CLA-2-87:S:N:N1:101 882788
Mr. Joseph S. Kaplan
Ross & Hardies
Park Avenue Tower
65 East 55th Street
New York, NY 10022-3219
RE: The tariff classification of trolley bus shells from Canada.
Dear Mr. Kaplan:
In your letter dated February 8, 1993, on behalf of New Flyer
of America (N.D.) Inc. (NFND) of Grand Forks, N.D., you requested
a tariff classific- ation ruling. The merchandise in question is
trolley bus shells which NFND imports from New Flyer Industries,
Manitoba, Canada. The vehicle is designed for the transportation
of ten or more persons. You have enclosed several photographs
illustrating visually the condition of the trolley bus shells at
the time of importation.
NFND imports five models of bus shells: forty-foot diesel,
forty-foot diesel low floor, forty-foot trolley bus, sixty-foot
diesel, and a sixty- foot trolley bus. In their imported condition
the shells are indicated to have the appearance of buses, roll on
their own wheels, have installed windows, and are finish painted on
their exterior surfaces. The trolley bus shells (which are
representative of all five shell models), have the following
components permanently installed prior to importation:
front suspension
rear suspension
wheels
power steering
brake, air and levelling system
public address system
exterior lamps
passenger signals
electrical system
paint and decals
safety equipment
driver's controls
base structure and body
flooring
windows
door system
Not present in the shells at the time of importation are:
propulsion system
traction equipment
seats and stanchions
bumpers
cooling system
fuel system
interior lighting
electrical system
destination signs
heating and air conditioning system
chair lift
customer options
auxiliary power supply
The diesel shells will be equipped with engine, transmission
and starter systems rather than propulsion systems and traction
equipment.
You state that the shell represents about 49.5 percent of the
cost of the completed bus. The remaining 50.5 percent is added in
the final stage assembly by NFND. You also note the shells are
substantial articles. As the component enumeration indicates, they
incorporate the chassis (base structure, axles, suspension, wheels
and rims), the body, and significant
amounts of trim.
General Rule of Interpretation (GRI) 1, Harmonized Tariff
Schedule of the United States (HTS), provides that for legal
purposes, classification shall be determined according to the terms
of the headings and any relative section or chapter notes and,
provided such headings or notes do not otherwise require, according
to Rules 2 through 6. GRI 2(a) provides that 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, whether imported unassembled or
not, has the essential character of the complete or finished
article.
Determining an article's essential character will depend, of
course, on the merchandise. As the merchandise changes, so, too,
may the factor or factors which determine its essential character.
Factors found to be relevant in other contexts are the significance
of the imported components or their role in relation to the use or
overall functioning of the completed article and, to the extent
that it validates that comparison, the cost or value of the
completed article versus the cost or value of the imported
components. The issue in this case is whether trolley bus shells
are more than mere bodies and in their condition as imported have
the essential character of public transport vehicles.
The term "unfinished" was defined in American Import Co. v.
U.S., 26 CCPA 72, 74, T.D. 49612 (1938), wherein the court stated:
/i/t has long been the generally accepted rule that a thing
may be classified for tariff duty purposes under the eo nomine
provision for the article unfinished if that thing has been so
far processed towards its ultimate completed form as to be
dedicated to the making of that article or class of articles
alone.
It is our position that the trolley bus shells consisting of
the vehicle body and engineless chassis is not classified under the
provision for vehicle bodies, nor under the provision for parts and
accessories of motor vehicles.
It is our further position the subject trolley bus shells
impart the essential character of complete trolley bus coaches.
The bus shells have been so far processed toward their ultimate
completed form as to be dedicated to the making of trolley bus
coaches. The imported articles have the appearance of a bus, and
have no utility or function other than to be completed into buses.
The applicable subheading for the New Flyer trolley bus shells
(that are designed for use with a diesel engine) will be
8702.10.0000, Harmonized Tariff Schedule of the United States
(HTS), which provides for public-transport type passenger motor
vehicles; with compression-ignition internal combustion piston
engine (diesel or semi-diesel). The rate of duty will be 3.1
percent ad valorem.
The applicable subheading for the New Flyer trolley bus shells
(not designed for use with a diesel engine) will be 8702.90.0000,
HTS, which provides for public-transport type passenger motor
vehicles: other. The rate of duty will be 3.1 percent ad valorem.
Goods classifiable under heading 8702, HTS, which have
originated in the territory of Canada may be entitled to a free
rate of duty under the United States-Canada Free Trade Agreement
(FTA) upon compliance with all applicable regulations.
This ruling is being issued under the provisions of Section
177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport