Classification of Electromagnet Assemblies; Application for Further Review of Protest No. 0401-07-100204

HQ H022184 May 8, 2009 CLA-2 OT:RR:CTF:TCM H022184 RM CATEGORY: Classification TARIFF NO.: 8505.90.80 Port Director Boston Service Port U.S. Customs and Border Protection 10 Causeway Street - Room 603Boston, MA 02222 RE: Classification of Electromagnet Assemblies; Application for Further Review of Protest No. 0401-07-100204 Dear Port Director: The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 0401-07-100204, timely filed by counsel on behalf of Varian Semiconductor Equipment Associates, Inc., concerning the classification of certain electromagnet assemblies under the Harmonized Tariff Schedule of the United States (“HTSUS”). In reaching this decision, we considered the arguments raised by Protestant during a telephone conference on December 3, 2008, and supplemental submissions, dated September 24, 2008, and December 17, 2008, and January 26, 2009. Protestant entered the merchandise on various dates between July 25, 2006, and December 26, 2006, under heading 8486, HTSUS, which provides in relevant part for “Machines and apparatus of a kind used solely or principally for the manufacture of … semiconductor devices …; parts and accessories.” U.S. Customs and Border Protection (“CBP”) liquidated the merchandise on various dates between June 8, 2007, and December 14, 2007, under heading 8505, HTSUS, which provides, in relevant part, for “Electromagnets.” FACTS: This Protest concerns electromagnet assemblies, models no. E11348380, E11342990, E11288570, E11288450, designed exclusively for incorporation into ion implanters, machines used in the fabrication of semiconductor devices. As described by Protestant, each assembly contains (1) an electromagnet, (2) fittings for assembly into the implanter, e.g., electrical leads and adapters, and (3) a cooling mechanism consisting of tubes that connect directly to the ion implanter and circulate water throughout the magnet to regulate its temperature. ISSUE: Are the electromagnet assemblies classified in heading 8505, HTSUS, as electromagnets, or in heading 8543, HTSUS, as “parts” of an ion implanter? LAW AND ANALYSIS: Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The Protest was timely filed within 180 days of liquidation for all involved entries. (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. 0401-07-100247 was 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 Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise. Specifically, Protestant alleges that the ruling is inconsistent with Headquarters Ruling Letter (“HQ”) 966211, dated April 24, 2003, HQ 966265, dated October 8, 2003, and HQ 962625, dated May 25, 1999, wherein CBP classified magnet assemblies as “parts” of the articles for which they were intended. Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). 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 2 through 6 may then be applied in order. The HTSUS headings under consideration are as follows: 8505 Electromagnets; permanent magnets and articles intended to become permanent magnets after magnetization; electromagnetic or permanent magnet chucks, clamps, and similar holding devices; electromagnetic couplings, clutches and brakes; electromagnetic lifting heads; parts thereof: Other, including parts: Other … 8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: 8543.90 Parts: Other: Other: 8543.90.84 Of ion implanters of subheading 8543.11; of flat panel displays other than for articles of heading 8528 Legal Note 2 to Section XVI, HTSUS, provides, in part: Subject to note 1 to this section, note 1 to chapter 84 and note 1 to chapter 85, parts of machines … are to be classified according to the following rules: (a) Parts which are goods included in any of the headings of chapters 84 and 85 (other than headings 8485 and 8548) are in all cases to be classified in their respective headings; (b) 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 are to be classified in heading 8517; * * * The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not 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). The ENs to Section XVI, HTSUS, state, in relevant part: The above rules do not apply to parts which in themselves constitute an article covered by a heading of this Section (other than headings 84.87 and 85.48); these are in all cases classified in their own appropriate heading even if specially designed to work as part of a specific machine. The ENs to heading 8505, HTSUS, state, in part: This heading covers: (1) Electro-magnets These are of various sizes and shapes according to the use for which they are intended. They consist specially of a coil wire around a core of soft iron, this core being either in one piece or laminated. The passing of electric current in the coil confers magnetic properties on the core, which can then be used either for attraction or repulsion. PARTS This heading does not cover: Electro-magnets … when presented with machines, apparatus, toys, games, etc., of which they are designed to form part (classified with those machines, apparatus, etc.) As a threshold matter, we note that, with certain exceptions (none of which apply in this case), the rates of duty applicable to goods are the rates in effect on the date of entry or withdrawal for consumption. See 19 CFR § 152.12 and 19 CFR § 141.69. Heading 8486, HTSUS, did not exist in 2006, the year the entries in question were filed. The heading came into existence with the implementation of the 2007 HTSUS, effective February 3, 2007. At the time the merchandise was entered, ion implanters and their parts were classified in heading 8543, HTSUS, as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in the chapter; parts thereof.” See NY 887680, dated August 3, 1993. Accordingly, for the purposes of this ruling, we will discuss heading 8543, HTSUS, as the heading for parts of ion implanters. Protestant argues that the electromagnet assemblies are classified in heading 8543, as parts of ion implanters.  