CLA-2 CO:R:C:M 950930 DWS
District Director
U.S. Customs Service
55 Erieview Plaza
Cleveland, OH 44114
RE: Protest No. 4102-91-100114; Drive Units for Lift Trucks;
Gear Boxes; Braking Assembly; EN 84.83; Section XVI,
Note 2(a); U.S. v.Citroen; 8431.20.00
Dear Sir:
This is our response on Application for Further Review of
Protest No. 4102-91-100114, dated September 26, 1991, concerning
your action in classifying and assessing duty on drive units for
lift trucks under the Harmonized Tariff Schedule of the United
States (HTSUS).
FACTS:
The subject merchandise, model TW 500, is a fixed ratio
transmission. It is coupled to an electric motor on the input
shaft side, and to the drive wheels on the output side. The
motor provides a certain rotational input speed which the gear
arrangement in the model TW 500 then steps down, trading off
rotational speed for torque. Bevel gears located in the rear of
the unit then take this higher-powered rotation and change its
direction into two 90 degree outputs. This is the transmitted
power that turns the wheels of the fork lift and causes movement.
At the end of the drive axles are wheel hubs, small flange-type
units which mount onto the axle and have four or five wheel lugs.
Disc brake rotors are in turn mounted onto these lugs.
ISSUE:
What is the proper classification of the lift truck drive
units under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1 provides that classification is determined
according to the terms of the headings and any relative section
or chapter notes.
The merchandise was entered under subheading 8431.20.00,
HTSUS, which provides for: "[p]arts suitable for use solely or
principally with the machinery of heading 8427." Heading 8427,
HTSUS, provides for: "[f]orklift trucks; other works trucks
fitted with lifting or handling equipment." However, the
merchandise was liquidated under subheading 8483.40.50, HTSUS,
which provides for: "[g]ear boxes and other speed changers:
[f]ixed ratio speed changers, multiple and variable ratio speed
changers each ratio of which is selected by manual manipulation:
[o]ther."
The importer argues that the merchandise is properly
classifiable as a part of a lift truck, because:
[w]hile this assembly does have a gear box, the speed
changing function is only one of many performed by the
TW 500. The TW 500 serves as a drive unit for lift trucks.
It is mounted directly to the frame of the lift truck and
serves as a structural support. The TW 500 as imported also
incorporates a braking assembly. These are disc brakes
which obviously perform the very important function of
stopping or slowing down the lift truck. The drive unit is
also bidirectional which means that it serves the function
of changing the direction of the lift truck.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are
to be used to determine the proper interpretation of the HTSUS.
54 Fed. Reg. 35127, 35128 (August 23, 1989). In part,
Explanatory Note 84.83 (pp. 1325, 1327) states that:
[t]he goods covered by this heading are mainly:
(i) Certain mechanical parts which are used in the
transmission of power from an external power unit to one
or more machines.
(ii) Certain internal parts of a machine, used to transmit
power to the various parts of the same machine. . . .
(E) GEAR BOXES AND OTHER SPEED CHANGERS, INCLUDING TORQUE
CONVERTERS
These provide a range of speeds which can be varied, either
by hand or automatically, according to the requirements of
the machine. They include, inter alia:
(1) Gear-boxes consisting of assemblies of gears which can
be selected in alternative arrangements; the speed of
transmission can thus be varied according to the
arrangement of gears set.
The importer first argues that the merchandise acts as the
drive unit for the lift truck, and therefore is not classifiable
as a gear box. We fully agree with the importer's description of
the merchandise, but not with the importer's argument regarding
its classification. The principal function of the drive unit is
to transmit power from the engine to the drive wheels, an
operation that is described in Explanatory Note 84.83, HTSUS.
The drive unit of the lift truck is used to transmit power to the
various parts of the same lift truck. This is the definition of
a gear box.
The importer next argues that the drive unit gives
structural support to the lift truck. This argument has no legal
relevance to the classification of the subject merchandise. Many
parts of machinery give structural support, but this fact does
not alter their classification under eo nomine provisions.
The importer's main argument is that the drive unit
incorporates a braking system. However, we note that only the
disc brake rotors are imported attached to the drive unit. The
hydraulic brake calipers, which are the actual braking
mechanisms, are attached to the unit after importation. It is a
basic tenet of customs classification that condition at the time
of importation is dispositive. U.S. v. Citroen, 223 U.S. 407, 32
S.Ct. 256, 56 L.Ed. 486 (1911). Because the hydraulic calipers,
to which the braking system is directly tied, are not present
upon importation, the model TW 500 does not incorporate a braking
system at the time of importation.
The importer's final argument is that because the drive unit
is bidirectional, it cannot be classified as a gear box. In its
description of a gear box, Explanatory Note 84.83, HTSUS, does
not limit it to unidirectional movement. Just because the drive
unit is bidirectional does not mean that, for tariff
classification purposes, the drive unit is not a gear box.
Therefore, based upon the description supplied by the
importer and given in Explanatory Note 84.83, HTSUS, it is our
position that the drive unit is classifiable as a gear box.
Section XVI, note 2(a), HTSUS, states that:
[p]arts which are goods included in any of the headings of
chapters 84 and 85 are in all cases to be classified in
their respective headings.
Even though the subject drive unit is a part of a lift
truck, because we find that it is classifiable as a gear box,
under section XVI, note 2(a), HTSUS, the drive unit is
classifiable under subheading 8483.40.50, HTSUS.
HOLDING:
The subject drive unit is classifiable under subheading
8483.40.50, HTSUS, which provides for: "[g]ear boxes and other
speed changers: [f]ixed ratio speed changers, multiple and
variable ratio speed changers each ratio of which is selected by
manual manipulation: [o]ther."
The protest should be denied in full. A copy of this
decision should be attached to the Customs Form 19 and provided
to the protestant as part of the notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division