CLA-2 OT:RR:CTF:TCM H180102 LWF
Elizabeth A. Martindale
Import/Export Compliance
Cameron International Corporation
3250 Briar Park, Suite 300
Houston, TX 77042
RE: Revocation of five ruling letters concerning the tariff classification of self-propelled modular transporters; Headquarters Ruling Letter (“HQ”) H122237, dated May 19, 2011; HQ H123524, dated March 18, 2011; New York Ruling Letter (“NY”) D86210, dated January 7, 1999; HQ 955231, dated January 7, 1994; and HQ 952400, dated February 9, 1993
Dear Ms. Martindale:
This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered Headquarters Ruling Letter (“HQ”) H122237, dated May 19, 2011, which was issued in response to a Request for Internal Advice from the Service Port of Houston concerning the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of self-propelled modular transporters (SPMTs) imported by Cameron International Corp. (“Cameron”). In HQ H12237, CBP concluded that the SPMTs, manufactured by Goldhofer AG (“Goldhofer”) in Germany, were classified in heading 8704, HTSUS, which provides for, “Motor vehicles for the transport of goods.” Upon review of HQ H122237, CBP has determined that the ruling is incorrect. Accordingly, for the reasons set forth below, CBP is revoking HQ H122237.
Similarly, CBP believes that it can best meet its obligations regarding the sound administration of the HTSUS under 19 C.F.R. § 177.7(a) by reconsidering certain published rulings so that CBP does not have in force rulings that may be inconsistent with its current views. As such, CBP is revoking four additional ruling letters concerning the tariff classification of other SPMTs that are substantially similar to the merchandise at issue in HQ H122237. Specifically, CBP is revoking HQ H123524, issued to Mammoet, Inc. on March 18, 2011; New York Ruling Letter (“NY”) D86210, issued to Kuehne & Nagel, Inc. on January 7, 1999; HQ 955231, dated January 7, 1994; and HQ 952400, issued to Sumitomo Corp. of America (“Sumitomo”) on February 9, 1993. In HQ H123524, CBP classified an SPMT manufactured by Scheuerle Fahrzeugfabrik GmbH (“Scheuerle”) in heading 8704, HTSUS; in ruling letters NY D86210, HQ 955231, and HQ 952400, CBP classified various Goldhofer, Scheuerle, and Sumitomo SPMTs in heading 8709, HTSUS, which provides for, “Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles.” Similar to its review of HQ H122237, CBP has determined that ruling letters HQ H123524, NY D86219, HQ 955231, and HQ 952400 are incorrect. Accordingly, CBP is also revoking ruling letters HQ H123524, NY D86219, HQ 955231, and HQ 952400, pursuant to the analysis set forth below.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke ruling letters HQ H122237, HQ H123524, NY D86210, HQ 955231, and HQ 952400 was published on February 4, 2015 in the Customs Bulletin and Decisions, Vol. 49, No. 5. CBP received five comments in support of the proposed revocation.
FACTS:
In HQ H122237, CBP described the Goldhofer SPMT as follows:
The Goldhofer PST/SL6 is a self-propelled modular transporter (SPMT). An SPMT is a modular vehicle designed for off-highway transport of extremely heavy loads over short distances. An SPMT is a modular unit, meaning that it can be connected to other SPMTs to accommodate larger loads. An SPMT is not towed by a tractor; rather it contains its own integrated power system. Each transport contains a removable power pack unit, containing the fuel combustion engine which drives the hydraulic pumps used to propel, steer and raise/lower the trailers. The top speed of the transporters when fully laden is 4.8s km/h. The power pack unit can also hydraulically raise or lower the trailer platform approximately 24 inches to allow the transporter to drive under a cargo load and lift it up, then set it down precisely at its destination. The total length of the transporter is 29.53 feet, and the outside turning radius is 28.9 feet. The transporters are imported with only an open bench seat for the driver, although an enclosed driver’s cabin is available as an optional accessory. The vehicle can alternately be controlled via remote. HQ H122237, dated May 19, 2011.
