CLA-2 OT:RR:CTF:TCM H238494 CkG
TARIFF NO: 8803.30.00
Steven B. Zisser
Zisser Customs Law Group
9355 Airway Road
Suite 1
San Diego, CA 92154
Re: Request for Binding Ruling for aircraft rack systems
Dear Mr. Zisser:
This is in response to your request of June 23, 2012, on behalf of your client, Gulfstream Aerospace Corp. (Gulfstream), concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of three different aircraft rack assemblies.
This request was first submitted to the National Commodity Specialist Division (NCSD) on March 20, 2012. The request was resubmitted to the NCSD on June 22, 2012. The NCSD forwarded your request to this office on February 5, 2013. We regret the delay in our response.
FACTS:
The Radio Navigational Rack Systems at issue are identified as part nos. 1159AVXA49331, 1159AVX49318-5, and 1159AVX49316. They are designed for installation into a G550 Gulfstream Business Jet Model. These units are used to house and support a variety of aircraft management systems, including avionic and radio navigation systems. Each unit is made up of several individual shelves which include cables, connectors, indicators, relays, switches, wire harnesses and other electronic components that drive the airplane’s primary communication and radio navigational functions.
Each unit also incorporates several pre-installed systems, including the Ground Service Control Module which controls which fuel tank is in use, the Battery volt/amp meter which controls the flow of electricity from the batteries to the systems, the Panel Cabin Pressure Controller which manages the pressure systems inside the airplane, Cabin Pressure Controllers designed to control air pressure flow in the cabin, the Baggage Compartment EER which controls water and waste systems, and various potentiometers used to control various electrical devices.
After importation into the United States various radio navigational systems are assembled into the rack system, including:
the Airshow 4000: a digital media unit that provides in-flight information to all data systems installed on the aircraft. It includes Doppler radar images, a Points of Interest Panel, Real-time 3D maps, flight progression map, news and entertainment.
two Modular Avionics Units with network interphase cards and advanced graphics modules that help coordinate the flow of all the communications and navigation data used by the aircraft.
other navigational equipment, including distance measuring equipment, and a range radio altimeter.
Part No. 1159AVXA49331 is installed into the cockpit area on the pilot side, Part no. 1159AVX49318-5 is installed in the rear of the aircraft, and part no. 1159AVX49316 is installed into the cockpit area on the co-pilot side.
ISSUE:
Whether the subject rack assemblies are classified in heading 8526, HTSUS, as radio navigational aid apparatus; heading 8529, HTSUS, as parts for use solely or principally with the apparatus of headings 8525 to heading 8528; or heading 8803, HTSUS, as parts of goods of heading 8801 or 8802.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRIs, 2 through 6, may then be applied in order.
The HTSUS provisions at issue are as follows:
8526: Radar apparatus, radio navigational aid apparatus and radio remote control apparatus:
Other:
8526.91.00: Radio navigational aid apparatus . . .
8529: Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528:
8529.90: Other:
Other:
Of radar, radio navigational aid or radio remote control apparatus:
8529.90.95: Assemblies and subassemblies, consisting of 2 or
more parts or pieces fastened or joined together . . .
8803: Parts of goods of heading 8801 or 8802:
8803.30.00: Other parts of airplanes or helicopters. . .
* * * *
Note 1 to Section XVI provides, in pertinent part, as follows:
This Section does not cover…
(l) Articles of Section XVII
Note 2 to Section XVI provides as follows:
Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter
85, parts of machines (not being parts of the articles of heading 8484, 8544,
8545, 8546 or 8547) are to be classified according to the following rules:
…
Other parts, if suitable for use solely or principally with a particular kind of
machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;
Note 2 to Section XVII provides, in pertinent part, as follows:
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:
…
(f) Electrical machinery or equipment (chapter 85);
Note 3 to Section XVII provides:
References in chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those chapters. A part or accessory which answers to a description in two or more of the headings of those chapters is to be classified under that heading which corresponds to the principal use of that part or accessory.
