• HQ H269223
• Jun 08, 2017

• Type : Classification • HTSUS : 8476.90.0000
•  Related:   K82370; N204484; N167776; N074022; N131698   

CLA-2 OT:RR:CTF:CPM H269223 NCD

Port Director
Service Port Charlotte
U.S. Customs and Border Protection
1901 Crossbeam Drive
Charlotte, NC 28217

Attn: Sharon Saunders, Senior Import Specialist

Re: Protests and Applications for Further Review Nos: 1512-14-100025, 1512-14-100026, and 1512-14-100130; Classification of incomplete PPE and MRO equipment dispensers

Dear Port Director:

The following is our decision as to Protests and Applications for Further Review Nos. 1512-14-100025, 1512-14-100026, and 1512-14-100130, which were timely filed on, respectively, March 25, 2014, April 2, 2014, and October 22, 2014. The protests all pertain to the classification of incomplete PPE and MRO equipment dispensers under the Harmonized Tariff Schedule of the United States (“HTSUS”). Various entries of the subject items were entered by Protestant and liquidated by U.S. Customs and Border Protection (“CBP”) at the Port of Wilmington (“the Port”). Protestant asserts that CBP’s classification of the subject items at liquidation is incorrect. In reaching the below decision, we have taken into account information provided and arguments set forth in all three protests; in Protestant’s supplemental submission of June 16, 2014 (“first supplemental submission”); in our April 24, 2017 meeting with Protestant’s representatives; and in Protestant’s supplemental submission of May 22, 2017 (“second supplemental submission”).

FACTS:

The instant protest pertain to the incomplete bodies of apparatus which, when fully assembled, are used to dispense personal protective equipment (“PPE”) and maintenance, repair, and operations (“MRO”) equipment. In its completed state, the item consists of a large metal outer shell that fully encases an internal rotary drum, as well as an external control panel from which the unit is operated. Along the internal drum’s outer circumferential surface are multiple rows of horizontal shelves and removable vertical dividers that, in conjunction, form adjustable compartments for the placement of PPE and MRO equipment. Dispensation of the PPE or MRO equipment contained in the apparatus is effectuated and regulated by the external control device, which includes a touchscreen-operated automatic data processor and radiofrequency or magnetic card reader.

According to Protestant, the large majority of the finished dispensers are sold to industrial suppliers, which in turn install the dispensers in their customers’ facilities – typically industrial worksites – and continually stock the dispensers’ internal compartments. Employees of a supplier’s customer can access a dispenser’s contents by swiping or scanning an employer-issued, dispenser-calibrated card and navigating a series of prompts displayed on the touchscreen to select specific equipment. Selection of the equipment in turn initiates the rotation of the internal drum to a designated position at which the compartment containing the selected equipment aligns with one of several doors along the front of the metal shell. Once the drum has been rotated to the correct position, the corresponding door is unlocked by an internal locking mechanism and is illuminated by LED lights, at which point the user can open the door and retrieve the equipment. Upon removal of the equipment, a notification indicating such is electronically transmitted to the supplier (or in some cases to the dispenser’s manufacturer for batching and transmission to the supplier). The supplier bills the customer for any items removed at regular intervals. However, in the purportedly limited cases in which the dispensers are sold directly to end-users, use of the dispensers may not necessarily involve a transaction of this type.

At entry, the subject dispensers consist of the side and back panels of the outer shell, the internal rotary drum with compartments, and the motor which rotates the drum. Following importation, they are fitted with front panels, which contain the compartment doors and mechanical locking mechanisms, as well as external control panels and various electrical components necessary for actuation of the mechanical components.

