HQ 0954408 - IA 48/93; AC Motor Drives; EN's 85.04(II) and 85.37; HQ's 082654 and 087499; NY 850743; Items 682.60 and 685.90; 8537.10.00 - United States International Trade Commision Rulings

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HQ 954408
January 19, 1994

CLA-2 CO:R:C:M 954408 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8504.40.00

Area Director
U.S. Customs Service
Building #77, JFK Airport
Room: 228
Jamaica, NY 11430

RE: IA 48/93; AC Motor Drives; EN's 85.04(II) and 85.37; HQ's 082654 and 087499; NY 850743; Items 682.60 and 685.90; 8537.10.00

Dear Area Director:

This is in response to your memorandum of May 27, 1993 (CLA-2-K:C:A1 MB), relating to a request for internal advice initiated by a letter dated March 18, 1993, from Barnes, Richardson & Colburn, on behalf of Square-D Company, concerning the classification of AC motor drives under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of "Omegapak" AC motor drives (Class 8803 Type P). They are electrical devices designed to supply AC electricity corresponding to a smooth sinusoidal wave-form at variable voltages and frequencies. Such electricity can be used to accurately power an electrical motor at variable speeds while maintaining constant torque. The drive is comprised of a DC supply obtained from a bridge rectifier fed by three-phase AC input lines, a filter capacitor circuit, an inverter consisting of six power transistors, and a microprocessor. The rectifier converts AC electricity into DC electricity. The DC supply is then filtered in the capacitor circuit and passed through the inverter to produce regulated AC electricity.

The microprocessor provides frequency control through a feedback loop. Based upon signals from sensors, the microprocessor monitors the voltage, frequency, and current of the output, and makes adjustments to maintain the desired motor performance. This control is performed from a local keypad. It is our understanding that, in actual applications, control is often accomplished through the use of an external programmable logic controller (PLC). The PLC is a computer equipped with sensors to monitor the operations of the processes which are driven by the motor and an interface to provide feedback to the AC motor drive.

The AC motor drives are for use in industrial applications which require that a motor operate at a constant torque. Applications for these drives include conveyor machines, pumps, grinders, and saws.

The subheadings under consideration are as follows:

8537.10.00: [b]oards, panels (including numerical control panels), consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, other than switching apparatus of heading 8517: [f]or a voltage not exceeding 1,000 V.

The general, column one rate of duty for goods classifiable under this provision is 5.3 percent ad valorem.

8504.40.00: . . . static converters (including rectifiers) . . . : [s]tatic converters.

The general, column one rate of duty for goods classifiable under this provision is 3 percent ad valorem.

ISSUE:

Whether the AC motor drives are classifiable under subheading 8537.10.00, as control circuits, or under subheading 8504.40.00, HTSUS, as static converters.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 85.04(II) (p. 1338) states:

(II) ELECTRICAL STATIC CONVERTERS

The apparatus of this group are used to convert electrical energy in order to adapt it for further use. They incorporate converting elements (e.g., valves) of different types. They may also incorporate various auxiliary devices (e.g., transformers, induction coils, resistors, command regulators, etc.). Their operation is based on the principle that the converting elements act alternately as conductors and non-conductors.

The fact that these apparatus often incorporate auxiliary circuits to regulate the voltage of the emerging current does not affect their classification in this group, nor does the fact that they are sometimes referred to as voltage or current regulators.

This group includes:

(A) Rectifiers by which alternating current (single or polyphase) is converted to direct current, generally accompanied by a voltage change.

(B) Inverters by which direct current is converted to alternating current.

It is our position that, based upon the description given in Explanatory Note 85.04(II), the subject AC motor drive, which includes a rectifier and an inverter, is classifiable as a static converter. The purpose of the merchandise is to convert electrical energy in order to adapt it for further use. The AC motor drive does possess a microprocessor which regulates the voltage of the emerging current. However, as Explanatory Note 85.04(II) makes clear, the incorporation of auxiliary circuits to regulate voltage does not preclude the classification of the merchandise under heading 8504, HTSUS. The fact that, in actual applications, the voltage regulation function can be handled by exterior controllers lends credence to this position.