It is counsel’s contention that the assemblies are not covered by heading 8505, HTSUS, the eo nomine provision for electromagnets, because they perform functions beyond those of an electromagnet, and because they are designed for use solely with an ion implanter. In support, he submits that in HQ 966211, HQ 966265, and HQ 962625, CBP classified similar magnet assemblies as parts of the devices for which they were designed. The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997) ("We conclude that these cases are not inconsistent and must be read together." At 779)). The first, articulated in United States v. Willoughby Camera Stores, 21 C.C.P.A. 322, 324 (C.C.PA. 1933) requires a determination of whether the imported item is "an integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article." The second line of cases, which evolved from United States v. Antonio Pompeo, 43 C.C.P.A. 9, 14 (C.C.P.A. 1955), hold that a device may be a part of an article if it is dedicated solely for use with another article. The electromagnet assemblies at issue satisfy both tests; (1) they are integral components of ion implanters without which, the machines could not function as such article, and (2) they are designed solely for use in ion implanters. Subject to certain exceptions not relevant here, “parts” of machines or apparatus of Chapter 84 or Chapter 85, HTSUS, are classified in accordance with Note 2 to Section XVI, HTSUS. At issue in this case is whether the electromagnet assemblies are classified pursuant to Note 2(a), as parts which are goods included in heading 8505, as electromagnets, or pursuant to Note 2(b), as other parts suitable for use solely or principally with ion implanters, in heading 8543, HTSUS. Heading 8505, HTSUS, provides eo nomine for “Electromagnets.” It is well established that an eo nomine provision includes all forms of the named article unless Congress indicates to the contrary. See National Advanced Systems v. United States, 26 F. 3d 1107, 1111 (Fed. Cir. 1994). The term “electromagnet” is not defined in the tariff. When a tariff term is not defined by the HTSUS or the legislative history, 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.'" Id. (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271 (Fed. Cir 1989). The Oxford English Dictionary (www.oed.com) defines the term “electromagnet” as “a magnet in which the magnetic force is produced by passing an electric current, spec. a piece of metal (typically of soft iron) enclosed within a wire in such a way that the arrangement acts as a magnet when the electric current is passed through the wire.” The McGraw-Hill Encyclopedia of Science and Technology (10th ed. 2005) defines the term “electromagnet,” in relevant part, as “[a] soft-iron core that is magnetized by passing a current through a coil of wire wound on the core. Electromagnets are used to lift heavy masses of material and to attract moveable magnetic parts of electric devices, such as solenoids, relays, and clutches.” At. 771. These definitions are consistent with the discussion of electromagnets in the ENs to heading 8505, included above. In Nidec Corporation v. United States, 861 F. Supp. 136 (Ct. Int’l Trade 1994) (hereinafter “Nidec”), aff'd, 68 F. 3d 1333 (Fed. Cir. 1995), the Court of International Trade (“CIT”) addressed the classification of electric rotary motors that were custom-designed for use in computers to rotate the disks in hard drives. The motors consisted of a shaft centering a precision spindle, a stator, and a rotor. The CIT concluded that, although designed specifically for use in computers, their “essence” was still that of a motor, not a spindle (the connector to the disks), because “[they] transmit the mechanical energy created by the rotor and the stator to the merchandise’s intended load – the disks.” Nidec, at 142. See EN 85.01 (“Electric motors are machines for transforming electrical energy into mechanical power.”). Accordingly, by application of GRI 1 and Note 2(a) to Section XVI, the CIT classified the merchandise in heading 8501, the eo nomine provision for electric motors. The Court of Appeals for the Federal Circuit affirmed the CIT’s judgment. Like the electric motors which were custom-designed for use in computers in Nidec, the electromagnet assemblies are specially designed for use in ion implanters. However, according to the information presented, the cooling mechanism merely contributes to the electromagnet’s function of generating a magnetic field. It does so by allowing the magnet to operate without overheating. Accordingly, by application of GRI 1 and Note 2(a) to Section XVI, HTSUS, the subject assemblies are classified in heading 8505, HTSUS, as electromagnets. Protestant claims that the subject assemblies are similar to the devices discussed in HQ 966265 (magnet assembly for a magnetic resonance imaging system), and HQ 962625 and HQ 966211 (cryostats containing electromagnets). We note, however, that in those rulings, CBP excluded the merchandise from heading 8505, HTSUS, because they were presented with the machines and apparatus for which they were designed to form a part. See EN 85.05(b). Conversely, in this case, the electromagnet assemblies are imported separately from the ion implanters. Therefore, these rulings are not dispositive in the classification of the subject merchandise. HOLDING: By application of GRI 1 and Note 2(a) to Section XVI, HTSUS, the electromagnet assemblies are classified in heading 8505, specifically in subheading 8505.90.80, HTSUS, which provides, in relevant part, for: “Electromagnets; … Other, including parts: Other.” The 2006 column one, general rate of duty is 1.3 percent ad valorem. Since the rate of duty under the classification indicated is the same as the liquidated rate, you are instructed to deny the protest in full. In accordance with the 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 in accordance with the decision must be accomplished prior to mailing of the decision. Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov. Sixty days from the date of the decision the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division