Tariff classification of Roche Diagnostics Operations, Inc. Modular Pre-Analytic System; Application for Further Review of Protest Number 3901-08-101741.

HQ H056797 October 7, 2010 CLA-2 OT:RR:CTF:TCM H056797 RES CATEGORY: Classification TARIFF NO.: 8479.89.98 Port Director Chicago Service Port U.S. Customs and Border Protection 9915 Bryn Mawr Rosemount, IL 60018 RE: Tariff classification of Roche Diagnostics Operations, Inc. Modular Pre-Analytic System; Application for Further Review of Protest Number 3901-08-101741. Dear Port Director: This letter is in reply to your memorandum dated May 19, 2009, regarding the Application for Further Review (“AFR”) of Protest Number 3901-08-101741 filed on behalf of Roche Diagnostics Operations, Inc. (“Roche”). The protest is against the U.S. Customs and Border Protection’s (“CBP”) classification of a Modular Pre-Analytic System (“MPA system”) for use in processing biological fluid samples under the 2007 Harmonized Tariff Schedule of the United States (“HTSUS”). We have also noted Roche’s memorandum of July 15, 2009, wherein Protestant withdrew certain entries from consideration under protest. Further, we have considered arguments Roche made in supplemental submissions dated October 6, 2009, and October 1, 2010, and in a meeting between Roche and members of my staff on September 29, 2010. FACTS: The MPA system at issue here is composed of up to twelve machines (also referred to as modules), depending on the configuration, of which each perform an individual function that contributes to the overall function of the MPA system—the preparation of clinical biological samples for analysis by a separate chemistry analyzer machine. These machines include the: Input Buffer Module; Automatic Centrifuge Module; Destopper/decapper Module; Online Aliquoter Module; Barcode Labeler module; Restopper/recapper Module; Flexible Sample Sorter Module; Output Buffer Module; Core Transport Lines; Connector Lines; Turntable Lines; and Sample Buffer Units. After importation, the machines/ modules are mounted on a core base at the end user’s site. The core base is a framework and appears to be comprised of parts of the Connector and Transport Lines and is assembled depending on the individual configuration of the end user’s room layout. The backsides of the modules are placed against the framework and there is a protruding metal plate from the framework that fits underneath the modules. The modules are bolted onto this protruding metal plate to keep the modules firmly in place on the core base. The modules are not imported bolted onto the core base but are imported individually for convenience of shipping and transportation. The MPA system accepts test tubes of biological fluid samples (“parent samples”), such as human blood, plasma, or urine. These parent samples are transported between the modules by the transport lines. The parent sample tubes, which have a barcode on them for identification purposes, are loaded into the MPA system by the Input Buffer Module (“IBM-P”), then go to the Automatic Centrifuge Module (“ACU”) where the fluid samples in the tubes are processed. Next, the Destopper/decapper Module (“DSP”), receives the tubes, removes the sample tube’s stopper and then returns the uncapped tube to the transport line where it goes to the Online Aliquoter Module (“Aliquoter”). The Aliquoter uses bellows to aspirate and dispense a smaller defined volume of liquid from the parent sample tube into separate tubes. This smaller defined volume of liquid is called an “aliquot”. The Barcode Labeler Module (“BCL”) receives the parent sample and the aliquot samples (also referred to as “child samples”), reads the parent sample barcode, prints barcode labels, and places them on the aliquot samples that identify them with the parent samples. After the BCL, the Restopper/recapper Module (“RSP”) receives the parent and aliquot samples and recaps them as necessary. The samples then go to the Flexible Sample Sorter Module (“FSS”) where it sorts samples that require specific sorting. Finally, the parent and aliquot samples move to the Output Buffer Module (“OBM-P’), which stores the samples, staging them for subsequent analysis or actions assigned by the user. The Core Transport Lines (“CLT”) is a conveyor belt system that transports the samples in racks to the input position of the aforementioned modules. The Connector Lines (“CL”) are linear segments of transport conveyors in which a conveyor belt system is used. CLs transport racks of samples between the MPA system and a chemistry analysis system and are ordered separately from the MPA systems based on the layout of a laboratory. The Turntable Lines (“TUL”) consist of a transport line and a turntable. The transport line moves racks of samples into or out of the turntable while the turntable rotates and aligns itself to one of the connected output lines. The Sample Buffer Units (“SBU”) connects to a specific chemistry analyzer. The SBU is comprised of a buffer for holding sample racks and a section of the CL. It is used to transport sample racks to a chemistry analyzer and to act as a buffer to temporarily store sample racks if the analyzer is not immediately available to process the samples. The CLT, CL, TUL, and SBU are ordered separately from a complete MPA system based upon an individual laboratory’s layout and configuration needs. The instant AFR involves three entries. The merchandise in the first entry was an MPA system that was entered on August 5, 2007, under heading 8479.50, HTSUS, as “[m]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:” and was liquidated on June 27, 2008, under the same heading. The merchandise in the second entry was an MPA system that was entered on February 21, 2008, under heading 9027.90, HTSUS, as “[i]nstruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus) . . . parts and accessories thereof: [m]icrotomes; parts and accessories” and was liquidated on July 18, 2008, under subheading 8479.90, HTSUS. The merchandise in the third entry was an MPA system and a TUL that were entered on March 8, 2008, under heading 8479.90, HTSUS, and heading 8479.50, HTSUS, respectively. These articles were liquidated on July 18, 2008, under the same headings. Roche asserts that the proper classification for a MPA system that consists of a configuration of the aforementioned modules and machines is under heading 8422, HTSUS, as “. . . machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers . . . .” ISSUE: Whether the subject MPA systems are classified under heading 8422, HTSUS, as machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers or under heading 8479, HTSUS, as machines and mechanical appliances having individual functions, not specified or included elsewhere in Chapter 84? LAW AND ANALYSIS: Initially, CBP notes that the protest was timely filed on November 25, 2008, which is within 180 days after the earliest liquidation date of the three entries above which was June 27, 2008. See 19 U.S.C. § 1514(c)(3) (2006). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. § 1514(a)(2). Further Review of Protest No. 3901-08-101741 is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed 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 Court of International Trade. 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 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 GRI 2 through 6 may be applied in order. 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 following HTSUS provisions are under consideration: 8422 Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof: 8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: The article at issue in the instant AFR is called an MPA system that is comprised of up to twelve different machines, each of which contributes a different function to the MPA system’s overall function of preparing a clinical biological fluid sample for analysis in a chemistry analyzer. Note 3 to Section XVI provides that: Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. The ENs to Section XVI, which provides that: (VI) Multi-Function Machines and Composite Machines * * * * * Composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI, are also classified according to the principal function of the composite machine. * * * * * For the purposes of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other, or mounted on a common base or frame or in a common housing. Assemblies of machines should not be taken to be fitted together to form a whole unless the machines are designed to be permanently attached either to each other or to a common base, frame, housing, etc. This excludes assemblies which are of a temporary nature or are not normally built as a composite machine. * * * * * The machines that make up the MPA system are bolted, post importation, onto a common framework called a core base. The mounting of the individual machines onto such a common frame indicates they are fitted together to form a whole for purposes of being a composite machine pursuant to Note 3 of Section XVI. Thus, according to Note 3, to determine under which heading to properly classify a MPA system we must determine what the principal function of the article is and then ascertain whether any of the components perform this principal function. The classification of the MPA system is then based on the classification of the machine that performs the principal function. If no component or machine of a composite machine is determined to perform the principal function, then the article is classified based on the application of GRI 3(c). As discussed supra, the principal function of the MPA system is to accept clinical parent samples of biological fluids in test tubes and then output smaller volume-sized samples (“child samples”) that are then sent to a chemistry analyzer for analysis. Roche asserts that the module that performs the principal function of the MPA system is the Online Aliquoter Module (“Aliquoter”), which aspirates and dispenses a small fixed volume of the parent clinical sample of fluid into a smaller volume that is usable by a chemistry analyzer. CBP agrees with this assertion. Therefore, the classification of a MPA system is based upon the classification of the Aliquoter. Roche argues that the Aliquoter is classified specifically under subheading 8422.30, HTSUS, as “. . . machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; machinery for aerating beverages,” because the Aliquoter is filling a container, in this case a small test tube, with a small fixed volume of biological fluid. The EN for heading 8422 describes the machines of this heading: This heading covers . . . machines of different types designed . . . for filling or closing such containers (including machines for aerating beverages) and, generally, for packing (including heat-shrink wrapping) goods for sale, transport or storage. These include: * * * * * (2) Machines for filling containers (e.g., casks, barrels, cans, bottles, jars, tubes, ampoules, boxes, packets or bags), frequently equipped with subsidiary automatic volume or weight control and with devices for closing the containers. * * * * * (4) Wrapping or cartoning machines, including those with provision for forming, printing, tying, stapling, taping, glueing, closing or otherwise finishing the packing. . . . * * * * * Machines which in addition to packing, wrapping, etc., also perform other operations remain classified in the heading provided the additional operations are incidental to the packing, etc. Thus machines which pack or wrap goods into the forms or presentations, in which they are normally distributed