OT:RR:CTF:EMAIN H299808 SK
Director Armando Taboada
Machinery Center of Excellence and Expertise
U.S. Customs and Border Protection
109 Shiloh Drive, Suite 300
Laredo, TX 78045
Attn: Jeffrey Kiekenbush , Senior Import Specialist; Lisa Ashmus, Supervisory Import Specialist
RE: Request for Internal Advice; classification of a “Milk Taxi”; portable machine for feeding calves.
Dear Director:
This is in response to your request for Internal Advice (“IA”), dated August 6, 2018, made pursuant to 19 C.F.R. § 177.11 of Title 19 of the Code of Federal Regulations (19 C.F.R. §177.11). The IA request was initiated by U.S. Customs and Border Protection’s (“CBP”) Machinery Center of Excellence and Expertise at the request of Sandler, Travis & Rosenberg, P.A., on behalf of their client, Abts Bou-Matic, LLC (hereinafter “ABM”). The IA concerns the classification of a Holm and Laue (“H&L”) Milk Taxi (“Milk Taxi”) under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The Holm & Laue Milk Taxi is a portable machine for use on dairy farms in calf feeding operations. Its functions are described as follows:
Calculates feed amounts per calf or group or calves
Provides operator readouts
Mixes ingredients via an agitator
Transports milk products to calf feeding pens via wheeled chassis
Maintains desired feeding temperatures via slight heating or cooling actions
Performs semi-automatic self-cleaning
The Milk Taxi’s standard features include:
Stainless steel tank with drain tap
Portable 4-wheeled chassis
Agitator
Electronic liquid level sensor
Thermometer
LED headlights
Hose and nozzle
Semi-automatic self-cleaner
The Milk Taxi is available with an optional pasteurization feature that heats milk to higher temperatures for prescribed periods of time to reduce or eliminate certain types of bacteria from milk. These models use cold water inside a double-walled tank to act as a cooling jacket for heat exchange. This feature is not standard as not all milk products fed to calves are pasteurized (i.e., colostrum).
ISSUE:
Whether the subject Milk Taxi is classifiable under subheading 8419, HTSUS, which provides for, in pertinent part, machinery, plant, or laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature, under heading 8434, HTSUS, which provides for, in pertinent part, milking machines, or under heading 8436, HTSUS, which provides for, in pertinent part, other agricultural machinery.
LAW AND ANALYSIS:
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will 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 will then be applied in order.
GRI 6 provides that classification of goods at the subheading level will be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the preceding GRIs on the understanding that only subheadings at the same level are comparable.
The HTSUS provisions under consideration are set forth below:
8419 Machinery, plant or laboratory equipment, whether or not electrically heated
(excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof
8434 Milking machines and dairy machinery, and parts thereof:
8436 Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof:
Section XVI Note 3 provides:
3. Unless the context otherwise requires, composite machines consisting of two or more
machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
Note 2 to Chapter 84, HTSUS, states, in relevant part:
2. Subject to the operation of Note 3 to Section XVI and subject to Note 9 of this chapter, a machine or appliance which answers to a description in one or more of the headings of 8401 to 8424, or heading 8486 and at the same time to a description in one or more of the heading 8425 to 8480 is to be classified under the appropriate heading of the former group or under heading 8486, as the case may be, and not the latter group.
Heading 8419 does not, however, cover:
* * *
(e) Machinery, plant or laboratory equipment, designed for mechanical operation, in
which a change of temperature, even if necessary, is subsidiary….
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes
(“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to heading 84.19 provide, in relevant part:
[T]he heading covers machinery and plant designed to submit materials (solid, liquid or gaseous) to a heating or cooling process in order to cause a simple change of temperature, or to cause a transformation of the materials resulting principally from the temperature change (e.g., heating, cooking, roasting, distilling, rectifying, sterilising, pasteurising, steaming, drying, evaporating, vaporising, condensing or cooling processes). But the heading excludes machinery and plant in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant, e.g., machines for coating biscuits, etc., with chocolate, and conches (heading 84.38), washing machines (heading 84.50 or 84.51), machines for spreading and tamping bituminous road-surfacing materials (heading 84.79).
The machinery and plant classified in this heading may or may not incorporate mechanical equipment.
* * *
The ENs to heading 84.34 provide:
This heading covers mechanical milking machines, and other machinery, whether for farm or industrial purposes, used in the treatment of milk or for converting it into other dairy products.
(I) MILKING MACHINES
A milking machine comprises a cluster of teat cups (each with a rubber liner) which are connected, by means of flexible tubing, on one side to a vacuum pump unit via a pulsator and on the other to a milk pail (usually of stainless metal). The pulsator, which is fixed to the lid of the milk pail, acts on the teat cups by alternating atmospheric pressure with a comparative vacuum between the cups and the liners. The assembly formed by the teat cup cluster, the pulsator and the milk pail is described as a “milking pail”.
In certain machines of smaller capacity, the milking pails and the vacuum pump unit may be on a common base (single or twin pail machines).
