CLA-2-87:OT:RR:NC:N1:106
Ralph Garcia, Manager, International Trade Compliance
Mitsubishi Motors North America, Inc.
6400 Katella Avenue
Cypress, CA 90603-5208
RE: The tariff classification of Continuously Variable Transmission (CVT) Assemblies from Mexico
Dear Mr. Garcia,
In your letter dated March 4, 2015, you requested a tariff classification ruling.
The two (2) items under consideration have been identified as a Continuously Variable Transmission (CVT) Assembly (Part Number 2700A461) which incorporates the CVT and the Torque Converter as one (1) unit. This assembly will be used for the manufacture of Mitsubishi Two Wheel Drive (2WD) vehicles. The second item has been identified as a Continuous Variable Transmission (CVT) Assembly (Part Number 2700A463) which incorporates the CVT, the Torque Converter and the Differential Assembly as one unit. This assembly will be used for the manufacture of Mitsubishi All Wheel Drives (AWD) vehicles.
As you stated in your request, “Although a conventional automatic transmission and a CVT both serve the same purpose, which is to transfer engine power to the drive shaft and wheels, they accomplish this task in distinctly different ways. In contrast to a conventional automatic transmission that offers a fixed number of gear ratios or speeds, a CVT can change seamlessly through an infinite number of effective gear ratios between the minimum and maximum values. The CVTs in question accomplish this through a system of variable diameter pulleys”.
Within each Assembly, there are two (2) V-Shaped pulleys that are split in half, perpendicular to their axis of rotation with a V-Belt running between the pulleys. One pulley is connected to the engine and the other pulley is connected to the drive wheels. The gear ratio changes when the two halves of one pulley move closer together, and the two halves of the other pulley move further apart.
The variable diameter pulleys used in the CVT, replaces the planetary gear system of conventional transmissions. But, CVTs are not without toothed wheels (gears). The CVT Assembly (Part Number 2700A461) contains an Output Gear, an Idler Gear, a Reduction Gear and a Final Gear. The CVT Assembly (Part Number 2700A463) which incorporates the Differential Assembly, also includes the Differential Gears.
You suggested classification in subheading 8708.99.6890, which provides for “Parts and accessories of motor vehicles: Other parts and accessories: Other: Other: Other: Other parts of power trains: Other.”
Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the General Rules of Interpretation (GRIs) taken in order. GRI 1 provides that the classification is determined first in accordance with the terms of the headings and any relative section and chapter notes.
There is no definition of “transmission” provided in the HTSUS or in the Explanatory Notes, however, it is a well-established tenet of customs law that tariff terms are construed in accordance with their common and commercial meanings and that the common meaning of a tariff term is a question of law. (Toyota Motor Sales, U.S.A., Inc. v. United States, 7 Ct. Int’l Trade 178, 182, 585 F.Supp 649 [1984], aff’d 753 F.2d 1061 [Fed.Cir. 1985]). Thus, it is proper for Customs to turn to lexicographic sources to determine the meanings of the terms at issue. Once having determined the meaning of the terms, in deciding if the subject articles are within the eo nominee classification of the HTS, Customs may consider the use of the merchandise. (United States v. Quon Quon Co., 46 CCPA 70, 73, C.A.D. 699 [1959]). Customs interprets the use of the merchandise to include the manner in which it is used as well as the reason for which it is used.
Webster’s Dictionary defines a transmission “as an assembly of parts including the speed changing gears and the propeller shaft by which the power is transmitted from an engine to a live axle; also: the speed changing gears in such assembly”.
According to Wikipedia, a powertrain of a motor vehicle “describes the main components that generate power and deliver it to the road surface, water, or air. This includes the engine, transmission, drive shafts, differentials, and the final drive”.
The applicable subheading of the Continuously Variable Transmission (CVT) Assembly (Part Number 2700A461) and the Continuous Variable Transmission (CVT) Assembly (Part Number 2700A463) will be 8708.40.1110, which provides for “Parts and accessories of the motor vehicles of headings 8701 to 8705: Gear boxes and parts thereof: Gear boxes: For the vehicles of subheading 8701.20 or heading 8702, 8703 or 8704: For vehicles of heading 8703.” The general rate of duty will be 2.5 percent. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Matthew Sullivan at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division