and sold in commerce, are classified in this heading, whether or not the machines also contain devices for weighing or measuring. Similarly the heading includes machines incorporating devices which, as a secondary function, cut, mould or press previously prepared products into purely presentational forms without affecting their essential character (e.g., machines for moulding butter or margarine into blocks, etc., and wrapping them). The heading does not, however, cover machines whose primary function is not to pack, wrap, etc., but to manufacture raw or semi-finished materials into finished products (e.g., combined cigarette making and packaging machines). * * * * * The EN to heading 8479 states that: This heading is restricted to machinery having individual functions, which: Is not excluded from this Chapter by the operation of any Section or Chapter Note. And Is not covered more specifically by a heading in any other Chapter of the nomenclature. And Cannot be classified in any other particular heading of this Chapter since: No other heading covers it by reference to its method of functioning, description or type. And No other heading covers it by reference to its use or to the industry in which it is employed. Or It could fall equally well into two (or more) other such headings (general purpose machines) The function that the Aliquoter performs is not simply filling a container. By definition, an “aliquot” is a portion, part, or sample of a chemical, medicine, etc. See Webster’s New World College Dictionary 36 (4th ed. 2007). The Aliquoter’s overall function is to create fractional fluid samples of a discrete amount of biological fluid that is derived from a larger parent sample. This is accomplished in two steps: (1) aspiration of a pre-determined fixed fluid volume from a parent sample and (2) dispensation of that fluid into a separate test tube, vial, assay tray, well plate, etc. In essence, the Aliquoter’s function is the transfer of precise volumes of fluid. Roche’s argument that the Aliquoter simply performs the function of filling a container does not accurately capture the true function of the Aliquoter (or other machines, such as pipetting systems that function exactly like the Aliquoter). However, even assuming, arguendo, that the Aliquoter, by dispensing a fluid into a smaller test tube (or vial), is technically filling that test tube with a fluid, this does not qualify as the “filling of a container” function that would fall under heading 8422. The function of the Aliquoter in a MPA system is not in the same context in which the function “filling a container” occurs for heading 8422 purposes. To discern what this context is, we look to the terms that EN 84.22 uses. There are references to “goods” in the EN 84.22 opening paragraph which states “. . . packing (including heat-shrink wrapping) goods for sale, transport or storage” and in the last paragraph which states “[t]hus machines which pack or wrap goods into the forms or presentations, in which they are normally distributed and sold in commerce, are classified in this heading . . . .” “Goods” is not defined in the HTSUS. A tariff term that is not defined in the HTSUS or in the ENs is construed in accordance with its common and commercial meaning. Nippon Kogasku (USA), Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982). The common definition of “goods” is that of merchandise or wares, which are things bought and sold in commerce. See Webster’s New World College Dictionary 36 (4th ed. 2007). Thus, EN 84.22 suggests that the function of “filling a container” context in heading 8422, HTSUS, is limited to machines that are actually involved in the packaging and packing process of merchandise that has a nexus with commerce—i.e., merchandise or things that are bought, sold, shipped, and/or distributed in commerce. For example, in other rulings where merchandise was classified under heading 8422, HTSUS, based on their function of filling a container, the item being filled into a container was some sort of product that was bought, sold, shipped, and/or distributed in commerce. In New York Ruling (“NY”) 879640, dated November 17, 1992, the machine at issue formed plastic pouches and then filled them with milk or other liquids and in NY N012291, dated June 19, 2007, the machine at issue made plastic bottles from plastic bottle blanks, filled the bottles with a liquid, and then capped the bottles. In both of these rulings, the machines were classified under subheading 8422.30, HTSUS, as machinery for filling, closing, sealing, capsuling or labeling bottles, cans or similar containers. These machines were filling their respective containers with products that were sold and distributed into commerce. In a ruling cited by Roche in its memorandum, NY K86998, dated June 17, 2004, the machines there automatically filled and closed a syringe or vial with a specific volume of liquid. These machines were classified under subheading 8422.30, HTSUS. As with the rulings discussed above, these machines in NY K86998 filled containers with a product, in this case vaccines, which were distributed and sold into commerce. In addition, machines in other rulings that were performing some other function listed in heading 8422 besides filling a container and were classified under heading 8422, were all involved in the context of packaging and packing of a product that was bought, sold, shipped, and/or distributed in commerce. See Headquarters Ruling (“HQ”) W968275, dated January 26, 2010 (classifying machines that labeled and sealed pre-filled syringes that contained pharmaceutical substances which were sold and distributed in commerce under subheading 8422.30.91); HQ 966109, dated November, 24, 2003 (classifying a machine that coiled finished copper wire into cardboard drums for