In the machines of larger capacity, the various components are usually separate. A variable number of milking pails may be connected to the vacuum pump unit by piping. Certain types have no milk pails, the milk passing directly from the teat cups to the cooling apparatus or storage tanks along a pipe line, generally fixed. These types include milking robots, also known as voluntary milking systems. These systems, which incorporate all the equipment necessary for automatic milking, inter alia, a nimble robotic arm, electronic devices, a vacuum pump, a compressor, a washing machine, milk meters, etc., are designed for milking cows at their own initiative. Each cow wears a collar carrying a transponder that identifies it, so that the system can decide whether the animal is due to be milked. The milking is performed by a robotic arm fitted with a laser-assisted vision system that permits the milk extraction devices to be guided directly to the teats of the cow.
When presented together, the various components of such machines are classified in this heading as constituting a functional unit within the meaning of Note 4 to Section XVI (see the General Explanatory Note to that Section). However, apparatus and appliances which do not contribute directly to the milking function (filters, cooling devices, storage tanks, apparatus for cleaning the teat cups and pipe lines, etc.) are not classified in this heading but in their appropriate headings.
(II) MACHINES FOR PROCESSING MILK
This group includes homogenisers. These break up the fat into fine particles which are more readily digestible, and which also remain longer in a state of emulsion without the formation of cream.
The majority of machines for processing milk depend essentially on the principle of heat exchange and are therefore excluded (heading 84.19), e.g., apparatus for pasteurisation, stassanisation or sterilisation; apparatus for condensing or drying milk; milk coolers.
The heading further excludes :
(a) Refrigerating appliances (whether or not specially designed for cooling or keeping milk) and milk cooling vats, incorporating an evaporator of a refrigerating unit (heading 84.18).
(b) Cream separators, filter presses and other filtering or clarifying machinery or apparatus (heading 84.21). (Simple filter funnels and milk strainers are, however, classified according to the constituent material.)
(c) Machines for washing milk containers, and milk bottling or canning machines (heading 84.22).
(III) MACHINERY FOR CONVERTING MILK
INTO OTHER DAIRY PRODUCTS
It should be noted that cream separators are excluded (heading 84.21). The heading does, however, cover machines, used for the manufacture of butter or cheese. They include :
(A) Butter making machines.
(1) Churns usually consist of a barrel of stainless steel, inside of which are a number of partitions or blades. The barrel or the blades are rotated by motor power and the resultant beating action hardens the cream to foam and gradually converts it into butter.
(2) Combined churns and workers. These machines, which are used for continuous production of butter, consist essentially of electric motors that drive cylinders with fast rotating elements which transform the cream into butter. The butter is pressed through the working elements of the machine as a continuous length.
(3) Machines for moulding butter into the required commercial shapes, but not including machines which also wrap or weigh the product (headings 84.22 and 84.23).
(B) Cheese making machines.
(1) Machines for breaking up and homogenising the mixtures of curd and cream in the manufacture of soft or cream cheeses.
(2) Machines for moulding hard, semi-hard and soft or cream cheeses, but not including machines which also wrap or weigh the product (headings 84.22 and 84.23).
(3) Cheese presses (e.g., of the mechanical, pneumatic, etc., types) are used, especially in the manufacture of harder cheeses, both to shape the product and to eliminate the superfluous moisture.
* * *
It should be noted that the heading excludes many machines and apparatus used in the dairy industry. For example, storage, maturing, processing, etc., vats and tanks whose operation depends primarily on fitted heating or cooling equipment fall in heading 84.18 or 84.19, whether or not they also incorporate mechanical equipment such as agitators. Vats, etc., not fitted with heating or cooling equipment, but incorporating mechanical features such as stirrers, agitators, tipping mechanisms, etc., are classified in this heading provided they are identifiable as specialized for dairy use. If they are not identifiable as for any one particular use, they are classified in heading 84.79. Vats, etc., not fitted with either thermal or mechanical equipment are classified as articles of the constituent material (e.g., heading 73.09, 73.10, 74.19, 76.11, or 76.12).
The EN to heading 84.36 provides, in relevant part:
The heading covers machinery, not falling in headings 84.32 to 84.35, which is of the type used on farms (including agricultural schools, co operatives or testing stations), in forestry, market gardens, or poultry keeping or bee keeping farms or the like. However, it excludes machines clearly of a kind designed for industrial use.
The subject merchandise was entered on June 12, 2014, under subheading 8434.10.00, HTSUS, which provides for milking machines. On November 13, 2014, CBP issued a CBP Form 29 “Notice of Action” to ABM in which the Milk Taxi was liquidated under
subheading 8419.89.95, HTSUS, which provides for, inter alia, [M]achinery…, whether or not electrically heated… , for the treatment of materials by a process involving a change of temperature.” The classification of the “Milk Taxi” was referred to this office for Internal Advice.
The headings under consideration fall under Section XVI of the Harmonized
System. Note 3 to Section XVI provides, in pertinent part, that machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. As described above, the subject Milk Taxi is capable of performing various functions such as feed calculations, mixing, heating, cooling, and self-cleaning. All of these functions, however, serve to further the primary function, which is to feed milk products to calves. Accordingly, pursuant to Note 3 to Section XVI, classification will be based on this primary function.
