CLA-2 OT:RR:CTF:TCM H123524 CkG
Port Director
U.S. Customs and Border Protection
Port of Houston
2350 N. Sam Houston Pkwy E. #1000
Houston, TX 77032-3100
RE: Application for Further Review of Protest No. 5309-10-100335;
classification of self-propelled modular transports
Dear Port Director:
This is in response to the Application for Further Review of Protest No. 5309-10-100335 filed on behalf of Mammoet, Inc. ('Protestant"), contesting Customs and Border Protection's (CBP) classification and liquidation of self-propelled modular transports in heading 8704, HTSUS, as motor vehicles for the transport of goods.
The subject merchandise was entered on June 30, 2009 at the Port of Houston. CBP liquidated the entry on April 23, 2010, in heading 8704, HTSUS. Protestant claims classification in heading 8716, HTSUS, as a trailer, or alternatively, as a works truck of heading 8709.
FACTS:
The instant merchandise is a self-propelled modular transporter ("SPMT), manufactured by Scheuerle Corp. An SPMT is a modular vehicle designed for off-highway transport of extremely heavy loads over short distances. An SPMT is a modular unit, meaning that it can be connected to other SPMTs to accommodate larger loads. An SPMT is not towed by a tractor; rather it contains its own integrated power system. Each transport contains a removable power pack unit, containing the fuel combustion engine which drives the hydraulic pumps used to propel, steer and raise/lower the trailers. The top speed when unladen is 12 km/h (roughly 6.5 mph). The power pack unit can also hydraulically raise or lower the trailer platform. Each module can be connected mechanically, or can be freely arranged up to distances of 999 meters, connected only by a data link. An SPMT is equipped with either four or six axles, referred to as "lines". The SPMTs have a capacity of 36 tons per line of two axels. Mammoet imports both the four and six line modules.
ISSUE:
Whether the instant transports are classified in heading 8704, HTSUS, as motor vehicles for the transport of goods; heading 8709, HTSUS, as works trucks; or heading 8716, HTSUS, as trailers.
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 5309-2010-100335 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with prior CBP rulings with respect to the same or substantially similar merchandise, specifically HQ 085424, dated November 29, 1989, HQ 952400, dated February 09, 1993, HQ 955231, dated January 7, 1994, and NY D86210, dated January 7, 1999.
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the remaining GRIs 2 through 6.
The HTSUS provisions under consideration are as follows:
8704: Motor vehicles for the transport of goods:
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel):
8704.23.00: G.V.W. exceeding 20 metric tons . . .
* * * * *
8709: Works trucks, self-propelled, not fitted with lifting or handling equipment, of the
type used in factories, warehouses, dock areas or airports for short distance transport of goods; ...; parts of the foregoing vehicles...:
Vehicles:
8709.19.00: Other...
* * * * *
8716: Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof:
Other trailers and semi-trailers for the transport of goods:
8716.39.00: Other . . .
* * * * *
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither 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, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 87.04 provides, in pertinent part, as follows:
The classification of certain motor vehicles in this heading is determined by certain features which indicate that the vehicles are designed for the transport of goods rather than for the transport of persons (heading 87.03)... The following features are indicative of the design characteristics generally applicable to the vehicles which fall in this heading:
(a) 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;
(b) 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);
(c) 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);
(d) Presence of a permanent panel or barrier between the area for the driver and front passengers and the rear area;
(e) 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).
...
This heading also covers :
(3) Self-loading vehicles equipped with winches, elevating devices, etc., but designed essentially for transport purposes.
EN 87.09 provides, in pertinent part, as follows:
This heading covers a group of self-propelled vehicles of the types used in factories, warehouses, dock areas or airports for the short distance transport of various loads (goods or containers) or, on railway station platforms, to haul small trailers.
Such vehicles are of many types and sizes. They may be driven either by an electric motor with current supplied by accumulators or by an internal combustion piston engine or other engine.
The main features common to the vehicles of this heading which generally distinguish them from the vehicles of heading 87.01, 87.03 or 87.04 may be summarised as follows :
(1) Their construction and, as a rule, their special design features, make them
unsuitable for the transport of passengers or for the transport of goods by road or other public ways.
(2) Their top speed when laden is generally not more than 30 to 35 km/h.
(3) Their turning radius is approximately equal to the length of the vehicle
itself.
Vehicles of this heading do not usually have a closed driving cab, the accommodation for the driver often being no more than a platform on which he stands to steer the vehicle. Certain types may be equipped with a protective frame, metal screen, etc., over the driver's seat.
The vehicles of this heading may be pedestrian controlled.
Works trucks are self-propelled trucks for the transport of goods which are fitted with, for example, a platform or container on which the goods are loaded.
Small tank trucks of a kind generally used in railway stations, whether or not fitted with subsidiary pumps, are also classified here.
Tractors of the type used on railway station platforms are designed primarily to tow or push other vehicles, e.g., small trailers. They do not themselves carry goods, and are generally lighter and less powerful than the tractors of heading 87.01. Tractors of this type may also be used on wharfs, in warehouses, etc.
EN 87.16 provides, in pertinent part, as follows:
This heading covers a group of non-mechanically propelled vehicles (other than those of the preceding headings) equipped with one or more wheels and constructed for the transport of goods or persons.
