CLA–2 OT:RR:CTF:TCM H250305 CKG
Port Director
U.S. Customs and Border Protection
Port of Memphis
3150 Tchulahoma Road, Suite 1
Memphis, TN 38118
ATTN: Valerie Weiss, Import Specialist
RE: Application for Further Review of Protest No. 2006-13-101393; classification of
tires from China
This is in response to the Application for Further Review of Protest No. 2006-13-101393, filed on behalf of Dynamic Tire Corporation (‘Protestant”), contesting Customs and Border Protection’s (CBP) classification and liquidation of three entries of tires from China in subheading 9903.40.05, HTSUS.
FACTS:
The merchandise at issue consists of new, pneumatic rubber tires, style S637, of the size and load configuration 235/85R16-14. The Sailun “S637” tires at issue measure 235 millimeters in width and 199.75 millimeters in height, with a ply rating of 14, a corresponding load range of G, and a speed rating of L (up to 75 mph).
The tires are marked on the sidewall with their size and load rating as well as the use designation “LT” and the words “Trailer Service Only”.
The merchandise at issue was entered on May 09, May 10 and August 27, 2012. The Port of Memphis liquidated the subject entries on April 05, April 12, and May 05, 2013, in subheading 9903.40.05, HTSUS, as tires of a kind used on motor cars and on-the-highway light trucks (provided for in subheading 4011.10.10 or 4011.20.10). Protestant claims classification in subheading 4011.99, HTSUS, as other tires.
New, pneumatic tires from China, of a kind used on motor cars, on-the-highway light trucks, vans, and sport utility vehicles, provided for in subheadings 4011.10.10, 4011.10.50, 4011.20.10, and 4011.20.50 of the HTSUS, entered between September 26, 2009 and September 25, 2012, are subject to an additional duty imposed by Presidential Proclamation number 8414. See 74 FR 47861, published September 17, 2009; http://www.cbp.gov/xp/cgov/trade/trade_programs/entry_summary/laws/ advalorem_chinese_tires.xml. Protestant argues that the tires under consideration are tires for use on trailers only and are therefore not subject to the safeguard duty rate.
ISSUE:
Whether the instant tires are classified in subheading 4011.20, HTSUS, as tires of a kind used on buses or trucks and subject to the safeguard duty rate under subheading 9903.40.05, HTSUS, or in subheading 4011.99, HTSUS, as other tires.
LAW AND ANALYSIS:
The matter protested 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)).
Further Review of Protest No. 2006-13-101393 was 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 involve questions of law or fact which have not been ruled upon by the Commissioner of Customs, his designee or by the Customs Courts.
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. GRI 6, HTSUS, requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable. The GRI's apply in the same manner when comparing subheadings within a heading.
The HTSUS provisions at issue are as follows:
4011: New pneumatic tires, of rubber:
4011.20: Of a kind used on buses or trucks:
4011.20.10: Radial…
***
4011.99: Other:
4011.99.45: Radial…
***
9903.40.05: Radial tires of a kind used on motor cars (other than racing cars), station wagons, sport utility vehicles, vans and on-the-highway light trucks (provided for in subheading 4011.10.10 or 4011.20.10)
* * * *
Upon examination of the subject merchandise, the Port liquidated the instant tires in subheading 4011.20.10, HTSUS, as tires of a kind used on trucks. Protestant contends that the tires at issue are tires for trailer use, classified as “other” tires in subheading 4011.99.45, HTSUS. Subheading 4011.20 is a “principal use” provision, governed by Additional U.S. Rule of Interpretation 1(a), HTSUS, which provides that:
In the absence of special language or context which otherwise requires--a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.
It is the principal use of the class or kind of good to which the imports belong and not the principal use of the specific imports that is controlling under the Rules of Interpretation. See Group Italglass, U.S.A., Inc. v. United States, 17 CIT 1177, 839 F. Supp. 866 (1993). Moreover, in Primal Lite, Inc. v. United States, 182 F.3d 1362 (Fed Ct. Apps. 1999), the Court stated that principal use under Additional U.S. Rule of Interpretation 1(a) limits the "class or kind" language to those goods that are "commercially fungible" with the imported goods.
The Courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. These include: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (1976). See also Lennox Collections v. United States, 20 CIT 194, 196 (1996).
