CLA-2 OT:RR:CTF:TCM H125916 GC
U.S. Customs and Border Protection
Chicago Service Port
9915 Bryn Mawr
Rosemont, Illinois 60018
Attn: Gregory Swat, Import Specialist
RE: Tariff classification of aluminum alloy bicycle wheel hubs;
Protest Number 3901-10-100538
Dear Port Director:
This letter is in reply to protest, and application for further review (AFR), number 3901-10-100538, dated May 25, 2010, filed on behalf of Trek Bicycle Corporation (Trek), against U.S. Customs and Border Protection’s (CBP) reclassification and subsequent liquidation of three entries of aluminum alloy bicycle wheel hubs.
FACTS:
This protest pertains to three entries taking place between January 10, 2010 and February 14, 2010, which cover, among other products, the front and rear wheel aluminum alloy bicycle wheel hubs imported for installation onto Trek bicycles. The hubs are stated to be quick release hubs. They are constructed of aluminum alloy with hollow unthreaded axles. After importation, a lever-operated quick release mechanism, also known as a quick release skewer, will be added to the subject hubs. The quick release skewer allows the bicycle owner to quickly remove and replace the wheel without the use of tools.
The subject merchandise was entered under subheading 8714.93.05, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “[p]arts and accessories of vehicles of headings 8711 to 8713: Other: Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket-wheels: Hubs: Aluminum alloy hubs with a hollow axle and lever-operated quick release mechanism….” At liquidation, dated March 12, 2010 for two entries and April 2, 2010 for the third, the bicycle wheel hubs were classified under subheading 8714.93.35, HTSUS, which provides for: “[p]arts and accessories of vehicles of headings 8711 to 8713: Other: Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket-wheels: Hubs: Other: Other….”
ISSUE:
Whether, at the time of importation, the subject bicycle wheel hubs possess the essential character of aluminum alloy hubs with a hollow axle and a lever-operated quick release mechanism provided for under subheading 8714.93.05, HTSUS?
LAW AND ANALYSIS:
Initially we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification and the rate and amount of duties chargeable. The protest was timely filed on May 25, 2010, within 180 days of liquidation, pursuant to 19 U.S.C. §1514(c)(3).
Further review of Protest 3901-10-100538 was properly accorded to protestant pursuant to 19 C.F.R. §174.24. Specifically, in accordance with Section 174.24(b), the decision against which the protest was filed involves questions of law or fact which had not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts (i.e., the scope of subheading 8714.93.05, HTSUS).
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 at the time of entry under consideration are as follows:
8714 Parts and accessories of vehicles of headings 8711 to 8713:
Other:
8714.93 Hubs, other than coater braking hubs and hub brakes, and free-wheel sprocket-wheels:
Hubs:
8714.93.05 Aluminum alloy hubs with a hollow axle and lever-operated quick release mechanism…
* * *
Other:
8714.93.35 Other…
It is undisputed that the subject bicycle wheel hubs are classified under heading 8714, HTSUS, as parts of bicycles. Because the dispute before us occurs beyond the heading level of the HTSUS, GRI 6 is implicated. GRI 6 states the following:
For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
Counsel for Trek argues that the wheel hubs are classified under subheading 8714.93.05, HTSUS, by application of GRIs 6 and 2(a). GRI 2(a) provides:
Any reference in a [sub]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 as the essential character of the complete or finished article. It shall also include 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 the context of GRI 2(a), CBP has explained that the term “essential character” means the attribute that serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the good; the aggregate of distinctive component parts that establishes the identity of an article as what it is, its very essence. See Headquarters Ruling Letter (HQ) 967975, dated March 24, 2006.
Accordingly, the central issue herein is whether the instant bicycle wheel hubs posses the essential character of “aluminum alloy hubs with a hollow axle and lever-operated quick release mechanism”, which are provided for under subheading 8714.93.05, HTSUS. While Trek acknowledges that the quick release skewers perform a significant function with respect to the operation of the subject hubs, it argues that classification under subheading 8714.93.05, HTSUS, would be consistent with HQ 967975, supra., where CBP applied GRI 2(a) to classify crimping presses imported with the precast dies necessary to crimp metal contacts to bare wire ends as unfinished bending and folding machine tools of heading 8462, HTSUS. In this regard, counsel for Trek states although the quick release skewers play an important role with respect to the subject quick release hubs, their absence at importation does not prevent a finding that the hubs possess the essential character of a good of subheading 8714.93.05, HTSUS. As support, counsel states that the instant hubs are specifically designed to incorporate lever-operated quick release skewers. Specifically, the hollow axles of the imported hubs are cited as characteristics that make the instant hubs recognizable as quick-release hubs classified under subheading 8714.93.05, HTSUS.
In HQ 967975, CBP found that the subject crimping machines consisted of the aggregate of distinctive component parts that established the identity of the subject articles as bending and folding machine tools of heading 8462, HTSUS. We note that the precast dies missing from the crimping machines at importation were necessary for the machines to work in conjunction with wire processing machines, but the crimping machines at importation were in fact capable of being used as stand-alone machines. Accordingly, per GRI 2(a), the scope of heading 8462, HTSUS, was determined to cover machine tools lacking the precast dies.
Here, the bicycle hubs at importation are not identifiable as bicycle hubs of subheading 8714.93.05, HTSUS, as “[a]luminum alloy hubs with a hollow axle and lever-operated quick release mechanism” because the lever-operated quick release mechanism (i.e. the quick release skewer) is not imported with the subject merchandise. Despite statements by Trek to the contrary, the fact that the imported hubs feature a hollow axle does not indicate that they are designed to be quick release hubs. Such hubs can be fitted with skewers that do not feature a quick release lever, which, in contrast to the precast dies at issue in HQ 967975, is a named element of products of subheading 8714.93.05, HTSUS. As imported, there is nothing about the subject merchandise that leads to the conclusion that it possess the essential character of an aluminum alloy hub with a hollow axle and a lever-operated quick release mechanism. Accordingly, the scope of subheading 8714.93.05, HTSUS, does not include the subject product by application of GRI 2(a). The instant bicycle wheel hubs are properly classified under subheading 8714.93.35, HTSUS, as other hubs, by application for GRIs 1 and 6.
HOLDING:
By application of GRI 1, HTSUS, the instant front and rear wheel aluminum alloy bicycle wheel hubs are classified under heading 8714, HTSUS. By application of GRIs 1 and 6, HTSUS, they subject merchandise is specifically provided for under subheading 8714.93.35, HTSUS, which provides for: “[p]arts and accessories of vehicles of headings 8711 to 8713: Other: Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket-wheels: Hubs: Other: Other….” The column one, general rate of duty at the time of entry was 10 percent ad valorem.
The protest should be denied. 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 CBP 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 Regulations and Rulings of the Office of International Trade 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