CLA-2 OT:RR:CTF:TCM H250613 CkG
TARIFF NO: 4011.99.45
Port Director
U.S. Customs and Border Protection
Area Port of Jacksonville
10426 Alta Drive
Jacksonville, FL 32206
Attn: Bradley W. Dauble, Import Specialist
RE: Application for Further Review of Protest No. 1803-13-150001;
classification of tires from China
Dear Port Director:
This is in response to the Application for Further Review of Protest No. 1803-13-150001, filed on behalf of Sutong China Tire Resources (‘Protestant”), contesting Customs and Border Protection’s (CBP) classification and liquidation of two entries of tires from China in subheading 9903.40.10, HTSUS.
The merchandise at issue was entered on July 06 and July 20 of 2011. The Port of Jacksonville liquidated the subject entries on July 05, 2013, in subheading 9903.40.10, HTSUS, as tires of a kind used on motor cars and on-the-highway light trucks (provided for in subheading 4011.10.50 or 4011.20.50). Protestant claims classification in subheading 4011.99, HTSUS, as other tires.
FACTS:
The merchandise at issue consists of four models of new, pneumatic rubber tires, in the following configurations:
ST 205/75R15 - 6
ST 225/75R15 - 8
ST 235/80R16 - 10
ST 235/85R16- 10
The tires are marked on the sidewall with the designation “ST” (for “special trailer”), their size and load rating, and the words “Trailer Service Only”. The tire tread pattern is designated as “JK42.” The tires all pertain to Sutong’s “Hi Run” line of tires.
ISSUE:
Whether the instant tires are classified in subheadings 4011.10.10 or 4011.20.10, HTSUS (and correspondingly, in subheading 9903.40.05, HTSUS), as radial tires of a kind used on passenger cars, buses or trucks, 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. 1803-13-150001 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 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 substantially similar merchandise.
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
4011.10: Of a kind used on motor cars (including station wagons and racing
cars)
4011.10.10: Radial…
***
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)
9903.40.10 Other 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 4011.10.50 or 4011.20.50)
* * * * *
The Port concluded that the instant tires are tires of a kind used on motor cars (subheading 4011.10, HTSUS), or trucks (subheading 4011.20, HTSUS). 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, and 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:// http://www.cbp.gov/xp/cgov/trade/trade_programs/entry_summary/laws/advalorem_chinese_tires.xml. The additional duty imposed by the Presidential Proclamation is codified in subheadings 9903.40.05 and 9903.40.10, HTSUS.
Protestant argues that the tires under consideration are clearly stamped with “ST” and “For trailer service only” on the sidewall, and are sold as radial trailer/utility tires in its sales catalog. Protestant also cites the Tire and Rim Association standards that indicate suitability of the instant tires for trailer use.
Subheadings 4011.10, HTSUS, and 4011.20, HTSUS, are “principal use” provisions, 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 (to prevent the rig from swaying), and have shallower treads and a slightly higher 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 ST235/80R16 - 10 model:
The instant tires measure 235 millimeters in width and 199.75 millimeters in height, with a ply rating of 10 and a corresponding load range of E. They are marked on the sidewall with their size and load rating, and pictures of the tires show that they are also marked both with the designation “ST” and the words “trailer service only”.
The depth of the JK42 tread ranges from 9/32” to 11/32”. This is a standard range for passenger car or trailer tires, but on the low end for a light truck tire. The width, height and diameter of the tires are indicative of trailer use, and the remaining Carborundum factors—specifically, the environment of sale, recognition in the trade and expectation of the ultimate purchaser—support classification in subheading 4011.99.
The Tire and Rim Association (TRA) publishes industry-recognized technical specifications on vehicle tires in its annual “Yearbook”. The 2009 TRA Yearbook includes the ST235/80R16 size configuration in the section for Trailer tires (titled “Tires for Trailers in Highway Service”), whereas the size 235/80R16 is not listed anywhere in the section of the Yearbook for Passenger Car or for Light Truck tires. In addition, the environment of sale and trade recognition strongly support classification of the instant tires in subheading 4011.99, HTSUS. For example, the top internet search results for “235/80R16” are all trailer tires. Searching for these specific size configurations on the websites of tire retailers such as Discount Tires Co and Tirerack.com, yields the same results: all search results are for trailer tires only.
The “ST’ and “for trailer use only” sidewall markings, the environment of sale and the recognition of trade of the instant tires as trailer tires will also affect the expectation of the ultimate purchaser, as the purchaser will expect from the physical characteristics, marketing and channels of trade of the instant tires that he is purchasing tires for use on trailers. Indeed, many top internet search results for “Hi Run” tires link to user discussions on forums such as www.thetruckstop.us, www.horsetrailerworld.com, www.rednecktrailer.com and www.rv.net.