* * * *
The Harmonized Commodity Description and Coding System Explanatory Notes
(“ENs”) constitute the official interpretation of the HTSUS. While not legally binding or
dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS
and are generally indicative of the proper interpretation of these headings at the
international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
GRI 2(a) provides as follows:
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. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
EN 88.03 provides, in pertinent part:
This heading covers parts of the goods falling in heading 88.01 or 88.02, provided the parts fulfil both the following conditions :
They must be identifiable as being suitable for use solely or principally with the
goods of the above mentioned headings;
and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see
the corresponding General Explanatory Note).
* * * *
You claim classification of the instant rack assemblies in heading 8803, HTSUS, as parts of aircraft, or alternatively, in heading 8526, HTSUS, as radio navigational aid equipment, or heading 8529, HTSUS, as parts of an apparatus of headings 8525 to 8528, HTSUS.
Pursuant to Note 2(f) to Section XVII, articles of chapter 85 are precluded from classification in heading 8803, HTSUS. Note 1(l) to Section XVI, in turn, excludes articles of Section XVII from Section XVI. The legal notes to Section XVI and Section XVII are mutually exclusive. Classification of the subject articles in one of the suggested headings in Chapter 85 prima facie excludes them from Chapter 88, and vice versa.
You contend that the subject rack systems, while incomplete, have the essential character of complete radio navigational aid apparatus of heading 8526, HTSUS, and are thus classified therein on the basis of GRI 2(a). However, before we can consider classification by applying the principle of GRI 2(a), we first have to consider whether classification is possible using GRI 1, that is, according to the terms of the headings and the applicable legal notes. See e.g., HQ H034673, dated September 23, 2010, and HQ H096891, dated December 20, 2010. Thus, if classification of the instant merchandise can be resolved at GRI 1—that is, according to the terms of the headings of the tariff schedule and the relevant Section Notes—GRI 2(a) is not applicable.
Regardless, we note that the instant rack systems are not classifiable in heading 8526, HTSUS, by GRI 1 or GRI 2. The rack assemblies are not a complete radar, radio navigational aid or remote control apparatus at GRI 1 because at the time of their importation they lack any dedicated radio navigational equipment. Furthermore, they cannot be classified by GRI 2(a) as unfinished radio navigational aid apparatus, because they lack the essential character of articles of heading 8526, HTSUS. In their condition as imported, the rack systems cannot be identified by their constituent components—cables, connectors and other electronic components that may be found in any number of electronic devices—as radio navigational equipment. The Explanatory Notes to heading 8526 list several examples of radio navigational aid equipment of heading 8526, including radio beacons and radio buoys, with fixed or rotating aerials; receivers, including radio compasses equipped with multiple aerials or with a directional frame aerial, and GPS receivers. None of this equipment is listed in the bill of materials provided by counsel; rather, they will be joined to the rack system after importation. Hence, the rack systems as imported lack the essential character of radio navigation aid apparatus of heading 8526, HTSUS, pursuant to GRI 2. Furthermore, as discussed below, even once complete the instant rack systems are not dedicated for use solely for radio navigation; they perform multiple functions which fall outside the scope of radio navigation.
Alternatively, you contend that the instant rack assemblies are classified, at GRI 1, in heading 8529, HTSUS, which provides for parts for use solely or principally with an article of headings 8525 to heading 8528. However, the instant rack systems, even once complete, are not parts of a larger apparatus described by headings 8525, 8526, 8527 or 8528. Additionally, the rack systems are not solely or principally used for radio navigation. The racks are used to house, manage and control a variety of aircraft management systems, including the control and management of fueling systems, water and waste systems, and pressure control systems that have no direct relation to radio navigation or radio transmission. These systems do not support the function of radio navigation; they are essential to the proper functioning of the aircraft as a whole, but are merely complementary to the function of radio navigation specifically. Because they are not dedicated for use solely or principally for radio navigation or radio transmission, the instant rack systems, in their condition as imported, are not described by heading 8529, HTSUS.
