.
Chapter 84.
Chapter rule 6: For the purposes of the subdivisions pertaining to this chapter, whenever the subdivision designation is underscored, the provisions of subdivision (d) of this note may apply to goods for use in a motor vehicle of chapter 87.
58. A change to subheading 8422.11 from any other subheading, except from tariff item 8422.90.02, 8422.90.04 or 8537.10.30 or from water circulation systems incorporating a pump, whether or not motorized, and auxiliary apparatus for controlling, filtering, or dispersing a spray.
As noted above, your port reclassified the parts at issue from subheading 8422.90.02 to subheading 8422.11, and thus according to GN 12(t)84.6.58 does not invoke preferential treatment under NAFTA and therefore any such claim is to be denied. Conversely, a change from subheading 8422.90.06 to subheading 8422.11 does invoke preferential treatment under NAFTA and therefore any such claim is to be granted.
The crux of the matter is the interpretation of the particular language of subheading 8422.90.02, specifically “[w]ater containment chambers for the dishwashing machines of subheading 8422.11 and other parts of dishwashing machines of the household type incorporating water containment chambers…” (Emphasis added.) Essentially the question before us is as follows: Does “incorporating” refer to a dishwashing machine of 8422.11 that contains a water containment chamber, or does “incorporating” refer to a dishwashing machine part that incorporates a water containment chamber?
The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. In this case, the ENs do not provide any insight as to how subheading 8422.90.02 should be interpreted. In cases in which the terms of the notes, headings, subheadings, and even ENs do not provide guidance as to how a tariff term is to be interpreted, we must rely on the common or commercial meaning of term. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). "To ascertain the common meaning of a term, a court may consult 'dictionaries, scientific authorities, and other reliable information sources' and 'lexicographic and other materials.'" Id. (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271, 69 C.C.P.A. 128 (C.C.P.A. 1982); Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)).
In this case, the term “incorporating” is controlling. “Incorporating” is defined as a verb that modifies “incorporate.” See, e.g., http://www.dictionary.com/browse/incorpo- rating (2017). “Incorporating” is specifically defined as “to unite or combine so as to form one body.” http://www.dictionary.com/browse/incorporating, supra. Adding “ing” to the end of a word signifies the present tense. See, e.g., https://en.oxford dictionaries.com/spelling/verb-tenses-adding-ed-and-ing (2017). Thus, “incorporating in this context refers to present state of combining so as to form one body. As such, we distinguish “incorporating” from the root term “incorporate” in that the latter is more generally defined as “to form or combine into one body or uniform substance, as ingredients” without indicating a particular tense. www.dictionary.com/browse/incorpo-rating, supra.
Consequently, the provision at issue from subheading 8422.90.02, which reads as…
Water containment chambers for the dishwashing machines of subheading 8422.11 and other parts of dishwashing machines of the household type incorporating water containment chambers… (Emphasis added.)
…is distinguished from the following:
Water containment chambers for the dishwashing machines of subheading 8422.11 and other parts of dishwashing machines of the household type that incorporate water containment chambers…
It is well-settled that goods are to be classified according to their condition as imported. See Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994); see also CBP Ruling HQ H250531 (April 20, 2015). The term “incorporating” signifies that the article at issue incorporates a water containment chamber in the present sense; in other words, at the time of importation. The term “and” as noted and emphasized above is meant to separate “water containment chambers” in the first part of the sentence from “other parts” in the second part of the sentence, thus referring to two distinct types of merchandise. The second type of merchandise, “other parts” incorporating water containment chambers at the time of importation, is the type of merchandise at issue herein, not water containment chambers themselves and not dishwashing machines that incorporate water containment chambers. In particular, the “other parts” must be parts of “dishwashing machines of the household type”.
Therefore, we find that subheading 8422.90.02, HTSUS, covers parts of dishwashing machines of the household type that incorporates a water containment chamber at the time of importation. Subheading 8422.90.02 does not refer to the dishwashing machine, whether or not the dishwashing machine does in fact incorporate a water containment chamber. As we noted above, the subject parts do not incorporate water containment chambers at the time of importation.
Given the foregoing, we conclude that the clip tub LH/RH releases and slide LH/RH assemblies are not other parts, incorporating water containment chambers, of dishwashing machines of the household type. Therefore, we further conclude that the clip tub LH/RH releases and slide LH/RH assemblies are properly classified under subheading 8422.90.06, HTSUS, which provides for “Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof: Parts: Of dishwashing machines: Other...”
With regard to whether the clip tub LH/RH releases and slide LH/RH assemblies undergo a tariff shift from non-originating to originating, given that the releases and assemblies are properly classified under subheading 8422.90.06, we note that a “change to subheading 8422.11 from any other subheading” [8422.90.06 in this case], as noted above, has occurred in this case. Therefore, we conclude that GN 12(t)84.6.58 applies to the subject merchandise and consequently a tariff shift from non-originating to originating has occurred, and that the dishwashing machines qualify for preferential treatment under NAFTA.
HOLDING:
By application of GRIs 1 and 6, the clip tub LH/RH releases and slide LH/RH assemblies are properly classified under heading 8422, HTSUS, specifically subheading 8422.90.06, HTSUS, which provides for “Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof: Parts: Of dishwashing machines: Other...” The general column one rate of duty, for merchandise classified in this subheading is Free.
By application of NAFTA General Note 12(t)84.6.58, the clip tub LH/RH releases and slide LH/RH assemblies have undergone a tariff shift from non-originating to originating. Consequently, the dishwashing machines qualify for preferential treatment under NAFTA.
Duty rates are provided for your convenience and 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.
The Protest should be GRANTED in accordance with the LAW AND ANALYSIS section above. A copy of this ruling should be attached to the CBP Form 19 or equivalent document and provided to the Protestant as part of the notice of action on the protest.
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