CLA-2 OT:RR:CTF:EMAIN H302985 DSR
TARIFF NOS.: 8417.90.00, 8481.80.90
Port Director, Port of New Orleans
423 Canal Street
Room 260
New Orleans, LA 70130
ATTN: Barbara Herman, Import Specialist,
Petroleum, Natural Gas, and Minerals Center of Excellence and Expertise
RE: Application for Further Review of Protest Number 2002-18-100011; Tariff classification of radiant floors, radiant panels, radiant arches, radiant coils and plenums from Malaysia
Dear Port Director:
This letter is in reply to the Application for Further Review (“AFR”) of Protest Number 2002-18-100011, timely filed on February 7, 2018, by Charter Brokerage, LLC, on behalf of Motiva Enterprises, LLC (“Protestant”). The protest is against U.S. Customs and Border Protection’s (“CBP”) classification of parts for a vertical, cylindrical fired heater under subheading 8419.90.95 of the Harmonized Tariff Schedule of the United States (HTSUS), and subheading 8481.80.90, HTSUS.
In issuing this ruling this office considered the discussion held with Protestant during a telephonic conference on June 23, 2020, and we also considered the supplemental information provided by Protestant on July 2, 2020.
FACTS:
The goods subject to this AFR are described as radiant floors, radiant panels, radiant arches, radiant coils and plenums. Protestant entered all of the goods under subheading 8419.90.30, HTSUS, which provides for parts of heat exchange units. CBP eventually liquidated the radiant floors, radiant panels, radiant arches, radiant coils under subheading 8419.90.95, HTSUS, which provides for “Machinery, plant or laboratory equipment … for the treatment of materials by a process involving a change of temperature such as heating …, other than machinery or plant of a kind used for domestic purposes; …Parts: Other: Other.” CBP liquidated the plenums 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.”
Protestant asserts that the goods are specifically manufactured for and used exclusively with a vertical, cylindrical fired heater that primarily consists of a stack, convection coils, radiant coils, a refractory, burner and radiant panels. The heater is designed for a hydrocracker unit and is used to heat crude oil to a desired temperature. The heating process is described by Protestant as employing one radiant section and one convection section within the heater, each so named by the “dominant heat transfer mechanism.” Burners in the radiant section combust fuel, which results in flames that are significantly hotter than the rest of the heater. Oil flowing through the radiant coils absorb the heat generated by the fuel combustion process and partially vaporize into gases that eventually pass over cooler convection coils in the convection section above the radiant section, thereby transferring the heat within the radiant coils to oil contained in the convection coils (the convection process). The radiant panels, radiant floors and radiant arches are simply structural components that contain the heat produced by the burner within a confined area.
The plenums are large, carbon steel chambers that connect to the compartment containing the burner and are used to distribute air to the heater’s burners. The chambers consist of an inlet damper that regulates airflow, and blades mounted on shafts that rotate to damper or regulate the flow of air into the combustion chamber. The blades open and close to ensure that a sufficient amount of air is available for fuel combustion.
ISSUE:
Whether the subject goods are classified as (1) parts of heat exchange units of subheading 8419.90.30, HTSUS; (2) parts of other machinery, plant or laboratory equipment for the treatment of materials by a process involving a change of temperature such as heating, under subheading 8419.90.95, HTSUS; (3) appliances similar to taps, cocks and valves for pipes, boiler shells, tanks, vats or the like, under subheading 8481.80.90, HTSUS; or (4) in subheading 8417, HTSUS, as parts of industrial furnaces.
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the entries at issue. See 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 the protest is properly accorded pursuant to 19 C.F.R. § 174.24(a) because the protest decision is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee.
Classification under the HTSUS is made 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 based on 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. 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).
8417 Industrial or laboratory furnaces and ovens, including incinerators, nonelectric, and parts thereof
* * * *
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:
8419.90 Parts:
8419.90.30 Of heat exchange units
Other:
8419.90.95 Other.
* * * *
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.
