CLA-2 CO:R:C:G 086555 JMH
Mr. Martin W. Dooley
President
Multimodal International, Ltd.
2258 Landmeier Road
Elk Grove Village, Illinois 60007
RE: Knocked-down backhoe excavators
Dear Mr. Dooley:
Your December 29, 1989, request for a classification ruling
under the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA) for certain knocked-down backhoe excavators
entered minus key components, on behalf of Kobelco Construction
Machinery (U.S.A.), has been referred to this office for a reply.
FACTS:
The articles in question are backhoe excavators imported
from Japan. The excavators are entered minus several key
components. These components include the link-bucket, the arm,
the boom, the counterweight, and the cab assembly.
You state that you are considering importing two alternative
forms of excavators. Alternative A consists of a backhoe
excavator without the link-bucket, arm, and the boom. The
percentage of total component value to total excavator value for
these parts ranges from 5.58% to 6.91%, depending on the model
excavator. Alternative B would import a backhoe excavator
without the link-bucket, the arm, the boom, the counterweight,
and the cab assembly. This alternative provides a range from
11.72% to 13.19% for percentage of total component value to the
total excavator value, depending on the excavator model.
ISSUE:
Whether the backhoe excavators imported are complete
excavators within the meaning of General Rule of Interpretation
(GRI) 2(a), HTSUSA, so to be classified within heading 8431,
HTSUSA.
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LAW AND ANALYSIS:
The classification of merchandise under the HTSUSA is
governed by the GRI's. GRI 1, HTSUSA, states in part that "for
legal purposes, classification shall be determined according to
the terms of the headings and any relative section or chapter
notes and...according to the following provisions..."
The "following provisions" mentioned within GRI 1, includes
GRI 2(a), HTSUSA, which states:
Any reference in a heading to an article shall be taken
to include a reference to that article incomplete or
unfinished, provided that, as presented, the incomplete
or unfinished article has the essential character of
the complete or finished article. It shall also be
taken to include a reference to that article complete
or finished (or falling to be classified as complete
or finished by virtue of this rule), presented
unassembled or disassembled.
According to GRI 2(a), if an incomplete article has the
essential character of the complete or finished article of a
heading, it is classified as the complete or finished article.
Little guidance is given for the determination of an article's
essential character. The nature of the item, its bulk,
quantity, or value may be looked to. However, such a
determination varies between different types of merchandise. See
Explanatory Note 3(b)(VIII), Harmonized Commodity Description and
Coding Service (HCDCS), Vol. 1, p. 4. The Explanatory Notes,
although not dispositive, are to be examined for the proper
interpretation of the HTSUSA. 54 Fed. Reg. 35127, 35128 (August
23, 1989). For machinery, the nature of the item is generally
determinative. For an item to have the essential character of a
machine, it must be recognizable as such a machine.
In this instance, an incomplete or unfinished backhoe
excavator would be classified as an excavator, if it has the
essential character of an excavator. The incomplete or
unfinished excavator must be easily recognizable as an excavator.
Although a part may be clearly recognizable as a component of a
specific machine, the part's presence does not guarantee
essential character nor does its absence guarantee the lack of
essential character. If certain components are absent upon
importation, but the remainder has the essential character of an
excavator, then the portion of the machine which is present
should be classified as an excavator.
It is the propelling base of an excavator which imparts the
essential character of an excavator. Alternative A, the backhoe
minus the link-bucket, arm, and the boom, has the essential
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character of a excavator. Alternative B, the backhoe without the
link-bucket, the arm, the boom, the counterweight, and the cab
assembly also has the essential character of an excavator. In
both situations the propelling base is substantial enough so that
it has the essential character of a incomplete or unfinished
excavator within the meaning of GRI 2(a). An incomplete or
unfinished article, with the essential character of a complete or
finished article, is to be classified as the complete or finished
article. Therefore, the two alternative backhoe excavators are
properly classified within subheading 8429.52.10, HTSUSA, as
"Self-propelled bulldozers, angledozers, graders, levelers,
scrapers, mechanical shovel, excavators... Mechanical shovels,
excavators and shovel loaders...Backhoes, shovels, clamshells and
draglines..."
HOLDING:
A backhoe excavator imported without a link-bucket, arm,
and boom, or a backhoe excavator imported without a link-bucket,
arm, boom, counterweight and cab assembly are incomplete and
unfinished backhoe excavators within the meaning of GRI 2(a),
HTSUSA. They are to be classified as a backhoe excavator, since
they have the essential character of a backhoe excavator. The
proper classification is within subheading 8429.52.10, HTSUSA, as
"Self-propelled bulldozers, angledozers, graders, levelers,
scrapers, mechanical shovel, excavators... Mechanical shovels,
excavators and shovel loaders...Backhoes, shovels, clamshells and
draglines..."
Sincerely,
John Durant, Director
Commercial Rulings Division