Tires designed specifically for trailer use differ from those for other on-road vehicles such as passenger cars and light trucks in that they are typically narrower than car tires, feature stiffer sidewalls (which prevents the rig from swaying, helps the trailer track straight, and reduces the risk of sidewall puncture and blowout), and have shallower treads and a higher maximum load capacity than light truck tires. They are generally marked on the sidewall with an “ST” (Special Trailer) designation and “for trailer use only”. These physical criteria are a useful indicator of intended use, and should be considered along with the remaining Carborundum factors.
The Sailun S637 tires measure 235 millimeters in width and 199.75 millimeters in height, with a ply rating of 14 and with a corresponding load range of G, and a speed rating L (up to 75 mph). Pictures of the tires show that they are marked on the sidewall with the designation “LT”, as well as with their size, load rating, and the words “trailer service only”.
The 235/85/R16 size is a common configuration for both light truck and trailer tires. The Tire and Rim Association (TRA) publishes industry-recognized technical specifications on vehicle tires in its annual “Yearbook”. The 2009 TRA Yearbook includes the 235/85/R16 configuration in the sections for both Light Truck and Trailer tires (titled “Tires for Trailers in Highway Service”). Similarly, tires of this size configuration are generally sold online as either trailer or light truck tires, depending on the brand and their particular construction features. Although the Protestant asserts that tires of a kind used on light truck have a maximum ply rating of 10 and load range of G, we note that we have found numerous light truck tires with ply ratings of up to 14. The ply and load rating of the instant tires therefore indicate suitability for use on either light truck or trailer tires.
The Protestant argues that the tires’ shallow tread and plain tread pattern distinguish these tires from those designed for other than trailer use. The tread depth of the S637 tires is stated to be 12/32nd of an inch; protestant argues that light truck tires feature a deeper tread of 14/32 inches. While trailer tires tend to have shallower treads than comparably sized light truck tires, a tread depth of 12/32nd of an inch still appears to be common for light truck tires; thus, we do not find the specific tread depth to be a compelling indication of use in this instance. Protestant further argues that the plain and straight line tread pattern indicates a design for use on trailers, because a light truck tire will typically have a more elaborate side-radiating tread designed for greater traction for steering on curves. We agree that the tread pattern of the instant tires is suggestive of a primary use on trailers.
The marketing and advertisement of the S637 Sailun tires indicate that the Sailun S637 tires are capable of use on either trailers or light trucks and buses. First, we note the “LT” (Light Truck) sidewall marking on the instant tires, which is suggestive of intended use. The Sailun website further describes the S637 as “a versatile regional all-position tire” with “a shallow tread for trailer applications”, and lists the potential applications of the S637 tires as “Pickup & Delivery Trucks, Intrastate & Interstate Buses, Regional Trucks, Long Distance Trucks, Tractor Trailers, Low Platform Trailers, RV's, and Tow Trucks.” The instant tires are also described as “truck” tires on the commercial invoice and packing list. The marketing and advertisement of the Sailun S637 tires suggest that they are suitable for use on either trucks or trailers. These factors are therefore inconclusive as to the principal use of the Sailun tires.
The remaining Carborundum factors, however, favor classification of the Sailun S637 tires as “other” than tires of a kind used on light trucks. The S637 Sailun tires are generally categorized online as trailer tires and move in the same channels of trade as trailer tires: they are sold on such sites as trailertiresandwheels.com and in the trailer section of online retailers such as Discount Tires, Simple Tires and Amazon. Customer reviews on sites such as simpletires.com, rvnet.com, and Motor Home Magazine further indicate that they are commonly used as trailer and rv tires.
On balance, we find that the evidence is insufficient to establish that the instant tires are of a class or kind principally used on trucks or buses. The instant tires are therefore classified in subheading 4011.99, HTSUS, as other new pneumatic tires of rubber.
HOLDING:
By application of GRIs 1 and 6, the Sailun S637 tires at issue are classified in
subheading 4011.99.45, HTSUS, which provides for “New pneumatic tires, of rubber: Other: Radial.” The 2013, column one, general rate of duty is 4% ad valorem.
You are instructed to allow the protest in full. 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 Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public online at
http://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