* * * *
Note 2 to Section XVI, HTSUS, provides the following, in pertinent part:
Subject to note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:
Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8487, 8548 or 9033) 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….
It is undisputed that the instant merchandise consists of parts of other machines and are therefore classified pursuant to Note 2 to Section XVI, supra. Likewise, it is also undisputed that the instant radiant coils, radiant panels, radiant arches and radiant floors are not themselves prima facie classifiable as goods covered by the headings of chapter 84, 85 or 91, and as such are classified per Note 2(b) to Section XVI, as parts of the good for which they are suitable for sole or principal use. Before they can be classified as parts of heat exchange units, it must first be determined whether the aforementioned heater that incorporates the goods is classified as a heat exchange device of heading 8419, HTSUS. EN 84.19(I)(B) explains that heat exchange devices classified in heading 8419, HTSUS, are units in which a hot fluid (hot gas, steam or liquid) and a cold fluid are made to traverse parallel paths (usually in opposite directions) separated by thin metal walls in such a manner that one fluid is cooled. These units are usually of the following three forms:
Concentric tube systems: one fluid flows in the annular interval, the other in the central tube.
A tubular system for the one fluid, enclosed in a chamber through which flows the other fluid.
Two parallel series of interconnected narrow chambers formed of baffle plates.
Protestant points to Headquarters Ruling Letter (“HQ”) H254022 (May 22, 2017) in support of its contention that the heater that incorporates the radiant coils, radiant panels, radiant floors and radiant arches is a heat exchanger of heading 8419, HTSUS. In HQ H254022, the subject article is described as oil cooler core (also referred to herein as “OCC”) “made of stainless steel and [consisting] of a stack of seventeen hollow plates through which automatic transmission fluid flows horizontally. The core has one inlet and one outlet port that allows the [automatic transmission fluid] to flow in and out of the oil cooler core… The [OCC] is attached to the back (drive shaft) end of the transmission assembly.” Also, the OCC functions in the following manner:
[It] cool[s] Automatic Transmission Fluid used in semi-trucks equipped with an Allison [Transmission, Inc.] transmission… In operation, hot [automatic transmission fluid] travels from the transmission to the oiler cooler and is run through the tubular system of the oil cooler core and heat is exchanged with the glycol based coolant as it transverses through the enclosed oil cooler housing.
In this case, one fluid (oil) enters the heater’s radiant section containing the radiant coils (and structurally supported by the radiant floors, panels, and arches), is heated by a burner to a temperature sufficient to partially vaporize the oil, resulting in hot gases that travel through tubes leading from the radiant chamber into the convection chamber. There, the tubes containing the hot gases pass over cooler tubes in order to heat the oil contained in the cooler tubes. Unlike the manner in which fluids traverse the OCC of HQ H254022, the oil in the cooler tubes does not circulate through the radiant coils (it enters the cooler tubes via the convection chamber through an inlet that is not part of the radiant chamber and exits through another separate outlet). Additionally, the heater is more than an apparatus with tubing, shells, plates or other structures through which fluids of differing temperatures simply flow (such as a heat exchanger), by virtue of the existence of the burner within the heater. For those reasons, we find that the heater cannot be classified as a heat exchanger of heading 8419, HTSUS and, therefore, the radiant coils, radiant panels, radiant arches, radiant floors, and plenums are not parts of a heat exchanger of heading 8419, HTSUS.
Although consideration can be given to whether the heater may be classified elsewhere in heading 8419, HTSUS, we note that heading 8417 provides for industrial or laboratory furnaces, including incinerators, nonelectric, and parts thereof. The term “furnace” is not defined in the text of the HTSUS or in the ENs to heading 8417. However, EN 84.17 states that the heading covers non-electrical industrial or laboratory type furnaces and ovens, designed for the production of heat in chambers at high or fairly high temperatures by the combustion of fuel (either directly in the chamber or in separate combustion chambers). The heater that would incorporate the goods subject to this protest uses a combustion process to raise the temperature of oil to a level that results in partial evaporation of the oil into gases that are used elsewhere in a complete hydrocracker unit. That process mirrors the process that EN 84.17 attributes to a furnace of heading 8417, HTSUS, and warrants classifying the heater as a furnace of that heading. As a result, the radiant coils, radiant panels, radiant arches and radiant floors are classified in subheading 8417.90.00, HTSUS, as parts of a furnace.
