CLA–2 OT:RR:CTF:TCM H127797 AMM
Mr. Alexander H. Schaefer
Crowell & Moring, LLP
1001 Pennsylvania Ave, NW
Washington DC, 20004-2595
RE: Request for Reconsideration of New York Ruling Letter N057448; Classification of flanged wheel hub units from Japan
Dear Mr. Schaefer,
This is in regard to your request, dated September 24, 2010, submitted on behalf of NSK Corporation (NSK), for reconsideration of New York Ruling Letter (NY) N057448, issued to you on May 28, 2009, regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of two flanged wheel hub units. In NY N057448, U.S. Customs and Border Protection (CBP) classified the flanged wheel hub units under heading 8482, HTSUS, as “Ball or roller bearings”.
FACTS:
The products at issue are NSK’s Generation 2 and Generation 3 Hub Units for Non-Driving Wheels. The hub units are angular-contact ball bearings with two rows of steel balls as rolling elements. Generation 2 Hub Units have a flanged outer ring which accommodates wheel studs by which the hub unit is bolted to the brake rotor and wheel of an automobile. The outer ring rotates with the wheel, while the inner ring is press-fitted onto an axle or shaft. Generation 3 Hub Units are double-flanged hub units with both the inner and outer rings flanged to accommodate mounting. When designed for mounting for outer ring rotation, the flanged outer ring of the Generation 3 unit features wheel studs to which the wheels and brake discs are mounted, while the inner ring flange is used to mount the hub unit to the car body. When designed for inner ring rotation, the inner ring features the wheel studs to which the wheels are mounted and the outer ring flange is used to mount the hub unit to the vehicle body.
Included below are cutaway diagrams of Generation 2 and Generation 3 Hub Unit designs, taken from pages 2 and 3 of your submission, dated September 24, 2010:
Generation 2 Hub Unit
Generation 3 Hub Unit
In NY N057448, dated May 28, 2009, CBP classified the Generation 2 and Generation 3 units under subheading 8482.10.50, HTSUS, which provides for “Ball or roller bearings, and parts thereof: Ball bearings: Other”. In your letter of September 24, 2010, you requested reconsideration of this ruling. Specifically, you requested that the above identified products be classified under heading 8708, HTSUS, which provides for “Parts and accessories of the motor vehicles of headings 8701 to 8705”.
ISSUE:
What is the proper classification of the instant Generation 2 and Generation 3 flanged wheel hub units under the HTSUS?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
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 2011 HTSUS provisions at issue are as follows:
8482 Ball or roller bearings, and parts thereof:
8482.10 Ball bearings:
8482.10.50 Other:
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8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:
Other parts and accessories:
8708.99 Other:
Other:
Other:
8708.99.58 Double flanged wheel hub units incorporating ball bearings
Note 1 to Section XVI (which covers chapter 84), HTSUS, states, in pertinent part: “This section does not cover: … (l) Articles of section XVII; …”.
Note 2 to Section XVII (which covers chapter 87), HTSUS, states, in pertinent part: “The expressions ‘parts’ and ‘parts and accessories’ do not apply to the following articles, whether or not they are identifiable as for the goods of this section: … (e) … articles of heading 8481 or 8482 …”.
It follows that, if the instant products are properly classified under heading 8482, HTSUS, Note 2(e) to Section XVII, HTSUS, precludes their classification under heading 8708, HTSUS. Therefore, CBP must first consider whether the instant merchandise is properly classified under heading 8482, HTSUS, as ball bearings.
I. Classification of Generation 2 Hub Units for Non-Driving Wheels
Heading 8482, HTSUS, provides for “Ball or roller bearings”. The terms “bearing” and “ball bearing” are not defined in the HTSUS. When a tariff term is not defined by the HTSUS or its legislative history, “the term’s correct meaning is its common meaning.” Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). The common meaning of a term used in commerce is presumed to be the same as its commercial meaning. Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989). To ascertain the common meaning of a term, CBP may consult “dictionaries, scientific authorities, and other reliable information sources” and “lexicographic and other materials.” C.J. Tower & Sons v. United States, 673 F.2d 1268, 1271 (C.C.P.A. 1982); Simod, 872 F.2d at 1576.