The subject items were entered in thirty-three separate entries between August 10, 2012 and September 5, 2014, and were classified upon entry in heading 8476, HTSUS, specifically subheading 8476.89.00, HTSUS, which provides for ”Automatic goods-vending machines (for example, postage stamp, cigarette, food or beverage machines), including money-changing machines; parts thereof: Other machines: Other.” CBP liquidated the units between September 27, 2013 and September 5, 2014 in heading 8479, HTSUS, specifically subheading 8479.89.98 of the 2013 and 2014 HTSUS, which provided for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other: Other.” In its protests and first supplemental submission, Protestant claims classification in heading 9403, HTSUS, specifically subheading 9403.20.00, HTSUS, which provides for “Other furniture and parts thereof: Other metal furniture.” In its second supplemental submission, Protestant claims, in the alternative, classification in 8476.89.00, HTSUS, as entered. ISSUE:

Whether the subject items are properly classified in heading 8476, HTSUS, as automatic goods-vending machines or parts thereof, in heading 8479, HTSUS, as machines having individual functions, or in heading 9403, HTSUS, as “other” furniture.

LAW AND ANALYSIS:

Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a) (2) as decisions on classification. The protests were timely filed, within 180 days of liquidation of the first entry. (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 Protests Nos. 1512-14-100025, 1512-14-100026, and 1512-14-100130 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because Protestant alleges that the decisions are inconsistent with a previous CBP decision with respect to 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. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.

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. 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) provides, in relevant part, that “[a]ny 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 articles has the essential character of the complete or finished article.”

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, 35128 (August 23, 1989).

The 2012, 2013, and 2014 HTSUS provisions under consideration in the instant case are as follows:

8476 Automatic goods-vending machines (for example, postage stamp, cigarette, food or beverage machines), including money-changing machines; parts thereof:

Other machines:

8476.89.00 Other

8476.90.00 Parts

8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:

Other machines and mechanical appliances:

8479.89 Other:

8479.89.98 Other

9403 Other furniture and parts thereof:

9403.20.00 Other metal furniture

Protestant claims that the subject items are classified in heading 9403, HTSUS, which applies, inter alia, to “other” furniture. Note 2 to Chapter 94 states, in pertinent part, as follows:

The articles (other than parts) referred to in headings 9401 to 9403 are to be classified in those headings only if they are designed for placing on the floor or ground…

The General EN to Chapter 94 expounds upon this requirement as follows:

For the purposes of this Chapter, the term “furniture” means:   Any “movable” articles (not included under other more specific headings of the Nomenclature), which have the essential characteristic that they are constructed for placing on the floor or ground, and which are used, mainly with a utilitarian purpose, to equip private dwellings, hotels, theatres, cinemas, offices, churches, schools, cafés, restaurants, laboratories, hospitals, dentists’ surgeries, etc., or ships, aircraft, railway coaches, motor vehicles, caravantrailers or similar means of transport. (It should be noted that, for the purposes of this Chapter, articles are considered to be “movable” furniture even if they are designed for bolting, etc., to the floor, e.g., chairs for use on ships);

EN 94.03 states, in pertinent part, as follows:

This heading covers furniture and parts thereof, not covered by the previous headings. It includes furniture for general use (e.g., cupboards, show-cases, tables, telephone stands, writing-desks, escritoires, book-cases, and other shelved furniture (including single shelves presented with supports for fixing them to the wall), etc.), and also furniture for special uses.

The heading includes furnitures for:

Private dwellings, hotels, etc., such as: cabinets, linen chests, bread chests, log chests; chests of drawers, tallboys; pedestals, plant stands; dressing-tables; pedestal tables; wardrobes, linen presses; hall stands, umbrella stands; side-boards, dressers, cupboards; food-safes; bedside tables; beds (including wardrobe beds, camp-beds, folding beds, cots, etc.); needlework tables; stools and foot-stools (whether or not rocking) designed to rest the feet, fire screens; draught-screens; pedestal ashtrays; music cabinets, music stands or desks; play-pens; serving trolleys (whether or not fitted with a hot plate).

Offices, such as: clothes lockers, filing cabinets, filing trolleys, card index files, etc.

Schools, such as: school-desks, lecturers’ desks, easels (for blackboards, etc.).

Churches, such as: altars, confessional boxes, pulpits, communion benches, lecterns, etc.

Shops, stores, workshops, etc., such as: counters; dress racks; shelving units; compartment or drawer cupboards; cupboards for tools, etc.; special furniture (with cases or drawers) for printing-works.

