CLA-2 CO:R:C:M 954785 KCC
Ms. Barbara Huffman
Total Shade Structures, Inc.
P.O. Box 70
Vanessa, Ontario
Canada NOE 1VO
RE: Steel structure for shade house system; GRI 2(a); incomplete
article; unassembled article; EN Rule 2(a); essential
character; condition as imported; U.S. vs. Citroen; steel
structure; machinery, equipment and implements to be used
for agricultural or horticultural purposes; HRL 083930;
three part test; 19 CFR 10.131-10.139
Dear Ms. Huffman:
This is in response to your letter dated July 5, 1993, to
Customs in New York, regarding the tariff classification of a
steel structure for a shade house system under the Harmonized
Tariff Schedule of the United States (HTSUS). Your letter was
forwarded to this office for a response.
FACTS:
The article under consideration is a shade house system
which protects sun-sensitive plants such as ginseng, from direct
sunlight. The shade house system consists of a steel structure
manufactured in Canada which is covered by a shade cloth. The
supporting steel structure consists of poles, anchors, cables and
bolts contained in a kit ready for assembly. The shade cloth is
a 78 percent leno lath weave manufactured in the U.S. and then
shipped directly to the customer. The shade cloth is not
imported with the unassembled kit.
ISSUE:
What is the tariff classification of the steel structure for
the shade house system under the HTSUS?
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1,
HTSUS, states, in part, that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes...." GRI 2(a), HTSUS,
states:
Any reference in a heading to an article shall be taken to
include a reference to that article incomplete or
unfinished, provided that, as presented, the incomplete or
unfinished article has the essential character of the
complete or finished article, it shall also be taken to
include a reference to that article complete or finished (or
falling to be classified as complete or finished by virtue
of this rule), presented unassembled or disassembled.
General Explanatory Note (EN) Rule 2(a) of the Harmonized
Commodity Description and Coding System (HCDCS) (pg. 2), states
that:
(I) The first part of Rule 2(a) extends the scope of any heading
which refers to a particular article to cover not only the
complete article but also that article incomplete or
unfinished, provided that, as presented, it has the
essential character of the complete or finished article.
The Explanatory Notes, although not dispositive, are to be looked
to for the proper interpretation of the HTSUS. 54 Fed. Reg.
35127, 35128 (August 23, 1989).
In general, essential character has been construed to mean
the attribute which strongly marks or serves to distinguish what
an article is; that which is indispensable to the structure, core
or condition of the article. In addition, EN Rule 3(b) (pg. 4),
provides further factors which help determine the essential
character of goods. Factors such as bulk, quantity, weight or
value, or the role of a constituent material in relation to the
use of the goods are to be utilized, though the importance of
certain factors will vary between different kinds of goods.
The issue to be determined is whether the steel structure as
imported has the essential character of the completed shade house
system. We are of the opinion that the essential character of
the shade house system is the shade cloth. The shade cloth is
the component which protects the plants from the sunlight and,
therefore, is the component which marks or serves to distinguish
the completed shade house system. As the steel structure without
the shade cloth does not have the essential character of the
completed shade house system, it cannot be classified as an
incomplete shade house system.
Classification is based upon the condition of an article at
the time of importation. United States vs. Citroen, 223 U.S. 407
(1911). Therefore, classification is based on the steel
structure's condition as imported. Pursuant to GRI 2(a), HTSUS,
the unassembled steel structure is classified in the same heading
as an assembled steel structure. We are of the opinion that the
steel structure is classified under subheading 7308.90.90, HTSUS,
which provides for "Structures (excluding prefabricated buildings
of heading 9406) and parts of structures (for example, bridges
and bridge sections, lock gates, towers, lattice masts, roofs,
and roofing frameworks, doors and windows and their frames and
thresholds for doors, shutters, balustrades, pillars and columns)
of iron or steel; plates, rods, angles, shapes, sections, tubes
and the like, prepared for use in structures, of iron or
steel...Other...Other...." This provision is dutiable at the
Column 1 rate of 5.7 percent ad valorem.
Moreover, Chapter 98, HTSUS, provides an additional U.S.
classification that grants preferential treatment to qualifying
articles. Subheading 9817.00.50, HTSUS, provides for machinery,
equipment and implements to be used for agricultural or
horticultural purposes. This tariff provision is an actual use
provision. See, Headquarters Ruling Letter (HRL) 083930 dated
May 19, 1989. To fall within this special classification the
following three part test must be met:
(1) The article in question must not be excluded from the
heading under Section XXII, Chapter 98, Subchapter
XVII, U.S. Note 2, HTSUS.
(2) The terms of the headings must be met in accordance
with General Rule of Interpretation (GRI) 1, HTSUS,
which provides that classification is determined
according to the terms of the headings and any relative
section or chapter notes.
(3) The article must comply with the actual use provision
requirements of sections 10.131-10.139, Customs
Regulations (19 CFR 10.131-10.139).
The first part of the test is that the articles not be
excluded from classification by Section XXII, Chapter 98,
Subchapter XVII, U.S. Note 2, HTSUS. As stated above, the steel
structure is classified under subheading 7308.90.90, HTSUS. This
subheading is not excluded from classification under heading
9817, HTSUS, by operation of Section XXII, Chapter 98, Subchapter
XVII, U.S. Note 2, HTSUS.
The second part of the test calls for the steel structures
to be included within the terms of subheading 9817.00.50, HTSUS,
as required by GRI 1, HTSUS. The steel structures must be
"machinery", "equipment" or "implements" used for "agricultural
or horticultural purposes." Webster's II New Riverside
University Dictionary (1988), defines machinery, equipment,
implement and agricultural as follows:
Machinery: machines or machine parts in general...the
working parts of a machine...a system of
related elements that operates in a definable
way....
Equipment: the act of equipping or state of being
equipped...something with which one is
equipped....
Implement: a tool, utensil, or instrument for doing a
task...an article used to outfit or equip....
Agriculture: the science, art, and business of cultivating
the soil, producing crops, and raising
livestock...farming.
Based on the submitted information, the steel structures
meet the definition of machinery, equipment and implements to be
used for agricultural purposes. The steel structure is an
implement which, when used in conjunction with the cloth shade,
shades plants from direct sunlight. Growing plants or the
production of crops is an acceptable agricultural use.
Therefore, the steel structure meets the requirements of the
second part of the test.
The third part of the test is that the requirements of 19
CFR 10.131-10.139), be met. If these requirements are
satisfied, the third part of the test will be met and the steel
structures will be classifiable under subheading 9817.00.50,
HTSUS.
HOLDING:
The unassembled steel structure is classified under
subheading 7308.90.90, HTSUS. Additionally, the steel structure
is eligible for duty free treatment under subheading 9817.00.50,
HTSUS, provided the actual use requirements of section 10.131-
10.139, Customs Regulations (19 CFR 10.131-10.139), are
satisfied.
Sincerely,
John Durant, Director
Commercial Rulings Division