CLA-2 OT:RR:CTF:TCM H035446 TNA
Port Director, Blaine Service Port
Customs and Border Protection
9901 Pacific Highway Blaine, WA 98230
Re: Protest and Application for Further Review No: 3004-08-100050; Rigid Hull Inflatable Boats
Dear Port Director:
The following is our decision regarding Protest No. 3004-08-100050, timely filed on July 14, 2008, regarding classification of inflatable boats under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
This protest describes one entry, on December 26, 2007, under subheading 8903.10.00, HTSUS, which provides for: yachts and other vessels for pleasure or sports: inflatable. The subject merchandise is an inflatable boat with an aluminum hull and deck. It contains foam flotation and black non-skid finish on the deck’s walking surface. The boat’s inflatable collar is made of black neoprene/hypalon and contains five chambers with interconnecting valves. The collar has an electric inflation system and overpressure relief valves. The vessel also comes with seating and a Delta MK2 fiberglass helm console. The boat is shrink-wrapped for shipment and delivery.
The boat is imported and sold with a kit of ancillary items for storage or installation onto the inflated boat that includes: a handheld spot light, a number of cables, a load adapter, CD manual and guide, a boat hook, pump straps, a weapons mount, a foot pump, a universal adapter, two repair kits, a nylon line, a radar reflector, components of two different radios, components of a radar display, various spare wires, connectors, fuses and fasteners, a second type of manual, a sling, paddles, and a pelican gun case. The weapons mount is supplied uninstalled and is not included in the boat weight.
CBP liquidated the entry as entered on April 11, 2008. Protestant claims classification in subheading 8906.90.00, as “other vessels, including warships and lifeboats other than row boats: other.”
ISSUE:
Whether rigid hull inflatable boats should be classified as boats for pleasure or sports under heading 8903, HTSUS or as warships and lifeboats under heading 8906, HTSUS?
LAW AND ANALYSIS:
The 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 of the first entry for entries made on or after December 18, 2004. (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)).
Review of Protest No. 3004-08-100050 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the protest is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or similar merchandise. Specifically, protestant alleges that HQ 967596, dated July 27, 2005, is inconsistent with your decision.
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. GRI 3(b) states:
When, by application of Rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
…
Mixtures, composite goods consisting or different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
The HTSUS headings under consideration are the following:
8903: Yachts and other vessels for pleasure or sports; row boats
and canoes:
8903.10.00: Inflatable
* * * * * * * * * * * *
8906: Other vessels, including warships and lifeboats other than row boats:
8906.90.00: Other
Legal note 2 to Section XVII states, in pertinent part:
The expressions “parts” and “parts and accessories” do not apply to the following articles, whether or not they are identifiable as for the goods of this section:
(a) Joints, washers or the like of any material (classified according to their constituent material or in heading 8484) or other articles of vulcanized rubber other than hard rubber (heading 4016);
(b) Parts of general use, as defined in note 2 to section XV, of base metal (section XV) or similar goods of plastics (chapter 39);
(c) Articles of chapter 82 (tools);
(d) Articles of heading 8306;
(e) Machines or apparatus of headings 8401 to 8479, or parts thereof; articles of heading 8481 or 8482 or, provided they constitute integral parts of engines or motors, articles of heading 8483;
(f) Electrical machinery or equipment (chapter 85);
(g) Articles of chapter 90;
(h) Articles of chapter 91;
(ij) Arms (chapter 93);
(k) Lamps or lighting fittings of heading 9405; or
(l) Brushes of a kind used as parts of vehicles (heading 9603).
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System 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 8903, HTSUS states, in pertinent part, that:
This heading includes yachts, marine jets and other sailboats and motorboats, dinghies, kayaks, sculls, skiffs, pedalos (a type of pedal operated float), sports fishing vessels, inflatable craft and boats which can be folded or disassembled.
The EN to heading 8906, HTSUS, states, in pertinent part, that:
[This heading] covers:
(1) Warships of all kinds, these include:
(a) Ships designed for warfare, fitted with various offensive weapons and defensive weapons and incorporating protective shields against projectiles (e.g., armour plating or multiple watertight bulkheads), or with underwater devices (anti magnetic mine detectors). They are generally also fitted with detection and listening devices such as radar, sonar, infra red detection apparatus and scrambling equipment for radio transmissions.
