Electric Generator Parts Aren't Water Gas Generators, DOJ Argues

A supermodule for use in hydrogen fuel-cell power plants is a part an electric generator and not a water gas generator, DOJ said in a June 20 reply brief at the Court of International Trade. Importer HyAxium's arguments to the contrary do not consider the supermodule in its entirety and the unit does not generate water gas, DOJ said (HyAxium v. U.S., CIT # 21-00057).

Instead of passing air and steam over burning solid fuels to make water gas, the PC50, when used inside a completed PureCell Model 400, catalytically reforms natural gas into a hydrogen-rich synthesis gas fuel that is then reacted in fuel cell stacks to generate electricity, heat and water, DOJ said. In arguing for classification as a water gas generator, HyAxium only considered whether the PC50's steam methane reformer component had the essential character of a completed water gas generator.

Heading 8503 describes the PC50 in its entirety as a part of an electric generator, DOJ said. HyAxium had argued that the primary function of the PC50 supermodule was to generate a water gas and there is "no dispute" that it does this (see 2305160045). That argument centered around the characteristics only of the PC50's steam methane reformer (SMR), but the longstanding classification precedent is that goods must be classified in their condition as imported, DOJ said. Even if the SMR is a water gas generator, DOJ said, the entire unit at issue is not.

"By elevating the features and functions of the SMR above the entire PC50, HyAxiom’s opposition sets forth an inherently limited, and ultimately immaterial, series of contentions," DOJ said. "The PC50 does far more than serve the SMR and its alleged 'water gas generating function.'"

In an interrogatory response, DOJ admitted that the SMR converts steam and methane into a water gas, but now wants that response ignored. The statement was "made early in the discovery process" and based on the limited amount of product information available to CBP at that time, DOJ said. "The extensive documentation, information, and testimony gathered throughout the entire discovery period altered our understanding of the SMR’s operations, and established that the SMR does not generate a water gas within the meaning of HTSUS heading 8405," DOJ concluded.