CLA-2- OT:RR:CTF:TCM H010587 TNA
Port Director, Service Port-San Francisco
U.S. Customs and Border Protection
555 Battery Street, Room 319 San Francisco, CA 94111
RE: Application for Further Review of Protest No: 2809-07-100165; Electric three-wheeled cars
Dear Port Director:
This is in reference to your correspondence, dated April 26, 2007, forwarding Application for Further Review (“AFR”) of Protest No. 2809-07-100165, timely filed on February 28, 2007, on behalf of Zap. The AFR concerns the classification of electric three-wheeled vehicles under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The merchandise at issue consists of three-wheeled electric vehicles called the “Xebra.” The Xebra is powered by a Gel Cell Battery with an onboard 110 Volt A/C charger. It is capable of speeds up to 40 miles per hour, and has a range of up to 40 miles in one charge. The vehicle is 10 feet long, 4.66 feet wide, 5.05 feet high, and weighs less than 1800 lb.
The Xebra does not have a conventional motor-vehicle type steering or suspension system such as heavy duty multiple leaf springs, transmission, reverse gear or differential. Instead, it uses motorcycle mechanical components, including steering and suspension system. The Xebra does not have an engine; rather, it is powered by a 72-Volt, wound DC motor with brushes that produces 5 kilowatts of electrical power and is akin to the motors that power the electrical portion of hybrid motor vehicles. The motor is mounted transversely with the rear wheels. It is connected to a reducer, which is coupled to a power shaft to one of the wheels. A reverse solenoid mounted transversely to the rear wheels changes the polarity of the electric motor and causes it to operate in the opposite direction. The steering system allows the driver to control the angle of the tires by turning an interior-mounted wheel and contains the basic connective parts that coordinate the action of the steering wheel to the action of the vehicle wheels. The vehicle’s suspension contains all the mains parts that an average motor vehicle does, including axles, shafts, wheel hubs, shock absorbers, bearings and integration with the braking system.
In addition, exhibits submitted by the protestant, including drawings of the Xebra, show that it contains many of the external features of a conventional motor vehicle as well. It has a conventional automobile’s body: it is completely enclosed and contains a back and front windshield, as well as side windows. It contains a steering wheel with an ignition, and a dashboard that also closely resembles that of a conventional motor vehicle. The dashboard, in particular, contains a speedometer, fuel gage, vents, a radio that can be upgraded to a CD player, and other features. Furthermore, the Xebra has four adjustable seats and safety equipment such as seatbelts. The interior also contains other comfort features such as a heater and optional leather seats. There is also storage space behind the back seats.
The merchandise was entered under subheading 8711.90.00, HTSUS, which provides for “motorcycles (including mopeds) and cycles fitted with an auxiliary motor: other” on October 22, 2005 and March 29, 2006. A rate advance was issued on May 25, 2005, reclassifying the merchandise in subheading 8703.90.00, HTSUS, which provides for: “motor cars and other motor vehicles principally designed for the transport of persons, other.” The merchandise was liquidated in subheading 8703.90.00, HTSUS, on September 15, 2006. The importer filed its protest on February 28, 2007, claiming that the correct classification for the merchandise is under subheading 8711.90.00, HTSUS.
ISSUE:
Whether the Xebra is classified under heading 8703, HTSUS, as motor cars and other motor vehicles principally designed for transport of people, or under heading 8711, HTSUS, as a motorcycle?
LAW AND ANALYSIS:
This matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).
Further Review of Protest No. 2809-07-100165 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs, or his designee, or with a decision made at any point with respect to the same or similar merchandise. Specifically, the Protestant states that the port’s classification is inconsistent with two New York (“NY”) Rulings, R00882, dated October 6, 2004, and C81209, dated November 25, 1997, that classify three-wheeled vehicles under subheading 8711.90.0000, HTSUS, as motorcycles.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order.
The HTSUS headings under consideration are the following:
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars:
8703.90.00 Other…
8711 Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars:
8711.90.00 Other…
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN to heading 8703, HTSUS, states, in pertinent part, the following:
This heading covers motor vehicles of various types (including amphibious motor vehicles) designed for the transport of persons...
The vehicles of this heading may have any type of motor (internal combustion piston engine, electric motor, gas turbine, etc.).
The heading also covers lightweight three wheeled vehicles of simpler construction, such as:
those fitted with motorcycle engine and wheels, etc. which, by virtue of their mechanical structure, possess the characteristics of conventional motor cars, that is motor car type steering system or both reverse gear and differential;
those mounted on a T shaped chassis, whose two rear wheels are independently driven by separate battery powered electric motors. These vehicles are normally operated by means of a single central control stick with which the driver can start, accelerate, brake, stop and reverse the vehicle, as well as steer it to the right or to the left by applying a differential torque to the drive wheels or by turning the front wheel…
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The following features are indicative of the design characteristics generally applicable to the vehicles which fall in this heading:
(a) Presence of permanent seats with safety equipment (e.g., safety seat belts or anchor points and fittings for installing safety seat belts) for each person or the presence of permanent anchor points and fittings for installing seats and safety equipment in the rear area behind the area for the driver and front passengers; such seats may be fixed, fold-away, removable from anchor points or collapsible;
(b) Presence of rear windows along the two side panels;
(c) Presence of sliding, swing-out or lift-up door or doors, with windows, on the side panels or in the rear;
(d) Absence of a permanent panel or barrier between the area for the driver and front passengers and the rear area that may be used for the transport of both persons and goods;
(e) Presence of comfort features and interior finish and fittings throughout the vehicle interior that are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ashtrays).
