CLA-2 CO:R:C:M 954420 DWS
Mr. Brian S. Goldstein
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd Floor
New York, NY 10036
RE: Motor Vehicle Parts; Gas Powered Cab Chassis; GRI 2(a);
Explanatory Notes 2(a)(V) and 2(a)(VII); Explanatory Note
3(b)(VIII); HQ 083222; HQ 088891; HQ 081999; HQ 950034
Dear Mr. Goldstein:
This is in response to your letter of June 7, 1993, to the
Regional Commissioner of Customs, New York Region, concerning the
classification of certain motor vehicle parts under the Harmonized
Tariff Schedule of the United States (HTSUS). Your letter was
referred to this office for a response.
FACTS:
The merchandise consists of motor vehicle parts imported from
Japan which, upon importation into the U.S., will be combined with
parts produced in the U.S and parts imported from Singapore and
Canada in the manufacture of gas powered cab chassis. The parts
which will be imported from Japan include the cab, the frame, and
the front and rear axles. The power control module (PCM) is
produced in the U.S., but will be sent to Japan for assembly into
one of the subassemblies of cab chassis which will be imported into
the U.S. The parts which will be imported from Canada include the
under cover assembly, the muffler assembly, and the center brake
ASM. The digital ratio adapter will be imported from Singapore.
Among the parts which will be added in the U.S. are the engine, the
automatic transmission, the fuel tank, the air cleaner, the
battery, the cooling fan, the tail pipe, and the heat shield. This
ruling is limited to the classification of the parts imported from
Japan.
All of the parts, imported in bulk, will go into inventory as
received once entered into the U.S.
Three alternative means of entering the prospective shipments
of the merchandise have been suggested. You have requested that we
rule upon the classification of the merchandise based upon each
alternative. In the first alternative, containers would be
imported on the same day at the same port. One container would
contain the cabs, the second container would contain the frame
assemblies, and the third container would contain miscellaneous
parts. In the second alternative, containers of cabs would be
imported one day, and containers of frame assemblies and
miscellaneous parts would be imported at a later date but possibly
at the same port. In the third alternative, containers of cabs
would be entered on one given date, containers of frame assemblies
would be entered at a later date, and containers of miscellaneous
parts would be entered on a third date, all potentially at the same
port.
ISSUE:
Whether the motor vehicle parts, imported in bulk, are
unassembled, incomplete cab chassis imparting the essential
character of finished cab chassis under the HTSUS?
Whether the motor vehicle parts are classifiable under the
various subheadings of the HTSUS which specifically describe the
parts?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
In determining whether the parts impart the essential
character of finished cab chassis, GRI 2(a) must be consulted. It
states that:
[a]ny reference in a heading to an article shall be taken to
include a reference to that article incomplete or
unfinished, provided that, as entered, the incomplete or
unfinished article has the essential character of the
complete or finished article. It shall also include a
reference to that article complete or finished (or falling
to be classified as complete or finished by virtue of this
rule), entered unassembled or disassembled.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS. 54
Fed. Reg. 35127, 35128 (August 23, 1989).
Explanatory Note 2(a)(V) (p. 2) states that:
[t]he second part of Rule 2(a) provides that complete or
finished articles presented unassembled or disassembled are
to be classified in the same heading as the assembled article.
When goods are so presented, it is usually for reasons such as
requirements or convenience of packing, handling or transport.
In part, Explanatory Note 2(a)(VII) (p. 2) states that:
[f]or the purposes of this Rule, "articles presented
unassembled or disassembled" means articles the components
of which are to be assembled either by means of simple fixing
devices (screws, nuts, bolts, etc.) or by riveting or welding,
for example, provided only simple assembly operations are
involved.
Explanatory Note 3(b)(VIII) (p. 4) states that:
[t]he factor which determines essential character will vary as
between different kinds of goods. It may, for example, be
determined by the nature of the material or component, its
bulk, quantity, weight or value, or by the role of a
constituent material in relation to the use of the goods.
It is claimed that the parts, imported in bulk and used
principally for inventory purposes, do not impart the essential
character of finished cab chassis. We agree. Among the many parts
produced in the U.S. and essential to the manufacture of cab
chassis are the engine, the automatic transmission, the fuel tank,
and the battery. Also, other important parts are imported from
Singapore and Canada.
In HQ 083222, dated April 25, 1989, which dealt with the
classification of automotive parts imported for assembly with other
parts into a truck, it was stated that:
it is reasonable to say that in order to have the essential
character of a motor vehicle, the imported components must be
advanced to the point that they are recognizable as a motor
vehicle, i.e., having the essential features of a vehicle
. . . There is no evidence that any of these components are
intended to be assembled into a specific motor vehicle, nor
is there any evidence that they constitute something other
than discrete components intended for inventory for a
manufacturing operation.
It is our position that the subject parts do not impart the
essential character of finished cab chassis. They are not advanced
to the point that they are recognizable as cab chassis. As
previously stated, essential articles such as the engine, the
automatic transmission, the fuel tank, and the battery are not
included in the shipments of parts. These components make up what
could be said to be the most essential parts of a cab chassis.
Without the engine or transmission there would be no motive power.
Without the battery, there would be no power. Even if there would
an engine or a battery, there would be no means available to
initiate combustion. See HQ 950034, dated February 3, 1992.
As in HQ 083222, there is no evidence that any of these
components are intended to be assembled into a specific cab
chassis, nor is there any evidence that they constitute something
other than discrete components intended for inventory for a
manufacturing operation.
It is also our position that the parts, imported in bulk, do
not qualify as unassembled cab chassis. There is no evidence that
the parts are presented for reasons such as requirements or
convenience of packing, handling or transport. They are parts
shipped in bulk for inventory purposes. This is not the type of
"convenience of packing, handling or transport" that the
Explanatory Notes contemplate. See HQ 088891, dated June 21, 1991.
Also, the parts, once imported into the U.S., are not
assembled by means of simple fixing devices as contemplated by
Explanatory Note 2(a)(VII). It is our understanding that the cab
chassis assembly operations in the U.S. are not simple assembly
operations.
In HQ 081999, dated December 10, 1990, which dealt with the
classification of parts imported for the assembly of golf carts, it
was stated that:
[w]e do not consider an assembly line operation in which a
motor vehicle is built piece by piece from the frame up as a
"simple" assembly within the meaning of GRI 2(a). The
disassociation of parts from individual vehicles, the parts
presented in bulk, and the nature of the required assembly
process after importation are evidence that the parts are not
presented together so that they can be reasonably associated
with individual CKD golf cars. Rather, the parts are in the
nature of parts inventory for the production of golf cars and,
as such, do not fall within the meaning of the term
"unassembled" for purposes of GRI 2(a).
Concerning the cab chassis, it is our understanding that the
assembly line operation involves construction of the cab chassis
piece by piece, there is a disassociation of the parts from the
finished cab chassis, and the parts are presented in bulk in the
nature of parts inventory for the production of cab chassis.
Therefore, because motor vehicle parts, imported in bulk, are
not unassembled, incomplete cab chassis imparting the essential
character of finished cab chassis, it is our position that the
parts are classifiable under the subheadings of the HTSUS which
specifically describe them.
HOLDING:
Under all three alternatives, the motor vehicle parts are
classifiable under the subheadings of the HTSUS which specifically
describe them.
Sincerely,
John Durant, Director
Commercial Rulings Division