CLA-2 OT:RR:CTF:TCM H272342 CkG
Margaret Wilson-McDowell
Customs/Drawback Administrator
Michelin North America, Inc.
One Parkway South P.O. Box 19001
Greenville, South Carolina 29602-9001
Re: Modification of NY I80181; classification of certain off-the-road
earthmover tires
Dear Ms. Wilson-McDowell:
This is in response to your request of October 30, 2015, for reconsideration of New York Ruling Letter (NY) I80181, dated April 15, 2002, with respect to five models of tires: the XL (part no. CAI 123434), the XGC (part no. 123691), the XHC (part no. 123444), the XVC (part no. 280557), and the XZ SC (part no. 123753), in subheading 4011.20.10, HTSUS, which provides for “New pneumatic tires of rubber: Of a kind used on buses or trucks: Radial.” We have reconsidered NY I80691, and for the reasons set forth below, we find that the classification of the XL and XZ SC tires in subheading 4011.20.10, HTSUS, was incorrect.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to modify NY I80181 was published on June 7, 2017, in Volume 51, Number 23 of the Customs Bulletin. No comments were received in response to this notice.
FACTS:
The subject merchandise consists of five models of earthmover tires: the XL tread pattern (part no. CAI 123434), the XGC tread pattern (part no. 123691), the XHC tread pattern (part no. 123444), the XVC tread pattern (part no. 280557), and the XZ SC tread pattern (part no. 123753).
The XL tread tire is marked on the sidewall with the TRA code E2 and the size designation 17.5R25 (indicating that the section width of the tire is 17.5 inches, the tire is of radial construction, and it has a rim diameter of 25 inches). The “E2” TRA code refers to tires for “Earthmover” vehicles, with a “Traction” tread.
The XGC tread tire is marked on the sidewall with the TRA code E2 and the size designation 20.5R25 (indicating that tire’s section width is 20.5 inches, the tire is of radial construction, and it has a rim diameter of 25 inches).
The XHC tread tire is marked on the sidewall with the TRA code E2 and the size designation 17.5R25 (indicating that tire’s section width is 17.5 inches, the tire is of radial construction, and it has a rim diameter of 25 inches).
The XVC tread tire is marked on the sidewall with the TRA code E2 and the size designation 27.00R49 (indicating that tire’s section width is 27 inches, the tire is of radial construction, and it has a rim diameter of 49 inches).
The XZ SC tread tire is marked on the sidewall with the TRA code E3 and the size designation 18.00R25 (indicating that tire’s section width is 18 inches, the tire is of radial construction, and it has a rim diameter of 25 inches). The “E3” TRA code refers to tires for “Earthmover” vehicles, with a “Rock” tread.
ISSUE:
Whether the instant tires are classified in subheading 4011.20, HTSUS, as tires “of a kind used on buses or trucks”, or in subheading 4011.80, HTSUS, as tires “of a kind used on construction, mining or industrial handling vehicles and machines.”
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRI). 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 may then be applied.
The HTSUS provisions at issue provide, in pertinent part, as follows:
4011 New pneumatic tires, of rubber:
4011.20 Of a kind used on buses or trucks
4011.20.10 Radial…
. . .
4011.80 Of a kind used on construction, mining or industrial handling vehicles and
machines:
4011.80.10: Having a "herring-bone" or similar tread…
Other:
4011.80.20: Radial…
…
4011.90: Other:
4011.90.10: Having a "herring-bone" or similar tread…
Other:
4011.90.20: Radial…
* * * *
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:
This heading also covers :
(1) Dumpers, sturdily built vehicles with a tipping or bottom opening body, designed for the transport of excavated or other materials. These vehicles, which may have a rigid or articulated chassis, are generally fitted with off the road wheels and can work over soft ground. Both heavy and light dumpers are included in this group; the latter are sometimes characterised by a two way seat, two seats facing in opposite directions or by two steering wheels, to enable the vehicles to be steered with the driver facing the body for unloading.
…
The heading also excludes :
Straddle carriers used in factories, warehouses, dock areas or airports, etc., for the
handling of long loads or containers (heading 84.26).
(b) Loader transporters used in mines (heading 84.29).
Subheading Explanatory Notes.
