CLA-2-84:OT:RR:NC:N1:106
Brian Kavanaugh, Trade Advisor
Deringer Logistics Consulting Group
173 West Service Road
Champlain, NY 12919-4441
RE: The tariff classification of Coil Tubing Unit and Injector from Canada
Dear Mr. Kavanaugh:
In your letter dated April 23, 2013 you requested a tariff classification ruling on behalf of your client Trican Well Service, located in Calgary, Alberta, Canada.
The items under consideration have been identified as 1) a Coil Tubing Injector and 2) a Coil Tubing Unit. You state that these items are used in the hydraulic fracturing (FRAC) industry for oil and gas recovery. The first item, the Coil Tubing Injector is designed to lift, inject and move the tubing from the coil through the injector into the wellbore through the injector head. The units components include a drive and traction system that provide power to the chair assembly to grip the coiled tubing string in order to run and retrieve the coiled tubing string, the frame, gooseneck and load cell. The injector can be mounted on a base or supported by a crane over the wellbore. You indicate that in order to operate, the injector must be attached to a Coiled Tubing Unit.
The second item, the Coiled Tubing Unit, is a trailer mounted well servicing unit, which is designed to inject coiled tubing into the well head. It provides the tractive effort for running and retrieving the coiled tubing string from the well head. The basic components of this unit are the trailer, control cabin, diesel engine and generator, the work reel, the drive and traction system, the chain systems, the frame and gooseneck, the load cell and electrical and hydraulic systems.
You state that prior to importation, the tractor is modified with a specially designed hydraulic power pack kit that is used to power the Unit. It is then “married” to the Unit after this modification, specifically set up to run the Unit, but can be used for other applications other than operating the Coil Unit.
In operation, the mast positions the injector head into the air to align the blowout preventer and lubrication string underneath the injector. Once positioned, the Unit performs multiple tasks, including cleanouts, stimulations, drilling, fishing and cementing. To achieve this, fluids are pumped though the coiled tubing down hole to the required depth. According to the information provided to us, this Unit is not capable of “attacking the Earth’s crust.”
In your request, you proposed that the Coil Tubing Injector and the Coil Tubing Unit be classified in subheading 8479.89.9850, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other … Oil and gas field wire line and down hole equipment”. In the alternative, you propose classifying these units in subheading 8479.89.9899, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other machines and mechanical appliances: Other: Other … Other”. Heading 8479, HTSUS does not encompass machines which are more specifically provided for in any other heading of chapter 84 or any other chapter of the Nomenclature. As the two units in question are specifically provided for elsewhere in the Nomenclature, classification in heading 8479, HTSUS, is precluded.
General Note 3 (h) (vi) to the HTSUS states “ ... a reference to “headings” encompasses subheadings indented thereunder.” Subheading 8428.90 provides for “Other lifting, handling, loading or unloading machinery … : Other machinery”.
The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the General Rules of Interpretation (GRIs).
The ENs to Chapter 84 state that “This heading is not limited to lifting or handling equipment for solid materials, but also includes machinery for liquids or gases”.
The applicable subheading for both the Coil Tubing Injector and the Coil Tubing Unit will be 8428.90.0290, HTSUS, which provides for “Other lifting, handling, loading or unloading machinery … : Other machinery: Other”. The general rate of duty will be 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 on World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding this ruling, please contact the National Import Specialist at (646) 733-3013.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division