CLA-2
OT:RR:CTF:TCM H255852 PTM
TARIFF NO: 8483.40.70
Lisa Wallace
Assistant Port Director, Trade Operations
U.S. Customs and Border Protection
477 Michigan Ave, Room 200
Detroit, MI 48228
RE: Internal Advice Request, Tariff Classification of a Turbo-Compound Gearbox
Dear Ms. Wallace,
We are writing in response to your May 20, 2014 correspondence, in which you forwarded a request for internal advice on behalf of Detroit Diesel Corporation. The request for internal advice concerns the tariff classification of a turbo-compound gearbox on the Harmonized Tariff Schedule of the United States (“HTSUS”). Our response follows.
FACTS:
The turbo compound gearbox is an apparatus used on diesel engines. It is used with a turbocharger, an axial power turbine (“APT”) and an idler gear to form a turbo compound system. The turbo compound system boosts the power of the engine by using exhaust to turn the crankshaft of the engine, which can increase the output power of the engine by up to 50 horsepower.
The turbocharger, APT, turbo-compound gearbox and idler gear are connected to the “hot” exhaust side of a diesel engine. When the engine’s exhaust stream leaves the exhaust manifold, it travels through the turbocharger, transmitting its energy to spin an internal wheel to compress ambient air to be sent to the engine’s intake system. The gas continues from the turbocharger to the APT. The APT incorporates a turbine blade and pinion gear, which is in turn attached to an input gear ring to the the turbo-compound gearbox.
The turbo-compound gearbox consists of the following components: steel housing, steel coupling housing, two steel tapered roller bearings, steel setting disc, steel busing, steel screws, four plastic O-ring gaskets, pressure disc, spur gear clutch shaft and hydraulic coupling assembly. Within the turbo-compound gearbox, the turning input ring gear powers a hydraulic coupling, which turns an output gear. The output gear is connected to an external idler gear, which in turn is connected to another gear located on the crankshaft. The exhaust gas turns the various gears which provides additional torque to the crankshaft, which increases horsepower. The output gear is continuous in its operation when the engine is operating.
ISSUE:
What is the tariff classification of the turbo-compound gearbox?
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 Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor 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. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions at issue are as follows:
8414 Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof:
8414.90 Parts:
* * *
8483 Transmission shafts (including camshafts and crankshafts) and cranks; bearing housings, housed bearings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints); parts thereof:
8483.40 Gears and gearing, other than toothed wheels, chain sprockets and other transmission elements entered separately; ball or roller screws; gear boxes and other speed changers, including torque converters:
* * *
8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:
Note 2 to Section XVII, HTSUS, of which heading 8708 is a part, provides:
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:
* * *
(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;
Thus, if the turbo-compound gearbox is classifiable in heading 8414 or under heading 8483 as an integral part of an engine, it is not classifiable as a “part” under heading 8708. Likewise, Note 3 to Section XVII, HTSUS states that “[r]eferences 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.” In this respect, Note 2 to Section XVI, HTSUS, governs the classification of parts under Chapter 84. It 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:
Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings…
In other words, if the turbo-compound gearbox is prima facie classifiable under a heading that specifically describes it, that heading will prevail over a provision for parts.
With respect to the scope of heading 8708, HTSUS, it is stated in EN 87.08 that:
This heading covers parts and accessories of the motor vehicles of headings 87.01 to 87.05, provided the parts and accessories fulfil both of the following conditions:
They must be identifiable as being suitable for use solely or principally with the above-mentioned vehicles; and
They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note). (Emphasis in original).
General EN (III)(C) to section XVII, HTSUS, provides that “[p]arts and accessories, even if identifiable as for the articles of this Section, are excluded if they are covered more specifically by another heading elsewhere in the Nomenclature…” (Emphasis in original).
