CLA-2 CO:R:C:M 955882 LTO
8714.99.10; 8714.99.50; 8714.99.90
Mr. John Porter
The Merry Sales Co.
1415 San Mateo Avenue
South San Francisco, California 94080
RE: Bicycle parts; Shimano New Deore XT Group Kit A (1994); GRI
3(b) sets; GRI 3(c); HQ 087303
Dear Mr. Porter:
This is in response to your letter of November 3, 1993, to
Customs in New York, requesting the classification of the Shimano
New Deore XT Group Kit A (1994) under the Harmonized Tariff
Schedule of the United States (HTSUS). This letter and your
additional submission of January 11, 1994, were forwarded to this
office for a response.
FACTS:
The merchandise under consideration is the Shimano New Deore
XT Group Kit A (1994), which includes the following components:
rear derailleur; front derailleur; integrated shifter/brake
lever; brake calipers; cassette; hubs; crank set; bottom bracket;
chain; and headset. The components, which are individually
boxed, are packaged in a cardboard shipping carton. The kits are
used to repair older model bicycles, make complete bicycles from
frame sets, tires, etc., or broken up and the components sold
individually.
The rear derailleur allows the chain to move from one chain
wheel to another when activated by the shifter. The front
derailleur allows the chain to move from one cassette cog to
another when activated by the shifter. The integrated
shifter/brake lever, which is generally two separate components,
activates the brake and controls which gear the bicycle is in.
The brake calipers make contact to the bicycle rim to slow and - 2 -
stop the bicycle when the brake lever is applied. The cassette
is a cluster of cogs that the chain travels on. It attaches to
the rear hub and transfers the energy to the rear wheel. The
hubs hold the cassette and allow the wheel to spin on an axle.
The crank set transfers the power from the pedals to the chain by
use of chain wheels attached to the crank. The bottom bracket
holds the crank set together while also holding onto the frame.
The chain transfers the power from the crank set to the rear
cassette. The head set provides the link between the fork stem
and frame of the bicycle.
ISSUE:
Whether the individual components of the Shimano Deore XT
Group Kit A (1994) are separately classified under the HTSUS.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states in pertinent part that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes . . . ."
You suggest that the individual components of the kit should
be classified as if imported separately. GRI 3(b) states that
"[w]hen, by the application of rule 2(b) or for any other reason,
goods are, prima facie, classifiable under two or more headings,
classification shall be effected as follows:
Mixtures, composite goods consisting of different
materials or made up of different components, and
goods put up in sets for retail sale, which cannot
be classified by reference to 3(a), shall be
classified as if they consisted of the material or
component which gives them their essential
character, insofar as this criterion is applicable
[underlining added]."
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) constitute the Customs Co-operation
Council's official interpretation of the Harmonized System.
While not legally binding, the ENs provide a commentary on the
scope of each heading of the Harmonized System, and are generally
indicative of the proper interpretation of these headings. See
T.D. 89-80, 54 Fed.Reg. 35127, 35128 (Aug. 23, 1989).
The Explanatory Notes to GRI 3(b), pg. 4, state that "[f]or
the purposes of this Rule, the term 'goods put up in sets for
retail sale' shall be taken to mean goods which:
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(a) consist of at least two different articles
which are, prima facie, classifiable in
different headings . . .;
(b) consist of products or articles put up
together to meet a particular need or carry
out a specific activity; and
(c) are put up in a manner suitable for sale
directly to users without repacking (e.g.,
in boxes or cases or on boards) [emphasis in
original]."
The Shimano kits meet part (a) of the above stated test, as
the chain is prima facie classifiable under heading 7315, HTSUS
(chain, of iron or steel), while the remainder of the components
are prima facie classifiable under heading 8714, HTSUS (bicycle
parts and accessories). Furthermore, as the kits' components are
packaged together in a cardboard box (labeled, "Shimano," "GRP-
XTA"), they meet part (c). However, while the kits' components
are clearly related, they do not consist of articles put up
together to meet a particular need or carry out a specific
activity. See HQ 953472, dated March 21, 1994. In fact, the
kits are often broken up and the components, which are
individually packaged, sold separately. Therefore, they fail
part (b). Because the kits are not "goods put up in sets for
retail sale," nor are they classifiable together by any other
means, the components of the kits must be classified
individually.
The front and rear derailleurs are classifiable under
subheading 8714.99.50, HTSUS, which provides for derailleurs.
The brake calipers are classifiable under subheading 8714.94.60,
HTSUS, which provides for parts of brakes. The hubs and
cassettes are classifiable under subheading 8714.93.30, HTSUS,
which provides for other hubs. The crank sets and bottom
brackets are classifiable under subheading 8714.96.50, HTSUS,
which provides for cotterless-type crank sets and parts thereof.
The roller chains are classifiable under subheading 7315.11.00,
HTSUS, which provides for roller chain. The headsets are
classifiable under subheading 8714.99.90, HTSUS, which provides
for other bicycle parts.
The integrated shifter/brake levers are classifiable under
subheading 8714.99.10, HTSUS, which provides for click twist
grips and click stick levers. In HQ 087303, dated August 17,
1990, Customs considered the classification of an earlier model,
Shimano integrated shifter/brake lever. We determined that the
integrated lever, which was both a brake lever and click twist
lever, was a GRI 3(b) composite good. However, we held that
neither the brake lever nor the click lever provided the
essential character of the article, and therefore, resorted to
GRI 3(c). GRI 3(c), which is made applicable at the subheading
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level by GRI 6, states that when an article cannot be classified
according to GRI 3(a) or 3(b), the article must be classified in
the subheading which falls last in numerical order. Accordingly,
the integrated shifter/brake lever was classified under
subheading 8714.99.10, HTSUS, rather than under subheading
8714.94.15, HTSUS, which provides for caliper and cantilever
bicycle brakes.
HOLDING:
The front and rear derailleurs are classifiable under
subheading 8714.99.50, HTSUS. The corresponding rate of duty for
articles of this subheading is 6% ad valorem.
The integrated shifter/brake levers are classifiable under
subheading 8714.99.10, HTSUS. The corresponding rate of duty for
articles of this subheading is 6% ad valorem.
The brake calipers are classifiable under subheading
8714.94.60, HTSUS. The corresponding rate of duty for articles
of this subheading is 10% ad valorem.
The hubs and cassettes are classifiable under subheading
8714.93.30, HTSUS. The corresponding rate of duty for articles
of this subheading is 10% ad valorem.
The crank sets and bottom brackets are classifiable under
subheading 8714.96.50, HTSUS. The corresponding rate of duty for
articles of this subheading is 6% ad valorem.
The roller chains are classifiable under subheading
7315.11.00, HTSUS. The corresponding rate of duty for articles
of this subheading is 4.2% ad valorem.
The headsets are classifiable under subheading 8714.99.90,
HTSUS. The corresponding rate of duty for articles of this
subheading is 10% ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division