H287055

HQ H287055 April 5, 2023 OT:RR:CTF:CPMM H287055 RRB CATEGORY: Classification TARIFF NO.: 8504.40.40 Port Director U.S. Customs and Border Protection Port of Chicago 5600 Pearl Street Rosemont, IL 60018 Attn: Osbaldo Cruz, Supervisory Entry Specialist RE: Application for Further Review of Protest No. 3901-16-100021; Tariff classification of motor control boards and electronic speed controllers for remote-controlled vehicles Dear Port Director: The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 3901-16-100021, timely filed on January 6, 2016, on behalf of Horizon Hobby Distributors, Inc. (“Protestant”). The AFR concerns U.S. Customs and Border Protection’s (“CBP”) classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of motor control boards (“MCBs”) and electronic speed controllers (“ESCs”) for radio remote-controlled vehicles (“RCVs”). FACTS: The protested merchandise consists of MCBs and ESCs, which are alleged to be solely or principally used with RCVs. ESCs are electronic circuit board assemblies, which are installed into and used in the control and operation of RCVs. Specifically, ESCs control the speed and direction of the electric motor that provides propulsive force to the RCV, while MCBs are used to control the operation of the RCV either automatically or through remote radio commands from the user. Each of the ESCs at issue is compatible with connectors that are used with RCVs. ESCs are often used on motors, providing a low voltage source of energy for the motor. The internal electronics interpret a signal from the radio control receiver in order to measure and compute the power and direction of the controlled motor. Generally, an MCB acts as the quadcopter flight controller by making decisions based on command signals the user sends from their transmitter. MCBs commonly perform a variety of functions for the quadcopter and may control some or all of the following aspects of flight, such as gyro stabilization, self-leveling, orientation and position, altitude hold, return home, waypoint navigation, and global positioning system (“GPS”) functionality. The protested entries consist of five different models of ESCs and one model of an MCB. Specifically, the five models of ESCs at issue are set forth below: The 80A Brushless Marine ESC: Dual Battery (DYNM3820) is compatible with pro boats. According to the Protestant’s online catalog, this item is “designed specifically [for] high performance marine applications.” It is “engineered to meet the demands of today’s high speed RC powerboats.” The 4-in-1 ESC: 300 QX (BLH7709) is compatible with quadcopters featuring “sensor assisted flight envelope [SAFE] technology” that “offers smooth flight capability that battles windy conditions for you and multiple modes so you can fly with the level of protection and assistance that suits any given moment of the flight.” The 10-Amp Brushless ESC: 350 QX (BLH7803) is compatible with various models of quadcopters featuring “sensor assisted flight envelope [SAFE] technology” and software that facilitates GPS and compass performance, self-leveling, altimeter technology, and a camera mount (camera sold separately). The 10-Amp Pro Brushless ESC (EFLA1010) is compatible with various models of radio-control aircraft. The 60-Amp Pro Switch-Mode BEC Brushless ESC (V2) (EFLA1060B) is also compatible with various models of radio-control aircraft. The protested MCB is described as a “Main Control Board with Receiver: 350 QX/2 (BLH7901)”. It is compatible with various models of quadcopters featuring “sensor assisted flight envelope [SAFE] technology” and software that facilitates GPS and compass performance, self-leveling, altimeter technology, and a camera mount (camera sold separately). The instruction manuals for the various quadcopters, radio-control aircraft, and pro boats that are compatible with the protested merchandise, as well as the instruction manuals for some of the ESCs and MCBs at issue, state the following: This is a sophisticated hobby product and NOT a toy. It must be operated with caution and common sense and requires some basic mechanical ability. Failure to operate this Product in a safe and responsible manner could result in injury or damage to the product or other property. This product is not intended for use by children without direct adult supervision. Do not attempt disassembly, use with incompatible components or augment product in any way without the approval of Horizon Hobby, Inc. This manual contains instructions for safety, operation and maintenance. It is essential to read and follow all the instructions and warnings in the manual, prior to assembly, setup or use, in order to operate correctly and avoid damage or serious injury. . . Age Recommendation: Not for children under 14 years. This is not a toy. (Emphasis in original). The protested merchandise was entered between September 4, 2014 and October 3, 2014, and the Port liquidated the merchandise as entered between July 15, 2015 and August 13, 2015. The MCBs were liquidated under subheading 8537.10, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517: For a voltage not exceeding 1,000 V,” at a duty rate of 2.7% ad valorem (2014). The ESCs were liquidated under subheading 8504.40, HTSUS, which provides for “Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof: Static converters,” at a duty rate of 1.5% ad valorem (2014). The Protestant filed this Protest and AFR, received on January 6, 2016, asserting that the subject merchandise is properly classified under subheading 9503.00.0090, HTSUSA (“Annotated”), which provides for “Tricycles, scooters, pedal cares and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: Other.” The Protest and AFR were denied by the Port Director but the denial was subsequently set aside by our office on September 8, 2018, pursuant to 19 U.S.C § 1515(c). ISSUE: Whether the subject MCB and ESC units are classified under heading 8504, HTSUS, as “electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof”; under heading 8537, HTSUS, as “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517”; or under heading 9503, HTSUS, as “Tricycles, scooters, pedal cares and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof.” LAW AND ANALYSIS: The protest was properly filed as a decision on classification under 19 U.S.C. § 1514(a)(2). The protest was timely filed within 180 days of liquidation of the entries. See 19 U.S.C. § 1514(c)(3). Further Review of Protest Number 3901-16-100021 is properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(b) for the MCB units on the grounds that the decision is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. In addition, Further Review of Protest Number 3901-16-100021 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) for the ESC units on the grounds that the decision involves matters previously ruled upon

The protest was properly filed as a decision on classification under 19 U.S.C. § 1514(a)(2). The protest was timely filed within 180 days of liquidation of the entries. See 19 U.S.C. § 1514(c)(3).Further Review of Protest Number 3901-16-100021 is properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(b) for the MCB units on the grounds that the decision is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. In addition, Further Review of Protest Number 3901-16-100021 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) for the ESC units on the grounds that the decision involves matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling. Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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 on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied. The 2014 HTSUS provisions under consideration are as follows:8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof.8537 Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numerical control apparatus, other than switching apparatus of heading 8517. 9503 Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”