The term “bearing” is defined as “[a]n object, surface, or point that supports: supporting power: point of support: … a machine part in which a journal, gudgeon, pivot, pin or other part revolves, oscillates, or slides – see ball bearing, needle bearing, roller bearing, thrust bearing.” Merriam Webster’s Third New International Dictionary, p. 192 (2003).
In THK America Inc. v. United States, 837 F.Supp. 427 (Ct. Int’l. Trade 1993), the Court of International Trade defined “ball bearings” as “a rolling bearing with balls as rolling elements.” THK America, 837 F.Supp. at 432 (citing The Antifriction Bearing Manufacturers Association Standard Terminology for Antifriction Ball and Roller Bearings and Parts, p. 2, (1984)). The Court further defined a “rolling bearing” as:
A bearing operating with rolling rather than sliding between the parts supporting load and moving in relation to each other. It comprises raceway members and rolling elements with or without means for their spacing and/or guiding. It may be de-signed to support radial, axial or combined radial and axial load.
THK America, 837 F.Supp. at 432 (citing The ABFMA Standard Terminology for Antifriction Ball and Roller Bearings and Parts, p. 12).
In the past, CBP has stated that “a design feature or features which imparts a significant additional non-friction reducing capability to a ball or roller bearing will remove that bearing from the scope of heading 8482.” See Headquarters Ruling Letter (HQ) 960049, dated August 26, 1997. For example, in NY 818084, dated February 7, 1996, CBP classified a splined hub unit for a driving wheel as a part of a motor vehicle in heading 8708, HTSUS, because its inner ring had a splined inner surface which enabled it to transmit the power of the driving axle to the wheel. CBP found this function to be unrelated to friction reduction. See also NY N022275, dated February 6, 2008; NY R023329, dated August 3, 2005; and NY I85202, dated August 20, 2002 (hub units with splined inner surfaces that transmit power from the drive axle to the wheel classified under heading 8708, HTSUS). Furthermore, in NY N075377, dated October 6, 2009, CBP classified an angular contact bearing with a double flanged wheel mounting hub and axle mounting flange in 8708, HTSUS, because it included a toothed sensor ring, known as a “tone ring,” which is a part of an anti-lock brake system.
However, certain features are related to the friction reducing capability of a bearing, and do not remove those products from the scope of heading 8482, HTSUS. In HQ 960049, CBP considered a Generation 2 hub unit for a non-driving wheel which had an inner ring fitted over an axle shaft and a flanged outer ring and spigot for attachment to the wheel hub. CBP stated “that for ball or roller bearings to function as friction-reducing elements they must necessarily have design features which permit them to attach to a shaft or machinery part with which they will be used.” See HQ 960049. There, CBP concluded that the flanged outer ring and spigot – which were designed to facilitate centering and mounting of the brake and wheel – were common design features of ball or roller bearings of this type and did not impart a non-friction reducing capability.
CBP also noted that the fact that the product at issue in HQ 960049 was designed for a specific vehicle was “not legally relevant because many ball or roller bearing types are manufactured to specific engineering and design criteria and are purchased with a particular application in mind.” See HQ 960049. See also HQ 965168, dated July 25, 2002 (double-flange "non-driven hub assembly" consisting of a mounting flange, wheel flange and a bearing, classified under heading 8482, HTSUS).
You submit that the flanged wheel hub units at issue are classified under heading 8708, HTSUS, as parts of motor vehicles. It is your position that the Generation 2 Hub Units are beyond the scope of heading 8482, HTSUS, which covers ball bearings, because they feature functionalities other than friction reduction, and must therefore be classified under heading 8708, HTSUS, as parts of motor vehicles. With regard to the instant Generation 2 Hub Units, you identify three functionalities which you allege to be non-friction reducing functions. We will address each claim separately.