The EN to heading 8711, HTSUS, states, in pertinent part, the following:
This heading covers a group of two wheeled motorised vehicles which are essentially designed for carrying persons.
In addition to motorcycles of the conventional type, the heading includes motor scooters, characterised by their small wheels and by a horizontal platform which joins the front and rear portions of the vehicle; mopeds, equipped with both a built in engine and a pedal system; and cycles fitted with an auxiliary motor.
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Three wheeled vehicles (e.g., the “delivery tricycle” type) are also classified here provided they do not have the character of motor vehicles of heading 87.03 (see the Explanatory Note to heading 87.03).
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Zap argues that its merchandise is classifiable eo nomine in heading 8711, HTSUS, as a motorcycle. We note that heading 8703, HTSUS, is also an eo nomine provision. A fundamental rule of tariff classification is that an eo nomine provision that names an article without terms of limitation, and, absent contrary legislative intent, is deemed to include all forms of the article. Nootka Packing, Co. v. United States, 22 CCPA 464, T.D. 47464 (1935).
Zap argues that the Xebra fits the common definition of motorcycle, largely by citing to definitions of “motorcycle” that encompass three-wheeled vehicles. The fact that the Xebra contains three wheels rather than four, however, does not, on its own, place the merchandise in heading 8711, HTSUS. Also, we note that the EN to heading 8703, HTSUS, expressly states that heading 8703, HTSUS, covers three-wheeled vehicles.
Zap also cites to New York Ruling Letter (“NY”) R00882, dated October 6, 2004, in support of its argument. The merchandise there, however, was a “Velomobile,” a vehicle distinguished by the fact that it is powered primarily by pedaling, although it has an electric motor. Some models of the Velomobile are also not enclosed.
Zap also cites to NY C81209, dated November 25, 1997. The merchandise at issue there was three different models of the Scootcar, one of which had four wheels, and another model of which had an internal combustible engine. As previously noted, the Xebra is powered by a DC motor. In addition, none of the models of the Scootcar are enclosed, so they cannot protect users from weather; neither do they contain some of the other features that distinguish
the Xebra, such as a back windshield, power seats, etc. As a result, both NY R00882 and NY C81209 can be distinguished from the present case.
In NY K87586, dated July 8, 2004, we classified two different types of battery-powered electric cars. The vehicles ranged in speed from 25 mph to 75 mph and had a battery driving range from 50 miles to 155 miles. They also contained many other features such as lamps and lights, rearview mirrors, safety belts, windshield wipers and front and rear safety glass. CBP classified these vehicles under subheading 8703.90.00, HTSUS, as motor cars and other motor vehicles designed for the transport of people.
In Headquarters Ruling Letter (“HQ”) 085762, dated January 23, 1990, we classified three-wheeled vehicles for transporting goods or people known as “Go-For” vehicles. Although the vehicles there had gas-powered engines, they also had other features of conventional motor vehicles, including operational reverse gears, conventional steering, turn signals, headlights, etc. There we concluded that “clearly, the mechanical structure of all three ‘Go-For’ models possess certain important characteristics of conventional motor cars, i.e., they have motor car type steering, a reverse gear, shaft drive, a parking brake, etc. Therefore, the Go-For is not properly classifiable under heading 87.11, HTSUSA, which provides for motorcycles.” Instead, two of the models, which were designed for transporting goods, were classified under heading 8704, HTSUS. The third model, however, because it was intended for highway travel and contained a cab with windshield wipers that protected the driver, was classified under heading 8703, HTSUS, as a vehicle designed for the transport of people.
In the present case, the Xebra is powered by an electric motor. It utilizes motorcycle mechanical components, including its steering and suspension system, and runs on three wheels rather than a traditional motor vehicle’s four wheels. While the Xebra lacks a reverse gear, it has a small electric motor mounted transversely with the rear wheels so as to propel them. This characteristic distinguishes it from a motorcycle or scooter, which are driven by a direct connection to the rear wheel by chain or belts. In addition, although Zap argues that the Xebra is powered by a motorcycle engine, the Xebra’s motor is distinguishable from the internal combustion engines that power motorcycles of heading 8711, HTSUS. Even if they were the same engine, however, the Xebra would not be excluded from classification in heading 8703, HTSUS, because the EN to heading 8703, HTSUS, explains that the heading covers three-wheeled vehicles with motorcycle engines.
In addition, pictures of the Xebra, both those submitted in conjunction with this AFR and those online at Zap’s website, show a vehicle that, with the exception of its three wheels, is shaped like a regular motor vehicle, both inside and outside. The Xebra is enclosed and contains windows, windshields, four adjustable, powered, seats and safety equipment such as seatbelts. Pictures of the outside show headlights, mirrors, doors etc. that all resemble a motor vehicle. Pictures of the Xebra’s inside reveal a steering wheel and console that are nearly identical to that of a regular motor vehicle. The interior also contains other comfort features such as a heater, optional leather seats and a radio that can be upgraded to a radio/CD player. Pursuant to the EN to heading 8703, HTSUS, these internal features are indicative of a motor vehicle of heading 8703, HTSUS.
It also contains many of the external features of a conventional motor vehicles, such as its enclosed cabin and windshields. As a result, the Xebra is classified in subheading 8703.90.00, HTSUS, as a motor car or other motor vehicle designed primarily for the transport of people.
HOLDING:
By application of GRI 1, the Xebra is classified in heading 8703, HTSUS, specifically under subheading 8703.90.0000, HTSUS, which provides for: “Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars: Other.” The general, column one duty rate in effect at the time of entry was 2.5% ad valorem.
You are instructed to DENY the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division