NCS/ARS/CL/10425

I. PRODUCT UNDER CONSIDERATION

This ruling concerns the classification of a compressor-cooled hot, natural and cold-water dispenser, Model No. BWD3C, presented in two configurations: (a) with a lower storage cabinet; and (b) with a lower refrigerated compartment ("with refrigerator").

    PRODUCT ANALYSIS

1. The declared specifications of both configurations are identical save for the lower cabinet, namely: heating capacity of 5 L/h at 85–95°C; cooling capacity of 2 L/h at 5–10°C; cooling by a vapour-compression (compressor) refrigeration system; net/gross weight of 11 kg / 11.9 kg; product dimensions of 270 × 295 × 855 mm; packing dimensions of 285 × 325 × 870 mm; and a loading quantity of 864 pieces per 40' HC container.
2. The appliance is a free-standing electrical apparatus which draws water from a bottle or reservoir and dispenses it, at the user's selection, at ambient temperature, heated by an electric resistance element to 85–95°C, or chilled by the compressor refrigeration circuit to 5–10°C. The lower portion of the housing comprises, according to configuration, either a simple storage cabinet or a small, refrigerated compartment.

II. ISSUE PRESENTED

1. Whether the BWD3C water dispenser is classifiable in heading 84.18 of the Harmonized System as refrigerating equipment, or in heading 85.16 as an electric water heater, and the appropriate subheading and national tariff line thereunder.

III. TARIFF CLASSIFICATION REVIEW

1. Classification is governed by the General Interpretative Rules of the Harmonized System (GIRs), applied in numerical order, and by the relevant Section and Chapter Notes, which have legal force. The following provisions are material:
2. Heading 84.18 covers "Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 84.15." The Explanatory Notes to heading 84.18 expressly include refrigerated drinking water dispensers and water coolers within the scope of the heading.
3. Heading 85.16 covers, inter alia, "Electric instantaneous or storage water heaters and immersion heaters."
4. Note 3 to Section XVI provides that, unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole, and other machines designed for the purpose of performing two or more complementary or alternative functions, are to be classified as if consisting only of that component or as being that machine which performs the principal function.
5. GRI 6 provides that classification at subheading level is determined according to the terms of the subheadings and any related subheading notes, mutatis mutandis, with only subheadings at the same level being comparable.

IV. ANALYSIS

A. The appliance is a composite machine within Note 3 to Section XVI

1. The BWD3C performs two distinct functions falling prima facie under different headings: the heating of water by an electric resistance element (a function described by heading 85.16) and the chilling of water by a compression-type refrigeration system (a function described by heading 84.18). It is accordingly a machine designed to perform two complementary or alternative functions and Note 3 to Section XVI requires classification according to its principal function.

B. The principal function is refrigeration

1. The refrigeration function is performed by a complete vapour-compression circuit comprising a compressor, condenser, evaporator and refrigerant charge. This system is the technologically dominant, most complex and most substantial component of the appliance, and it is the feature by which such appliances are known and marketed in trade ("water coolers" / "water dispensers with compressor cooling"). The heating function, by contrast, is achieved by a simple resistance heating element of a kind commonly incorporated as a subsidiary feature in many appliances.
2. In the alternative, if it were considered that neither function could be identified as principal, classification would fall to be determined by GRI 3(b) as applied through GRI 1 and the Section Notes; the refrigeration system, being the component of decisively greater complexity, bulk and value, confers the essential character of the appliance, again leading to heading 84.18. Heading 85.16 is not the most appropriate because heating is not the principal function and that heading does not describe the refrigeration capability of the appliance at all.

C. Subheading classification

1. Within heading 84.18, subheadings 8418.10 to 8418.40 cover combined refrigerator-freezers, household refrigerators, freezers of the chest and upright types, and refrigerated display furniture; none of these describes a drinking water dispenser. The appliance therefore falls to subheading 8418.69 as "Other refrigerating or freezing equipment: Other," by application of GRI 6.

D. The two cabinet configurations

1. Configuration (a) — with storage cabinet. The unrefrigerated storage cabinet is a subsidiary storage feature which does not perform any independent mechanical or electrical function and does not affect classification. The appliance is classified in subheading 8418.69.
2. Configuration (b) — with refrigerator. The lower refrigerated compartment is served by the appliance's refrigeration system and is ancillary in size and purpose to the principal water-dispensing function. Both the water-cooling function and the refrigerated compartment fall within heading 84.18 in any event, so the heading is not in doubt. At subheading level, the compartment does not convert the appliance into a household refrigerator of subheading 8418.21; the appliance remains, in its objective characteristics and presentation, a drinking water dispenser with an ancillary refrigerated compartment, and is likewise classified in subheading 8418.69. This conclusion is conditioned on the refrigerated compartment being ancillary in capacity to the dispensing function, as declared by the applicant.

FINAL TARIFF CLASSIFICATION

        On the strength of the applicant's product specification for Model BWD3C, including the declared heating and cooling capacities, cooling method, dimensions, weights and cabinet configurations set out in Part I, as well as the legal provisions of the HSN (Note 3 to Section XVI), the tariff classification of the hot, natural and cold-water dispenser, Model No. BWD3C, in both the storage-cabinet and refrigerator-cabinet configurations, is 84.18.69.00.00, ‘other refrigerating or freezing equipment’, at 5% Rate of Duty and 0% VAT in the ECOWAS CET 2022 - 2027.

LEGAL JUSTIFICATION

GIRs 1 & 6