641 F.Supp.2d 1337 (CIT 2009), 05-00170, ENI Technology, Inc. v. United States

Docket Nº:Court 05-00170.
Citation:641 F.Supp.2d 1337
Opinion Judge:POGUE, Judge.
Party Name:ENI TECHNOLOGY INC., Plaintiff, v. UNITED STATES, Defendant. Slip Op. 09-93.
Attorney:Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (Robert B. Silverman, Robert F. Seely, Steven P. Florsheim and Curtis W. Knauss) for the Plaintiff. Tony West, Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial L...
Case Date:September 01, 2009
Court:Court of International Trade
 
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Page 1337

641 F.Supp.2d 1337 (CIT 2009)

ENI TECHNOLOGY INC., Plaintiff,

v.

UNITED STATES, Defendant.

Slip Op. 09-93.

Court No. 05-00170.

United States Court of International Trade.

September 1, 2009

Page 1338

[Copyrighted Material Omitted]

Page 1339

[Copyrighted Material Omitted]

Page 1340

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (Robert B. Silverman, Robert F. Seely, Steven P. Florsheim and Curtis W. Knauss) for the Plaintiff.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Aimee Lee); Yelena Slepak, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection for the Defendant.

OPINION

POGUE, Judge.

This consolidated action involves the proper classification of merchandise, identified as " radio frequency generators" (" RF Generators" or " merchandise" ), imported by Plaintiff ENI Technology Inc. (" ENI" ), for use, inter alia, in Court No. 05-00170 Page 2 semiconductor manufacturing processes.1 ENI challenges the United States Customs and Border Protection's (" Customs" or " Government" ) classification of the merchandise as " static converters," with a 1.5% ad valorem duty. ENI claims that its merchandise is properly classified as " machines [used] for processing semiconductor materials," which are duty free.

Before the Court are cross motions for summary judgment pursuant to USCIT Rule 56. The Court has exclusive jurisdiction pursuant to 28 U.S.C. § 1581(a) (2000).2

Because ENI's merchandise is principally used as parts of plasma 3 processing systems, which are machines used for semiconductor manufacturing, and because the merchandise does not meet the definition of " static converters," the court grants

Page 1341

ENI's motion as to " principal" use. However, because the record, as currently before the court, does not resolve the subsidiary issue of the type of plasma processing in which ENI's imports are used, ( see Def.'s Mem. of Law in Opp'n to Pl.'s Mot. for Summ. J. & in Supp. of Def.'s Cross-Mot. (" Def.'s Mem." ), Ex. A, Pl.'s Resp. to Def.'s First Interrogs. & Req. for Produc. of Docs. (" Interrogs." ) at 1-2 (" The semiconductor processing systems include plasma-assisted etch systems, which remove materials (‘ ETCH’ ); plasma-assisted chemical vapor deposition systems, which deposit materials from a gaseous source (‘ CVD’ ); and plasma-assisted physical vapor deposition systems, which deposit materials from a solid source (‘ PVD’ )" )), the court otherwise denies both motions, directing the parties to address this subsidiary issue.

For ease of reference, the court opinion is organized in accordance with the following TABLE OF CONTENTS:

BACKGROUND 1341
Undisputed Facts 1343
I. The RF Generator 1343
II. The Plasma Processing System 1345
III. ENI's Marketing of the RF Generator 1346
IV. Use of the RF Generator 1346
V. Design of the RF Generator 1347
VI. The RF Generator as Known in the Trade 1348
STANDARD OF REVIEW 1348
DISCUSSION 1349
I. The RF Generator as a Heading 8466 " Part" or " Accessory" 1349
II. Heading 8504 (" Static Converters" ) 1353
A. Common Meaning of " Static Converter" 1353
B. Explanatory Notes for HTSUS Heading 8504 1354
III. Headings 8479 and 8543 1357
IV. Classification of the RF Generators 1359
A. Subheading 8504.40.95 1359
B. Subheading 8479.89.84 1359
CONCLUSION 1361