The rack assemblies also contain various subassemblies and components that may incorporate articles from other headings in Chapter 85, including electrical signaling apparatus of heading 8531, potentiometers of heading 8533, electrical switches and relays of heading 8535 or heading 8536, temperature controllers of heading 8537, or management processors of heading 8543. However, none of these chapter 85 provisions describe the rack assemblies in their entirety at GRI 1. Nor are the subject rack assemblies parts of a larger apparatus encompassed by any of the headings in Chapter 85. Because the instant rack assemblies are not classifiable at GRI 1 in any of the claimed provisions of Chapter 85, classification in heading 8803, HTSUS, is not precluded by Note 2(f) to Section XVII.
Heading 8803, HTSUS, provides for parts of goods of heading 8801 or 8802, HTSUS. Heading 8802, HTSUS, in turn provides for airplanes and other aircraft. The courts have considered the nature of "parts" under the HTSUS and two distinct though not inconsistent tests have resulted. In Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, ("Bauerhin") 110 F.3d 774 (Fed. Cir. 1997), the court identified two distinct lines of cases defining the word "part". Consistent with United States v. Willoughby Camera Stores, ("Willoughby Camera") 21 C.C.P.A. 322 (1933), one line of cases holds that a part of an article "is something necessary to the completion of that article without which the article to which it is to be joined, could not function as such article." Id. at 324. The other line of cases evolved from United States v. Pompeo, ("Pompeo") 43 C.C.P.A. 9 (1955), which held that a device may be a part of an article even though its use is optional and the article will function without it, if the device is dedicated for use upon the article, and, once installed, the article will not operate without it. Under either line of cases, an imported item is not a part if it is "a separate and distinct commercial entity". ABB, Inc. v. United States, 28 Ct. Intl Trade 1444, 1452-53 (2004). The definition of "parts" was also discussed in Rollerblade, Inc. v. United States, 282 F. 3d 1349, 1353 (Fed. Cir. 2002), wherein the court defined parts as "an essential element or constituent; integral portion which can be separated, replaced, etc." Id. at 1353.
The instant rack assemblies, in their condition as imported, are an essential and integral element of the aircraft with which they will be used. They incorporate several control and management systems that control a variety of essential functions of the aircraft, including the fuel systems, the water and waste systems, and pressure control systems. Upon completion in the United States, they will also include various radio navigational systems. Photos of the rack systems, diagrams indicating where they are installed on the Gulfstream airplanes, and the fact that they are being imported by Gulfstream Corp., an airplane manufacturer, for use with a specific Gulfstream jet model, indicate that the rack systems are specifically designed and dedicated for use solely with airplanes of heading 8802, HTSUS, and they are not separate and distinct commercial entities. Thus, the instant rack systems are classified in heading 8803, HTSUS, as parts of aircraft.
This decision is consistent with prior CBP rulings on similar merchandise. See e.g., HQ 954192, dated September 17, 1993, in which CBP concluded that various electronic apparatus for use with an Airbus A320 aircraft, including an Audio Management Unit, an Audio Signal Centralizing Unit, an Apparatus for Radio Communication Between Pilot and Passengers, and a Ground Crew Radio Transmitting and Receiving Apparatus were classified in heading 8803, HTSUS, as parts of aircraft, and that Note 2(f) to Section XVII did not apply.
HOLDING:
By application of GRI 1, the subject Rack System, part nos. 1159AVXA49331, 1159AVX49318-5, and 1159AVX49316, are provided for in heading 8803, specifically subheading 8803.30.00, HTSUS, as other parts of airplanes or helicopters. The 2014 column one, general rate of duty is Free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
A copy of this ruling letter should be attached to the entry documents filed
at the time the goods are entered. If the documents have been filed without a copy, this
ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division