Laboratories or technical offices, such as: microscope tables; laboratory benches (whether or not with glass cases, gas nozzles and tap fittings, etc.); fume-cupboards; unequipped drawing tables.

Pursuant to Note 2 to Chapter 94, and as explained in the General EN to the chapter, the tariff term “furniture” applies, with limited exceptions, only to portable articles that are designed for placement on the floor or ground and that are primarily utilitarian, rather than decorative, in nature. See The Pomeroy Collection, Ltd. v. United States, 893 F. Supp. 2d 1269, 1283-85 (Ct. Int’l Trade 2013) (citing Furniture Import Corp. v. United States, 56 Cust. Ct. 125, 133 C.D. 2619 (1966)). Above and beyond this, the requisite and defining features of furniture are evident in the exemplars of such set forth in EN 94.03. See LeMans Corp. v. United States, 660 F.3d 1311, 1321 (Fed. Cir. 2011) (stating that use of EN exemplars to clarify the scope of a heading is “entirely proper”). One notable characteristic shared by all the exemplars is the inherence of their utilitarian value by virtue of their structural design. For example, tables, desks, pulpits, alters, beds, foot-stools, and trolleys are all made up of flat surfaces capable of bearing weight with the support of legs, while draught screens and play-pens consist of vertical panels or rails that provide enclosure for their users. None of these articles require assistive mechanisms to render them fully functional. In a similar vein, the cabinets, cupboards, wardrobes, chests, sideboards, lockers, and other receptacles identified in EN 94.03 all include doors, lids, or other openings that offer complete and direct access to their internal space. In this manner, they enable the uninhibited manual placement and retrieval of contents stored within them by their users, even when stripped of any additional components – mechanical, electrical, or otherwise – that may restrict or increase ease of access.

In contrast, the subject items, while free-standing and movable, lack a structural design that renders them suitable for storage in the absence of its mechanical components. Rather than openly accessible, the items’ internal compartments are incorporated into a rotary drum which is encased on three sides. As such, only a portion of the article’s full range of compartments are reachable at any given time, and complete access to the compartments is contingent upon rotation of the internal mechanical drum to particular positions. It is unclear whether the drum could be rotated manually to this end, and in fact, Protestant has conceded that it is not used in this manner. It is therefore our view that, absent mechanization of the drum to allow for unfettered placement, storage, and retrieval of PPE and MRO equipment contained in the compartments, the item cannot be said to offer utilitarian value as a receptacle. Because it also lacks the utility of, and structural likeness to, any other article of furniture, it cannot be said to satisfy the criteria of furniture for purposes of classification in heading 9403, HTSUS.

Protestant contends that the subject item is in fact classifiable in heading 9403 at the time of entry because it is, at that point, “essentially a metal cabinet with storage compartments and a motor that rotates the drum.” We disagree. The subject item is not essentially a storage cabinet; rather, it is essentially a machine, insofar as it contains all the requisite features to mechanically dispense the items placed in it. Specifically, the item is equipped at entry with the drum, which rotates the compartment to align with the access doors, as well as the internal mechanism that unlocks these doors. That it does not contain the electronic device to track the dispensation of these items upon entry is irrelevant, as discussed above. In fact, because the unit’s compartments are entirely encased by the outer shell, manual placement or retrieval of items is not possible when the unit is left unpowered. That the item is completely useless for its intended purpose absent its mechanical components further reinforces our position that it cannot be considered an article of furniture.

