CLA-2 RR:CR:GC 965369 GOB
Port Director
U.S. Customs Service
200 Granby Street
Norfolk, VA 23510
RE: Internal Advice 02/004; Automotive Housing Assembly Stampings;
Differential Carriers
Dear Port Director:
This is in reply to your memorandum of November 1, 2001, forwarding a request for internal advice initiated by a letter of September 5, 2001, submitted by counsel on behalf of Meritor do Brasil Ltda. (“Meritor”).
FACTS:
Meritor requests internal advice with respect to certain automotive housing assembly stampings and differential carriers, which it describes as follows:
The housing assembly stamping is made of both forged steel and ductile iron. The shape and appearance of the product is similar to the final product – the axle drive. The material prevalent in the final product is the same material prevalent in the housing stamping assembly; namely: forged steel and ductile iron . . . The housing assembly stamping will be used exclusively in drive axles of power trains . . . After importation into the United States, the housing sampling assembly is assembled with the differential carrier by bolting them and plugging the axle shafts into the drive axle.
The differential carrier is also made of forged steel and ductile iron, the material prevalent in the final product . . . It will also be used exclusively in drive axles of power trains . . . The differential carrier is assembled into the housing assembly stamping. Together both parts form an almost complete drive axle.
ISSUE:
What is the classification under the HTSUS of the subject automotive housing assembly stamping and differential carrier?
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 Meritor’s claim that the goods are classified pursuant to GRI 2(a) in subheading 8708.50.80, HTSUS, as unfinished drive axles. Meritor states:
The shape and material of the housing assembly stamping impart 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 the shape and materials, the “housing assembly stamping” is the component of the drive axle responsible for the execution of the product’s ultimate
function . . .
As to the differential carrier the similarities also exist between the part and the final product. For example, the prevalent material of the drive axle and of the differential carrier is the same (i.e. forged steel and ductile iron). The differential carrier is the central part of the drive axle. In itself, it imparts the essential character of a drive axle.
The Random House Dictionary of the English Language (unabridged ed.; 1973) provides the following definitions:
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.
The McGraw-Hill Encyclopedia of Science & Technology (1992) provides the following definitions:
Differential. In drive axles, the differential is the gear assembly between axle shafts that permits one wheel to rotate at a speed different from that of the other (if necessary), while transmitting torque from the final-drive ring gear to the axle shafts.
Power train. The power available from the engine crankshaft to do work is transmitted to the drive wheels by the power train.
In support of its position, Meritor 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.”
Meritor 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.”
In HQ 964655 dated January 30, 2002, Customs determined that axle center sections were classified in subheading 8708.99.67, HTSUS, after finding that they did not have the essential character of axles or drive axles.
The provision which Meritor claims to be 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 goods at issue here are not axles and they do not include axles. We further find that they do not have the essential character of axles, drive axles, or drive axles with differential. Therefore, we find that they are not classified in subheading 8708.50.80, HTSUS.
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 goods here do not “constitute the aggregate of distinctive component parts that establish” the identity of drive axles with differential.
In HQ 960950 dated January 16, 1998, we stated that “Customs believes that the power train of a motor vehicle extends from the engine through the transmission and differential through the power axles.” We find that the housing assembly stampings and differential carriers 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 HQ 964655 and NY 810208, both described above.
HOLDING:
The automotive housing assembly stampings and differential carriers 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