Based on the above, we find that this model is not of the class or kind principally used on buses or trucks, and are therefore classified in subheading 4011.99, HTSUS, and not subheadings 4011.10 or 4011.20, HTSUS. Therefore, it is not subject to the safeguard duty rate under subheadings 9903.40.05 or 9903.40.10, HTSUS.
The ST 205/75R15 - 6, ST 225/75R15 - 8 and ST 235/85R16 -10 models:
The instant tires measure 205, 225 and 235 millimeters in width and 153.75, 168.75, and 199.75 millimeters in height, respectively, with ply ratings of 6, 8 and 10 and a corresponding load range of E. They are marked on the sidewall with their size and load rating, and pictures of the tires show that they are also marked both with the designation “ST” and the words “trailer service only”.
The JK42 tread depth ranges from 9/32” to 11/32”, generally indicative of passenger car or trailer use, but on the low end for a light truck tire. The size, ply and load ratings of the instant tires indicate their suitability for use on either light trucks or trailers. The protestant identifies no other physical characteristics that make the instant tires particularly suitable for trailer use or which otherwise distinguish them from tires of a kind used on trucks.
The 205/75R15, 225/75R15 and 235/85R16 sizes are all common configurations for both light truck and trailer tires. 205/75R15 and 225/75R15 are also common size configurations for passenger car tires, but 235/85R16 is not a size configuration available for passenger car 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 205/75R15 and 225/75R15 size configuration in the sections for Passenger Car, Light Truck and Trailer tires (titled “Tires for Trailers in Highway Service”). The 235/85R16 size is listed only the sections for Light Trucks and Trailers.
Similarly, tires of the 205/75R15 and 225/75R15 size configurations are generally sold online as passenger car, trailer or light truck tires, depending on the brand and their particular construction features. The ply ratings of 6 and 8, and corresponding load ranges of C and D, also indicate suitability for use on passenger cars, light trucks or trailers. Size 235/85R16 tires, on the other hand, are available as an option for light trucks or trailers, but not for passenger cars.
The design and depth of the tread pattern indicates a suitability for multiple uses, but it is particularly suggestive of use on passenger cars or trailers. The protestant does not articulate any other specific design features which may distinguish these tires from those designed for passenger cars or light trucks. The physical characteristics of the ST 205/75R15-6 and ST 225/75R15-8 models are therefore inconclusive as to their primary use with trailers, passenger cars or light trucks. Similarly, the physical characteristics of the ST 235/85R16-10 model are inconclusive as to their primary use with trailers or light trucks. However, the physical characteristics do indicate that the ST 235/85R16-10 tire is not of a class or kind used on passenger cars, and thus not classified in subheading 4011.10, HTSUS.
The remaining Carborundum factors are generally supportive of the Protestant’s claimed classification in subheading 4011.99, HTSUS. Protestant categorizes and markets the instant tires as trailer tires on its website and in its product catalog. While these size configurations are all also commonly sold as light truck tires, all results for 205/75R15, 225/75R15 and 235/85R16 “Sutong” tires, or “Hi Run” tires with the JK42 tread, are “ST” and “trailer” tires. None of the tires at issue appear to be commonly sold as light truck tires. Protestant does, however, sell tires in other sizes and treads as light truck tires (under the “Synergy” and “Hemisphere” lines), lending further weight to the argument that the instant models are not commercially fungible with light truck tires.
The “ST’ and “for trailer use only” sidewall markings, the environment of sale and the recognition of trade of the instant tires as trailer tires will also affect the expectation of the ultimate purchaser, as the purchaser will expect from sidewall markings as well as the marketing and channels of trade of the Sutong tires that he is purchasing tires for use on trailers. Indeed, many top internet search results for “Hi Run” tires link to user discussions on forums such as www.thetruckstop.us, www.horsetrailerworld.com, www.rednecktrailer.com and www.rv.net.
Based on the above, we find that there is sufficient evidence that these tires are not of a class or kind principally used on passenger cars or light trucks. Thus, we find that these models are classified in subheading 4011.99, HTSUS, and not subheading 4011.20, HTSUS, and are therefore not subject to the safeguard duty rate under subheadings 9903.40.05 or 9903.40.10, HTSUS.
HOLDING:
Pursuant to GRIs 1 and 6, the Hi Run ST 205/75R15-6 , ST 225/75R15-8, ST 235/80R16-10, and ST 235/85R16-10 tires are classified in heading 4011, HTSUS, specifically subheading 4011.99.45, HTSUS, which provides for ““New pneumatic tires, of rubber: Other: Other: Radial…”. The 2013 general, column one rate of duty is 4% ad valorem. The additional duty imposed by Presidential Proclamation 8414 and codified in subheadings 9903.40.05 and 9903.40.10, HTSUS, do not apply.
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 Regulations and Rulings of the Office of International Trade 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