Wednesday, January 13, 2016

Ruling of the Week 2016.1: Ice Cream Makers

I am a man of few hobbies. One of the ways I entertain myself is by making ice cream. Since I make it, I must eat it as well. That is probably not the best outcome, but there it is.

It occurred to me that I do not know how to classify an ice cream  maker under the Harmonized Tariff Schedule of the United States. Luckily, I could find the answer.

In NY N269539 (Nov. 6, 2015), Conair, the parent to the Cuisinart brand of ice cream makers, asked U.S. Customs and Border Protection to classify a machine. I have not been able to find a picture of the specific machine, which is described as model number WCIC20, a two-quart machine with a compressor. That makes it a self-cooling unit and is a big advance over the Cuisinart unit I use, which requires that the tub be frozen prior to starting the process. This machine operates in three modes to mix, freeze, and keep the ice cream cool.

Since this is the first  Ruling of the Week for 2016, let's walk through it carefully.

First, ask yourself where this device might be classified. We know it contains a motor and a compressor, either of those is a possible description. It is also a freezer or at least "freezing equipment." In cooling mode, it seems to act more as a refrigerator than a freezer (though I would never leave my ice cream in a refrigerator for long).

A motor would be classified in Heading 8501 and a compressor in Heading 8414. A freezer is in Heading 8418. How do we arrive at the right classification?

First, always start with the heading language, do not go below the headings until you have eliminated the incorrect alternatives. The way to eliminate headings is to apply the General Rules of Interpretation, in order, until a correct classification emerges.

General Rule of Interpretation 1 tells us that "classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ." Before we go any further, we need to check those section and chapter notes.

The notes to Section XVI (which includes Chapters 84 and 85) tell us what is not included in that Section, how to classify parts, and other information that is not particularly helpful. Until, that is, we get to Section XVI, Note 4, which states that:

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.

That tells us something important. Our ice cream machine consists of multiple components, including a motor and a compressor, plus various electronics and other parts. The components are intended to do a clearly defined function: make delicious and fattening ice cream. Consequently, if there is a machine describing that function in Chapter 84 or Chapter 85, it should be classified as that machine.

Next, we scan the Notes to Chapter 84 and find nothing that excludes our ice cream machine. Looking down the headings (and looking ONLY at the headings), we quickly see that it is not a nuclear reactor, not a steam boiler, not an internal combustion engine, etc. It could be a gas compressor of 8414, but we have already excluded that by virtue of Note 4 to Section XVI. Finally, we arrive at 8418, which covers "Refrigerators, freezers and other refrigerating or freezing equipment, electric or other . . . ." Although the tariff does not say "Ice Cream Machines," this is a pretty good description of the product.

We are still not done. Is there a better place to put this device? Scanning through Chapters 84, we run into Heading 8419, which covers:

Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes . . . .

What about that? This machine certainly treats materials by cooling. But, our machine is for household use and this heading excludes machinery "of a kind used for domestic purposes." That means it cannot apply to our device. I don't see anything else in the tariff that is a good candidate. Therefore, we can conclude that 8418 is the correct heading. It is very important to understand that we did this entirely through GRI 1, without jumping to essential character, relative specificity, or other classification rules. Generally speaking, if you are beyond Rule 1, you should assume you are wrong until proven otherwise.

We are not done. We must now determine the six-digit subheading. Here, we start another process of elimination. This is not a combined refrigerator-freezer with separate doors. It is not just a refrigerator because it also freezes. Eventually, we end up at 8418.69 as an "other" device and at 8418.69.0180 as the correct tariff classification.

We can confirm that it is correct, or at least that Customs and Border Protection agrees, by reading the ruling.

Now, to prove that I make ice cream, I give you sweet corn ice cream with blackberry sauce and pound cake. You're welcome.


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