CLA-2 OT:RR:CTF:TCM H292051 EKR
Center Director, Machinery Center of Excellence and Expertise
U.S. Customs and Border Protection
Laredo Field Office
109 Shiloh Drive, Suite 300
Laredo, TX 78045
ATTN: Deborah L. Ryan, Supervisory Import Specialist
RE: Application for Further Review of Protest No. 1401-17-100571; Classification of rotary blowers
Dear Center Director:
This is in response to the Application for Further Review (“AFR”) of Protest No. 1401-17-100571, dated October 30, 2017, filed on behalf of Kaeser Compressors, Inc. (“Kaeser”) in response to your classification of rotary blowers, model number EB 421-C, under the Harmonized Tariff Schedule of the United States (HTSUS). The articles were entered on November 22, 2016, and liquidated on October 6, 2017.
FACTS:
The products at issue are described in Kaeser’s marketing materials as “Rotary Lobe Blower Packages,” Model No. EB 421-C (“the blowers”). The protest states that the blowers are stationary, rotary “compressors” with a rated motor power of 37.26 kilowatts and 80 horsepower. The maximum operating pressure for the blowers is 15 pounds per square inch gauge (“psig”), with a typical operating pressure of 6.9 psig. Thus, when operating at sea level where atmospheric pressure is 14.7 pounds per square inch (“psi”), the blowers produce a maximum pressure of 29.7 psi, with a typical operating pressure of 21.6 psi.
ISSUE:
Whether the blowers are classified under subheading 8414.59.65, HTSUS, as “Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof: Fans: Other: Other: Other” or under subheading 8414.80.16, HTSUS, as “Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof: Other, except parts: Air compressors: Other.”
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 protest was 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 Protest No. 1401-17-100571 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because protestant alleges that the protest involves matters previously ruled upon by Customs and Border Protection (CBP) or by the courts but facts are alleged or legal arguments are presented which were not considered at the time of the original ruling. Specifically protestant argues that the industry-accepted standards for distinguishing between fans, blowers, and compressors have changed since CBP issued Headquarters Ruling letter (“HQ”) 952670, dated December 21, 1992, as evidenced by a Final Rule (“the DOE Final Rule”) published by the Department of Energy (“DOE”), establishing a definition of “compressor” for purposes of energy efficiency regulations. 81 FR 79991 (November 15, 2016).
Classification under the HTSUS is determined 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. Further, only those subheadings at the same level of indentation are comparable.
GRI 6 provides as follows:
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 2016 HTSUS provisions under consideration are as follows:
8414 Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof:
Fans:
8414.59 Other:
Other:
8414.59.65 Other.
* * * * *
8414.80 Other, except parts:
Air compressors:
8414.80.16 Other.
In addition, in interpreting 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). EN 84.14 explains that heading 8414, HTSUS, covers “machines and appliances, hand-operated or power driven, for the compression of air or other gases, or for creating a vacuum, and also machines for circulating air or other gases.” The EN notes that, “[t]here are several types of compressors, for example, reciprocating piston, centrifugal, axial and rotary compressors.” The EN also describes fans classified in heading 8414, HTSUS, as follows:
(B) FANS
These machines, which may or may not be fitted with integral motors, are designed either for delivering large volumes of air or other gases at relatively low pressure or merely for creating a movement of the surrounding air.
Those of the first kind may act as air extractors or as blowers (e.g., industrial blowers used in wind tunnels). They consist of a propeller or blade-type impeller revolving in a casing or conduit, and function on the principle of rotary or centrifugal compressors.
The second type are of more simple construction, and consist merely of a driven fan rotating in free air.
Both CBP and Kaeser agree that the instant blowers are properly classified in heading 8414, HTSUS. Kaeser asserts that CBP erred in classifying the instant blowers as “fans” of subheading 8414.59.65, HTSUS, rather than “other” merchandise (specifically, “air compressors”) of subheading 8414.80.16, HTSUS. Kaeser notes that neither the tariff, nor the legal notes provide a definition for the terms “fan” or “compressor” as used in heading 8414. However, CBP has several rulings considering the meaning of these terms with respect to the subheadings in heading 8414, HTSUS.
In HQ 952670, CBP considered the classification of centrifugal turbochargers for use in compression-ignition diesel engines. The turbochargers were designed to draw in outside air and compress its volume 3.5 to 4 times normal atmospheric pressure, before packing it into engine cylinders. CBP agreed with the importer that the turbochargers are correctly classified in heading 8414, HTSUS. In order to determine the correct subheading for the turbochargers, CBP considered the common meaning of the terms “fan” and “compressor,” as used in the subheadings to heading 8414, HTSUS. CBP noted that the ENs for heading 8414, HTSUS, suggest that compressors and fans can be distinguished from one another on the basis of operating pressures, with fans operating at low pressure, and compressors operating at high pressures, although the ENs do not specify typical operating pressures for either apparatus. CBP next considered general lexicons, but found them unhelpful in distinguishing fans from compressors. Ultimately, CBP used a technical resource, Van Nostrand’s Scientific Encyclopedia (1963), to make the necessary distinction. Van Nostrand’s Scientific Encyclopedia distinguished fans, blowers, and compressors from one another on the basis on final operating pressure: defining “fans” as machines creating a final pressure below 1 psi, “blowers” as machines creating a final pressure between 1 and 35 psi, and “compressors” as machines creating a final pressure in excess of 35 psi. Applying this standard to the subject turbochargers, CBP determined that those with a compression ratio of 3.5 times normal atmospheric pressure of 14.7 psi created a final operating pressure of 51 psi. Those with a compression ratio of 4 times normal atmospheric pressure created a final operating pressure of nearly 59 psi. Therefore, the turbochargers were not “fans” and were also within the common meaning of the term “compressor” for tariff purposes, and were classified accordingly.