In HQ 082654, dated July 28, 1989, a speed control voltage regulator for a sawing machine, consisting of various components including a printed circuit board assembly and a rectifier, was held to be classifiable under item 682.60, Tariff Schedules of the United States (TSUS), which, in part, provides for: " . . . converters (rotary or static) . . . rectifiers and rectifying apparatus . . . " As the HTSUS was enacted on January 1, 1989, for HTSUS purposes, the speed control was also held to be classifiable under subheading 8504.40.00, HTSUS. As the merchandise in HQ 082654 possessed a printed circuit assembly, the other provision at issue was the predecessor to heading 8537, HTSUS, item 685.90, TSUS, which, in part, provides for: "[e]lectrical switches, relays, fuses . . . and other electrical apparatus for making or breaking electrical circuits, for the protection of electrical circuits, or for making connections to or in electrical circuits; switchboards and control panels . . . " In HQ 082654, it was held that the speed control was not "more than" a rectifier or rectifying apparatus, and could not therefore be classifiable under item 685.90, TSUS, even though it possessed a printed circuit board assembly.

Decisions under the TSUS are not dispositive in interpreting the HTSUS. However, on a case-by-case basis they should be considered instructive in interpreting the HTSUS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. H. Conf. Rep. No. 576, p.550.

It is our position that the holding in HQ 082654 is direct precedent in the classification of the subject merchandise under the HTSUS, in that the nomenclature interpreted in HQ 082654 has remained unchanged and no dissimilar interpretation is required by the text of the HTSUS. Just as in HQ 082654 where it was held that the speed control, containing a printed circuit board assembly, was not "more than" a rectifier or rectifying apparatus, the subject AC motor drive is classifiable as a static converter even with the presence of the microprocessor, as directed by Explanatory Note 85.04(II). In fact, the speed control in HQ 082654 was held to be classifiable under subheading 8504.40.00, HTSUS.

It is claimed that the AC motor drive is classifiable under subheading 8537.10.00, HTSUS, because it operates as a control circuit. In part, Explanatory Note 85.37 (p. 1391) states that:

[t]hese consist of an assembly of apparatus of the kind referred to in the two preceding headings (e.g., switches and fuses) on a board, panel, console, etc., or mounted in a cabinet, desk, etc. They usually also incorporate meters, and sometimes also subsidiary apparatus such as transformers, valves, voltage regulators, rheostats or luminous circuit diagrams.

The goods of this heading vary from small switchboards with only a few switches, fuses, etc. (e.g., for lighting installations) to complex control panels for machine-tools, rolling mills, power stations, radio stations, etc., including assemblies of several of the articles cited in the text of this heading.

The heading also covers:

(3) "Programmable controllers" which are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines.

It is our position that the AC motor drive is not classifiable under subheading 8537.10.00, HTSUS, and is not described under Explanatory Note 85.37. The merchandise does possess a microprocessor, however, for the reasons stated above, the entire AC motor drive is classifiable under subheading 8504.40.00, HTSUS.

It is claimed that NY 850743, dated April 5, 1993, and HQ 087499, dated October 9, 1990, are dispositive as to the classification of the merchandise under subheading 8537.10.00, HTSUS. However, based upon an analysis of both rulings, neither NY 850743, which involved the classification of a servo motor and transistor drive, nor HQ 087499, which involved the classification of Tachyprocessor speed control unit, deal with merchandise which are in the same class or kind of articles as the subject AC motor drive. This determination is made even stronger in view of HQ 082654, which is directly on point concerning the classification of the subject merchandise under the HTSUS.

HOLDING:

The AC motor drives are classifiable under subheading 8504.40.00, HTSUS, as static converters.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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