HQ 961196 - Absor ption Liquid Chiller/Heater; Liquid Chilling System, Ap paratus for Producing Chilled Water and Hot Water for Space Heating and Cooling in Commercial Buildings; Oil or Gas Fired Apparatus Principally Used for Producing Chilled Water; Refrigerating Equipment, Heading 8418, Parts of Air Conditioning Machines, Heading 8415; Section XVI, Note 2; NY 825406, NY 852437, HQ 952361, HQ 962279 - United States International Trade Commision Rulings

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HQ 961196

JANUARY 8, 1999

CLA-2 RR:CR:GC 961196 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8418.69.00

Mr. William H. Steere
Carrier Corporation
P.O. Box 4800
Syracuse, NY 13221

RE: Absor ption Liquid Chiller/Heater; Liquid Chilling System, Ap paratus for Producing Chilled Water and Hot Water for Space Heating and Cooling in Commercial Buildings; Oil or Gas Fired Apparatus Principally Used for Producing Chilled Water; Refrigerating Equipment, Heading 8418, Parts of Air Conditioning Machines, Heading 8415; Section XVI, Note 2; NY 825406, NY 852437, HQ 952361, HQ 962279

Dear Mr. Steere:

In a letter to Customs National Commodity Specialist Division, New York, dated November 14, 1997, you inquire as to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of the Carrier 16DF070 Direct-Fired Absorption Liquid Chiller/Heater.

You cited several administrative rulings in which similar merchandise was classified in different provisions. As we have informed you, it was necessary to resolve this apparent conflict. This process has now been completed and we are in a position to address your ruling request.

FACTS:

Submitted literature describes the Carrier 16DF070 absorption liquid chiller/heater as a natural gas-fired apparatus used to produce chilled water and hot water for space cooling and heating applications in commercial buildings. Cooling-to-heating changeover is accomplished by activating an internal control valve. The apparatus consists essentially of one low-stage and one high-stage generator, a burner assembly, condenser, evaporator, absorption unit, heat exchanger, and control center.

It has no fan. The literature and other evidence of record leads us to conclude that the principal purpose of a complete absorption chiller/heater is to produce chilled water. The operation involves heating a solution of water and lithium bromide in which the lithium bromide vaporizes and the water remains behind. A series of condensing and evaporating steps progressively removes more and more of the heat from the water. Chilled water produced by this apparatus is pumped directly to the building's cooling/heating circulation system. Fans or blowers in the building's master system, or in individual room units, distribute the coolness. Humidity is added by condensation as hot air passes over cooler fins in the room units. Available information is that a complete liquid chiller of the type in issue can produce chilled water as low as 43 degrees F.

You contend that the liquid chiller in issue is apparatus of heading 8418 because it refrigerates, that is, makes something cold or chilly. As such, it is within the common meaning of the term refrigerating for tariff purposes. Moreover, several of the devices enumerated statistically under subheading 8418.69.00, HTSUS, do not operate in a continuous cycle of operations, of low temperatures (in the region of 0 degrees C or less), previously considered necessary for refrigerating and freezing applications, so that true refrigerating equipment need not necessarily operate in that temperature range.

The provisions under consideration are as follows:

8415 Air conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity...; parts thereof:

8415.81.00 Incorporating a refrigerating unit and a valve for reversal of the cooling/heat cycle

8415.82.00 Other, incorporating a refrigerating unit

8415.90 Parts:

8415.90.80 Other

8418 ...other refrigerating or freezing equipment, electric or other;...parts thereof:

8418.69.00 Other

ISSUE:

Whether an absorption liquid chiller/heater, as described, is refrigeration equipment of heading 8418.

LAW AND ANALYSIS:

Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. Section XVI, Note 2, governs the classification of goods that are identifiable as parts of machines or apparatus of Chapter 84 or Chapter 85. Parts which are goods included in any of the headings of Chapters 84 and 85 are in all cases to be classified in their respective headings. See Note 2(a). Other parts, if suitable for use solely or principally with a particular machine, or with a number of machines of the same heading, are to be classified with the machines of that kind. See Note 2(b).

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

In one of the rulings you cite, HQ 952808, dated February 16, 1993, heading HTS 8418, other refrigerating or freezing equipment, was essentially eliminated from consideration, based on certain ENs for that heading. Those notes stated that the equipment of heading 8418 in the main produces low temperatures (in the region of 0 degrees C or less) at the active cooling element. Information available to us at the time indicated that
absorption liquid chillers using lithium bromide as the absorbent produce water temperatures as low as 43 degrees F (8 degrees C), a temperature which the industry does not recognize as required for refrigeration.

However, we note the term refrigeration is not defined by any legal note in the HTSUS and the temperature range stated in the heading 8418 ENs i.e., in the region of 0 degrees C or less, applies to the equipment "in the main." We note as well that the 8418 ENs describe Absorption Type Refrigerators on p. 1268, and on p. 1269 list as apparatus of the foregoing kind refrigerated water or beverage fountains and beer coolers. Neither of these apparatus operates in a continuous cycle of operation in the region of 0 degrees C or less. Similarly, in HQ 952361, dated August 18, 1992, temperature-controlled wine storage units were classified in an appropriate subheading of heading 8418. Thus, the referenced ENs describe the absorption liquid chillers in issue, but do not necessarily preclude classification in heading 8418 of such apparatus, even if they do not operate in a continuous cycle of operation in the region of 0 degrees C or less. We note that HQ 952808 was revoked by HQ 962279, dated December 23, 1998, which classified an absorption liquid chiller as other refrigerating equipment, in subheading 8418.69.00, HTSUS. See also NY 825406, dated January 13, 1988, and NY 852437, dated May 21, 1990.

Where not defined in an HTSUS section or chapter note or in an appropriate EN, tariff terms are to be construed according to their common and commercial meanings, which are presumed to be the same. How a term is used within an industry has been regarded as a particularly authoritative source of its common meaning. The 1998 ASHRAE handbook REFRIGERATION, published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc., states in the introductory language of Chapter 43 under LIQUID CHILLING SYSTEMS, that the most frequent application for liquid chilling systems is for air conditioning systems, although both brine cooling for low-temperature refrigeration and chilling of fluids in industrial processes are also common. This source also states that in the refrigeration cycle of modern water-lithium bromide chillers, chilled water enters the cooler at 54 degrees F, for example, and leaves at 44 degrees F. From this, we can reasonably conclude that apparatus which produces chilled water at 44 degrees F is regarded as refrigerating equipment for purposes of heading 8418.

HQ 952808 was revoked primarily because of its erroneous conclusions with respect to heading 8418. Nevertheless, while an absorption chiller/heater, imported without fans, is not an incomplete or unfinished air conditioning machine of heading 8415, it is still a part under that heading. But, because the chiller/heater is also a good included in heading 8418, it must be classified in that heading under the authority of Section XVI, Note 2(a).

HOLDING:

Under the authority of GRI 1, HTSUS, the Carrier 16DF070 direct-fired, absorption liquid chiller/heater is provided for in heading 8418. It is classifiable in subheading 8418.69.00, HTSUS.

Sincerely,

John Durant, Director
Commercial Rulings Division

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