First, you allege that the integral flanges on the inner and outer components of the hub units perform critical safety and performance functions. Specifically, you state 1) that the wheel hub mounting flanges which attach the wheel to the hub perform a critical safety function because their failure can lead to a separation of the wheel from the vehicle, and 2) that the final machining of the mounting flanges is critical to ensure even brake pad wear.
We disagree. A ball bearing is an article which reduces the friction of a rotating load. The manner in which the bearing supports that load, and the manner in which the load is rotated, are both functions of the bearing’s friction reducing capability. Without that load, there can be no friction to reduce. Furthermore, the rotation of that load is what generates the friction which the bearing must reduce.
It is apparent that for ball or roller bearings to function as load-supporting or friction-reducing elements, they must necessarily have design features which permit them to attach and align correctly with a shaft and other machinery with which they will be used. CBP is of the opinion that the flanges are a design feature common to ball or roller bearings of this type that does not impart a significant, non-friction reducing capability. See HQ 960049. Neither does machining the wheel flanges to fit against the wheel in a certain way and permit proper alignment.
Second, you state that the wheel studs of the instant products allow the units to transmit “braking power” to the wheel. The wheel studs are used to secure the hub units to the wheel and brake rotor (or drum), creating a “sandwich” of the wheel, hub unit, and brake rotor/drum. You state that the resulting component sandwich transmits “frictional braking power” to the wheel when the rotor or drum is restrained by the brake caliper.
In our view, the action of the caliper on the rotor is what converts rotational energy to heat and reduces the speed of wheel rotation. The studs are nothing more than fasteners that allow the brake rotor, as well as the wheel, to be mounted after importation to the flanged race of the hub unit, such that all three components are fixed with respect to each other and move together as a single mechanical system. CBP has consistently held that features that facilitate the mounting of a bearing for its intended purpose do not amount to a non-friction reducing capability. See HQ 960049; HQ 965168.
We note that the wheel studs at issue are distinguishable from drive wheel hub splines discussed in NY 818084 and similar rulings. See e.g., NY N022275; NY R023329; NY I85202. Those splines serve no other purpose but to impart to a hub unit the ability to transmit force, i.e. torque, from a drive axle to a wheel when mated with a compatible splined transmission shaft, and they do so without any additional components. Further, the splines are unique to driven wheel assemblies, are not fasteners, and certainly do not obviate the need for studs to allow the various components of a driven wheel hub assembly to be mounted together.
Third, you state that the hubs have a significant effect on the vehicle’s overall system functions. Specifically, you state that the hubs 1) are critical for vehicle chassis system structural strength and integrity, 2) impart ride and handling stiffness characteristics, and 3) ensure accurate positioning between the brake calipers and brake rotor or drum. However, CBP believes that the first two listed functions relate directly to the bearing’s ability to support a load. As discussed above, the manner in which the bearing supports that load is a function of the bearing’s friction reducing capability. Without the proper strength and integrity of the structural components, and without the proper alignment of the parts, the load would not be properly supported. Ride stiffness and handling are directly affected by the distance between the shaft and the rollers, and how the rollers are compressed with applied load. Therefore, neither of these listed characteristics impart a significant, non-friction reducing capability. Furthermore, with regard to assuring accurate positioning between the brake calipers and brake rotor or drum, design features which permit bearings to attach to machinery with which they will be used do not impart significant non-friction reducing capability.
CBP concludes that the instant products do not have any significant, non-friction reducing capabilities that would remove them from heading 8482, HTSUS. According to your submission, dated September 24, 2010, the Generation 2 Hub Units “feature two rings – an inner and an outer – forming a double-row angular contact ball bearing” wherein the roller element may be tapered or spherical. This product is designed to attach to both the axle and wheel of a motor vehicle, and to support the load of that vehicle. Therefore, the Generation 2 Hub Units meet the definition of “ball bearing” given above, and are properly classified under heading 8482, HTSUS, specifically under subheading 8482.10.50, which provides for “Ball or roller bearings, and parts thereof: Ball bearings: Other”.
