CLA-2 OT:RR:CTF:TCM H030419 DSR
Gary C. Chambers, President
ATC Sales, LLC
5679 Adams-Leidenforst Road
Hector, NY 14841
RE: Reconsideration of NY N025810, dated April 22, 2008; classification of motor vehicle from China
Dear Mr. Chambers:
This is in response to a request for reconsideration dated December 3, 2008, made on behalf of ATC Sales, LLC (hereinafter “ATC”) of New York (NY) ruling letter N025810, issued to ATC by U.S. Customs and Border Protection (CBP) on April 22, 2008.
The issues addressed by this ruling originated in a request for a ruling made by ATC on April 8, 2008, pertaining to the tariff classification of motor vehicles from China. The resulting ruling NY N025810 classified the motor vehicles, identified as “Cooler Scooters,” under subheading 8704.31.00, of the Harmonized Tariff Schedule of the United States (HTSUS), covering “Motor vehicles for the transport of goods: Other, with spark-ignition internal combustion piston engine: G.V.W. not exceeding 5 metric tons.”
You assert that the classification of the motor vehicles was in error, and that the correct tariff classification is heading 8703, HTSUS, in particular subheading 8703.21.00, which provides for “Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars: Other vehicles with spark-ignition internal combustion reciprocating piston engine: Of a cylinder capacity not exceeding 1,000 cc.”
FACTS:
The Cooler Scooter is a four-wheeled vehicle that is offered with two engine options: a two-piston stroke engine with 49cc of cylinder capacity; and a four-piston stroke engine with 33cc of cylinder capacity. Both engines operate by spark-ignition internal combustion, their horsepower rates at 1.5hp, and they each have a fuel capacity of .16 gallons. The Cooler Scooter is 39.5 inches long with a 28.5-inch turning radius, has a maximum speed of seven (7) miles per hour, and comes equipped with pneumatic tires. A plastic cooler is specially designed for and permanently attached to the floor section connecting the vehicle’s four wheels, and serves as both a seat and a stowage area for goods. The vehicle does not possess a protective frame, windshield, roof, windows, passenger heating or cooling elements, safety restraints, rearview mirrors, armrests, or headlights.
The vehicle’s marketing materials state that it is designed with the intention of safely seating and transporting one human operator, and is described as “the world’s first all-terrain cooler.” The vehicle is used to transport the operator and picnic supplies a short distance to off-road locations but is pictured in its marketing materials being used in a variety of locales and operating on a variety of surfaces, including asphalt, grass, and dirt trails. However, it is not recommended for use on any public roads or highways, as noted in its owner’s manual, inasmuch as such use may be unlawful depending upon the laws of the jurisdiction in which the Cooler Scooter is operated. Additional information provided to this office indicates that the Cooler Scooter has the following additional characteristics and features: handgrips; steering handle bar; finger brake and throttle; chain guard; rear bumper with stabilizer wheel; running boards; and fenders. The patent (U.S. Pat. No. 7,055,642) that covers the vehicle claims the following:
[The Cooler Scooter] is a transport kart capable of transporting at least one human passenger through use of … container for said human passengers to sit and ride upon during transport … wherein said container includes a stowage space … [and is] capable providing for … human transportation by providing for attachment of ... container representative of common ice-chest or common cooler to provide primary means of support and seating.
ISSUE:
Whether the Cooler Scooter is classified under heading 8703, HTSUS, as a motor vehicle “principally designed for the transport of persons,” or under heading 8704, HTSUS, as a motor vehicle “for the transport of goods.”
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration in this case are as follows:
8703 Motor car and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars:
* * *
Other vehicles, with spark-ignition internal combustion reciprocating piston engine:
8703.21.00 Of a cylinder capacity not exceeding 1,000 cc …
* * * *
8704 Motor vehicles for the transport of goods:
* * *
Other, with spark-ignition internal combustion piston engine:
8704.31.00 G.V.W. not exceeding 5 metric tons …
* * * *
Commencing with classification of the Cooler Scooter, in accordance with the dictates of GRI 1, both headings refer to “vehicles,” however the term is not defined in the HTSUS nor in the ENs. A tariff term that is not defined in the HTSUS or in the ENs is construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States, 69 CCPA 89, 92, 673 F.2d 380, 382 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 134, 673 F.2d 1268, 1271 (1982). The New Oxford American Dictionary 2nd Edition defines “vehicle” as “means of conveyance provided with wheels or runners and used for the carriage of persons or goods; a carriage, cart, wagon, sledge, or similar contrivance.” The Cooler Scooter is powered by a motorized engine and is clearly a device with wheels that is used to carry persons and goods over land. Thus, the Cooler Scooter is a “motor vehicle” within the meanings of both heading 8703 and heading 8704, HTSUS. The question that remains is whether it is a motor vehicle principally designed for the transport of persons, and thus provided for in heading 8703, or if it is otherwise a motor vehicle designed to transport goods and, thus, provided for in heading 8704.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80. The EN to heading 8703 notes the following factors should be considered when determining if a motor vehicle falls within heading 8703:
(1) Presence of permanent seats with safety equipment (e.g., safety seat belts or anchor points and fittings for installing safety seat belts) for each person or the presence of permanent anchor points and fittings for installing seats and
safety equipment in the rear area behind the area for the driver and front passengers; such seats may be fixed, fold-away, removable from anchor points or collapsible;
(2) Presence of rear windows along the two side panels;
(3) Presence of sliding, swing-out or lift-up door or doors, with windows, on the side panels or in the rear;
(4) Absence of a permanent panel or barrier between the area for the driver and front passengers and the rear area that may be used for the transport of both persons and goods;
(5) Presence of comfort features and interior finish and fittings throughout the vehicle interior that are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ashtrays).
