CLA-2 OT:RR:CTF:TCM H174522 DSR
U.S. Customs and Border Protection
Seattle Service Port
1000 Second Ave., Suite 2100 Seattle, WA 98104
Attn: Heather Scott, Senior Import Specialist
RE: Tariff classification of bicycle cogs and bicycle hubs; Protest Number 3001-11-100145
Dear Port Director:
This letter is in reply to protest, and application for further review (AFR), number 3001-11-100145, dated March 31, 2011, filed on behalf of Trek Bicycle Corporation (Protestant), against U.S. Customs and Border Protection’s (CBP) reclassification and subsequent liquidation of one entry of bicycle cogs and wheel hubs.
FACTS:
This protest pertains to one entry of rear hub cogs and front and rear wheel aluminum alloy bicycle wheel hubs imported for installation onto Trek bicycles and wheels. The hubs are quick release hubs and 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 cogs at issue are circular articles of metal with teeth on their outer edges and holes in their middles. They are also referred to as “sprockets” and, after importation, they are assembled to form a “cluster” or “cassette” by being grouped to fit one upon another. The cassette is attached to the rear hub (center bar from which the spokes extend) of a bicycle wheel by lining up splines on the rear hub with grooves formed by the aligned cogs on the inner surface of the cassette, and pushing the cassette towards the center of the hub. The cassette is then secured to the hub with a lock nut. The cassettes are referred to as “SRAM XG-1099,” “SRAM PG 1050,” and “SRAM PG 1070.” The rear portion of the bicycle pedal chain is wrapped around the cassette so that the rear wheel rotates when the bicycle is pedaled.
Protestant entered the cogs on September 17, 2010, under subheading 8714.93.70, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of [bicycles]: Other: Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket wheels: Free-wheel sprocket-wheels,” free of duty. On March 18, 2011, CBP reclassified and liquidated the merchandise under subheading 8714.99.80, HTSUS, which provides for “Parts and accessories of [bicycles]: Other: Other: Other…” dutiable at 10% ad valorem.
Also on September 17, 2010, Protestant entered the hubs 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….” and free of duty. At liquidation, on March 18, 2011, 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…” dutiable at 10% ad valorem.
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?
Whether, at the time of importation, the subject bicycle cogs are classified under subheading 8714.93.70, HTSUS, as free-wheel sprocket-wheels; under subheading 8714.93.35, HTSUS, as other hubs; or under subheading 8714.99.80, HTSUS, as other parts of bicycles?
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 March 31, 2011, within 180 days of liquidation, pursuant to 19 U.S.C. §1514(c)(3).
Further review of Protest No. 3001-11-100145 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 8714.93.70, 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 (2010) HTSUS provisions under consideration at the time of entry 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.
* * *
8714.93.70 Free-wheel sprocket-wheels
* * *
8714.99 Other:
8714.99.80 Other.
* * * *
Classification of the hubs
With regard to the classification of the hubs, the analysis and holding contained in HQ H125916, dated April 20, 2011, are incorporated by reference. The hubs are 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…” The column one, general rate of duty at the time of entry was 10 percent ad valorem. (See attached).
Classification if the cogs
It is undisputed that the subject bicycle rear cogs 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.
Protestant first asserts that the cogs are classified under subheading 8714.93.70, HTSUS, as free-wheel sprocket-wheels because (1) they are essentially indistinguishable from “traditional” free-wheel sprocket-wheels that have been classified in subheading 8714.93.70, HTSUS; and (2) CBP has previously classified an item substantially similar to the instant merchandise under subheading 8714.93.79, HTSUS.
Subheading 8714.93.70, HTSUS, is an eo nomine provision and the meaning of an eo nomine classification is determined as of the time of the enactment of the tariff provisions. However, that meaning in not fixed in that an eo nomine provision includes all articles subsequently created that come within its scope. FAG Bearings, Ltd. v. United States, 9 C.I.T. 227, 228 (1985); see also National Advanced Systems v. United States, 26 F.3d 1107, 1111 (Fed. Cir. 1994).
The term “free-wheel sprocket-wheel” is not defined in the HTSUS or in its legislative history, thus, its correct meaning is its common, or commercial, meaning. Mita Copystar America v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). The common meaning of a term is presumed to be the same as its commercial meaning. Simod America Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989).