Finally, we note that Note 2(e) to Section XVII, HTSUS, precludes the instant products from classification as parts of motor vehicles under heading 8708, HTSUS, by virtue of their classification under heading 8482, HTSUS.
II. Classification of Generation 3 Hub Units for Non-Driving Wheels
With regard to the Generation 3 Hub Units, it is your position that they are completely described by subheading 8708.99.58, HTSUS, as double flanged wheel hub units incorporating ball bearings. In the alternative, you argue that the Generation 3 Hub Units are beyond the scope of heading 8482, HTSUS, because they feature functionalities in addition to those of a ball bearing.
Your first argument is that the Generation 3 Hub Units are properly classified under heading 8708, HTSUS, because they are fully described by subheading 8708.99.58, HTSUS. We note, however, that the instant Generation 3 Hub Units must first be properly classified under heading 8708, HTSUS, taking into account any relevant Section or Chapter notes, before the text of any subheadings can be considered. See GRI 1.
As indicated above, Note 2(e) to Section XVII, HTSUS, excludes articles of heading 8482, HTSUS, from Section XVII, HTSUS (which includes heading 8708, HTSUS). Thus, if a product is properly classified under heading 8482, HTSUS, as a ball bearing, then it is precluded from classification under heading 8708, HTSUS, as a part or accessory of a motor vehicle. Your argument that the articles are properly classified under heading 8708, HTSUS, because they are “double flanged wheel hub units” of subheading 8708.99.58, HTSUS, ignores the text of GRI 1 and the relevant Section Notes, which directs CBP to consider whether the article is properly classified under heading 8482, HTSUS, before considering whether it is classified under heading 8708, HTSUS.
The Generation 3 hub units at issue feature inner and outer rings that form a double-row angular contact ball bearing. This product is designed to attach to both the axle and wheel of a motor vehicle, and to support the load of that vehicle. As such, they are properly classified under heading 8482, HTSUS, as ball bearings.
You argue that the Generation 3 Hub Units include additional functionalities which place them outside the scope of heading 8482, HTSUS. Your arguments are identical to those which you presented with respect to the Generation 2 Hub Units above. For the reasons elaborated above in our discussion of the Generation 2 Hub Units, we reach the same conclusion, namely, that the Generation 3 Hub Units do not have any significant, non-friction reducing capability that would exclude them from classification under heading 8482, HTSUS. As the articles are properly classified under heading 8482, HTSUS, Note 2(e) to Section XVII, HTSUS, specifically excludes them from classification as parts of motor vehicles under heading 8708, HTSUS.
On May 3, 1989, the U.S. Department of Commerce, International Trade Administration (ITA), published Anti-Dumping Duty Order A-588-804 for antifriction bearings (other than tapered roller bearings) and parts thereof from Japan. See 54 Fed. Reg. 19101; See also 71 Fed. Reg. 54469 (continuation of A-588-804). We note that whether the merchandise at issue is subject to antidumping orders is beyond the administrative authority of CBP. CBP is not charged with the administrative authority to ascertain nor impose antidumping orders. Such authority is within the purview of the ITA, who is not necessarily bound by a country of origin or classification determination issued by CBP with regard to the scope of antidumping orders or countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the ITA and are separate from tariff classification and origin rulings issued by CBP. You may contact the ITA at http://www.trade.gov/ia/ (click on “Contact Us”), or at 1-800-872-8723. For further information, you can also view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using the AD/CVD Search tool at http://www.cbp.gov (click on “Import” and “AD/CVD”).
HOLDING:
By application of GRI 1, the Generation 2 Hub Units and Generation 3 Hub Units are both classified under heading 8482, HTSUS, specifically under subheading 8482.10.50, which provides for “Ball or roller bearings, and parts thereof: Ball bearings: Other”. The general, column one rate of duty is 9% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
New York Ruling N057448, dated May 28, 2009, is AFFIRMED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division