CLA-2:RR:CR:GC 962065 AML
Port Director of Customs
200 East Bay Street
Charleston, South Carolina 29401
RE: Protest 1601-98-100066; Forty and sixty foot transit bus
shells; NY 882788
Dear Port Director:
The following is our decision regarding protest 1601-98-100066, dated June 29, 1998, concerning your classification of
transit bus shells pursuant to the Harmonized Tariff Schedule of
the United States (HTSUS).
FACTS:
The articles consist of forty and sixty foot transit bus
shells which, upon importation, have the following components
permanently installed:
a) base structure
b) body
c) axles
d) front suspension
e) rear suspension
f) rims
g) wheels
h) power steering
i) brake chamber
j) fuel tank
k) engine cradle (including the frame for installation of
the engine and the fan shroud which are bolted on)
l) flooring
m) partial door system including door panels
n) windshield
o) outside body trim (including the rain gutters and rub
rail)
p) corrosion protection paint
q) steering wheel
r) tracking for interior lights
s) air duct system
t) destination sign door and enclosure
Upon arrival at the protestant's plant, the remaining
necessary parts are installed to complete the transit bus.
The bus shells were entered between April and August of
1997. The entries were liquidated between April 10 and June 26,
1998, with classification in subheading 8707.90.50, HTSUS, as
bodies (including cabs) for the motor vehicles of headings 8701
to 8705. This protest was filed on June 29, 1998. Citing
General Rule of Interpretation (GRI) 2(a) and New York Ruling
Letter (NY) 882788, dated February 24, 1993, the protestant
contends that the articles are properly classifiable in
subheading 8702.10.30, HTSUS, as incomplete or unfinished motor
vehicles for the transport of 16 or more persons, including the
driver.
ISSUE:
Whether the bus shells are classified under subheading
8702.10.30, HTSUS, as motor vehicles for the transport of 16 or
more persons, including the driver, or subheading 8707.90.50,
HTSUS, as bodies (including cabs) for the motor vehicles of
headings 8701 to 8705?
LAW AND ANALYSIS:
Initially we note that the protest was timely filed (i.e.,
within 90 days after but not before the notice of liquidation;
see 19 U.S.C. 1514 (c)(3)(A)) and the matter is protestable (see
1514 U.S.C. 1514 (a)(2) and (5)).
The HTSUS, 1997, subheadings under consideration are as
follows:
8702 Motor vehicles for the transport of ten or more
persons, including the driver:
8702.10 With compression-ignition internal
combustion piston engine (diesel or
semi-diesel):
8702.10.30 Designed for the transport of
16 or more
persons, including the driver.
* * * * * * * * * * * *
8707 Bodies (including cabs), for the motor vehicles of
headings 8701 to 8705:
8707.90 Other:
8707.90.50 Other.
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.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the 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. Customs believes the ENs should
always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128
(Aug. 23, 1989).
General Chapter Note for Chapter 87, p.1543, provides that
"this Chapter covers the following vehicles . . .: (2) Motor
vehicles designed for the transport of persons (heading 87.02 or
87.03)[.]" The Note further provides that:
[a]n incomplete or unfinished vehicle is
classified as the corresponding
complete or finished vehicle provided it has the
essential character of the latter (see
Interpretative Rule 2(a)), as for example:
* * *
(B) A motor vehicle not equipped with its engine
or with its interior
fittings.
GRI 2(a) states in pertinent part 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 presented,
the incomplete or unfinished article has the essential
character of the complete or finished article.
The bus shells when imported contain a substantial amount of
equipment and number of components necessary for a completed
transit bus. The Courts have referred to the ENs in determining
essential character for purposes of GRI 2(a) (see Sharp
Microelectronics Technology, Inc. v. United States, 932 F. Supp.
1499, 1504-1505 (CIT 1996), affirmed, 122 F.3d 1446 (1997)). As
noted above, the EN for Chapter 87 makes clear that a motor
vehicle which is not equipped with its engine or interior
fittings has the essential character of the motor vehicle.
Accordingly, the bus shells are classified as motor vehicles for
the transport of 16 or more persons, including the driver; since,
in its unfinished state, the article has the essential character
of such a motor vehicle.
This is consistent with NY 882788, dated February 24, 1993,
in which we held that a similarly unfinished or incomplete
trolley bus was classified under heading 8702, HTSUS, pursuant to
GRI 2(a).
HOLDING:
The forty and sixty foot transit bus shells are classified
under subheading 8702.10.30, HTSUS, as motor vehicles for the
transport of 16 or more persons, including the driver. The 1997
column 1, general rate of duty is 2.4% ad valorem.
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 are to 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 make the decision available to
Customs personnel, and to the public on the Customs Home Page on
the World Wide Web at www.customs.ustreas.gov, by means of the
Freedom of Information Act, and other methods of public
distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division