The gearbox at issue here does not interact with the engine of the vehicle directly. Rather, it works as the transmission to the turbo-charger system. Here, the “primary article” is the turbo-compound system, not a motor vehicle. As a part or accessory to a turbo-compound system, it cannot be classified under heading 8708, HTSUS, as a part or accessory to a motor vehicle because the gearbox facilitates the function of the turbo-compound system. In this regard, we are guided by Mitsubishi Electronics America, Inc. v. United States, 19 C.I.T. 378 (1995) (Mitsubishi), wherein the Court of International Trade discussed whether a clutch is classifiable as a part of an automobile. The court stated:
The Court notes that if the subject merchandise is not a clutch, but rather a part of a starter motor, then it cannot be classified as part of an automobile, even though it is used solely in automobiles. This is because a subpart of a particular part of an article is more specifically provided for as a part of a part than as a part of the whole. C.F. Liebert v. United States, 60 Cust. Ct. 677, 686-87, 287 F.Supp. 1008, 1014 (1968) (holding that parts of clutches that are parts of winches are more specifically provided for as parts of clutches than as parts of winches). Mitsubishi, 19 C.I.T. at 383 n.3. See also HQ H005091, dated January 24, 2007; HQ 963325, dated September 15, 2000.
Similarly, the turbo-compound gearbox is used solely with a diesel automobile engine. However, its function is to act as a transmission to the turbo-compound system, rather than as a transmission to the diesel engine itself. Consequently, it may not be classified as part an automobile.
With respect to the application of Note 2 to Section XVI, HTSUS, supra, we note that heading 8414 provides for “Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof.” The turbo-compound gearbox operates in conjunction with several other components of the turbo-compound system. It functions as the transmission for the turbo-compound system by transferring the energy from the exhaust gas to the crankshaft. However, it does not operate as a pump, gas compressor or fan, or as a ventilating or recycling hood. Consequently, it is not described by heading 8414, HTSUS.
Heading 8483 covers “Transmission shafts (including camshafts and crankshafts) and cranks; bearing housings, housed bearings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints); parts thereof:” The EN to heading 8483 provides:
E) GEAR BOXES AND OTHER SPEED CHANGERS, INCLUDING TORQUE CONVERTERS
These provide a range of speeds which can be varied, either by hand or automatically, according to the requirements of the machine. They include, inter alia :
(1) Gear boxes consisting of assemblies of gears which can be selected in alternative arrangements; the speed of transmission can thus be varied according to the arrangement of gears set.
Within the turbo-compound gearbox, the turning input ring gear powers a hydraulic coupling, which is connected to and turns an output gear. The output gear is connected to an external idler gear, which is in turn connected to a gear on the crankshaft. Thus, the gearbox transmits power from the turbocharger to the crankshaft, which in turn provides additional power to the diesel engine. The turbo-compound gearbox conforms to the description of a gearbox as described in EN 8483 inasmuch as it as an assembly of gears. We note that the turbo-compound gearbox, when operating, performs at only one speed. However, the description of the gearbox in EN 8483 notes that the heading includes gearboxes with different speed arrangements. It does not preclude gearboxes that operate at one speed. Moreover, the “requirements of the machine,” in this case the turbo-compound system, requires only one speed for the operation of the system. Either the system is operating, or it is not. Consequently, we find that the turbo-compound gearbox meets the description of a “gear-box” as set forth in EN 8483. As a result, pursuant to Note 2(a) to Section XVI the article is classifiable as a gearbox under heading 8483, HTSUS.
CBP has previously classified articles that are used in conjunction with turbochargers in the specific heading for that article rather than as a part. For example, in N228900 (Aug. 29, 2012), CBP classified an exhaust part described as a “turbocharger to DPD flex pipe” under heading 7307 as a tube or pipe fitting, rather than as a part of a motor vehicle or a part of a turbo-charger. Consistent with the foregoing, we find that the turbo-compound gearbox is classified under heading 8483 HTSUS as a gearbox.
HOLDING:
By application of GRI 1s (Note 2(a) to Section XVI, HTSUS), and 6, the turbo-compound gearbox is classified in heading 8483, and more specifically in subheading 8483.40.7000, which provides for “Transmission shafts (including camshafts and crankshafts) and cranks; bearing housings, housed bearings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints); parts thereof: Gears and gearing, other than toothed wheels, chain sprockets and other transmission elements entered separately; ball or roller screws; gear boxes and other speed changers, including torque converters: Other speed changers.” The column one, general rate of duty is 25¢ each + 3.9%. Duty rates are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
You are to mail this decision to the importer of record no later than 60 days from the date of the decision. At that time, the Office of 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