CBP has continued to apply this standard in interpreting the meaning of the terms “fan” and “compressor” with respect to classification within heading 8414, HTSUS. For example, in HQ 955390, issued February 15, 1994, CBP classified two types of rotary blowers in heading 8414, HTSUS. Citing HQ 952670, the ruling notes that neither blower operates at a pressure in excess of 35 psi. Therefore, the ruling classified the rotary blowers as fans. (See also HQ 955739, dated April 22, 1994; HQ 953199, dated April 2, 1993; and New York Ruling letter (“NY”) N019160, dated November 20, 2007). In HQ 962057, dated April 20, 1999, CBP considered the proper subheading for “double diaphragm linear motion air pumps or compressors and parts.” Ultimately classifying the subject merchandise as “pumps” of heading 8414, CBP nonetheless reiterated the applicable standard enunciated in HQ 952670, stating:
We believe that the distinction in HQ 952670, based on the compression ratio of the machines, remains valid for the articles in that ruling (turbochargers for engines) and in regard to the competing tariff provisions in that ruling (fans, blowers and compressors). In this regard see, e.g., McGraw-Hill Encyclopedia of Science and Technology, Vol. 4, p. 234 (7th Ed., 1992), in which it is stated “[w]hen [compressors are] compared with centrifugal or axial-flow fans on the basis of discharge pressure, compressors are generally classed and high-pressure and fans as low pressure machines.”
Kaeser presents three arguments in support of classification in subheading 8414.80.16, HTSUS. First, Kaeser argues that the standard applied by the CEE to distinguish fans from compressors, first established in HQ 952670, is no longer consistent with the accepted industry standard. Kaeser urges CBP to adopt the definition of “compressor” promulgated by the DOE Final Rule at 10 C.F.R. §431.432. Second, Kaeser argues that subheading 8414.80.16, HTSUS, more specifically describes the instant blowers, because the “taxonomy” of the subheading mimics the specifications used by Kaeser in developing and marketing their products. Lastly, Kaeser asserts that good governance principles weigh in favor of CBP adopting and applying the same definition of “compressor” for classification purposes as DOE uses for energy-efficiency regulation. As explained below, we do not consider any of these to be persuasive in determining the correct tariff classification of the instant blowers.
In determining the proper subheading for the instant blowers under the HTSUS, we compare subheadings at the same level of indentation, before considering the text of subheadings at subsequent levels of indentation. Thus, we first determine the correct classification at the six digit level, before considering classification at the eight or ten digit level. As a result, Kaeser’s second argument, regarding the taxonomy of subheading 8414.80, and the specificity of its provisions, is inapposite. CBP classified the instant blowers as “fans” of subheading 8414.59, HTSUS, while Kaeser asserts that the blowers are compressors which would be “other” articles of subheading 8414.80, HTSUS. Therefore, we first consider whether the blowers are “fans,” as classification in that subheading would preclude classification in a subheading for “other” articles.
The ENs for heading 8414 state that fans of heading 8414 are “designed either for delivering large volumes of air or other gases at relatively low pressure or merely for creating a movement of the surrounding air.” Moreover, the ENs indicate that blowers are considered to be a type of fan, stating that:
[Fans] of the first kind may act as air extractors or as blowers (e.g., industrial blowers used in wind tunnels). They consist of a propeller or blade-type impeller revolving in a casing or conduit, and function on the principle of rotary or centrifugal compressors.
The standard enunciated by CBP’s rulings follows this pattern. Machines with final operating pressures between 1 and 35 psi are considered to be “blowers” under the framework established in HQ 952670. CBP applied that framework to rotary blowers in HQ 955390, classifying the rotary blowers under consideration as “fans” of subheading 8414.59, HTSUS. Though these rulings are somewhat dated, they remain consistent with the language of the tariff and the ENs for heading 8414, HTSUS. Therefore, the proper classification of the instant blowers is subheading 8414.59, HTSUS.
With respect to Kaeser’s first and third arguments, that CBP should adopt the definition of “compressor” established in the DOE Final Rule because it is more consistent with current industry practice and would harmonize standards applied by the U.S. government, we note that the DOE definition is specific to DOE’s statutory authority to regulate the efficiency of certain products. DOE’s Final Rule states that the definition of “compressor” has been added to the regulations to classify certain compressors as covered equipment under Part A-1 of Title III of the Energy Policy and Conservation Act (EPCA) (42 U.S.C. 6311-6317), as amended. As noted in the DOE Final Rule, DOE developed this definition in conjunction with a complementary definition for fans and blowers, “with the intent that DOE regulations do not leave any gaps in coverage.” 81 FR 79991, 79993. The distinction drawn by the DOE Final Rule between fans and blowers, on the one hand, and compressors on the other is explicitly tailored to DOE’s regulation of the energy efficiency of such products, and relies on the statutory authority of the EPCA. Accordingly, it has limited utility with respect to the classification of the instant blowers under the HTSUS. See Amersham Corp. v. United States, 5 C.I.T. 49, 56, 564 F.Supp. 813, 817 (1983) (Noting that “statutes, regulations and administrative interpretations relating to ‘other than tariff purposes’ are not determinative of [CBP] classification disputes.”).
HOLDING:
The Protest is DENIED. By application of GRI 1, the subject displays are classified under heading 8414, HTSUS, specifically in subheading 8414.59.65, which provides for: “Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof: Fans: Other: Other: Other.” The 2016, column one, general rate of duty is 2.3% ad valorem.
Duty rates are provided for 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/.
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. 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 Home Page at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division