H326274

HQ H326274 June 17, 2024 OT:RR:CTF:EMAIN H326274 JRG / UBB CATEGORY: Classification; Valuation TARIFF NO.: 8462.91.40 Center Director Machinery Center of Excellence and Expertise P.O. Box 3130 Laredo, TX 78044-3130 RE: Application for Further Review of Protest No. 3801-21-107713; Tariff classification of aluminum extrusion line; Accounting for international freight expenses in valuation Dear Director: This is our decision regarding an Application for Further Review (AFR) of Protest 3801-21-107713, filed by counsel on October 27, 2021, behalf of International Extrusions, Inc. (Protestant). The Protest and AFR concern the classification of a 2500 MT Alumnium Press (Press), a Handling System, and a Gas Billet Furnace (Furnace) as machines and components that comprise an aluminum extrusion line under the Harmonized Tariff Schedule of the United State (HTSUS). The AFR was forwarded to this office for consideration. FACTS: Entry No. 788-1712468-4 contained the Press, Handling System, and Furnace to construct an aluminum extrusion line for converting aluminum logs into parts for motor homes. The subject entry was one of three shipments containing the aluminum extrusion line’s components with the other two containing an Automatic Line for Ageing and Packing (Automatic Line) and various accessories, respectively. The Press, Handling System, and Furnace comprise 56.3% of the aluminum extrusion line and 66% of its value. The Furnace also includes a Hot Logs Shear and the Handling System is comprised of the following: a. Lead Out Table and Roller Table; b. Cooling System; c. Hot Flying Saw; d. Double Puller; e. Transfer Belts; f. Cooling Kevlar Belts; g. Strecher Feeding Belts; h. Stretcher, Ton 60; i. After Stretcher Table; j. Saw Feeding Roller Table; k. Final Cutting Saw; l. Cutting to Length Table; and m. Electrical Equipment. On October 18, 2019, subject entry was entered under 8428, HTSUS, which covers “Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics).” On April 30, 2021, the subject entry was liquidated under 8462, HTSUS, covering “Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above.” On October 27, 2021, Protestant filed the instant Protest and AFR. Protestant does not dispute the Press was properly classified under 8462, HTSUS, but asserts the Handling System and Furnace should have been separately classified under 8428, HTSUS, as previous detailed, and 8417, HTSUS, for “Industrial or laboratory furnaces and ovens, including incinerators, nonelectric, and parts thereof,” respectively, because the components do not comprise a functional unit that has the essential character of a complete or finished aluminum extrusion line. Protestant maintains the Press, Handling System, and Furnace could not have the essential character of an aluminum extrusion line without the Automatic Line, evinced by the automatic line accounting for 24% of the aluminum extrusion line’s value and 43.7% of its size as well as its role in ageing and cooling the extruded aluminum. Protestant further contends the Handling System and Furnace constitute functional units themselves, under Note 4 to Section XVI, HTSUS, and, as such, should be classified separately. Finally, Protestant argues that, if the Press, Handling System, and Furnace are classified together, subheading 8479.81.00, HTSUS, or, alternatively, subheading 8479.89.94, HTSUS, would be appropriate because there is no one purpose that serves as the principal purpose of an aluminum extrusion line. ISSUE: Whether the Press, Handling System, and Furnace should be classified together and, if so, whether the items should be classified under heading 8462, HTSUS, or heading 8479, 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 October 27, 2021, within 180 days of liquidation of the entry, pursuant to 19 U.S.C. § 1514(c)(3), with a supplemental submission being considered under 19 C.F.R. § 174.28. Further Review of Protest No. 3801-21-107713 is properly accorded pursuant to 19 CFR § 174.24(a), as the decision against which the protest was filed is alleged to be inconsistent with a U.S. Customs and Border Protection (CBP) ruling or decision with respect to the same or substantially similar merchandise. As justification for further review pursuant to 19 CFR 174.24(a), Protestant notes that in CBP Ruling Letter (HQ) 965790, dated October 25, 2002, CBP separately classified an extrusion press, handling system, and log heater oven because they were entered in separate shipments and no one shipment consisted of the individual components intended to contribute together to a clearly defined function, pursuant to Note 4 to Section XVI, HTSUS. 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 (ARIs). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings and any relative section or chapter notes.” If the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, GRIs 2 through 6 may be applied in order. GRI 2(a) states: Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled. Furthermore, Note 4 to Section XVI, which includes Chapter 84, states: Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function. The HTSUS headings and subheadings at issue are: 8462 Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above: * * * 8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Under Note 4 to Section XVI, HTSUS, the Press, Handling System, and Furnace are “intended to contribute together to a clearly defined function” of heading 8462, HTSUS, specifically “working metal” through aluminum extrusion. The term “working metal” is not defined or explicitly enumerated in the HTSUS. As a result, its correct meaning is its common, or commercial, meaning. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001) ("To ascertain the common meaning of a term, a court may consult 'dictionaries, scientific authorities, and other reliable information sources' and 'lexicographic and other materials.'" (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271, 69 C.C.P.A. 128 (C.C.P.A. 1982))). Merriam-Webster Dictionary defines “metalworking,” the noun describing the act of “working metal,” as “the act or process of shaping things out of metal.” Metalworking, Merriam-Webster

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 October 27, 2021, within 180 days of liquidation of the entry, pursuant to 19 U.S.C. § 1514(c)(3), with a supplemental submission being considered under 19 C.F.R. § 174.28. Further Review of Protest No. 3801-21-107713 is properly accorded pursuant to 19 CFR § 174.24(a), as the decision against which the protest was filed is alleged to be inconsistent with a U.S. Customs and Border Protection (CBP) ruling or decision with respect to the same or substantially similar merchandise. As justification for further review pursuant to 19 CFR 174.24(a), Protestant notes that in CBP Ruling Letter (HQ) 965790, dated October 25, 2002, CBP separately classified an extrusion press, handling system, and log heater oven because they were entered in separate shipments and no one shipment consisted of the individual components intended to contribute together to a clearly defined function, pursuant to Note 4 to Section XVI, HTSUS. 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 (ARIs). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings and any relative section or chapter notes.” If the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, GRIs 2 through 6 may be applied in order. GRI 2(a) states: Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be