CAFC Affirms Classification of HVAC Actuators as Machinery, Not Regulating Instruments
A product must be “designed to” directly measure and control a property of gas or liquid in order to be classified as an automatic regulating or controlling instrument, said the U.S. Court of Appeals for the Federal Circuit on Dec. 19 as it affirmed a lower court ruling on the tariff classification of Belimo’s heating and air conditioning system flow actuators (here). The connection between air temperature and a sensor on Belimo’s actuator used to confirm the position of a damper blade is too tenuous, and the actuator should be classified as electrical machinery, said CAFC.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The sensor improves the actuator by measuring the position of the damper and comparing it to instructions for damper position sent by a central control unit. If the damper position is off, the actuator automatically adjusts it to the correct position. Belimo had argued the sensor brought the actuator under heading 9032 as an automatic regulating or controlling instrument, dutiable at 1.7%. CBP had instead classified the actuator under heading 8501 as electrical machinery, dutiable at 4.4%.
Under Note 7(a) to Chapter 90, heading 9032 covers “instruments and apparatus for automatically controlling the flow, level, pressure or other variables of liquids or gases, or for automatically controlling temperature … which are designed to bring this factor to, and maintain it at, a desired value, stabilized against disturbances, by constantly or periodically measuring its actual value … .” In a decision issued in December 2013, CIT ruled that the actuator isn’t an automatic regulating or controlling instrument, because it doesn’t itself measure the air temperature or air flow to determine the correct position of the damper (see 13121029). Rather, the central control unit measures the air temperature to decide where to position the damper. Belimo’s actuator just makes sure the damper is in its intended position.
On appeal, CAFC agreed that the connection between air flow and temperature and the actuator’s purpose is too indirect. Although the air temperature may indirectly affect how the actuator functions, calling the actuator a regulating instrument “stretches the heading too far,” it said. “A block of ice may be sensitive to temperature, but the ice does not ‘measure’ temperature in any meaningful way,” noted the Appeals Court. Note 7(a) to Chapter 90 requires that an instrument be “designed to” measure a property of gases or liquids, and use that value to control that property. Belimo’s actuator was not designed to measure and control air flow or temperature. Rather, it was designed to measure the damper blade’s position, said CAFC.
(Belimo Automation A.G. v. U.S., CAFC #2014-1165, dated 12/19/14, Judges Prost, Newman and Taranto)
(Attorneys: Robert Silverman of Grunfeld Desiderio for plaintiff appellant Belimo Automation, A.G.; Amy Rubin for defendant U.S. government)