* * * * *
SPMTs are multi-axel machines designed for the purpose of raising, moving, and positioning very large, multi-ton payloads, such as bridge segments, portions of ship hulls, and oil rig constructions. SPMTs feature a series of wheel bogies attached in pairs along a modular, rigid trailer to form the length of the transporter. Hydraulic lift cylinders are mounted on each of wheel bogies and equip the machine with lifting capabilities, as well as independent suspension over uneven terrain. When the hydraulic cylinders are operated in unison, the SPMT can be used to drive under, elevate, and load cargo without the use of a crane or separate lifting equipment. When operated independently of one another, the hydraulic lift cylinders permit each wheel to move vertically to accommodate rough and uneven terrain, thereby keeping the cargo platform level.
Because of their slow maximum speed and heavy weight, load-carrying SPMTs are not operated on roads or highways without first closing the operations area to public traffic. Similarly, unladen SPMTs are not certified for use on public roadways, but instead are typically delivered to worksites on tractor trailers. Although optional driver’s cabins are often available for attachment to SPMT vehicles, the machines are frequently controlled by a pedestrian operator via tethered or remote radio frequency controls.
ISSUE:
Whether the Goldhofer SPMT is classified in heading 8427, HTSUS, as other works trucks fitted with lifting or handling equipment; heading 8704, HTSUS, as motor vehicles for the transport of goods; or heading 8709, HTSUS, as works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods.
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRIs). 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 of 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 GRIs may then be applied.
The following HTSUS provisions will be referenced:
8427 Fork-lift trucks; other works trucks fitted with lifting or handling equipment
8704 Motor vehicles for the transport of goods
8709 Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles
* * * * *
Note 1(l) to Section XVI, HTSUS, states:
1. This section does not cover:
(l) Articles of section XVII
* * * * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to heading 84.27, HS, states, in relevant part:
With the exception of straddle carriers and works trucks fitted with a crane of heading 84.26, this heading covers works trucks fitted with lifting or handling equipment.
Works trucks of this description include, for example:
…
(B) OTHER WORKS TRUCKS FITTED WITH LIFTING OR
HANDLING EQUIPMENT
This group includes:
(1) Trucks with mechanically elevating platforms for the maintenance of electric cables, public lighting systems, etc. (See the introduction to Explanatory Note to heading 84.26 regarding elevating platforms of this type mounted on lorries).
(2) Other trucks fitted with lifting or handling equipment including those specialized for use in particular industries (e.g., in the textile or ceramic industries, in dairies, etc.).
* * * * *
The EN to heading 87.04, HS, states, in relevant part:
This heading covers in particular:
Ordinary lorries (trucks) and vans (flat, tarpaulin-covered, closed, etc.); delivery trucks and vans of all kinds, removal vans; lorries (trucks) with automatic discharging devices (tipping lorries (trucks), etc.); tankers (whether or not fitted with pumps); refrigerated or insulated lorries (trucks); multi-floored lorries (trucks) for the transport of acid in carboys, cylinders of butane, etc.; dropframe heavy-duty lorries (trucks) with loading ramps for the transport of tanks, lifting or excavating machinery, electrical transformers, etc.; lorries (trucks) specially constructed for the transport of fresh concrete, other than concrete-mixer lorries (trucks) of heading 87.05; refuse collectors whether or not fitted with loading, compressing, damping, etc., devices.
…
The classification of certain motor vehicles in this heading is determined by certain features which indicate that the vehicles are designed for the transport of goods rather than for the transport of persons (heading 87.03). These features are especially helpful in determining the classification of motor vehicles, generally vehicles having a gross vehicle weight rating of less than 5 tonnes, which have either a separate closed rear area or an open rear platform normally used for the transport of goods, but may have rear bench-type seats that are without safety seat belts, anchor points or passenger amenities and that fold flat against the sides to permit full use of the rear platform for the transport of goods. Included in this category of motor vehicles are those commonly known as “multipurpose” vehicles (e.g., van-type vehicles, pick-up type vehicles and certain sports utility vehicles). The following features are indicative of the design characteristics generally applicable to the vehicles which fall in this heading:
(a) Presence of bench-type seats without safety equipment (e.g., safety seat belts or anchor points and fittings for installing safety seat belts) or passenger amenities in the rear area behind the area for the driver and front passengers. Such seats are normally fold-away or collapsible to allow full use of the rear floor (van-type vehicles) or a separate platform (pick-up vehicles) for the transport of goods;
(b) Presence of a separate cabin for the driver and passengers and a separate open platform with side panels and a drop-down tailgate (pick-up vehicles);
(c) Absence of rear windows along the two side panels; presence of sliding, swing-out or lift-up door or doors, without windows, on the side panels or in the rear for loading and unloading goods (van-type vehicles);
(d) Presence of a permanent panel or barrier between the area for the driver and front passengers and the rear area;
(e) Absence of comfort features and interior finish and fittings in the cargo bed area which are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ashtrays).