Subheading 8704.10
These dumpers can generally be distinguished from other vehicles for the transport of goods (in particular, tipping lorries (trucks)) by the following characteristics…”
the dumper body is made of very strong steel sheets; its front part is extended over
the driver’s cab to protect the cab; the whole or part of the floor slopes upwards
towards the rear;
in some cases the driver’s cab is half width only;
lack of axle suspension;
high braking capacity;
limited speed and area of operation;
special earth moving tyres;
because of their sturdy construction the tare weight/payload ratio does not exceed
1 : 1.6;
the body may be heated by exhaust gases to prevent materials from sticking or
freezing.
It should be noted, however, that certain dumpers are specially designed for working in mines or tunnels, for example, those with a bottom opening body. These have some of the characteristics mentioned above, but do not have a cab or an extended protective front part of the body.
* * * *
Heading 40.11 provides for “New pneumatic tires, of rubber.” There is no dispute that the instant tires are classified therein. The issue arises at the six-digit subheading level.
Subheading 4011.20 provides for “New pneumatic tires, of rubber: Of a kind used on buses or trucks.” Subheading 4011.80 provides for “New pneumatic tires, of rubber: Of a kind used on construction, mining or industrial handling vehicles and machines.” Subheading 4011.90 provides for “New pneumatic tires, of rubber: Other.”
Subheading 4011.20 is a “principal use” provision, governed by Additional U.S. Rule of Interpretation 1(a), HTSUS (AUSRI 1(a)), which provides that “In the absence of special language or context which otherwise requires--a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.”
Trucks are motor vehicles for the transport of goods that are classifiable in Chapter 87. However, we note that the EN to heading 40.11 as well as the international legal text of the Harmonized System uses the word “lorries” in subheading 4011.20 instead of “trucks”. In this regard, we note that Article 3 of the International Convention on the Harmonized Commodity Description and Coding System, states in pertinent part, as follows:
Subject to the exceptions enumerated in Article 4: Each Contracting Party undertakes… that, in respect of its Customs tariff and statistical nomenclatures: it shall use all the headings and subheadings of the Harmonized System without addition or modification, together with their related numerical codes; it shall apply the General Rules for the interpretation of the Harmonized System and all the Section, Chapter and Subheading Notes, and shall not modify the scope of the Sections, Chapters, headings or subheadings of the Harmonized System…
In complying with the undertakings at paragraph 1(a) of this Article, each Contracting Party may make such textual adaptations as may be necessary to give effect to the Harmonized System in its domestic law. That the text of subheading 4011.20 in the HTSUS refers to “trucks” as opposed to “lorries” is indicative of a textual adaptation to give effect to a term (“lorries”) that is not commonly used in American English. Accordingly, the scope of subheading 4011.20, HTSUS, is informed by the legal text of the Harmonized Commodity Description and Coding System as well as EN 40.11.
The Explanatory Note to subheading 8704.10 draws a distinction between “dumpers” and “lorries” (trucks), stating that “These dumpers can generally be distinguished from other vehicles for the transport of goods (in particular, tipping lorries (trucks)) by the following characteristics”, such as, i.e., “special earth-moving tires.”
The Tire and Rim Association (TRA) Yearbook provides the following explanation of its “Earthmover” designation:
Earthmover: transportation usually occurs over unimproved surfaces at speeds up to 40 mph and short distances, up to 2.5 miles, one way. Equipment in this category is mainly haulage trucks and scrapers.
The CBP Informed Compliance Publication (ICP) on Classification of Tires further notes that “There are numerous machines identified as classifiable in chapter 84 that move on tires but are not trucks. These would include excavating machines of heading 8429, construction machines and snow plows of heading 8430, agricultural machines of heading 8432 and harvesting machines of heading 8433. Although they all may be designed in some instances to roll on tires, they are not trucks, but machines, and their tires would be classifiable further on in heading 4011.”
Thus, the reference to buses and lorries in the legal text of the HS and the Explanatory Notes indicates that the contemplated class or kind of tires classified in subheading 4011.20 consists of those tires meant to be used on-road or on-the highways passenger or commercial vehicles, classified in heading 8704, HTSUS.
The instant tires are used on a variety of vehicles, some of which are classified in heading 8704, HTSUS, as motor vehicles for the transport of goods, and some in other headings. Specifically, mobile cranes and straddle carriers are classified in heading 8426, HTSUS. Tires of a kind used solely or principally with mobile cranes, straddle carriers, and similar specialty vehicles are therefore not tires of a kind used on trucks or lorries, and are not classified in subheading 4011.20, HTSUS. Tires which are equally suitable for use with these types of specialty machines and with lorries or trucks within the meaning of subheading 4011.20, HTSUS, remain classified therein.
