CBP Finds Robotic Workstations, Not Conveyors, Determine Classification for Engine Assembly System
A multi-station conveyor system used for assembling internal combustion engines should be classified based on the workstations and not the conveyors, CBP said in an Oct 2. ruling. The importer, Sanyo Machine America, through its lawyer at Neville Peterson, asked CBP to review its denial of a protest involving the assembly system. The goods were imported unassembled from Japan and originally entered under heading 8428 as “other lifting, handling, loading or unloading machinery.” CBP subsequently reclassified the system under heading 8479, as “machines and mechanical appliances [that] have individual functions not specified elsewhere.”
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The assembly systems include “conveyors and over 20 robotic workstations, each of which performs a different part of the engine assembly process. While the conveyors all perform the same function, that of conveying the engine through the various assembly workstations, the specific functions of the assembly workstations vary,” CBP said. The workstation operations include tightening, quality checking, measuring, loosening and sealing. Sanyo said in its protest that the goods should instead be classified under subheading 8428.39.00 as other continuous-action conveyors for goods or materials.
The classification for composite machines is based upon the component that “performs the device’s principal function,” CBP said. The company argues “that the subject machine’s conveyor modules perform its most critical or principal function in achieving the purpose of manufacturing an engine” and “dismisses the robotic workstations as performing simple tasks such as tightening and loosening, which only take a few seconds,” CBP said. Sanyo said that the end users purchase the machine and use the conveyor “to eliminate the high cost and inefficiencies of manual transportation of engine components within a factory,” CBP noted.
CBP wasn't “persuaded by Sanyo’s arguments,” it said. “Without the robotic workstations, no engine can be produced and what remains is a conveyor system that moves bulk engine parts around a factory with no clear purpose,” the agency said. “In other words, the system performs the principal function of assembling or manufacturing an automobile engine (i.e. it does not merely convey the engine components).”
CBP also questioned Sanyo's description of its customers' rationale for purchasing the system. “Pricing data provided by Sanyo indicate that the purchase price of the workstation components is one and a half times higher than the purchase price of the conveyor components,” it said. “It is not reasonable for a rational purchaser to spend an additional one and half times the value of the conveyor system for mere assembly 'features.' Rather, it is reasonable to conclude that a purchaser pays the premium for the machines robotic workstations and that the conveyor components, which cost less, are subsidiary to the assembly functions of the machine.” As a result CBP was correct when it classified the machine in heading 8479 as “machines and mechanical appliances having individual functions not specified or included elsewhere.”