In its submission to CBP in support of this request for Internal Advice, Counsel submits that the subject merchandise is classified in subheading 8434.10.00, HTSUS, as a milking machine, pursuant to GRI 1. In the alternative, Counsel submits that the subject merchandise remains classified in this provision pursuant to GRI 4, which states:
Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods in which they are most akin.
Heading 8434, HTS, is an eo nomine provision. As such, the heading provides for
all forms of its named exemplars, i.e., “milking machines” and “dairy machines.” The ENs to heading 84.34, set forth supra, describe “milking machines” as devices for extracting milk from animals using a vacuum pump. The ENs further state that this heading covers milking machines or other machinery “used in the treatment of milk” and that “[a]pparatus and appliances which do not contribute directly to the milking function (filters, cooling devices, storage tanks, apparatus for cleaning the teat cups and pipe lines, etc.) are not classified in this heading but in their appropriate headings.” As the subject merchandise does not perform milk extraction (i.e., remove milk from an animal), it does not contribute directly to a milking function and is therefore not a “milking machine” of heading 8434, HTSUS. We further note that the subject merchandise is not classified as a “dairy machine” of heading 8434, HTS, in that its primary function is not to treat milk, but to feed milk to calves.
Heading 8419, HTSUS, provides for, in pertinent part, “[M]achinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating… .” Note 2(e) to Chapter 84, HTSUS, set forth above, states that “the heading excludes machinery, plant or laboratory equipment in which a change of temperature, even if necessary, is subsidiary.” See also EN 84.19, which provides that “the heading excludes machinery and plant in which the heating or cooling, even if essential, is merely a secondary function designed to facilitate the main mechanical function of the machine or plant.”
The United States Court of International Trade (CIT) has addressed the scope of heading 8419, HTSUS. In Applied Biosystems v. United States, 34 C.I.T. 769, 777 (Ct. Int'l Trade 2010), the CIT held that the treatment of DNA and RNA materials by a change in temperature was central to the function of a polymerase chain reaction (PCR) machine. By contrast, where the control of temperature is not the primary purpose of laboratory equipment, the CIT has held that such machines fall outside the scope of heading 8419, HTSUS. For example, in Applikon Biotechnology, Inc. v. United States, 807 F. Supp. 2d 1323 (Ct. Int'l Trade 2011), the CIT found that the regulation of temperature was not essential to a machine’s primary purpose of growing cells and concluded that the machine’s heating function was “subsidiary to the cell growth function […] in the same manner that the water heating circuit in a washing machine is subsidiary to its function of cleaning clothes.” Applikon Biotechnology, Inc. v. United States, 807 F. Supp. 2d 1323, 1331 (classifying under heading 8479, HTSUS, a machine designed to maintain, via a mixing function, an aseptic and homogenous environment in which to culture cells). In reaching its holding, the CIT considered that the merchandise’s temperature control capability was not used by every process for which the machine was suited.
In the instant case, the primary function of the Milk Taxi is to feed various milk products to calves. While the Milk Taxi is capable of heating and cooling in order to achieve desired feeding temperatures, and some models of the Milk Taxi are capable of heating to levels that effect pasteurization, these functions are not essential to the article’s primary purpose of administering feed to calves. In applying the CIT’s guidance concerning the scope of heading 8419, HTSUS, we find that the ability to slightly heat or cool, or to pasteurize, is not necessary for feeding calves and these heating features are not used by every process for which the Milk Taxi is suited (i.e., making feed amount and ingredient calculations, mixing, administering feed to calves, self-cleaning). As such, classification in heading 8419, HTSUS, is precluded by application of Note 2(e) to Chapter 84.
Heading 8436, HTSUS, provides for, in pertinent part, other agricultural machinery. The ENs to heading 8436, HTSUS, state that this provision covers machinery of the type used on farms, excluding machinery classified in headings 8432 to 8435, HTSUS. As the subject merchandise is agricultural machinery (i.e., its primary function is for use on farms in calf-feeding operations), and it is not classified in headings 8432 to 8435, HTSUS, it falls within the scope of heading 8436, HTSUS, specifically under subheading 8436.80.00, HTSUS.
As the subject merchandise is classified in heading 8436, HTSUS, pursuant to GRI 1, Counsel’s alternative argument that classification be effected pursuant to GRI 4 is moot.
HOLDING:
By application of GRI’s 1 and 6, the subject Milk Taxi is classified in heading 8436, HTSUS, specifically under subheading 8436.80.00, HTSUS, which provides for “[O]ther agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof; other machinery: other: other… .” The 2019 column one general rate of duty is free.
Duty rates are provided for the Internal Advice applicant’s convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided online at http://www.usitc.gov.
This ruling is issued under the provisions of Part 177 of Title 19 of the Code of Federal Regulations (19 CFR Part 177).
You are directed to mail this decision to the Internal Advice applicant no later than 60 days from the date of this letter. On that date, CBP will make the decision available to CBP personnel and the public via www.cbp.gov, the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Craig T. Clark, Director Commercial and Trade Facilitation Division