CLA-2 RR:TC:MM 958835 RFA
Port Director
U.S. Customs Service
200 St. Paul Place
Baltimore, MD 21202
RE: Protest 1303-95-100455; Steam Turbine; Generator; Generating
Set; "Condition As Imported"; Parts; Legal Note 2 to Section
XVI; Headings 8501, 8502, 8503; C.S.D. 92-11; HQs 952704,
953231
Dear Port Director:
The following is our decision regarding Protest 1303-95-100455, which concerns the classification of a steam turbine and
a generator under the Harmonized Tariff Schedule of the United
States (HTSUS).
FACTS:
The subject merchandise consists of a steam turbine and a
generator, imported separately on different cargo vessels. The
subject merchandise was originally intended to be shipped
together and imported into the United States as a generating set.
However, due to packaging problems, some of the crates for the
turbine could not fit on the first vessel and were consequently
shipped on a later date on another vessel. This resulted in the
generator being imported on March 28, 1995 and entered on March
29, 1995, and the steam turbine being imported and entered on
April 5, 1995.
The merchandise was entered under subheading 8502.30.00,
HTSUS, as a generating set. The entries were liquidated on July
7, 1995, under subheading 8411.82.80, HTSUS, as other gas
turbines, and under subheading 8503.00.95, as parts of
generators. The protest was timely filed on October 3, 1995.
Classification of the generator under subheadings 8501.61.00,
through subheadings 8501.64.00, HTSUS, as AC generators,
depending upon their output in kVA, is also under consideration.
The 1995 subheadings under consideration are as follows:
8411.82.80: Turbojets, turbopropellers and other gas
turbines, and parts thereof: [o]ther gas
turbines: [o]f a power exceeding 5,000 kW:
[o]ther. . . .
Goods classifiable under these provisions had a
general, column one rate of duty of 5 percent ad
valorem.
8501: Electric motors and generators (excluding
generating sets):
AC generators (alternators):
8501.61.00: Of an output not exceeding 75 kVA. . . .
8501.62.00: Of an output exceeding 75 kVA but not
exceeding 375 kVA. . . .
8501.63.00: Of an output exceeding 375 kVA but not
exceeding 750 kVA. . . .
8501.64.00: Of an output exceeding 750 kVA. . . .
Goods classifiable under these provisions had a
general, column one rate of duty of 2.9 percent ad
valorem.
8502.30.00: Electric generating sets and rotary
converters: [o]ther generating sets. . . .
Goods classifiable under these provisions had a
general, column one rate of duty of 2.9 percent ad
valorem.
8503.00.95 Parts suitable for use solely or principally
with the machines of heading 8501 or 8502:
[o]ther: [o]ther. . . .
Goods classifiable under these provisions had a
general, column one rate of duty of 3 percent ad
valorem.
ISSUE:
Whether a steam turbine and a generator, intended to be
imported together, can be classifiable together as a generating
set, or must classification be determined based upon their
condition as imported?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's). GRI
1 provides that classification shall be determined according to
the terms of the headings and any relative section or chapter
notes.
Customs has consistently followed the long-standing
classification principle enunciated by the Supreme Court in
United States v. Citroen, 223 U.S. 407, 414-415, 32 S.Ct. 259, 56
L.Ed. 486 (1911), which stated that:
[t]he rule is well established that "in order to
produce uniformity in the imposition of duties, the
dutiable classification of articles must be
ascertained by an examination of the imported article
itself, in the condition in which it is imported."
(cites omitted) This, of course, does not mean that a
prescribed rate of duty can be escaped by resort to
disguise or artifice. When it is found that the
article imported is in fact the article described in a
particular paragraph of the tariff act, an effort to
make it appear otherwise is simply a fraud on the
revenue and cannot be permitted to succeed. (cite
omitted)
However, protestant argues that Customs should allow an
exception to be applied to this long-standing classification
principle on the grounds that they did not intend to import the
merchandise separately, and that the merchandise is designed,
marketed, and intended to be sold together. In support of the
position that Customs should look at the merchandise's post-importation condition and the importer's intent, protestant cites
to C.S.D. 92-11 (May 20, 1991), HQ 952704 (February 1, 1993), and
HQ 953231 (May 12, 1993). In these rulings, Customs allowed
equal number of pants and jackets, imported together but packaged
separately, to be classified as track suits so long as the entry
documents supported the claim that the merchandise will be sold
as a retail set. We find that these rulings are not dispositive
to protestant's situation because in those rulings all of the
merchandise was imported together. The issue in those rulings
was whether or not to allow merchandise to be classified as a
"retail set" even though they were not packaged together. In the
present situation, the turbine and the generator were not
imported together and therefore, they must be classified
separately. This is consistent with the principles set forth in
Citroen.
