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HQ 965635

JULY 16, 2002

CLA-2 RR:CR:GC 965635 JAS


TARIFF NO.: 8418.61.00

Ms. Nancy Pellowe
Tecumseh Products Company
100 East Patterson Street
Tecumseh, Michigan 49286

RE: Condensing Unit and Vertical Receiver for Use in Refrigeration; HQ 965123 Revoked

Dear Ms. Pellowe:

In HQ 965123, which we issued to you on February 27, 2002, a condensing unit and a vertical receiver were held to be other parts of refrigerating or freezing equipment, in heading 8418, Harmonized Tariff Schedule of the United States (HTSUS), and a capacitor mounting bracket was held to be an article of iron or steel of heading 7326, HTSUS.

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 HQ 965123 was published on June 5, 2002, in the Customs Bulletin, Volume 36, Number 23. Four (4) comments were received in response to that notice. All favored Customs proposal. These comments are substantially in accordance with the discussion in this ruling under LAW AND ANALYSIS.


As stated in HQ 965123, the articles at issue are a condensing unit, identified as part 2B3142-1, a vertical receiver, identified as part 51080, and a capacitor mounting bracket, identified as part 57068-2. The condensing unit consists of a compressor, a finned coil-type condenser you describe as a heat exchanger, and a fan with motor, all mounted onto a common base. You indicate the unit is principally used in refrigeration applications. The vertical receiver is
basically a shell with connections, whose purpose is to hold refrigerant for the condensing unit. The capacitor mounting bracket is of base metal and functions to attach a capacitor (a device which helps in starting or running the compressor) directly onto the compressor or elsewhere on the condensing unit, as the customer designates.

As imported, the condensing unit lacks an evaporator which you indicate is necessary to allow the apparatus to function as refrigeration equipment. After importation, the evaporator will be connected to the condensing unit by brazing tubes with or without fittings. Company guidelines state the distance between condensing unit and evaporator should not normally exceed 100 ft.

The HTSUS provisions under consideration are as follows:

8418 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other;parts thereof:

Other refrigerating or freezing equipment;:

8418.61.00 Compression type units whose condensers are heat exchangers


8418.99.80 Other


Whether the condensing unit, vertical receiver and capacitor mounting bracket, imported without an evaporator, constitute refrigerating or freezing equipment of heading 8418, HTSUS, or parts of such equipment under the same heading.


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 4, HTSUS, states in part 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 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 is to be classified in the heading appropriate to that function.

In your ruling request of June 25, 2001, which resulted in HQ 965123, you requested classification in subheading 8418.61.00, HTSUS, as other refrigerating or freezing equipment, compression type units whose condensers are heat exchangers. You cited relevant 8418 ENs which, you indicated, stated that apparatus of heading 8418 included units comprising a compressor (with or without motor) and condenser mounted on a common base, whether or not complete with evaporator.

We rejected your claim on the basis that it involved application of the functional unit concept found in Section XVI, Note 4 which, we stated, is a classification at the GRI 1 level, and applies to finished or complete goods. Because the condensing unit lacked the evaporator necessary to its function as refrigerating equipment, the good, as imported, was considered incomplete or unfinished. We concluded that there is no legal authority to classify incomplete or unfinished goods as functional units. We have undertaken a thorough review of the matter and now conclude that this is incorrect and no longer represents Customs position on this issue.

By its terms, GRI 2(a), HTSUS, extends the scope of a 4-digit heading to include an article, whether assembled or unassembled, that is imported incomplete or unfinished. The imported article, however, must be found to have the essential character of the complete or unfinished good. Section XVI, Note 4, HTSUS, is the authority under GRI 1 for classifying a series of machines or components in a 4-digit heading describing a clearly defined function performed by the goods. Given the relationship between GRI 1 and GRI 2(a) in determining the scope of headings, it logically follows, in our opinion, that GRI 2(a) may also be applied to determine whether under GRI 1 a series of machines or components may qualify for classification under Section XVI, Note 4, even if imported incomplete or unfinished.

Under GRI 2(a), the factor or factors which determine essential character will vary with the goods. It may, for example, be determined by the nature of a component or components, their bulk, quantity, weight or value, or the role of a component or components in relation to the use of the good. It is the latter factor that is the most compelling in this case. The cited 8418 ENs establish that compression-type refrigerators are classified in heading 8418 if comprising a compressor (with or without motor) and condenser mounted on a common base, whether or not complete with evaporator. The evaporator will be connected to the condensing unit after importation by brazing tubes with or without fittings. Based on the cited ENs, we conclude that an importation consisting of a compressor with fan and motor, and a condenser together, in this case, with a vertical receiver to hold refrigerant and a capacitor mounting bracket, represents the aggregate of distinctive component parts that establish the identity of the goods as other refrigerating or freezing equipment of heading 8418. If imported separately, however, the capacitor mounting bracket would be classifiable in subheading 8418.99.80, HTSUS, in accordance with NY H82804, dated June 29, 2001.


Under the authority of GRI 2(a) and Section XVI, Note 4, HTSUS, the condensing unit, part 2B3142-1, the vertical receiver, part 51080, and the capacitor mounting bracket, part 57068-2, are provided for in heading 8418. They are classifiable as other refrigeration or freezing equipment, compression-type units whose condensers are heat exchangers, in subheading 8418.61.00, HTSUS.


HQ 965123, dated February 27, 2002, is revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.


Myles B. Harmon, Acting Director
Commercial Rulings Division

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