By contrast, the EN to heading 8704 lists the following factors as supportive of classification of a motor vehicle under heading 8704:
Presence of bench-type seats without safety equipment (e.g., safety seat
belts or anchor points and fittings for installing safety seat belts) or passenger amenities in the rear area behind the area for the driver and front passengers. Such seats are normally fold-away or collapsible to allow full use of the rear floor (van-type vehicles) or a separate platform (pick-up vehicles) for the transport of goods
Presence of a separate cabin for the driver and passengers and a separate open platform with side panels and a drop-down tailgate (pick-up vehicles)
Absence of rear windows along the two side panels; presence of sliding, swing-out or lift-up door or doors, without windows, on the side panels or in the rear for loading and unloading goods (van-type vehicles)
Presence of a permanent panel or barrier between the area for the driver and front passengers and the rear area
Absence of comfort features and interior finish and fittings in the cargo bed area which are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ashtrays).
Moreover, the Court of Appeals for the Federal Circuit has stated the following:
By the express language of 8703, “motor vehicle principally designed for the transport of persons,” it is clear that the vehicle must be designed “more” for the transport of persons than goods. Webster's Third New International Dictionary of the English Language, Unabridged (1986) defines “principally” as “in the chief place, chiefly;’ and defines “designed” as “done by design or purposefully opposed to accidental or inadvertent; intended, planned.” Thus, if the vehicle is equally designed for the transport of goods and persons, it would not be properly classified under 8703 HTSUS. There is nothing in the legislative history that indicates a different meaning.
Marubeni America Corp. v. United States, 35 F.3d 530, 534 (Fed.Cir. 1994), aff’g Marubeni America Corp. v. United States, 821 F. Supp. 1521 (CIT 1993). Thus, the Cooler Scooter need not be uniquely designed for the transport of persons to fall within heading 8703. It need only be principally designed for that purpose, which is dependent upon both the structural and auxiliary design features, as neither by itself is determinative. Id. at 535.
Here, the Cooler Scooter possesses none of the features listed in EN 8703. There are no safety restraints or fittings, windows, or doors on the Cooler Scooter, nor are there any comfort features typical of a motor vehicle principally designed for the transport of persons, such as a cushioned seat; arm rests; handholds; footwells; or seat belts. See HQ H021296 (April 30, 2009) (lists features such as minimal storage area; protective frame; roof; windshield; integrated heating and cooling elements; safety restraints; rearview mirrors; headlights; and speedometer as indicative of a vehicle that is principally designed for the transport of persons); HQ 961512 (April 24, 1998) (lists speedometer; odometer; head lamps; tinted glass windshield with wiper; duel rear view mirrors; adjustable buckets seats; seatbelts; doors; and a stereo system as indicative as a vehicle that is designed principally for the transport of persons); HQ 956345 (February 16, 1995); Marubeni at 537 (lists comfortable seats that recline; stereo outlets; ashtrays; cubbyholes; armrests; handholds; footwells; seat belts; child seat tie down hooks; and operable windows as indicative as a vehicle that is designed principally for the transport of persons). At its essence, the Cooler Scooter is a four-wheeled motorized platform upon which a cooler is permanently affixed for use as a stowage container and as a bench seat for the operator of the vehicle. There is no segregated “passenger” area in the vehicle at all and it possesses none of the features that are typically indicative of a vehicle designed principally for the transport of persons. As a result, we find that the Cooler Scooter does not fall within the purview of heading 8703, HTSUS, but is instead covered by heading 8704, HTSUS, specifically 8704.31.00, HTSUS, which covers “Motor vehicles for the transport of goods: Other, with spark-ignition internal combustion piston engine: G.V.W. not exceeding 5 metric tons.”
HOLDING:
By application of GRI 1, the “Cooler Scooter” is classifiable under heading 8704, HTS. Specifically, it is classifiable under subheading 8704.31.00, HTSUS, which covers “Motor vehicles for the transport of goods: Other, with spark-ignition internal combustion piston engine: G.V.W. not exceeding 5 metric tons.” The column one, general rate of duty is 25 percent ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N025810, dated April 22, 2008, is hereby AFFIRMED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division