Protestant asserts that the common or commercial meaning of “free-wheel” has evolved with the evolution of bicycling technology, and that the cogs at issue perform the same function (when combined) as the older “multiple free-wheel sprockets,” and essentially represent only a technological improvement upon the “traditional” design. We disagree for the following reasons.
When the term “free-wheel sprocket wheels” appeared in the HTSUS, assemblages of the cogs at issue were a nascent technology and not yet in widespread use. What is commonly and has traditionally been referred to within the bicycle industry as a “freewheel” possesses an internal ratcheting mechanism and is screwed onto a compatible wheel hub of a bicycle. See Sutherland's Handbook for Bicycle Mechanics, 4-26 to 4-49 (7th Ed. 2005); see also www.sheldonbrown.com/free-k7.html. The compatible wheel hub possesses a standardized set of threads that allows for the efficient replacement of a freewheel when its cogs wear out or if a user desires different gear ratios. See www.sheldonbrown.com/freewheels.html. In time, it became known that using an increasing number of cogs on a freewheel hub could cause the bearing inside of the freewheel to be too far removed from the drive-side axle support, resulting in flexing stress being placed upon the rear axle and possibly causing the axle to bend or break.
The instant cogs are designed to overcome that limitation. Instead of screw threads, they possess a series of splines that form the mechanical connection between the cogs and a compatible hub (a freehub). The cluster of cogs (the cassette) is locked into place by a locknut. The cassette possesses no contained free wheel rotating mechanism; rather, the rotating mechanism is built into the wheel hub, which virtually eliminates the flexing stress overload issue common with freewheels by placing the driver-side axle bearing near the frame, as opposed to towards the center of the axle behind a free wheel. These differences in design and functionality have led to the bicycling industry to clearly distinguish and market clusters of the instant cogs as freehub cassettes, as opposed to freewheels. See www.bikepedia.com/PA/category3.aspx?catkey=2006. Images of a freehub and a freewheel hub, and a freehub cassette and freewheel, appear below.
Protestant also refers to New York Ruling (NY) R02468, dated September 13, 2005, in which CBP classified an item described as “bicycle cog (toothed wheel that is part of the drive chain; one component of the rear hub assembly) 3” diameter 1/8” thick teeth are spaced at ½” intervals)” under subheading 8714.93.70, HTSUS, covering free-wheel sprocket-wheels. Although there is nothing within the text of the ruling to support Protestant’s understanding that the cog possesses splines or is used with a locknut, Protestant concludes that the instant cog is substantially similar to that cog, compelling classification of the instant cog under subheading 8714.93.70, HTSUS, as well. Without information that supports Protestant’s assumption, we cannot rely on NY R02468 as a basis for ruling in Protestant’s favor.
Finally, with regard to the applicability of subheading 8714.93.35, HTSUS, which covers “other” hubs, Protestant has submitted no evidence in support of its argument that the subject cogs are hubs. The term (bicycle) “hub” is not defined tariff in the HTSUS or in its legislative history. Thus, its correct meaning is its common, or commercial, meaning. The Oxford English Dictionary defines “hub” as the “central solid part of the axle from which the spokes radiate and which rotates on (or with) the axle.” www.oed.com; see also http://sheldonbrown.com/gloss_ho-z.html#hub (defining hub as “[t]he middle part of a wheel, to which the inside ends of the spokes attach. A hub consists of an axle, which attaches to the forkends; a shell, to which the spokes attach, and bearings to connect the axle to the shell, permitting the shell to revolve around the axle. In the case of a rear hub, the shell would also have a provision for attaching the rear sprocket(s).”) The instant cogs are not hubs within the meaning of subheading 8714.93, HTSUS, because no spokes are attached to them, they do not contain bearings, nor do they consist of an axle and shell. Instead, they attach to hubs.
In conclusion, the subject cogs are not classifiable as hubs, nor are they classifiable as “free-wheel sprocket-wheels.” They are combined to be used with bicycle freehubs and are properly classifiable under subheading 8714.99.80, HTSUS, as other parts and accessories of bicycles.
HOLDING:
By application of GRI 1, HTSUS, the instant cogs are classified under heading 8714, HTSUS. By application of GRIs 1 and 6, HTSUS, the cogs are specifically provided for under subheading 8714.99.80, HTSUS, which provides for: “[p]arts and accessories of vehicles of headings 8711 to 8713: Other: Other: Other.” The column one, general rate of duty at the time of entry was 10 percent ad valorem.
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 are 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 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