Ships of this category may be distinguished from merchant ships by their greater speed and manoeuvrability, by the size of the crew, by bigger fuel tanks and by special magazines for the transport and use of ammunition at sea.
(b) Certain specially fitted ships which do not carry weapons or armour plating but yet are recognisable as wholly or mainly for use in warfare, such as landing craft or certain fleet auxiliaries (for transporting ammunition or mines, etc.), troop ships.
(c) Submarines.
* * * * * * * * * *
As an initial matter, a number of headquarters rulings about vessels have been decided according to whether the subject merchandise meets the definition of a “vessel.” See, e.g., HQ 962171, HQ 083121, HQ 967596. In the present case, it is not disputed that Zodiac’s boats meet this definition. They are capable of practical and substantial use on water and are made of the requisite gauge plastic. Rather, the issue in this case is whether Zodiac’s boats can best be described as a boat for pleasure or sports under heading 8903, HTSUS, or as a warship under heading 8906, HTSUS.
CBP notes that the inflatable boat is imported with a kit of ancillary equipment that includes such things as a flashlight, radios, cables, and a gun mount. Protestant argues that the accessories, once assembled with the boat, make the boat into a search and rescue boat rather than a pleasure vessel. Legal Note 2 to Section XVII lists merchandise that cannot be classified as parts or parts and accessories under this section, whether or not they are identifiable as for the goods of this section. The vast majority of the items of the ancillary kit fall under Legal Note 2, and, as such, cannot be classified as parts, or parts and accessories, of the inflatable boat.
Under GRI 1, heading 8906, HTSUS, is a provision for “other vessels, including warships and lifeboats other than rowboats.” The EN to Heading 8906 indicates that it is intended as a catch-all provision to include “all vessels not included in the more specific headings 89.01 to 89.05.” The list of products in EN 89.06 does not contain search and rescue boats. The ships that it lists that are used for warfare or by public authorities have characteristics not present in the inflatable boat at issue here. Therefore, the instant merchandise is not described by the terms of heading 8906, HTSUS. To the extent that the instant merchandise can be classified in heading 8903, HTSUS, as an inflatable vessel for pleasure or sports, it cannot be classified in heading 8906, HTSUS.
Protestant argues that the inflatable boat, fitted with the ancillary items, is transformed into a vessel other than for pleasure or sport and therefore not described by the terms of heading 8903, HTSUS. However, many of the items included in the ancillary equipment kit are safety items, which are not precluded from boats of heading 8903, HTSUS. For instance, in HQ 967596 we classified a vessel in heading 8903, HTSUS, despite the presence of sponsons that imparted shock absorption, stability and additional floatation. Furthermore, life boats with oars are classified under heading 8903, HTSUS. See, e.g., EN 89.03. Therefore, the presence of paddles, lights, pumps, straps, and other safety items do not preclude an inflatable boat from classification in heading 8903, HTSUS.
Protestant points specifically to the gun mount in the kit as transforming the vessel into a police or war boat under heading 8906, HTSUS, rather than a pleasure boat under heading 8903, HTSUS. A gun mount does not, however, necessarily give a boat the character of a war boat. To the contrary, war boats are outfitted with various weaponry, shields, and highly technical detection and radio devices. See EN to Heading 8906. In addition, the gun mount is supplied uninstalled in a case for storage and therefore does not give the subject vessel the character of a war boat. As a whole, the items in the ancillary equipment kit are basic safety and communication devices that pleasure craft frequently incorporate.
Lastly, we have classified the boat under GRI 1, which, if packaged together with the accessories, would constitute the essential character of the article under GRI 3(b). If the accessories are imported separately, however, we note that they and the boat would not constitute a set under GRI 3(b) because the supplies in the kit do not meet a particular need or carry out a specific activity. As a result, CBP finds that the instant inflatable boats with rigid hulls are classifiable under subheading 8903.10.00, which provides for “yachts and other vessels for pleasure or sports; row boats and canoes: other.”
HOLDING:
By application of GRI 1, Zodiac’s rigid hull inflatable boat is classified under 8903.10.00 HTSUS, which provides for: “yachts and other vessels for pleasure or sports; row boats and canoes: other.” As such, the applicable duty rate is 2.4% 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