This heading also covers :
(1) Dumpers, sturdily built vehicles with a tipping or bottom opening body, designed for the transport of excavated or other materials. These vehicles, which may have a rigid or articulated chassis, are generally fitted with off the road wheels and can work over soft ground. Both heavy and light dumpers are included in this group; the latter are sometimes characterised by a two way seat, two seats facing in opposite directions or by two steering wheels, to enable the vehicles to be steered with the driver facing the body for unloading.
(2) Shuttle cars. These vehicles are used in mines to transport coal or ore from the hewing machinery to the conveyor belts. They are heavy, underslung vehicles, equipped with tyres and fitted with internal combustion piston engines or electric motors; they unload automatically by means of a conveyor belt which forms the floor of the vehicle.
(3) Self loading vehicles equipped with winches, elevating devices, etc., but designed essentially for transport purposes.
…
The heading also excludes:
(a) Straddle carriers used in factories, warehouses, dock areas or airports, etc., for the handling of long loads or containers (heading 84.26).
(b) Loader transporters used in mines (heading 84.29).
* * * * *
The EN to heading 87.09, HS, states, in relevant part:
This heading covers a group of self propelled vehicles of the types used in factories, warehouses, dock areas or airports for the short distance transport of various loads (goods or containers) or, on railway station platforms, to haul small trailers.
Such vehicles are of many types and sizes. They may be driven either by an electric motor with current supplied by accumulators or by an internal combustion piston engine or other engine.
The main features common to the vehicles of this heading which generally distinguish them from the vehicles of heading 87.01, 87.03 or 87.04 may be summarised as follows:
(1) Their construction and, as a rule, their special design features, make them unsuitable for the transport of passengers or for the transport of goods by road or other public ways.
(2) Their top speed when laden is generally not more than 30 to 35 km/h.
(3) Their turning radius is approximately equal to the length of the vehicle itself.
Vehicles of this heading do not usually have a closed driving cab, the accommodation for the driver often being no more than a platform on which he stands to steer the vehicle. Certain types may be equipped with a protective frame, metal screen, etc., over the driver’s seat.
The vehicles of this heading may be pedestrian controlled.
Works trucks are self propelled trucks for the transport of goods which are fitted with, for example, a platform or container on which the goods are loaded.
…
The heading excludes:
(a) Straddle carriers and works trucks fitted with a crane (heading 84.26).
(b) Fork lift trucks and other works trucks fitted with lifting or handling equipment (heading 84.27).
(c) Dumpers (heading 87.04).
* * * * *
Legacy U.S. Customs Service (“U.S. Customs”) first set forth its analysis concerning the classification of SPMTs in ruling letter HQ 952400, dated February 9, 1993, in which it classified two models of Sumitomo SPMTs in heading 8709, HTSUS. The Sumitomo machines at issue in HQ 952400 consisted of platform trucks ranging in length from approximately 10 to 20 meters and possessed maximum payload capacities from 50 to 280 tons; the Sumitomo SPMTs were designed to be operated a low-speeds when laden and featured minimum turning radiuses equal to the approximate length of each vehicle. This office notes that in determining the tariff classification of the Sumitomo SPMTs in HQ H952400, U.S. Customs demurred that “because of the limited number of [SPMTs] in the United States at present, our finding is based on the best information available, and does not include an analysis of the merchandise in the United on a large scale basis.” Nonetheless, this office finds that the physical characteristics and operating capabilities of the Sumitomo SPMTs described in ruling letter HQ 952400 indicate that the machines are substantially similar to the Goldhofer SPMT at issue in ruling letter HQ H122237.
