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HQ 967102




September 27, 2004

CLA-2 RR:CR:GC 967102 NSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 8411.82.8000

Mr. Joseph P. Brick
KPMG LLP
Chartered Accountants
Suite 3300 Commerce Court West
PO Box 31 Stn Commerce Court
Toronto ON M5L 1B2

RE: NY H81222 revoked; aero-derivative gas turbines

Dear Mr. Brick:

This is in response to an internal request for reconsideration of NY H81222, dated May 31, 2001, on the classification of two gas turbines under the Harmonized Tariff Schedule of the United States (HTSUS). The merchandise was classified under subheading 8411.12.80, HTSUS. However, in researching a related issue, Customs and Border Protection (CBP) determined that NY H81222 should be revoked. This ruling letter sets forth the correct classification.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of NY H81222, as described below, was published in the Customs Bulletin on July 21, 2004. No comments were received in response to the notice.

FACTS:

The merchandise at issue are the Rolls-Royce RB-211 and Rolls-Royce Avon gas turbines. Both engines, although originally designed as turbojets to provide motive power for aircraft, have been adapted for industrial use, thereby putting them in a class of engine referred to as “aero-derivative,” a term of art indicative of their original design purpose.

In the case of the Rolls-Royce RB-211, the bypass fan and fan turbines have been removed, with the resulting product being a twin spool gas generator capable of generating power between 25,200 kilowatts and 44,500 kilowatts, depending on what type of use the engine is put to. Primarily, it is used for a variety of power generation and mechanical drive applications. The Rolls-Royce Avon has been reconfigured and matched with either the RT48 or RT56 power turbine, making it well suited for a variety of power generation and mechanical drive applications. Depending on what type of use the Rolls-Royce Avon is put to, it is capable of generating power between 14,672 kilowatts and 21,000 kilowatts. Because of their adapted designs, these aero-derivative gas turbines are now incapable of providing motive power for aircraft.

In NY H81222, CBP classified both gas turbines under subheading 8411.12.80, HTSUS, which provides for “Turbojets, turbopropellers and other gas turbines and parts thereof: Turbojets: Of a thrust exceeding 25 kN: Other.”

ISSUE:

Whether the Rolls-Royce RB-211 and Rolls-Royce Avon gas turbines are turbojets of subheading 8411.12.80, HTSUS, or other gas turbines of subheading 8411.82.80, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). 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 GRIs.

The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. The ENs, although neither dispositive or legally binding, facilitate classification by providing a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

The HTSUS provisions under consideration are as follows:

Turbojets, turbopropellers and other gas turbines, and parts thereof:

Turbojets:

Of a thrust exceeding 25kN:

Other

Other gas turbines:

Of a power exceeding 5,000 kW:

Other

In NY H81222, CBP held that the Rolls-Royce RB-211 and Rolls-Royce Avon gas turbines at issue therein, recognized aircraft engines having been adapted for industrial use (aero-derivative), were classified as turbojets under subheading 8411.12.80, HTSUS. Having been adapted for industrial use, these engines are no longer capable of providing motive power to an aircraft. However, CBP classified them as turbojets, the classification of these engines in an unaltered state, in keeping with the position that an aero-derivative gas turbine is essentially still a turbojet. Heading 8411, HTSUS, covers three types of engines: Turbojets; Turbopropellers; and Other Gas Turbines. EN 84.11 parallels the heading listings for these three engine types and states in pertinent part as follows:

This heading covers turbo-jets, turbo-propellers and other gas turbines.

Turbo-Jets

A turbo-jet consists of a compressor, a combustion system, a turbine and a nozzle, which is a convergent duct placed in the exhaust pipe. The hot pressurized gas exiting from the turbine is converted to a high velocity gas stream by the nozzle. The reaction of this gas stream acting on the engine provides the motive force which may be used to power aircraft. In its simplest form the compressor and turbine are accommodated on a single shaft. In more complex designs the compressor is made in two parts (a two spool compressor) in which the spool of each part is driven by its own turbine through concentric shafting. Another variation is to add a ducted fan usually at the inlet to the compressor and drive this either by a third turbine or connect it to the first compressor spool. The fan acts in the nature of a ducted propeller, most of its output bypassing the compressor and turbine and joining the exhaust jet to provide extra thrust. This version is sometimes called a “bypass fan jet.”