Protestant also cites previous CBP rulings, including New York Ruling Letter (NY) N204484, dated March 13, 2012, and NY K82370, dated January 27, 2004, in support of its asserted classification in heading 9403. However, unlike the subject merchandise, the “Hybrid Accucab” at issue in NY N204484 took the form of a traditional cabinet, replete with doors that allowed full access to the unit’s internal shelves, and therefore fit among the exemplars set forth in EN 94.03. While the Hybrid Accucab was equipped with electronic components that controlled access to the unit and managed its contents, these components did not impart the unit’s functionality as a receptacle. Similarly, while the “Variable Height” cabinet, countertop, and washbasin at issue in NY K82370 incorporated mechanical components, those components were designed only to raise or lower the primary articles so as to facilitate their use. They did not altogether enable this use, as the cabinet, washbasin, and countertop were already fully functional as, respectively, receptacles and a weight-bearing surface. Accordingly, our determination is not precluded by either NY N204484 or NY K82370, and is in fact supported by various CBP rulings pertaining to machines that move or dispense items placed within them. See, e.g., NY N167776, dated June 22, 2011 (classifying storage unit with internal rotating chambers outside heading 9403, HTSUS); NY N074022, dated September 29, 2009 (similarly classifying pharmaceutical distribution system with internal retrieval mechanism outside heading 9403).

As such, we consider Protestant’s alternative claim for classification in heading 8476, HTSUS, as “automatic goods-vending machines.” In so doing, we note that the items are incomplete at entry and are processed into finished goods only following importation. We therefore must specifically determine whether the goods into which the items are completed fall within the scope of heading 8476, and if so, whether the items can be treated as the completed goods for purposes of classification. Alternatively, because heading 8476 applies to “parts” of vending machines, we consider whether the items qualify as such in the event that they cannot be classified as complete articles of the heading.

EN 84.76 provides, in pertinent part, as follows with respect to the scope of heading 8476, HTSUS:

This heading covers the various kinds of machines which supply some kind of merchandise when one or more coins, tokens or a magnetic card are put in a slot (other than those machines covered more specifically by other headings of the Nomenclature or excluded from the Chapter by a Chapter or Section Note).  The term “vending” in the context of this heading refers to a “monetary” exchange between the purchaser and the machine in order to acquire a product.  This heading does not cover machines which dispense a product but do not have a device to accept payment.   * * *   The heading covers not only machines in which the distribution is automatic, but also those consisting of a number of compartments from which the merchandise can be withdrawn after the coin has been inserted, the machine incorporating a device for releasing the lock of the appropriate compartment (e.g., by pressing on a corresponding button).

* * *

PARTS   Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), the heading also covers...parts of the machines of this heading.

The term “vending machine” is not defined in the HTSUS. In the absence of a statutory definition, a tariff term is construed according to its common and commercial meaning, which are presumably identical. Tyco Fire Products v. United States, 841 F.3d 1353, 1357 (Fed. Cir. 2016). A term’s meaning may be ascertained by reference to dictionaries, which specifically impart its common meaning, as well as “other reliable information sources” and, in particular, the ENs. Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999); see also GRK Can., Ltd. v. United States, 761 F.3d 1354, 1357 (Fed. Cir. 2014) (emphasizing the importance of the ENs). Among the sources that are regularly consulted pursuant to this maxim is industry literature, which may inform a term’s commercial meaning. See Rocknell Fastener, Inc. v. United States, 267 F.3d 1354, 1361 (Fed. Cir. 2001) (citing ANSI specifications as industry standards indicative of commercial designation); see also Well Luck Co., Inc. v. United States, 208 F. Supp. 3d 1364 (Ct. Int'l Trade 2017); and Specialty Commodities, Inc. v. United States, 190 F. Supp. 3d 1277, 1285-1286 (Ct. Int'l Trade 2016) (both citing industry references in defining tariff terms at issue).

“Vending machine” is consistently defined in dictionaries as an apparatus that dispenses merchandise in exchange for coins or another form of payment. See, e.g., Oxford English Dictionary (2017), available at http://www.oed.com/view/Entry/222068 (defining vending machine as a “slot machine from which comestibles or other small goods may be obtained”); Merriam-Webster.com, definition of VENDING MACHINE, https://www.merriam-webster.com/dictionary/?vending%?20machine (last visited June 6, 2017) (defining term as “a coin-operated machine for selling merchandise”); Collins English Dictionary, vending machine, https://www.collinsdictionary.com/?us/?dictionary/?english/vending-machine (defining term as “a machine that automatically dispenses consumer goods such as cigarettes, food, or petrol, when money is inserted.”). This definition of vending machine is consistent with characterizations of such in industry literature and EN 84.76. See National Automatic Merchandising Association, Vending 101 (stating that vending involves provision of service at an “unattended point of sale”); and EN 84.76 (“’Vending’ in the context of this heading refers to a ‘monetary’ exchange between the purchaser and the machine in order to acquire a product.”); see also Headquarters Ruling Letter (HQ) 962415, dated February 22, 2000 (determining that medication dispenser did not qualify as a vending machine because dispensation did not involve a monetary transaction).

