CLA-2 R:C:M 956576 JAS
District Director of Customs
300 South Ferry Street, Rm. 1001
Terminal Island, CA 90731
RE: PRD 2704-94-100441; Passenger Shuttle Cabin, Part of Shuttle
Vehicle; Railway, Tramway Passenger Coach Without Truck or Bogie,
Passenger Compartment, Incomplete, Unfinished Shuttle Vehicle,
Heading 8605.00.00, GRI 2(a); HQ 957777, HQ 957790
Dear District Director:
This is our decision on Protest 2704-94-100441, filed
against your classification of the VSL Shuttle Cabin from
Switzerland. The entry under protest was liquidated on November
12, 1993, and this protest timely filed on February 10, 1994.
FACTS:
The article under protest is the Mirage/Treasure Island
Metro Shuttle Cabin, also referred to as the VSL passenger
shuttle cabin. After importation, the shuttle cabin will be
assembled with a truck or bogie into a shuttle vehicle to serve
as the passenger-carrying component of a people mover called the
VSL-Metro Shuttle System. The completed shuttle vehicle is
designed to accommodate 60 passengers, with seating for 22 and
standing room for 38. It is not self-propelled and will be
pulled horizontally among pre-programmed stops along a monorail
by means of an external cable.
As imported, the shuttle cabin will measure 12,000 mm x
2,520 mm x 3,470 mm. It will be fully enclosed and consist of
sides, front and rear nose cones, roof, and floor with body
frame, with all components being of aluminum-alloy profiles and
sheets bolted, welded or riveted. The cabin will have insulated
interior walls, one pneumatically operated sliding double wing
passenger door, sidewall and corner safety glass windows,
emergency exit doors and marker lights on each side of the front
end nose cone. The interior of the cabin will be outfitted with
molded plastic U-shaped seats arranged along the front and inside
walls, carpeted floor, vertical and horizontal holding bars,
ceiling panels with integrated air ducts, air conditioning and
heating apparatus, and channels for loudspeakers and translucent - 2 -
lighting elements. Both the interior and exterior will be fully
painted and the outside accented and a logo applied.
The shuttle cabin is essentially a fully outfitted passenger
compartment that will be assembled after importation with a bogie
or truck into a shuttle vehicle. The bogie consists of running
wheels, guide wheels, suspension with air springs and a
guidance/control system that is essentially a controller that
operates from the Shuttle System's main computer. The bogie has
compartments for battery chargers, batteries, power supply,
rectifiers and compressor, all of which will be sourced
independently. The shuttle cabin is said to represent 43.8
percent of the cost or value of the completed shuttle vehicle.
The shuttle cabin was entered under a provision in heading
8428 for other lifting, handling, loading or unloading machinery.
The local import specialist determined that the shuttle cabin
constituted an incomplete or unfinished railway passenger coach
and liquidated the entry under heading 8605.00.00, HTSUS.
Counsel for protestant advances an alternative claim under a
provision in heading 8706 as other parts of railway or tramway
rolling stock.
The provisions under consider are as follows:
8428 Other lifting, handling, loading or
unloading machinery (for example, elevators,
escalators, conveyors, teleferics):
8428.90.00 Other machinery...2 percent
* * * *
8605.00.00 Railway or tramway passenger coaches, not
self-propelled...18 percent
* * * *
8607 Parts of railway or tramway locomotives or
rolling stock:
Other:
8607.99 Other:
8607.99.10 For vehicles of heading 8605 or
8606, except brake regulators
...5.5 percent
- 3 -
ISSUE:
Whether the VSL passenger shuttle cabin is an incomplete or
unfinished railway or tramway passenger coach.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 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 provided the headings or notes do not
require otherwise, according to GRIs 2 through 6. GRI 2(a)
provides that any reference in a heading to an article shall be
taken to include a reference to that article incomplete or
unfinished, provided that, as entered, the incomplete or
unfinished article, whether imported unassembled or not, has the
essential character of the complete or finished article.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the Customs Cooperation
Council's official interpretation of the Harmonized system.
While not legally binding on the contracting parties, and
therefore not dispositive, the ENs provide a commentary on the
scope of each heading of the Harmonized System and are thus
useful in ascertaining the classification of merchandise under
the System. Customs believes the notes should always be
consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23,
1989)
With respect to the claim under heading 8428, relevant ENs
indicate that with certain exceptions the heading covers a wide
range of machinery for the mechanical handling of materials,
goods, etc. (lifting, conveying, loading, unloading, etc.). They
remain in heading 84.28 even if specialized for a particular
industry. Among the Intermittent Action Machines listed on p.
1198 of the ENs are Funiculars, which are winch-operated coaches
that run on rails. The ENs state, however, that heading 84.28
covers only the traction mechanism and winch. It excludes the
coach and the track or rail. The VSL passenger shuttle cabin is
not a good of heading 8428.
With respect to the liquidated provision under heading
8605.00.00, we noted in HQ 089208, dated December 26, 1991, and
in HQ 952234, dated July 23, 1992, that a railway or tramway
passenger coach is a wheeled rail vehicle designed to carry
passengers, primarily for day travel. As designed, a complete or
finished coach would ordinarily comprise the structural shell
outfitted with seats and other customary furnishings relative to
passenger comfort, sometimes supported by an underframe, and
trucks consisting of the wheels, axles and brakes, plus pneumatic - 4 -
and electric subassemblies. We concluded in the cited decisions
that the imported components were the aggregate of distinctive
component parts which identified the importations as wheeled rail
vehicles designed to carry passengers, and that, as imported, the
components were clearly dedicated to making completed passenger
railcars.
We have reconsidered this matter and are now of the opinion
that in the cited decisions undue reliance may have been placed
on legal principles developed under the HTSUS predecessor tariff
code, the Tariff Schedules of the United States. While we
recognize that on a case-by-case basis administrative and
judicial decisions under a prior nomenclature can be instructive
in interpreting provisions of the HTSUS, this is not the case
here. We also believe that the characterization of a railway
passenger coach first and foremost as a vehicle capable of a
transport function must be more fully considered. In this latter
regard, the General Explanatory Notes (EN) to Chapter 86 state,
at p. 1414, that incomplete or unfinished vehicles are classified
with the corresponding complete or finished vehicles, provided
they have the essential character thereof. The note then lists
examples of vehicles that would be considered incomplete or
unfinished for tariff purposes. However, the EN continues by
stating that bodies of motorized railway or tramway coaches, of
vans, wagons or trucks, or of tenders, not mounted on
underframes, are classified as parts of railway or tramway
locomotives or rolling stock (heading 86.07). For these reasons,
it is now our position that the VSL passenger shuttle cabin does
not have the essential character of a complete or finished
railway passenger coach not self-propelled. HQ 957777, dated May
30, 1995, supports this conclusion. This decision revoked HQ
089208 and HQ 952234 and represents Customs current position in
the matter. HQ 957790, dated May 30, 1995, is in accord with HQ
957777.
HOLDING:
Under the authority of GRI 1, the VSL passenger shuttle
cabin is provided for in heading 8607. It is classifiable in
subheading 8607.99.10, HTSUS.
The protest should be ALLOWED. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4,
1993, Subject: Revised Protest Directive, you should mail this
decision, together with the Customs Form 19, to the protestant no
later than 60 days from the date of this letter. Any
reliquidation of the entry or entries in accordance with the
decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision the Office of
Regulations and Rulings will take steps to make the decision - 5 -
available to Customs personnel via the Customs Rulings Module in
ACS and to the public via the Diskette Subscription Service, the
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division