Turbo-Propellers

Such engines are similar to turbo-jets, but have a further turbine downstream of the compressor turbine, which is coupled to a conventional propeller such as is used on piston engined aircraft. This latter turbine is sometimes referred to as a “free turbine,” meaning that it is not mechanically coupled to the compressor and compressor turbine shaft. Thus most of the hot pressurized gas leaving the compressor turbine is converted into shaft power by the free turbine instead of being expanded in a nozzle as is the case in turbo-jets. In some cases, the gases leaving the free turbine may be expanded in a nozzle to provide auxiliary jet power and assist the propeller.

Other Gas Turbines

This group includes industrial gas-turbine units which are either specifically designed for industrial use or adapt turbo-jets or turbo-propeller units for uses other than providing motive power for aircraft.

There are two types of cycles:

The simple cycle, in which air is ingested and compressed by the compressor, heated in the combustion system and passed through the turbine, finally exhausting to the atmosphere. The regenerative cycle, in which air is ingested, compressed and passed through the air pipes of a regenerator. The air is pre-heated by the turbine exhaust and is then passed to the combustion system where it is further heated by the addition of fuel. The air/gas mixture passes through the turbine and is exhausted through the hot gas side of the regenerator and finally to the atmosphere.

There are two types of designs:

The single-shaft gas turbine unit, in which the compressor and turbine are built on a single shaft, the turbine providing power to rotate the compressor and to drive rotating machinery through a coupling. This type of drive is most effective for constant speed applications such as electrical power generation. The two-shaft gas turbine unit, in which the compressor, combustion system and compressor turbine are accommodated in one unit generally called a gas generator, whilst a second turbine on a separate shaft receives the heated and pressurized gas from the exhaust of the gas generator. This second turbine known as the power turbine is coupled to a driven unit, such as a compressor or pump. Two-shaft gas turbines are normally applied where load demand variations require a range of power and rotational speed from the gas turbine

These gas turbines are used for marine craft and locomotives, for electrical power generation, and for mechanical drives in the oil and gas, pipeline and petrochemical industries.

We note initially that each type of engine designated under heading 8411, HTSUS, is considered to be a “Gas turbine,” but it is the specific construction and use of the gas turbine that determines whether that model is classified as a “Turbojet,” “Turboprop” or “Other Gas Turbine.”

As in H81222, CBP had previously classified aero-derivative gas turbines under subheadings 8411.11/12, HTSUS, and 8411.21/22, HTSUS, in keeping with the position that, notwithstanding certain adaptations, they were still described under the eo nomine provisions for turbojets and turbopropellers, respectively. This prior approach to classifying such merchandise was followed despite the fact that, in their altered state for industrial use, aero-derivative gas turbines are no longer capable of providing motive power to aircraft. However, it should be noted that an eo nomine provision is one which describes a commodity by a specific name, usually one well known to commerce, i.e. “turbojets” or “turbopropellers.” Ordinarily, use is not a criterion in determining whether merchandise is included within an eo nomine provision, but use may be considered where common and commercial meaning of the article at the time the tariff schedule was drafted included references to use. See Admiral Div. Of Magic Chef, Inc. v. United States, 754 F. Supp. 881 (1990) and United States v. Quon Quon Co., 46 C.C.P.A. 70, 73, C.A.D. 699 (1959). In considering the scope of the eo nomine provisions at issue, EN 84.11 states that turbojets and turbopropellers specifically described in subheadings 8411.11/12 and 8411.21/22, HTSUS, may be used to power aircraft. In contrast, other gas turbines of subheading 8411.81/82, HTSUS, are described as including industrial gas-turbine units which are either specifically designed for industrial use or else adapt turbo-jets or turbo-propeller units for uses other than providing motive power for aircraft.

