OT:RR:CTF:EMAIN H310618 SK
Center Director
Center of Excellence and Expertise – Petroleum, Natural Gas & Minerals
U.S. Customs and Border Protection
1 World Trade Center
Suite 741
Long Beach, CA 90831
Attn: Tatum O’Brien, Supervisory Import Specialist; Ismael Colon, Import Specialist
Re: Protest No. 2704-20-123526; Classification of sucker rods and sucker rod couplings
Dear Center Director:
This is our decision regarding an Application for Further Review (AFR) of Protest No. 2704-20-123526, filed by Noatum Logistics on behalf of Exceed Oilfield Equipment (Protestant). The Protest and AFR concern the classification of certain oilfield equipment, specifically sucker rods and sucker rod couplings, under the Harmonized Tariff Schedule of the United States (HTSUS). The AFR was forwarded to this office for consideration. No samples were provided for examination.
FACTS:
The classification of “sucker rods” and “couplings” intended for use with sucker rods are at issue in this Protest and AFR. Sucker rods are solid rods (without a bore) used to connect surface oilwell pumping equipment to a down-hole pump. They generate downward force to displace oil from below ground to the surface. The subject sucker rods are made of polished steel and vary between 25-30 feet in length. They are manufactured and used solely for use in pumpjack units. Couplings for sucker rods are made from metal and feature internal threads that allow for a precise and secure fit. Couplings designed for sucker rods are designed to carry the high torque requirements of progressing cavity-pumping applications and the high loads of deep wells.
Eleven entries of the subject articles were made between January 2 and May 21, 2019,
and liquidated as entered between the dates of November 29, 2019 and April 17, 2020. The sucker rods were liquidated under heading 8431, HTSUS, specifically subheading 8431.43.80, HTSUS, which provides for “[P]arts suitable for use solely or principally with the machinery of headings 8425 to 8430: Of machinery of heading 8426, 8429 or 8430: Parts for boring or sinking machinery of subheading 8430.41 or 8430.49: Other.” As products of China, the merchandise was subject to duties imposed by heading 9903, HTSUS, specifically subheading 9903.88.01, HTSUS, which provides for “[E]xcept as provided in headings 9903.88.05, 9903.88.06, 9903.88.07, 9903.88.08 or 9903.88.10, articles the product of China, as provided for in U.S. note 20(a) to this subchapter and as provided for in the subheadings enumerated in U.S. note 20(b) [to this subchapter].” The subject couplings were liquidated as entered under heading 7307, HTSUS, specifically subheading 7307.99.50 which provides for “[T]ube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: Other: Other: Other.” As products of China, the merchandise was subject to duties imposed by heading 9903, HTSUS, specifically subheading 9903.88.03, HTSUS, which provides for “[A]rticles the product of China, as provided for in U.S. note 20(e) to this subchapter and as provided for in the subheadings enumerated in U.S. note 20(f).”
Protestant submits that the subject sucker rods are properly classifiable under heading 8413, HTSUS, specifically subheading 8413.91.90 which provides for “[P]umps for liquids, whether or not fitted with a measuring device; liquid elevators; part thereof: Parts: Of pumps: Other.” In support of this classification, Protestant cites to New York Ruling Letter (NY) R00333, dated May 25, 2004, in which U.S. Customs and Border Protection (CBP) classified substantially similar sucker rods under subheading 8413.91.90, HTSUS. Counsel protests liquidation of the entries under subheading 9903.88.01, HTSUS, and claims the subject sucker rods are covered by the exclusion set forth in Chapter 99 Note 20(q)(20) under subheading 9903.88.14, HTSUS, which provides for “[R]ods and couplings designed for use with oil and gas field pumps, the foregoing of American Petroleum Institute grade (described in statistical reporting number 8413.91.9080 prior to January 1, 2019; described in statistical reporting number 8413.91.9095 effective January 1, 2019 through December 31, 2019; described in statistical reporting numbers 8413.91.9065, 8413.91.9085 or 8413.91.9096 effective January 1, 2020).”
Protestant also submits that the subject couplings are properly classifiable as parts of pumps for liquids under subheading 8413.91.90, HTSUS. Protestant claims that the exclusion applicable to the sucker rods, specified supra, also applies to the subject couplings. Protestant states that the subject couplings are not covered by heading 7307, HTSUS, in that they are not couplings used with tubes or pipes; rather, the couplings are intended for use with solid sucker rods.
ISSUE:
What is the proper classification of the subject merchandise under the HTSUS?
