CLA-2 CO:R:C:M 955501 DWS
District Director
U.S. Customs Service
55 Erieview Plaza
Plaza Nine Building, 6th Floor
Cleveland, OH 44114
RE: IA 91/93; Fabricated Steel Base and Acoustic Steel Enclosure;
Gas Turbine; Kores Manufacturing Inc. v. U.S.; HQ 065167
(IA 34/80); American Powerail, Inc. v. U.S.; GRI 2(a);
Explanatory Notes 2(a)(V) and (VII); 8411.99.90
Dear District Director:
This is in response to your memorandum of October 28, 1993
(CLA-1-CL:DD:CO:TEB AW), relating to a request for internal advice
initiated by a letter dated July 27, 1993, from General Electric
Company, concerning the classification of a fabricated steel base
and an acoustic steel enclosure under the Harmonized Tariff
Schedule of the United States (HTSUS).
FACTS:
The merchandise consists of a fabricated steel base and an
acoustic steel enclosure, designed solely for use with the "LM2500
Gas Turbine" in a marine environment. The gas turbine is used in
marine and industrial applications.
The enclosure is the acoustical and thermal protection for
the gas turbine and is designed to be mated to the corresponding
mounting interfaces on the gas turbine. Special features,
including the ability to withstand shocks, lateral and torsional
motion, and vibration, have been designed into the enclosure to
withstand severe marine conditions. It also features noise
reduction and corrosion resistance. The enclosure, which measures
approximately 315 inches x 104 inches x 77.5 inches, consists of
welded panels (four sides and a roof) with steel sheet outer skin framed with 4 inch wide bars and steel zee shaped
studs. The walls and roof are filled with insulation wrapped in
mylar or kapton bags which are fitted between the zee members. A
damping compound is applied to the inner surface of the outer skin.
The inner surfaces of the walls and roof are covered with stainless
steel. The enclosure is imported into the U.S. in a knock down
flat form (KDF), requiring minor assembly after importation.
The base, which measures approximately 315 inches x 104 inches
x 18 inches, is the primary structural support of the gas turbine
and is designed to be mated to the corresponding mounting
interfaces on the gas turbine. The same special features designed
into the enclosure are present in the base. The base also features
noise reduction. It is a welded structure consisting of 18 inch
high double webbed side and end beams, and a 4 inch thick floor
made from top and bottom steel sheets separated by structural
members (angles and beams).
The subheadings under consideration are as follows:
8411.99.90: [t]urbojets, turbopropellers and other gas
turbines, and parts thereof: [p]arts: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 3.7 percent ad valorem.
7326.90.90: [o]ther articles of iron or steel: [o]ther:
[o]ther: [o]ther: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 5.7 percent ad valorem.
ISSUES:
Whether the acoustic steel enclosure and fabricated steel base
are classifiable under subheading 8411.99.90, HTSUS, as parts of
gas turbines, or under subheading 7326.90.90, HTSUS, as other
articles of steel.
Whether the acoustic steel enclosure, imported into the U.S.
in a complete and unassembled form, imparts the essential character
of an assembled acoustic steel enclosure.
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.
To determine the classification of the merchandise, we must
ascertain whether the enclosure and the base are parts of gas
turbines. Whether an article is a part of another article depends
on the nature of the so-called "part" and its usefulness, function
and purpose in relation to the article in which it is designed to
serve. Kores Manufacturing Inc. v. U.S., 3 CIT 178, 179 (1982),
aff'd appeal No. 82-83 (C.A.F.C. 1983).
In HQ 065167 (IA 34/80), dated December 1, 1980, a Tariff
Schedules of the United States (TSUS) decision, we held that
articles similar to the subject merchandise (base structures and
barrier walls) were classifiable under item 657.25, TSUS, as other
articles of iron or steel. The importer claimed that the
merchandise in that case was classifiable under item 660.54, TSUS,
as parts of gas turbine engines.
In explaining our holding in HQ 065167, we stated that:
[t]he base structure, support mount, barrier wall, and
exhaust eductor or suitable substitutes for such items are
essential to the intended operation of the gas turbine
engine when they are assembled into a propulsion system for
marine or industrial use. However, in determining
whether a component is part of an article the relevant
question is whether that component is essential to the
completion of the article. See American Powerail, Inc.
v. U.S., ___ Cust. Ct. ___, C.D. 4828 (1979). In the case
at hand, the gas turbine engine is complete in itself
without the support components of modular enclosure.
Therefore, the components in issue are not parts of a
gas turbine engine for the purposes of tariff
classification in item 660.54, TSUS . . .
Decisions under the TSUS are not dispositive in interpreting
the HTSUS. However, on a case-by-case basis they should be
considered instructive in interpreting the HTSUS, particularly
where the nomenclature previously interpreted in those decisions
remains unchanged and no dissimilar interpretation is required by
the text of the HTSUS. H. Conf. Rep. No. 576, p.550.
We consider HQ 065167 instructive in this instance because it
dealt with similar merchandise, and the nomenclature at issue has
remained unchanged. It is our position, therefore, that the
acoustic steel enclosure and the fabricated steel base are not
parts of the "LM25OO Gas Turbine". Although the components are
essential to the operation of the gas turbine in a marine
application, they are not essential to the completion of the gas
turbine itself. The gas turbine can operate effectively without
the use of the enclosure and base.
Consequently, because the enclosure and base are not
classifiable elsewhere in the HTSUS, they are classifiable under
subheading 7326.90.90, HTSUS.
We must now determine whether the enclosure, imported into
the U.S. in a complete and unassembled form, imparts the essential
character of an assembled enclosure. GRI 2(a) 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.
It is our position that the enclosure, imported in a complete
and unassembled form, imparts the essential character of an
assembled enclosure. Also, we are satisfied that the enclosure is
presented unassembled for reasons such as convenience of packing,
handling, or transport, and that the enclosure will be assembled
by means of simple fixing devices.
HOLDING:
The acoustic steel enclosure and the fabricated steel base
are classifiable under subheading 7326.90.90, HTSUS, as other
articles of iron or steel.
This decision should be mailed by your office to the internal
advice requester no later than 60 days from the date of this
letter. On that date, the Office of Regulations and Rulings will
take steps to make the decision available to Customs
personnel via the Customs Ruling Module in ACS and the public via
the Diskette Subscription Service, Lexis, Freedom of Information
Act, and other public access channels.
Sincerely,
John Durant, Director