Recent Customs rulings further demonstrate that aero-derivative gas turbines are not defined by the eo nomine provisions for turbojets or turbopropellers because those designations are reserved for gas turbines that provide motive power for aircraft. In HQ 966934, dated May 6, 2004, CBP ruled that aero-derivative gas turbines for industrial use and gas turbines designed specifically for industrial use are in all cases classified under subheading 8411.81/82, HTSUS. This position is further supported in NY J84449, dated June 2, 2003, NY J84454, dated June 2, 2003 and NY J84459, dated June 2, 2003, wherein engine parts of an aero-derivative gas turbine were classified under subheading 8411.99.9060, as parts for “nonaircraft gas turbines.”

The above analysis and cited rulings support the finding by CBP that turbojet and turbopropeller gas turbines, which provide motive power for aircraft, are classified under subheadings 8411.11/12, HTSUS, and 8411.21/22, HTSUS, respectively. In contrast, both aero-derivative gas turbines and gas turbines designed specifically for industrial use, and incapable of providing motive power to aircraft, form the class or kind of gas turbine that is considered a turboshaft engine and which comprise the “Other gas turbine” subheading group of 8411.81/82, HTSUS. In addition, and to further assist in classifying gas turbines, it is equally apparent that the power output of tubojet engines is measured in pound thrust, or so-called kilonewtons, while the power output of turboprop and turboshaft engines is normally measured in kilowatts. This expression of power is usually indicative of the type of use to which the engine is utilized. Turbojet engines are typically used on high-speed and commercial aircraft wherein compressed air and gas are exhausted from the engine, providing the thrust that powers the aircraft. In contrast, turboprop engines operate on low-speed, low-altitude aircraft, the exhaust flow from the compressor turbine being used to power a conventional propeller as opposed to exhausting into the atmosphere to provide thrust. And, turboshaft engines are typically used in industrial and marine applications, being derived from aircraft engines (aero-derivative), designed specifically for industry, or else used to power a helicopter or boat propeller.

In considering NY H81222, it seems apparent that the analysis used by CBP was consistent with the previous approach to gas turbine classification. Both the Rolls-Royce RB-211 and Rolls-Royce Avon gas turbines at issue have been adapted from their original designs for exclusive industrial use. In practical terms, this entailed removing the bypass fan and fan turbines of the Rolls-Royce RB-211 so that exhaust flow could be routed to another turbine that in turn generates power. In the case of the Rolls-Royce Avon, the engine has been reconfigured and matched with a separate power turbine, again for the purpose of generating power; in their adapted form, each is capable of generating power in excess of 5,000 kilowatts. In view of the foregoing, they are both aero-derivative engines and therefore classified under subheading 8411.82.80, HTSUS, as “Turbojets, turbopropellers and other gas turbines, and parts thereof: Other gas turbines: Of a power exceeding 5,000 kW: Other.” It should also be noted that in March 2004, CBP issued an Informed Compliance Publication (ICP) entitled “Turbojets, Turbopropellers and Other Gas Turbines, (HTSUS) and Parts Thereof.” Although an ICP is published for general information purposes only and therefore cannot serve as the sole basis upon which an importer claims, or CBP issues, a classification, the ICP nevertheless reflects the current CBP position on this merchandise.

HOLDING:

The Rolls-Royce RB-211 and Rolls-Royce Avon gas turbines are classified under subheading 8411.82.8000, Harmonized Tariff Schedule of the United States Annotated, as “Turbojets, turbopropellers and other gas turbines, and parts thereof: Other gas turbines: Of a power exceeding 5,000 kW: Other.” The general column one rate of duty is 2.5 percent ad valorem.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.

EFFECT ON OTHER RULINGS:

NY H81222 is REVOKED.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division


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