Industry literature and EN 84.76 both further indicate that vending machines may incorporate a broad range of payment mechanisms, including, among other things, card readers and devices designed to process other forms of “cashless” payment. See, e.g., National Automatic Merchandising Association, Vending 101; Chris Mumford, The Components Of Credit Card Vending, Automatic Vending Merchandiser, July 22, 2014, http://www.vendingmarketwatch.com/article/?10256874/?the-components-of-credit-card-vending; and Tim Sanford, AVA Study Shows UK’s Vending Industry and Cashless Payments on Upswing, Vending Times, June 6, 2017 (all discussing the prevalence of non-cash payment mechanisms in vending machines). These mechanisms may not effectuate direct and immediate payment but instead trigger a process by which payment is eventually delivered, via third party institutions, from the purchaser’s account to that of the vendor. See Chris Mumford, The Components Of Credit Card Vending, Automatic Vending Merchandiser, July 22, 2014, http://www.vendingmarketwatch.com/?article?/10256874/the-components-of-credit-card-vending; see also Credit Cards.com, How a Credit Card is Processed, http://?www.creditcards.com/?credit-card-news/how-a-credit-card-is-processed-1275.php (last visited May 25, 2017). In light of this, we are of the view that an apparatus incorporating a payment mechanism qualifies as a vending machine within the meaning of heading 8476, HTSUS, even if the temporal nexus between delivery and payment is not necessarily direct. See NY N131698, dated December 7, 2010 (indicating that hotel minibar which transmits consumption data to hotel system for subsequent billing is classified in heading 8476, HTSUS).

Here, the subject items consist of an encased rotary drum with incorporated compartments that are clearly designed to dispense the equipment located in the compartments. According to the Protestant, the vast majority of the equipment dispensers into which the subject items are ultimately assembled effectively initiate a payment process upon removal of the dispensed equipment, and as such, can be likened to credit card-compatible vending machines. As Petitioner explains, this is because the vast majority of dispensers are sold to industrial suppliers which rely upon the dispensers’ card reader and internal tracking system to subsequently bill customers for the dispensed equipment. To support this contention, Protestant has proffered numerous purchase orders evidencing sales of the dispensers to industrial suppliers. To the extent that a given dispenser is verifiably used in this manner, we agree that it conducts a transaction similar to that conducted by vending machines upon insertion of a credit card or other non-cash form of payment. Specifically, removal of the goods by a customer’s employee commences a process that eventually, though not immediately, results in payment for the goods by the customer to the supplier. That equipment dispensers of this type qualify as vending machines is further supported by industry literature referring to such products as “industrial vending machines.” See, e.g., Anna Wells, Dispense Sense, Industrial Maintenance & Plant Operation, Sept. 17, 2013, https://www.impomag.com/article/2013/09/dispense-sense; AutoCrib Unveils Three New Industrial Vending Solutions At IMTS, Industrial Distribution, Sept. 11, 2014, https://www.inddist.com/product-release/2014/09/autocrib-unveils-three-new-industrial-vending-solutions-imts. Moreover, the method of the dispenser’s equipment delivery, i.e., by the alignment and unlocking of compartments containing the equipment, is permissible within the scope of heading 8476, HTSUS. See EN 84.76.

That said, while the vast majority of the finished dispensers may qualify as vending machines by virtue of their sale to industrial suppliers for use as such, at least some do not. Of the latter category are the dispensers sold directly to end-users, i.e., the companies whose employees use the dispensers and which may not necessarily exact payment from their employees for this use. Given that the subject items are all of uniform construction at entry, it is not possible to distinguish those falling in the former category from those falling in the latter. As such, it cannot be definitively stated that all finished dispensers are products of heading 8476, HTSUS.

