OT:RR:CTF:EMAIN H314368 PF
Port Director
U.S. Customs and Border Protection
Port of Pembina
112 W. Stutsman
Pembina, ND 58271
Attn: Lorie Vagle, Machinery CEE Import Specialist
RE: Protest and Application for Further Review No: 4501-20-101593; Classification of Proximity Sensors
Dear Port Director:
The following is our decision as to Protest and Application for Further Review No. 4501-20-101593, which was filed on June 30, 2020, on behalf of Altec Industries ("Altec" or "protestant"). The protest pertains to the classification of inductive proximity sensors under the Harmonized Tariff Schedule of the United States ("HTSUS").
The subject merchandise was entered by protestant on September 20, 2019 and liquidated on May 22, 2020. U.S. Customs and Border Protection ("CBP") liquidated the entries under heading 8543, HTSUS, which provides for "Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:" On June 30, 2020, protestant filed a protest and AFR regarding the tariff classification of the subject merchandise and claiming that the correct classification of the subject merchandise should in heading 8536, HTSUS, which provides for "Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1,000 V; connectors for optical fibers, optical fiber bundles or cables:."
FACTS:
The subject merchandise is described as inductive proximity sensors/switches (IPS) that employ a non-contact inductive sensor that use a magnetic field to sense distance to metallic objects. The IPS is said to be used in outrigger applications by creating a magnetic field, sensing a response from a nearby metallic object, and sending a signal. The subject IPS detects and does not open or close electrical contacts for the purpose of switching or protecting electrical circuits. The IPS is a solid-state device that generates an output signal when metal objects are either inside or entering into its sensing area. The unit creates an electromagnetic field that, when changed by the presence of a metal object, sends an electrical impulse that connects or disconnects an electrical terminal.
ISSUE:
Whether the subject merchandise is classified in heading 8536, HTSUS, as an electronic switch or in heading 8543, HTSUS as an electrical machine and apparatus, having individual functions, not specified or included elsewhere.
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. 4501-20-101593 is properly accorded to Protestant pursuant to 19 C.F.R. 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of CBP or his designee, or with a decision made by CBP with respect to the same or substantially similar merchandise.
Merchandise imported into the United States is classified under the HTSUSA. 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 ("AUSRIs"). 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.
The 2019 HTSUS provisions under consideration are:
8536 Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1,000 V; connectors for optical fibers, optical fiber bundles or cables:
8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
In understanding the language of the HTSUS, the Explanatory Notes ("ENs") of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, 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).
The Explanatory Note to heading 85.43 provides, in pertinent part, as follows:
The electrical appliances and apparatus of this heading must have individual functions. The introductory provision of Explanatory Note to heading 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of this heading.
The Explanatory Note to heading 84.79 provides, in relevant part, as follows:
For this purpose the following are to be regarded as having "individual functions":
A) Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other machine or appliance.
The protestant alleges that the IPS is described as electrical switching apparatus of heading 8536, HTSUS, because it functions as an electronic switch by sensing the presence of metal and changing the electrical output from an open or closed state, which is used to connect/disconnect the terminal that powers an electrical load. Heading 8536, HTSUS, provides for "Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1,000 V; connectors for optical fibers, optical fiber bundles or cables."
However, the subject IPS detects and does not open or close electrical contacts for the purpose of switching or protecting electrical circuits. The IPS is a solid-state device that generates an output signal when metal objects are either inside or entering into its sensing area. The unit creates an electromagnetic field that, when changed by the presence of a metal object, sends an electrical impulse that connects or disconnects an electrical terminal. The IPS acts as a transducer. The common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities, and other reliable sources. Nippon Kogasku (USA Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (Fed. Cir. 1982). "Transducer" is defined as "a device that changes power from one system into another form for another system." Merriam-Webster Online Dictionary.[1]
CBP has classified transducers and merchandise similar to the IPS in heading 8543, HTSUS. For example, in Headquarters Ruling ("HQ") H243640, dated November 21, 2014, CBP addressed the classification of a Hall-Effect sensor. This type of sensor works by converting a magnetic field of sufficient amplitude into a voltage, which is processed by outside devices. Moreover, in NY N009077, dated April 5, 2007, CBP classified ABS sensors that are attached to a vehicle wheel or differential that is meant to measure the speed of the wheel. The sensor creates a magnetic field that, when disrupted by the presence of a gear tooth, sends an electrical signal to the vehicle's electric control unit that interprets the signal. These items were classified in heading 8543, HTSUS.
The Protestant relies on New York Ruling ("NY") L84813, dated May 27, 2005, to support the classification of the subject merchandise in heading 8536, HTSUS. The sensors classified in NY L84813, consisted of a detection circuit and a thyristor (semiconductor switching device), that supplied electricity to a device. The functions of the merchandise in NY L84813 exceeded the mere detection of metal and it was the element that switched the electricity on and off based on the results of the proximity circuits.
As discussed, the subject merchandise does not satisfy the text of heading 8536, HTSUS, because it does not make electrical connections or provide electrical protection. Moreover, CBP has classified sensors that function similar to the IPS in heading 8543, HTSUS. The IPS is also not covered by any other heading in Chapter 85 or elsewhere in the Nomenclature, and therefore is properly classified in heading 8543, HTSUS, and specifically in subheading 8543.70.45, HTSUS.
HOLDING:
Pursuant to GRI 1, the subject merchandise is classified in heading 8543, HTSUS, and specifically in subheading 8543.70.45, which provides for Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other." The 2019 column one, general rate of duty for merchandise of this subheading is 2.6 % ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheadings 8543.70.45, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. As such, the subject merchandise is classified under subheading 9903.88.02, HTSUS, in addition to subheading 8543.70.45, HTSUS, listed above.
For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 at https://hts.usitc.gov/current.
You are instructed to DENY the Protest.
You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division
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[1] http://www.merriamwebster.com/dictionary/transducer (2024).