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HQ 089242


August 13, 1991

CLA-2 CO:R:C:M 089242 DFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 8419.89.50; 8421.29.00; 9817.00.50

Mr. Clayton F. Davis
Director,
Division of Regulations
State House Station 28
Augusta, Maine 04333

RE: Evaporator, Sap; Separator, reverse osmosis

Dear Mr. Davis;

In a letter dated April 18, 1991, you inquired as to the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), of a reverse osmosis separator and a sap evaporator.

FACTS:

These two articles are used in the removal of excess water from maple sap as part of the processing of the maple sap into maple syrup. The reverse osmosis separator removes water by a filtering process in which a membrane permeable by water retains the more viscous sap. Further removal of excess water is effected by the application of heat in the evaporator.

ISSUE:

Whether the reverse osmosis separator and the sap evaporator are entitled to duty free treatment under subheading 9817.00.50, HTSUSA, as machinery, equipment and implements to be used for agricultural or horticultural purposes.

LAW AND ANALYSIS:

You assert that this equipment was entitled to duty-free treatment under the Tariff Schedules of the United States (TSUS), as agricultural implements not specially provided for. However, when the HTSUSA became effective on January 1, 1989, this type of machinery was classified as filtering machinery. You ask that a more specific ruling be issued identifying the use of such machinery and allowing free entry when it is clearly used for agricultural purposes.

Under the prior schedules, reverse osmosis separators were classified in item 661.95, TSUS, as filtering and purifying machinery and apparatus for liquids or gases with duty at the rate of 3.9 percent ad valorem. Classification under item 666.00, TSUS, with duty free entry was precluded because the only part of that item's description they could possibly fit viz., "agricultural and horticultural implements not specially provided for" by its very language excluded them.

Sap evaporators which concentrated the sap by heat were classified under item 666.20, TSUS, as machinery for use in the manufacture of sugar. It should be noted that they would have been classified in a dutiable provision, Item 661.68, TSUS, which provided for industrial machinery, plant . . . for the treatment of materials by a process involving a change of temperature but for the exclusion in that provision of sugar machinery.

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided such headings or notes do not otherwise require, according to [the remaining GRI's taken in order]." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes.

Machinery for sugar manufacture is entitled to duty-free treatment under subheading 8438.30.00, HTSUSA. The Explanatory Notes to the HTSUSA (EN), although not dispositive, should be looked to for the proper interpretation of the HTSUSA. See 54 FR 35128 (August 23, 1989). The EN to heading 84.38 at page 1224
excludes from that heading juice concentration plant (8419),vacuum boiling or crystallizing pans and other plant of heading 84.19 and filter presses (8421). Heading 8419, HTSUSA, unlike item 661.68, TSUS, does not exclude sugar machinery from classification thereunder. The separator and evaporator cannot be classified under subheading 8436.80.00, HTSUSA, as other agricultural machinery, because they are more specifically provided for under headings 8419 and 8421, HTSUSA. We note that EN (b) to heading 84.36 at page 1218 states in pertinent part that "[t]he heading does not cover: [m]achinery and plant operating by processes involving a change of temperature (heading 8419)." Although heading 8421 is not specifically mentioned as being excluded, the EN are not exhaustive. Based on the foregoing, it is our position that the separator is normally classifiable under subheading 8421.29.00, HTSUSA, and the evaporator is classifiable under subheading 8419.89.50, HTSUSA.

The issue then to be resolved is whether the separator and the evaporator are eligible, upon certification of actual use, for duty free entry under subheading 9817.00.50, HTSUSA. In Headquarters Ruling Letter 073168 dated June 6, 1984, Customs held that these items were not eligible for duty-free treatment under item 870.40, TSUS, the predecessor provision to subheading 9817.00.50, HTSUSA. It remains our opinion that the processing of maple sap into maple syrup, first by the reverse osmosis separator and subsequently, by the evaporator, though performed on a farm, is not an agricultural or horticultural activity. Unlike cleaning, sorting and grading of agricultural products, the processing of sap into maple syrup is more than a simple preparation of the product for market. It changes the agricultural product, maple sap, to maple syrup. Consequently, it is our opinion that the separator and the evaporator do not qualify for duty-free treatment under subheading 9817.00.50, HTSUSA.

HOLDING:

The reverse osmosis separator and the sap evaporator do not qualify for duty-free treatment under subheading 9817.00.50, HTSUSA, as machinery, equipment and implements to be used for agricultural or horticultural purposes.

The reverse osmosis separator is classifiable under subheading 8421.29.00, HTSUSA, as filtering or purifying machinery and apparatus for liquids, other, with duty at the rate of 3.9 percent ad valorem.

The sap evaporator is classifiable under subheading 8419.89.50, HTSUSA, as machinery, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature such as heating, evaporating, other, other. The applicable rate of duty for this provision is 4.2 percent ad valorem.

Sincerely,

John Durant, Director

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