LAW AND ANALYSIS:
A decision on classification and the rate and amount of duties chargeable is a protestable matter under 19 U.S.C. §1514(a)(2). The subject Protest was timely filed on April 25, 2020, within 180 days of liquidation, pursuant to 19 U.S.C. § 1514(c)(3). Further Review of Protest No. 2704-20-123526 is properly accorded pursuant to 19 CFR § 174.24(a), as the subject entries were liquidated under a HTSUS provision that is inconsistent with a CBP ruling on substantially similar merchandise.
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 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.
The following 2019 provisions of the HTSUS are under consideration:
7307 Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel
8413 Pumps for liquids, whether or not fitted with a measuring device; liquid elevators; parts thereof
8431 Parts suitable for use solely or principally with the machinery of headings 8425 to 8430
Note 1(f) to Section XV, HTSUS, states, in relevant part, that this Section does not cover “[A]rticles of Section XVI (machinery, mechanical appliances and electrical goods).”
Note 1(g) to Section XVI, HTSUS, states, in relevant part, that this Section does not cover “[P]arts of general use, as defined in Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39).”
Note 2(a) to Section XV, HTSUS, states, in relevant part:
2. Throughout the Nomenclature, the expression “parts of general use” means:
Articles of heading 73.07, 73.12, 73.15, 73.17, or 73.18 and similar articles of other base metal;
Note 2 to Section XVI, HTSUS, states, in pertinent part:
2. 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….
The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the Harmonized System (HS) 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).
EN 73.07, provides, in pertinent part:
This heading covers fittings of iron or steel, mainly used for connecting the bores of two tubes together, or for connecting a tube to some other apparatus, or for closing the tube aperture. This heading does not however cover articles used for installing pipes and tubes but which do not form an integral part of the bore (e.g., hangers, stays and similar supports which merely fix or support the tubes and pipes on walls, clamping or tightening bands or collars (hose clips) used for clamping flexible tubing or hose to rigid piping, taps, connecting pieces, etc.) (Heading 73.25 or 73.26).
EN 84.13, HS, provides, in pertinent part:
This heading covers most machines and appliances for raising or otherwise continuously displacing volumes of liquids (including molten metal and wet concrete), whether they are operated by hand or by any kind of power unit, integral or otherwise.
* * * * *
PARTS
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the goods of this heading are also classified here, e.g., pump housings or bodies; rods specially designed to connect and drive the piston in pumps placed at some distance from the prime mover (e.g., pumping rods, “sucker rods”); pistons, plungers, vanes; cams (lobes); helicoidal screws, impeller wheels, diffuser vanes; buckets and bucket-fitted chains; bands for band-type liquid elevators; pressure chambers.
EN 84.31, HS, provides, in pertinent part:
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), this heading covers parts for use solely or principally with the machinery of headings 84.25 to 84.30.
It should also be noted that many parts do not fall in this heading since they are:
Specified elsewhere in the Nomenclature, e.g., suspension springs (heading 73.20), engines (heading 84.07 or 84.08, etc.) and electrical ignition or starting equipment (heading 85.11).
As set forth above, the EN to heading 84.13 includes “sucker roads” as a “Parts” exemplar. The subject sucker rods are used in a manner that supports this classification, in that they translate the up/down motion of an oilwell surface pump to a down-hole pump. The sucker rods create a pump action that displaces liquid (oil). As such, the subject sucker rods are “parts of pumps for displacing liquids” and classified in heading 8413, HTSUS, specifically subheading 8413.91.90, HTSUS. This classification is consistent with NY R00333 cited supra.
The subject couplings are specifically designed for use with pumped to work in conjunction with sucker rods to carry the high torque requirements of progressing cavity-pumping applications and the high loads of deep wells. The subject sucker rod couplings are therefore parts of pumps for displacing liquids and classified in heading 8413, HTSUS, specifically subheading 8413.91.90, HTSUS. We further note that as the subject couplings are specifically designed for use with solid rods that do not possess a bore, they are not classified in heading 7307, HTSUS, as they are not couplings for use with tubes or pipes.
HOLDING:
By application of GRIs 1 and 6, both the subject sucker rods and sucker rod couplings are classifiable under heading 8413, HTSUS, specifically subheading 8413.91.90, HTSUS, which provides for “[P]umps for liquids, whether or not fitted with a measuring device; liquid elevators; part thereof: Parts: Of pumps: Other.” The 2019 column one, general rate of duty 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 online at http://www.usitc.gov/tata/hts/.
You are instructed to ALLOW the protest. 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, 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