BACKGROUND At issue here are three entries 4 of Page 1342 ENI's 5 RF Generators,6 imported between 2002 and 2004. As noted above, upon liquidation, Customs classified the RF Generators as " static converters" pursuant to the Harmonized Tariff Schedule of the United States (" HTSUS" ) Subheading 8504.40.95 (2002) and HTSUS Subheading 8504.40.95 (2004).7 ENI protested the classification, and Customs denied ENI's protest on February 11, 2005, applying HQ 966466 (Oct. 24, 2003), available at 2003 WL 23303566. After paying the required duties, charges and exactions on its RF Generators, ENI filed suit here. In its complaint, ENI asserts that its RF Generators are more properly classified either as machines for the processing of semiconductor materials, under HTSUS 8479.89.84,8 or physical vapor deposition apparatus, under HTSUS 8543.89.10.9 Accordingly, ENI's complaint requests that the court direct the appropriate Customs officer to re-liquidate the entries, and refund the excess duties collected, with lawful interest. Following discovery, ENI moved for summary judgment,10 arguing that its RF Page 1343 Generators should be classified under HTSUS 8479.89.84. 11 The Government has cross-moved for summary judgment, defending the original classification, " static converters," and, in the alternative, proffering HTSUS 8543.89.96 (" Electrical machines and apparatus.... Other" -a " basket" provision 12). Undisputed Facts The following undisputed facts are before the court. I. The RF Generator The RF Generators are machines that generate power at a fixed radio frequency. 13 They are powered by electricity, i.e., they receive alternating current (" AC" ) 14 at 60 Hz from the main U.S. electric grid 15 (" mains power" ), from which they generate or produce power at radio frequencies. To be exact, the RF Generator creates RF current at 13.56 MHz 16 ranging from 300 to 10,000 watts.17 It is undisputed that the output of RF Generator is RF current,18 in Page 1344 other words, alternating current in the radio frequency range, at a certain wattage. 19 In the process of making RF current, RF Generators convert the AC to direct current (" DC" ) using a rectifier or similar device.20 The RF Generator also regulates the DC " to keep the voltage very uniform" in order to " hold the RF power constant." (Pl.'s Mem., Ex. 4, Fairfax Dep. at 60.) Subsequently, the various RF Generator models utilize either a narrow band RF crystal oscillator or a direct digital synthesis module (" DDS" ) to generate RF signal. 21 The oscillator or DDS " shape[s] the wave form," that is, it generates the desired 13.56 MHz frequency.22 End users purchase RF Generators to obtain " not just the [RF] frequency but [also] ... hundreds or thousands of watts of power at that frequency." (Pl.'s Mem., Ex. 4, Fairfax Dep. at 64.) To serve this purpose, the RF signal is transferred from the oscillator/DDS through a " variable attenuator" 23 to either an amplifier or an inverter, depending on the model.24 The variable attenuator, which reduces the amplitude or magnitude of the signal, is used so as to " control the final amount of power that is delivered to the load [ 25]." (Pl.'s Mem., Ex. 4, Fairfax Dep. at 57.) The amplifier or inverter receives the signal and increases its wattage and current levels to desired specifications.26 Amplifiers and inverters operate in different ways-the amplifier matches and amplifies an incoming signal,27 whereas an inverter " converts DC to some form of alternating current" and makes only one type of waveform whose " design is fixed by the inverter" -but both devices perform this " same function" in the RF Generator. (Pl.'s Mem., Ex. 4, Fairfax Dep. at 48, 51.) In essence, according to ENI's evidence, the AC input at 60 Hz is converted into DC; that DC then facilitates the creation of or is converted into (alternating) RF current.28 Notably, the RF Generator converts AC to RF in two steps rather than one. ( Id. at 58-59.) According to Page 1345 Fairfax, RF is created in two steps because to do so is " most practical and most economical." ( Id. ) 29 Once created, the RF Generator's alternating current at radio frequency 13.56 MHz is transmitted through a 50-ohm coaxial cable. (Pl.'s Stmt. of Material Facts Not in Issue (" Pl.'s Stmt." ) ¶ 9.) 30 It is this output which then has utility within the manufacturing process. II. The Plasma Processing System The RF Generator can be used in various types of plasma processing, e.g., production of semiconductor devices and integrated circuits through PVD, CVD and etch plasma processing.31 The plasma processing system or " tool" 32 is comprised of a set of room-sized machines, each segregated in its own housing and performing its own function, which together form the plasma processing system.33 ( See Def.'s Mem., Ex. A, Interrogs. ¶ ¶ 2-4.) The RF Generator operates with these machines.34 ( See id. ) When used as a part of a plasma processing system, the RF Generator is the only source of RF power to the plasma chamber.35 As such, RF Generators, in providing RF current at 13.56 MHz, are integral to the plasma processing system.36 From the RF Generator, the RF output flows through the coaxial cable to a separate machine called an " impedance [ 37] Page 1346 matching network" that " matches the output impedance of the RF [G]enerator to that of the plasma processing chamber." 38 The output then flows from the impedance matching network to an antenna located within the sealed...

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