CLA-2 OT:RR:CTF:TCM H288022 DSR
U.S. Customs and Border Protection
Seattle Service Port
1000 Second Avenue, Suite 2100
Seattle, WA 98104
Attn: Heather Scott, Senior Import Specialist
RE: Modification of HQ H174522; revocation of HQ H161003 and NY N116976; tariff classification of free-wheel bicycle cogs; Protest Number 3001-11-100145
Dear Port Director:
In Headquarters Ruling Letter (“HQ”) H174522, dated June 5, 2012, U.S. Customs and Border Protection (“CBP”) classified certain free-wheel bicycle cogs in subheading 8714.99.80, HTSUS, which provides for other parts of bicycles. The ruling also classified front and rear wheel aluminum bicycle wheel hubs in subheading 8714.93.35, HTSUS, which provides for hubs other than coaster braking hubs and hub brakes, other, other. Since HQ H174522 was issued, CBP has reviewed the ruling and determined that the classification provided for the cogs is incorrect and, therefore, that portion of the ruling must be modified for the reasons set forth in this ruling. Additionally, HQ H161003 (May 13, 2013) and NY N116976 (August 20, 2010), which also classified substantially similar articles under subheading 8714.99.80, HTSUS, are revoked for the same reasons.
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 of the proposed modification of HQ H174522, and revocations of HQ H161003 and NY N116976, was published on November 1, 2017, in the Customs Bulletin, Volume 51, No. 44. CBP received no comments in response to the notice.
FACTS:
The relevant merchandise subject to HQ H174522 was described as one entry of rear hub cogs imported for installation onto bicycles and wheels. The cogs at issue are circular articles of metal with teeth on their outer edges and holes in their middles. They are also referred to as “sprockets” and are assembled to form a “cluster” or “cassette” by being grouped to fit one upon another. The cassette is then attached to the rear hub (center bar from which the spokes extend) of a bicycle wheel by lining up splines on the rear hub with grooves formed by the aligned cogs on the inner surface of the cassette, and pushing the cassette towards the center of the hub. The cassette is then secured to the hub with a lock nut. The cassettes are referred to as “SRAM XG-1099,” “SRAM PG 1050,” and “SRAM PG 1070.” The rear portion of the bicycle pedal chain is wrapped around the cassette so that the rear wheel rotates when the bicycle is pedaled.
The cogs were entered under subheading 8714.93.70, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of [bicycles]: Other: Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket wheels: Free-wheel sprocket-wheels,” free of duty. CBP reclassified and liquidated the merchandise under subheading 8714.99.80, HTSUS, which provides for “Parts and accessories of [bicycles]: Other: Other: Other…” dutiable at 10% ad valorem.
ISSUE:
Whether the articles are classified under subheading 8714.99.80, HTSUS, which provides for other parts of bicycles, or in subheading 8714.93.70, HTSUS, which provides for free-wheel sprocket wheels.
LAW AND ANALYSIS:
Classification under the 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 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 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs. The HTSUS provisions under consideration in this ruling are as follows:
8714 Parts and accessories of vehicles of headings 8711 to 8713:
Other:
8714.93 Hubs, other than coater braking hubs and hub brakes, and
free-wheel sprocket-wheels:
8714.93.70 Free-wheel sprocket-wheels.
8714.99 Other:
8714.99.80 Other.
* * * *
First, we note that in HQ H174522, CBP incorrectly identified the articles under consideration as single cogs (or “sprockets”) that are assembled into cassettes post-importation. It appears the articles are actually imported as multiple cogs assembled into cassettes by being grouped to fit one upon another. However, this discrepancy does not impact our interpretation of the scope of subheading 8714.93.70, HTSUS, because subheading 8714.93.70 covers both “Multiple free-wheel sprockets” or cassettes (subheading 8714.93.7030), and “Other” or single free-wheel sprocket-wheels (subheading 8714.93.7060).
CBP also concluded that articles did not meet the common and commercial meaning of the term “free-wheel sprocket-wheels” because the articles did not screw onto a bicycle wheel’s hub and did not possess an internal ratcheting mechanism common to older “traditional” cogs and cassettes that we believed were contemplated by the term “free-wheel sprocket-wheels.” Citing Sutherland's Handbook for Bicycle Mechanics, 4-26 to 4-49 (7th Ed. 2005); also www.sheldonbrown.com/free-k7.html. We concluded that those differences in design and functionality led to the bicycling industry distinguishing such cassettes from “free-wheels” and marketing them as “freehub cassettes.” Citing www.bikepedia.com/PA/category3.aspx?catkey=2006.