Protestant asks that Customs classify the merchandise as an
"entirety" or as a set because they did not have the "intent" of
shipping the merchandise separately. Protestant believes that
this lack of intent is sufficient to apply the doctrine of
entireties and classify the merchandise together. This claim
violates the fundamental principles of classification. In KMW
Johnson, Inc. v. United States, 13 CIT 1079, 1083, the court
stated that:
It is fundamental in customs cases that "the dutiable
classification of articles imported must be ascertained
by an examination of the imported article itself, in
the condition in which it is imported." Worthington v.
Robbins, 139 U.S. 337, 341 (1981) (Blatchford, J.).
Similarly, in cases in which it is contended that
imported articles constitute an "entirety,"
"[c]lassification is determined by the condition of the
articles at the time of importation." Miniature
Fashions, Inc. v. United States, 54 CCPA 11, 17, C.A.D.
894 (1966).
The doctrine of entireties does not apply where the imported
article is not imported with the article with which it is claimed
to be an entirety. United States v. Baldt Anchor, Chain & Forge
Division of the Boston Metals Co. et al., 59 CCPA 122, C.A.D.
1051, 459 F.2d 1403 (1972). See also Franklin Industries, Inc. v.
United States, 1 CIT 349 (1981) (wherein the court held that to
enjoy classification under a single tariff item number all
components necessary to the completion of a particular article
must be imported in the same shipment). Because the courts have
not required an "intent" to determine classification under the
doctrine of entireties, we refuse to do so here. Customs will
continue to adhere to the principle that merchandise must be
classified in its condition as imported. Therefore, we find that
the steam turbine is eo nomine classifiable under subheading
8411.82.80, HTSUS, as other gas turbines.
Classification of the generator must be determined in
accordance with Legal Note 2 to section XVI, HTSUS, which
provides for:
Parts of machines (not being parts of the articles of
heading 8484, 8544, 8545, 8546 or 8547) are to be
classified according to the following rules:
(a) Parts which are goods included in any of the
headings of Chapter 84 and 85 (other than headings
8485 and 8548) are in all cases to be classified
in their respective headings;
(b) Other parts, if suitable for use solely or
principally with a particular kind of machine, or
with a number of machines of the same heading
(including a machine of heading 8479 or 8543) are
to be classified with the machines of that kind.
However, parts which are equally suitable for use
principally with the goods of headings 8517 and
8525 to 8528 are to be classified in heading 8517;
(c) All other parts are to be classified in heading
8485 or 8548.
Based upon the application of Legal Note 2(a) to section
XVI, HTSUS, we find that the generator is properly classifiable
under heading 8501, HTSUS, as a generator. Classification under
the proper subheading depends upon the generator's output in kVA.
HOLDING:
The steam turbine is classifiable under subheading
8411.82.80, HTSUS, which provides for: "[t]urbojets,
turbopropellers and other gas turbines, and parts thereof:
[o]ther gas turbines: [o]f a power exceeding 5,000 kW: [o]ther. .
. . " The generator is classifiable under subheadings 8501.61.00
through 8501.64.00, HTSUS, as AC generators, depending upon their
output in kVA.
The protest should be DENIED, except to the extent that
reclassification of the merchandise as indicated above results in
a partial allowance. In accordance with Section 3A(11)(b) of
Customs Directive 099 3550-065, dated August 4, 1993, Subject:
Revised Protest Directive, this decision, together with the
Customs Form 19, should be mailed by your office to the
protestant no later than 60 days from the date of this letter.
Any reliquidation of the entry in accordance with the decision
must be accomplished prior to mailing of the decision. Sixty
days from the date of the decision the Office of Regulations and
Rulings will take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Freedom of Information Act
and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division