Moreover, even assuming that such a determination were possible, none of the subject items constitute finished vending machines at the time of entry. As stated above, GRI 2(a) provides that unfinished articles may be treated as finished for purposes of classification under GRI 1 so long as they have the “essential character” of the finished good. The EN to Section XVI states as follows with respect to the application of GRI 2(a) to, inter alia, articles of heading 8476:

(IV) INCOMPLETE MACHINES (See General Interpretative Rule 2 (a))   Throughout the Section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine). Thus a machine lacking only a flywheel, a bed plate, calendar rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading provided for parts. Similarly a machine or apparatus normally incorporating an electric motor (e.g., electromechanical hand tools of heading 84.67) is classified in the same heading as the corresponding complete machine even if presented without that motor.

As discussed above, a defining feature of a vending machine is its capacity to dispense goods in exchange for (eventual) payment. This being the case, it is our view that the payment mechanism constitutes a “main essential feature” of a vending machine, without which an apparatus lacks the essential character of such. Here, the subject articles contain the internal rotary drums and compartments from which PPE and MRO equipment is dispensed, but lack the external control panel and additional electronic components with which a payment process can be initiated. As such, even where a given item is slated for eventual use as a vending machine, it cannot be treated as such for purposes of classification in heading 8476, HTSUS, pursuant to GRI 2(a). In view of the above, none of the subject items can be classified as vending machines of heading 8476.

However, because heading 8476, HTSUS, also applies to parts of vending machines, we alternatively consider whether the subject items can be classified as such. Note 2 to Section XVI states as follows with respect to parts of, inter alia, articles of heading 8476:

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;

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 (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517…(emphasis added)

Applied here, Note 2(b) provides that “parts” of vending machines are classified in heading 8476, HTSUS, if they are suitable for use solely or principally with vending machines. Like the term “vending machine”, the term “part” has been left undefined in the HTSUS. In the absence of a statutory definition of “part,” courts have developed two distinct but consistent tests for determining whether a particular item can be described as such. Bauerhin Techs. Ltd. Pshp. v. United States, 110 F.3d 774, 779 (Fed. Cir. 1997). Under the first of these, initially promulgated in United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322, 324 (1933), an imported item can be described as part of an article if it is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 779.*

It is beyond dispute that the subject items are integral to the use of the finished dispensers as vending machines. But for the rotary drum and accompanying compartments, for example, the vending machines would be unable to effectively dispense PPE and MRO equipment. Moreover, the subject items include the bulk of the encasement that imparts the vending machines with their form and shields their contents from unauthorized removal, thus ensuring the integrity of the billing system. The subject items therefore satisfy the Willoughby Camera vis-à-vis the finished dispensers slated for use as vending machines. As stated above, Protestant has proffered numerous invoices indicating that the overwhelming majority of the dispensers are purchased by industrial suppliers, which operate the dispensers as vending machines within the meaning of heading 8476. Hence, the subject items can be described as parts suitable for use “principally” with vending machines of the heading. The subject items thus satisfy the criteria of Note 2(b) to Section XVI and are consequently classified as parts of vending machines in heading 8476, HTSUS, specifically subheading 8476.90.00, HTSUS.

HOLDING:

By application of GRIs 1 and 2(a), the equipment storage, dispensation, and management unit is classified in heading 8476, HTSUS, specifically subheading 8476.90.0000 of the 2012, 2013, and 2014 HTSUSA (Annotated), which provided for “Automatic goods-vending machines (for example, postage stamp, cigarette, food or beverage machines), including money-changing machines; parts thereof: Parts.” The 2012, 2013, and 2014 general column one rate of duty for subheading 8476.90.0000, HTSUSA, is free.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.

Since reclassification of the merchandise as indicated above will result in the same rate of duty as claimed, you are instructed ALLOW the protests in full.

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 International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website 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