In classifying the Sumitomo SPMTs in heading 8709, HTSUS, U.S. Customs in HQ 952400 rejected classification of the machines in heading 8704, HTSUS, and cited EN 87.09, HS, to provide guidance on the distinction between merchandise of the two headings. Specifically, U.S. Customs noted that EN 87.09, HS, states that the heading covers:
[S]elf-propelled vehicles of the type used in factories, warehouses, dock areas or airports for the short distance transport of various loads (goods or containers)… The main features common to vehicles of this heading which generally distinguish them from the vehicles of heading 87.01, 87.03, or 87.04 may be summarized as follows:
(1) Their construction and, as a rule, their special design features, make them unsuitable for the transport of passengers or for the transport of goods by road or other public ways.
(2) Their top speed when laden is generally not more than 30 to 35 km/h.
(3) Their turning radius is approximately equal to the length of the vehicle itself.
* * * * *
Considered in the context of the 1993 EN to heading 87.09, HS, U.S. Customs in HQ 952400 found that the maximum speeds when laden and the turning radius of the Sumitomo SPMTs were well-described by the “common features” of works trucks set forth in the EN. U.S. Customs wrote that, “the very heavy weights of the loads the trucks are designed to carry, considered in addition to the weights of the vehicles themselves, could not or would not normally be carried by road or other public ways.” Additionally, although the following exemplar was subsequently removed from EN 87.09, HS, in 1997, at the time U.S. Customs issued HQ 952400, the EN specifically provided that the heading included works trucks “…fitted with, for example, a platform or container (sometime designed for elevating) on which the goods are loaded.” Consequently, U.S. Customs concluded that when considering all the features of the Sumitomo SPMTs, the vehicles were properly described by heading 8709, HTSUS, as works trucks, not fitted with lifting or handling equipment, of the type used in factories, warehouses, or dock areas for the short distance transport of goods.
In classifying the Sumitomo SPMTs in heading 8709, HTSUS, U.S. Customs rejected classification of the vehicles from heading 8427, HTSUS, as other works trucks fitted with lifting or handling equipment, because it determined that the Sumitomo SPMTs were “not fitted with lifting or handling equipment.” Specifically, CBP noted that although the Sumitomo SPMTs featured elevating platforms “for the purpose of loading large pallets of goods,” the exemplars provided in the 1993 version of EN 87.09, HS, included works trucks “…fitted with, for example, a platform or container (sometimes designed for elevating) on which the goods are loaded.” See EN 87.09, HS (1992). Consequently, CBP concluded that because elevating platforms were “solely used to load and unload goods to be carried for short distance transport,” the Sumitomo SPMTs’ elevating platforms were akin to the machinery described in EN 87.09, HS, and did not constitute “lifting or handling equipment,” which would have otherwise classified the vehicles in heading 8427, HTSUS. Similarly, in ruling letters HQ 955231, dated January 7, 1994, and NY D86210, dated January 7, 1999, CBP classified Scheuerle and Goldhofer SPMTs substantially similar to the Sumitomo imports in heading 8709, HTSUS, concluding that an SPMT’s ability to raise and lower its cargo platform was consistent with the description in EN 87.09, HS, that works trucks of the heading may feature a “platform or container (sometimes designed for elevating).”
Upon review of the physical characteristics and operating capabilities of instant Goldhofer SPMTs (and SPMTs in general in prior CBP rulings), there is no dispute that the machines are identifiable as “works trucks.” The term “work trucks” is described in EN 87.09, HS, and as discussed above, the SPMTs’ extreme weight, slow laden speed, small turning radius, and inability to operate on public roads indicate that the machines are clearly distinguishable from vehicles of heading 87.01, 87.03, or 87.04. See EN 87.09, HS. Atypical examples of the use of SPMTs on public roadways to move cargo over long distances indicate that such operations require special permits from local transportation officials and that the roads first be closed to public traffic. Moreover, to the extent that SPMTs are primarily used to precisely elevate, handle, and position extremely heavy cargo (e.g., bridge segments, ship sections, oil rigs, etc.) to facilitate complex assembly and repairs operations in the construction, shipping, and petroleum industries, we note that the machines are not typically used for the “transport” of cargo. See EN 87.04, HS. As such, this office finds that the Goldhofer SPMTs at issue in HQ H122237 are properly described as “works trucks” for the classification purposes.