The XGC tire is described in Michelin’s “Earthmover and Industrial Tire Reference” guide as “The non-directional Michelin® radial tire designed to deliver exceptional operator comfort and durability in high-speed and demanding on- and offroad crane applications.” The brochure for the XGC tire further indicates that the XGC is designed for use on a range of vehicles, including mobile cranes, tractor-trailers, flatbed trucks, and fire and rescue trucks. While mobile cranes are not trucks within the meaning of 4011.20, HTSUS, tractor trailers, flatbed trucks, and fire and rescue trucks are trucks within the meaning of subheading 4011.20, HTSUS. The XGC tire is further designed for both mixed on and off-road use, including high speed, on-the highway use. The XGC is are therefore of a kind used on trucks, and classified in subheading 4011.20.10, HTSUS.
The XHC tire is described in the Earthmover and Industrial Tire Reference guide as “[t]he multi-purpose Michelin® radial tire designed for a wide spectrum of applications such as normal highway and off-road crane operations.” Your revocation request indicates that they are used for transport applications and with specialty machines such as self-propelled, on and off-road cranes. No brochure or additional information is available. Given that your submission and the Earthmover Tire guide indicate that the XHC is used for on-highway transport, we do not have reason to believe that the conclusion of NY I80181 that the XHC tire is classified in subheading 4011.20, HTSUS, was in error.
The XVC tire is designed for use on rigid dump trucks and mobile cranes. Mobile cranes are classified in heading 8426, HTSUS, and are not “trucks” for the purposes of subheading 4011.20, HTSUS. Tires for dump trucks, however, may remain classified in subheading 4011.20 if designed for on road or mixed use. The Michelin earthmover tire guide states that the XVC tires are “designed especially for high-speed applications on well-maintained site roads and highways.” The XVC tires are therefore of a kind used on buses or trucks and classified in subheading 4011.20.10, HTSUS.
The XL tire is designed for crash and fire rescue vehicles and military transport vehicles, “to provide exceptional traction on soft, muddy ground conditions and deliver solid performance in high-speed applications”. The XL tire is advertised as an “all-terrain tactical vehicle radial”, with a “cut-resistant tread compound” and “reinforced with durable steel-belted radial construction to provide excellent puncture and damage resistance.” The top internet search results for “Michelin XL” and Michelin XL tread” tire are for military tires. The XL is designed for speeds from 50 to 62 mph, depending on the size (generally the larger the size, the lower the maximum speed). The XL, as an earthmover tire designed for off highway and off road conditions in rough terrain, is not of a kind used on buses or trucks. The XL tire is not used directly in construction, mining or industrial handling applications; furthermore, it is designed for higher speeds than those applications typically demand. We therefore conclude that the XL is classified in subheading 4011.90.20, HTSUS, as an “other” new, pneumatic tire.
The XZ SC tires are used primarily in off-highway or off-road conditions, on industrial machines and vehicles such as dock cranes and straddle carriers. The XZ SC tires are thus not of a class or kind used on trucks and are not classified in subheading 4011.20, HTSUS. The XZ SC is a radial tire, and does not have a herring bone tread pattern. The XZ SC is therefore classified in subheading 4011.80.20, HTSUS.
This conclusion is consistent with prior CBP rulings HQ H263902, dated June 23, 2016, NY N272481, dated March 1, 2016, and NY N261453, dated February 20, 2015.
HOLDING:
The XGC (part no. 123691), XHC (part no. 123444) and XVC (part no. 280557) tread tires are classified in subheading 4011.20.10, HTSUS, which provides for “New pneumatic tires, of rubber: Of a kind used on buses or trucks: Radial.” The 2016 column one, general rate of duty is 4% ad valorem.
The XZ SC (part no.123753) tread tires are classified in subheading 4011.80.20, HTSUS, which provides for “New pneumatic tires, of rubber: Of a kind used on construction, mining or industrial handling vehicles and machines: Other: Radial.” The 2017 column one, general rate of duty is 4% ad valorem.
The XL tread tires (part no.123434) are classified in subheading 4011.90.20, HTSUS, which provides for “New pneumatic tires, of rubber: Other: Radial.” The 2017 column one, general rate of duty is 4% ad valorem.
EFFECT ON OTHER RULINGS:
NY I80181, dated April 15, 2002 is hereby modified with respect to part nos. 123434 (XL tread tire) and 123753 (XZ SC tread tire).
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division