CLA-2 RR:CR:GC 964655 GOB
Port Director
U.S. Customs Service
200 St. Paul Place
Baltimore, MD 21202
RE: Internal Advice 01/013; Axle Center Sections
Dear Port Director:
This is in reply to your memorandum of July 26, 2001 (APP 6-PD:TO:TT AB) forwarding a request for internal advice initiated by a letter of June 28, 2001, submitted by counsel on behalf of Dana Industrias Ltda. (“Dana”).
FACTS:
Dana requests internal advice with respect to certain axle center sections, which it describes as follows:
The axle center section is made of both forged steel and ductile iron (cast iron). The shape of the axle center section is similar to the final product – the axle drive. The material prevalent in the final product is the same material prevalent in the axle center section; namely: forged steel and ductile iron . . .
After importation into the United States, tube assemblies are pressed and welded to the axle center section. A brake system (disc or drum) is then assembled at each end of the axle using bolts and nuts to which specific torques are applied. Axle shaft assemblies are added through the tube connecting to the side gears (spline male/female type), which are inside the axle center section. The specific torque is applied to the bolts/nuts of the axle shaft. The drive axle is then completed. After that, the drive axle is submitted to leakage testing and, if approved, filled with oil and accommodated in transport racks to be delivered to customers.
ISSUE:
What is the tariff classification of the subject axle center sections?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s may then be applied. GRI 2(a) provides in pertinent part: “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 has the essential character of the complete or finished article.”
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.
The HTSUS provisions under consideration are as follows:
8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:
8708.50 Drive axles with differential, whether or not provided with other transmission components:
8708.50.80 For other vehicles
* * * * * *
Other parts and accessories:
8708.99 Other:
Other:
Other:
8708.99.67 Other parts for power trains
It is Dana’s claim that the goods are classified pursuant to GRI 2(a) in subheading 8708.50.80, HTSUS, as unfinished drive axles. Dana states:
In this case, the shape and material of the axle center section imparts the essential character of the drive axle. Both the unfinished and the finished products have similar shape and the same predominant material (i.e. forged and steel ductile iron).
In addition to shape and materials, the “axle center section” is the component of the drive axle responsible for the execution of the product’s ultimate function.
The Random House Dictionary of the English Language (unabridged ed.; 1973) provides the following automotive definitions:
axle: 1. Mach. the pin, bar, shaft or the like, on which or by means of which a wheel or pair of wheels rotates . . .
differential: . . . 7. Also called differential gear. Mach. An epicyclic train of gears designed to permit two or more shafts to revolve at different speeds, as a set of gears in an automobile permitting the rear wheels to revolve at different speeds when the car is turning . . .
power train: a train of gears and shafting transmitting power from an engine , motor, etc., to a mechanism being driven.
In support of its position, Dana cites HQ 082932 dated March 27, 1989, where Customs classified unfinished automotive brake components, rotors and drums in subheading 8708.39.50, HTSUS, which provides for: “Brakes and servo-brakes and parts thereof: . . . Other: . . . For other vehicles.” Therein we stated: “The unfinished brake drums and rotors in this case are imported in the shape of brake drums and rotors and need only be machined to tolerances. Thus, they have the essential character of the finished products when they are imported.”
Dana also cites HQ 962985 dated December 13, 1999, where, pursuant to GRI 2(a), we classified the frame, motor, and controls of a golf cart, imported together, in subheading 8704.90.00, HTSUS, which provides for “Motor vehicles for the transport of goods: . . . Other.” Therein we stated: “Though incapable of motion without the wheels, these components impart the approximate size and shape to, and are the very essence of, a motorized cart for carrying a golf bag with clubs. They constitute the aggregate of distinctive component parts that establish its identity as what it is, a complete or finished Walkalong [motorized cart for carrying golf clubs].”
In NY 810208 dated June 8, 1995, Customs classified an “automotive bearing-fitted center-support drive shaft housing” in subheading 8708.99.67, HTSUS, which provides for: “Parts and accessories of the motor vehicles of headings 8701 to 8705: . . . other parts and accessories: Other: Other: . . . Other: . . . Other parts for power trains.”
The provision which Dana claims is applicable, subheading 8708.50.80, HTSUS, provides as follows: “Parts and accessories of the motor vehicles of headings 8701 to 8705: . . . Drive axles with differential, whether or not provided with other transmission components: . . . For other vehicles.” [Emphasis supplied.] The axle center sections as imported are differentials without axles, i.e., they are not axles and they do not include axles. We further find that they do not have the essential character of axles or drive axles.
We find HQ 082932, excerpted above, to be distinguishable in that the goods there, brake drums and rotors, needed only to be machined before becoming the final product.
We find HQ 962985, also excerpted above, to be distinguishable from the instant case because the axle center sections here do not “constitute the aggregate of distinctive component parts that establish” the identity of drive axles with differential.
Accordingly, we find that the axle center sections are classified in subheading 8708.99.67, HTSUS, as: “Parts and accessories of the motor vehicles of headings 8701 to 8705: . . . Other parts and accessories: Other: . . . Other: . . . Other: . . .Other parts for power trains.”
Our determination is consistent with NY 810208, described above.
HOLDING:
The axle center sections are classified in subheading 8708.99.67, HTSUS, as: “Parts and accessories of the motor vehicles of headings 8701 to 8705: . . . Other parts and accessories: Other: . . . Other: . . . Other: . . . Other parts for power trains.”
This decision should be mailed to the internal advice requester no later than 60 days from the date of this letter. 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.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division