If the subject plenums can be classified as goods of heading 8481, HTSUS, they are classified pursuant to Note 2(a) to Section XVI, HTSUS, and therefore precluded from being classified as parts of a good of headings 8419 or 8417, HTSUS, per Note 2(b). EN 84.81 provides, 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) [emphasis added]. The heading includes such devices designed to regulate the pressure or the flow velocity of a liquid or a gas [emphasis added].
The appliances regulate the flow by opening or closing an aperture (e.g., gate, disc, ball, plug, needle or diaphragm) [emphasis added]. 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 [emphasis added].
The term “valve” is not defined in the HTSUS or the ENs. A tariff term that is not defined in the HTSUS or in the ENs is construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States, 69 C.C.P.A. 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 C.C.P.A. 128, 673 F.2d 1268 (1982).
Webster’s II New Riverside University Dictionary, Houghton Mifflin Co., 1988 (page 1275), defines a valve as “a device that regulates the flow of gases, liquids or loose materials through a structure, as a pipe, or through an aperture by opening, closing or obstructing a port or passageway.” Also, a valve is “any of numerous mechanical devices by which the flow of liquid, gas, or loose material in bulk may be started, stopped, or regulated by a movable part that opens, shuts, or partially obstructs one or more ports or passageways.” www.merriam-webster.com/dictionary/valve (last visited February 12, 2020).
The plenums are large, carbon steel chambers that connect to the heater and are used to distribute air to the heater’s burners. The chambers consist of an inlet damper that regulates airflow, and blades mounted on shafts that rotate to damper or regulate the flow of air into the combustion chamber. The blades open and close to ensure that a sufficient amount of air is available for fuel combustion. We find that the plenums are ejusdem generis with the “taps, cocks, valves and similar appliances”, and they are also similar to the goods of heading 8481, HTSUS, described in the EN to heading 8481. The Court of International Trade (CIT) has stated that the canon of construction ejusdem generis, which means literally, of the same class or kind, teaches that “where particular words of description are followed by general terms, the latter will be regarded as referring to things of a like class with those particularly described.” Nissho Iwai American Corp. v. United States (Nissho), 10 CIT 154, 156 (1986). The CIT further stated that “[a]s applicable to customs classification cases, ejusdem generis requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms.” Nissho at 157. Heading 8481 provides for “taps . . . valves and similar appliances . . . or the like[,]” making an enumeration of specific things followed by a general word or phrase. “The general word or phrase is held to refer things of the same kind as those specified.” Sports Graphics, Inc. v. United States, 24 Fed. 3d 1390, 1392 (Fed. Cir. 1994). The essential characteristics and purposes of the plenums are squarely described by EN 84.81, therefore the plenums are of the same class and kind as the valves of heading 8481, HTSUS, and are accordingly classified in subheading 8481.80.90, HTSUS, 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.”
HOLDING:
The protest is DENIED. Pursuant to GRIs 1 (Note 2(b) to Section XVI) and 6, the radiant coils, radiant panels, radiant arches and radiant floors are classified under heading 8417, HTSUS, specifically under subheading 8417.90.00, HTSUS, which provides for “Industrial or laboratory furnaces and ovens, including incinerators, nonelectric, and parts thereof: Parts.” The 2017 column one, general rate of duty is 3.9% ad valorem. Pursuant to GRIs 1 (Note 2(a) to Section XVI) and 6, the plenums are classified under heading 8481 HTSUS, specifically 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.” The 2017 column one, general rate of duty rate is 2% ad valorem.
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 at www.usitc.gov. 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,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division