The vehicles of this heading are designed to be towed by other vehicles (tractors, lorries, trucks, motorcycles, bicycles, etc.), to be pushed or pulled by hand, to be pushed by foot or to be drawn by animals.
Protestant claims classification in heading 8716, HTSUS, as a trailer or semi-trailer. Heading 8716 covers trailers, semi-trailers, and other vehicles, non-mechanically propelled. Protestant cites Headquarters Ruling Letter (HQ) 085424, dated November 29, 1989, as support for its claim that the SPMTs are not mechanically propelled. In that ruling, we stated as follows:
The trailer, although described as "powered" and designed with two hydraulic motors to provide tractive power to the tracks, is not self-propelled. The trailer does not have its own power source (motor and hydraulic pump to power the two hydraulic motors). The two hydraulic motors can become functional only when the trailer is coupled to the Formatic 4 tractor and its hydraulic system. Furthermore, the trailer has no independent steering system....
The term "mechanically propelled" is not synonymous with "self-propelled." For example, wheelchairs with a mechanical device for propulsion when operated by the physical action of the operator are not self-propelled. They are, however, mechanically propelled. In this case, the hydraulic motors, powered by a pump located on a tractor, provide mechanical propulsion to the tracks on the trailer.
This ruling in no way excludes self-propelled vehicles from classification in heading 8716, HTSUS; it merely notes that not all mechanically propelled vehicles are self-propelled. EN 87.16 offers further clarification of what is meant by "mechanically propelled." The EN states that vehicles of heading 8716 are designed to be towed by other vehicles, to be pushed or pulled by hand, by animals, etc. Hence non-mechanically propelled vehicles are vehicles which have no built-in means of propulsion, and have to be pushed or pulled by the operator, by other vehicles, etc. HQ 085424 merely clarifies the distinction between "self-propelled" and "mechanically propelled." A self-propelled vehicle, according to HQ 085424, would require an independent power source and steering system. The vehicle at issue in HQ 085424 was not self-propelled because the hydraulic motors were powered by a separate tractor, but they were mechanically propelled because the hydraulic motors still provided mechanical propulsion to the trailer-as opposed to other vehicles included in this heading, such as sleds, which rely primarily on gravity and physical propulsion by the operator. The instant trailers have an independent power source providing mechanical propulsion, and an independent steering system; they are therefore both self-propelled and mechanically propelled. The SPMTs are therefore not described by the terms of heading 8716, HTSUS, which includes only non-mechanically propelled vehicles.
Alternatively, Protestant claims classification in heading 8709, HTSUS, as a works truck, self-propelled, not fitted with lifting or handling equipment. As noted above, the SPMT contains an elevating platform which raises and lowers to load and deposit cargo without the aid of additional lifting devices such as cranes. The Scheurele brochure for the instant SPMT indicates that the power pack unit, which provides both the propulsion and lift capability, possesses an elevating capacity of up to 12 degrees. Trucks with lifting or handling equipment are not provided for in heading 8709, HTSUS. Although protestant points to prior CBP rulings, HQ 955231, dated January 7, 1994, and HQ 952400, dated February 09, 1993, classifying similar platform trucks in heading 8709, HTSUS, we note that these rulings relied in part on the language of the EN to 87.09, which at the time included "self-propelled trucks for the transport of goods which are fitted with, for example, a platform or container (sometimes designed for elevating) on which the goods are loaded (emphasis added)." EN 87.09 no longer contains any reference to elevating platforms. Our decision in NY D86210, dated January 7, 1999, was based on CBP's position at the time as set forth in the HQ rulings discussed above, which is no longer applicable due to the change in the EN. Furthermore, as CBP noted in HQ 955231, the transports at issue do not have the features commonly associated with works trucks of heading 8709, such as open driving cabs.
EN 87.09 also states that the construction and design features of works trucks of heading 8709 make them unsuitable for the transport of goods by road or other public ways. While protestant claims that the Scheurele SPMT is not suitable for transport of goods by road, we note that the brochure submitted with the protest in fact lists road transportation as one of the intended uses, and further asserts that the SPMT is certified for such use ("homologation for road transport"). Indeed, the brochure claims that each SPMT has a multi-functional use-e.g., an integrated driver's cabin for longer transportation routes.
The Scheurele SPMT is fitted with lifting equipment and is thus precluded from classification in heading 8709, HTSUS. The SPMT is indisputably a motor vehicle for the transport of goods, prima facie classifiable in heading 8704. Protestant disputes classification in heading 8704 on the basis that heading 8709 offers a more specific description. However, because classification in other headings of Chapter 87 is precluded, there is no more specific provision. As a motor vehicle for the transport of goods, the SPMT falls within the scope of heading 8704.
HOLDING:
By application of GRI 1, the Scheuerle SPMTs are classified in heading 8704, HTSUS, specifically subheading 8704.23.00, HTSUS, which provides for "Motor vehicles for the transport of goods: Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel): G.V.W. exceeding 20 metric tons." The 2010 column one, general rate of duty is 25% ad valorem.
You are instructed to deny the protest in full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division
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