This office disagrees, however, with the conclusion reached in prior CBP rulings that SPMTs are properly described by the text of heading 8709, HTSUS, as “Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods.” Specifically, this office has reconsidered the meaning of the terms “lifting or handling equipment” as used in heading 8709, HTSUS, and finds that the independent suspension and cargo elevating functions of the Goldhofer SPMT hydraulic systems constitute “lifting or handling equipment” as used in heading 8709, HTSUS.
The terms “not fitting with lifting or handling equipment,” are not defined in Nomenclature. However, as discussed supra, a previous version of EN 87.09, HS, stated that the heading included works trucks “…fitted with, for example, a platform or container (sometimes designed for elevating) on which the goods are loaded.” See EN 87.09, HS (1992). Subsequent to the publication of ruling letters HQ 952400 and HQ 955231, the EN to 87.09, HS, was amended in 1997 and can no longer be read to support the classification of SPMTs in heading 8709, HTSUS, as works trucks not fitted with lifting or handling equipment. Specifically, the previously included exemplar, “self-propelled trucks for the transport of goods which are fitted with, for example, a platform or container (sometimes designed for elevating) on which the goods are loaded” (emphasis added), was narrowed by deleting the parenthetical “(sometimes designed for elevating).” See EN 87.09, HS. Additionally, an exclusionary note was added to EN 87.09, HS, which specifically states that the heading excludes, “Fork-lift trucks and other works trucks fitted with lifting or handling equipment (heading 84.27).” Id. (Emphasis original). As such, this office finds that scope of heading 8709, HTSUS, is not intended to include works trucks that are fitted with elevating platforms. Consequently, because SPMTs are capable of hydraulically lifting their cargo platforms and precisely positioning loaded cargo, this office finds that the subject merchandise does not fall under the scope of heading 8709, HTSUS, and is thus not excluded from classification under Section XVI, HTSUS, by Note 1(l) to Section XVI.
Heading 8427, HTSUS, provides, in pertinent part, for “other works trucks fitted with lifting or handling equipment,” and the distinction between works trucks of headings 8427 and 8709, HTSUS, is highlighted by the EN to 84.27, HS, which states that the heading covers works trucks fitted with lifting or handling equipment and specifically identifies “trucks with mechanically elevating platforms” as exemplars of the heading 84.27, HS. Additionally, EN 84.27, HS, explains that the heading includes, “other trucks fitted with lifting or handling equipment[,] including those specialized for use in particular industries.”
Similar to the exemplars described in EN 84.27, HS, the instant SPMTs are works trucks that feature cargo platforms that can be hydraulically raised and lowered via hydraulic rams attached to each of the SPMTs’ wheel bogies. The hydraulic rams on the wheel bogies allow the SPMTs to traverse rough and uneven terrain while maintaining the cargo platform at a level orientation. Additionally, operators of the SPMTs use the machines’ the hydraulic systems to lower and raise the cargo platforms to self-load and deposit cargo without the use of a separate crane or other lifting equipment. The slow maximum speed and precision maneuverability of the SPMTs allow operators to elevate, move, and position extremely heavy cargo (e.g., bridge segments, ship sections, oil rigs, etc.) to facilitate complex assembly and repairs operations in the construction, shipping, and petroleum industries. Insomuch as the SPMTs’ elevating platforms are described by EN 84.27, HS, CBP finds that the vehicles are provided for, eo nomine, by the terms of heading 8427, HTSUS, as other works trucks fitted with lifting or handling equipment.
HOLDING:
By application of GRI 1, the Goldhofer SPMTs are classified in heading 8427, HTSUS, specifically in subheading 8427.20.80, HTSUS, which provides for, “Fork-lift trucks; other works trucks fitted with lifting or handling equipment: Other self-propelled trucks: Other.” The column one, general rate of duty for subheading 8427.20.80, HTSUS, is free.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin and Decisions.
EFFECT ON OTHER RULINGS:
In accordance with the above analysis, HQ H122237, dated May 19, 2011; HQ H123524, dated March 18, 2011; NY D86210, dated January 7, 1999; HQ 955231, dated January 7, 1994; and HQ 952400, dated February 9, 1993 are hereby REVOKED.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division