We have now re-examined that conclusion and believe that the interpretation of the subheading term “free-wheel sprocket wheels” in HQ H174522 is unnecessarily restrictive and does not adequately take into account that the more technologically advanced or improved articles at issue share the essential characteristics of the older free-wheel cogs and cassettes that have been within the scope of subheading 8714.93.70, HTSUS. To wit, courts have long ruled that eo nomine provisions for the classification of merchandise necessarily include technological advancements or commercially sophisticated versions of the same articles. Borneo Sumatra Trading Co., Inc. v. United States, 311 F. Supp. 326, 338-39 (Cust. Ct. 1970) (citing R.J. Saunders & Co., Inc. v. United States, 49 C.C.P.A. 87, C.A.D. 801 (1962)). See also Simmon Omega, Inc. v. United States, 83 Cust.Ct. 14, C.D. 4815 (1979), and Trans-Atlantic Co. v. United States, 471 F.2d 1397, 60 C.C.P.A. 100, C.A.D. 1088 (1973), in which the courts have held that technological advancements and "improvement in the design of an article does not militate against its continuing to be a form of the named articles." In Wagner Spray Tech. Corp. v. United States, 31 C.I.T. 676, 680 (2007), the C.I.T. concluded that an eo nomine provision may be expanded to include improved merchandise only when the essential characteristic is shared between the original and improved good. (“[A]n article which has been improved or amplified but whose essential characteristic is preserved or only incidentally altered is not excluded from an unlimited eo nomine statutory designation.”) (quoting Casio, Inc. v. United States, 73 F.3d 1095, 1098 (Fed. Cir. 1996)).
Whether cogs or cassettes slide onto a wheel hub and are locked with a locknut, and contain an internal ratcheting mechanism, or are instead designed to directly screw onto a free-wheel hub without possessing an internal ratcheting mechanism, the purposes and defining features of the articles are to allow a bicycle power train to be engaged when pedaling forward and coast freely when not pedaled or pedaling backwards. Subheading 8714.93.70, HTSUS, does not require that a clutch mechanism must be located inside of a cog, or cassette, and outside of the rear hub, in order for the articles to be classified in that subheading. Nor is there a requirement that such articles screw directly onto a wheel hub. Instead, the overriding question is whether the article under consideration functions as a sprocket-wheel of the free-wheel type. Here, the subject articles act as free-wheel sprocket-wheels of subheading 8714.93.70, HTSUS, by allowing a bicycle power train to be engaged when pedaling forward and coast freely when not pedaled or pedaling backwards. For those reasons, we find that the subject articles (cassettes) of HQ H174522 are instead properly classified in subheading 8714.93.70, HTSUS, as “free-wheel sprocket-wheels,” and free of duty.
In HQ H161003, the items under consideration are described as circular articles of metal with teeth on their outer edges and holes in their middles. They are also referred to as “sprockets” or “cogs” and, after importation, they are assembled to form a “cluster” or “cassette” by being grouped to fit one upon another. The cassette is attached to a rear hub (center bar from which the spokes extend) of a bicycle wheel by lining up splines on the rear hub with grooves formed by the aligned cogs on the inner surface of the cassette, and pushing the cassette towards the center of the hub. The cassette is then secured to the hub with a lock nut. The rear portion of the bicycle pedal chain is wrapped around the cassette so that the rear wheel rotates when the bicycle is pedaled. The items are substantially similar to those of HQ H174522, supra, and were also incorrectly classified in subheading 8714.99.80, HTSUS, as other parts of bicycles, by incorporating the holding of HQ 174522 by reference. Given our reconsideration of that holding, we now find that the cogs of HQ H161003 are instead properly classified in subheading 8714.93.70, HTSUS, as “free-wheel sprocket-wheels.”
Finally, we note that in NY N116976, CBP classified a “Cassette Single-speed Driver Unit” in subheading 8714.99.80, HTSUS, as an “other” part of a bicycle. The article is described as a cylindrical piece of metal with a hole at its center and a star-shaped flange. It possesses internal bearings and attached to the rear wheel hub of a bicycle, where a bicycle chain would be wrapped around it and allow a bicycle power train to be engaged when pedaling forward and coast freely when not pedaled or pedaling backwards. We now also find that the article of NY N116976 is instead properly classified in subheading 8714.93.70, HTSUS, as a “free-wheel sprocket-wheel.”
HOLDING:
By application of GRIs 1 and 6, the cassettes of HQ H174522, and the cogs of H161003 and NY N116976, are classified in subheading 8714.93.70, HTSUS, as “free-wheel sprocket-wheels,” and free of duty. The classification of the hubs of HQ H174522 is not affected by this action. Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov
EFFECT ON OTHER RULINGS:
HQ H174522, dated June 5, 2012, is modified in accordance with this decision. HQ H161003, dated May 13, 2013, and NY N116976, dated August 20, 2010, are revoked.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division