CLA-2 CO:R:C:M 954420 DWS

Mr. Brian S. Goldstein
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd Floor
New York, NY 10036

RE: Motor Vehicle Parts; Gas Powered Cab Chassis; GRI 2(a); Explanatory Notes 2(a)(V) and 2(a)(VII); Explanatory Note 3(b)(VIII); HQ 083222; HQ 088891; HQ 081999; HQ 950034

Dear Mr. Goldstein:

This is in response to your letter of June 7, 1993, to the Regional Commissioner of Customs, New York Region, concerning the classification of certain motor vehicle parts under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for a response.

FACTS:

The merchandise consists of motor vehicle parts imported from Japan which, upon importation into the U.S., will be combined with parts produced in the U.S and parts imported from Singapore and Canada in the manufacture of gas powered cab chassis. The parts which will be imported from Japan include the cab, the frame, and the front and rear axles. The power control module (PCM) is produced in the U.S., but will be sent to Japan for assembly into one of the subassemblies of cab chassis which will be imported into the U.S. The parts which will be imported from Canada include the under cover assembly, the muffler assembly, and the center brake ASM. The digital ratio adapter will be imported from Singapore. Among the parts which will be added in the U.S. are the engine, the automatic transmission, the fuel tank, the air cleaner, the battery, the cooling fan, the tail pipe, and the heat shield. This ruling is limited to the classification of the parts imported from Japan.

All of the parts, imported in bulk, will go into inventory as received once entered into the U.S.

Three alternative means of entering the prospective shipments of the merchandise have been suggested. You have requested that we rule upon the classification of the merchandise based upon each alternative. In the first alternative, containers would be imported on the same day at the same port. One container would contain the cabs, the second container would contain the frame assemblies, and the third container would contain miscellaneous parts. In the second alternative, containers of cabs would be imported one day, and containers of frame assemblies and miscellaneous parts would be imported at a later date but possibly at the same port. In the third alternative, containers of cabs would be entered on one given date, containers of frame assemblies would be entered at a later date, and containers of miscellaneous parts would be entered on a third date, all potentially at the same port.

ISSUE:

Whether the motor vehicle parts, imported in bulk, are unassembled, incomplete cab chassis imparting the essential character of finished cab chassis under the HTSUS?

Whether the motor vehicle parts are classifiable under the various subheadings of the HTSUS which specifically describe the parts?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

In determining whether the parts impart the essential character of finished cab chassis, GRI 2(a) must be consulted. It states that:

[a]ny 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 has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989).

Explanatory Note 2(a)(V) (p. 2) states that:

[t]he second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.

In part, Explanatory Note 2(a)(VII) (p. 2) states that:

[f]or the purposes of this Rule, "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved.

Explanatory Note 3(b)(VIII) (p. 4) states that:

[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

It is claimed that the parts, imported in bulk and used principally for inventory purposes, do not impart the essential character of finished cab chassis. We agree. Among the many parts produced in the U.S. and essential to the manufacture of cab chassis are the engine, the automatic transmission, the fuel tank, and the battery. Also, other important parts are imported from Singapore and Canada.

In HQ 083222, dated April 25, 1989, which dealt with the classification of automotive parts imported for assembly with other parts into a truck, it was stated that:

it is reasonable to say that in order to have the essential character of a motor vehicle, the imported components must be advanced to the point that they are recognizable as a motor vehicle, i.e., having the essential features of a vehicle . . . There is no evidence that any of these components are intended to be assembled into a specific motor vehicle, nor is there any evidence that they constitute something other than discrete components intended for inventory for a manufacturing operation.

It is our position that the subject parts do not impart the essential character of finished cab chassis. They are not advanced to the point that they are recognizable as cab chassis. As previously stated, essential articles such as the engine, the automatic transmission, the fuel tank, and the battery are not included in the shipments of parts. These components make up what could be said to be the most essential parts of a cab chassis. Without the engine or transmission there would be no motive power. Without the battery, there would be no power. Even if there would an engine or a battery, there would be no means available to initiate combustion. See HQ 950034, dated February 3, 1992.

As in HQ 083222, there is no evidence that any of these components are intended to be assembled into a specific cab chassis, nor is there any evidence that they constitute something other than discrete components intended for inventory for a manufacturing operation.

It is also our position that the parts, imported in bulk, do not qualify as unassembled cab chassis. There is no evidence that the parts are presented for reasons such as requirements or convenience of packing, handling or transport. They are parts shipped in bulk for inventory purposes. This is not the type of "convenience of packing, handling or transport" that the Explanatory Notes contemplate. See HQ 088891, dated June 21, 1991.

Also, the parts, once imported into the U.S., are not assembled by means of simple fixing devices as contemplated by Explanatory Note 2(a)(VII). It is our understanding that the cab chassis assembly operations in the U.S. are not simple assembly operations.

In HQ 081999, dated December 10, 1990, which dealt with the classification of parts imported for the assembly of golf carts, it was stated that:

[w]e do not consider an assembly line operation in which a motor vehicle is built piece by piece from the frame up as a "simple" assembly within the meaning of GRI 2(a). The disassociation of parts from individual vehicles, the parts presented in bulk, and the nature of the required assembly process after importation are evidence that the parts are not presented together so that they can be reasonably associated with individual CKD golf cars. Rather, the parts are in the nature of parts inventory for the production of golf cars and, as such, do not fall within the meaning of the term "unassembled" for purposes of GRI 2(a).

Concerning the cab chassis, it is our understanding that the assembly line operation involves construction of the cab chassis piece by piece, there is a disassociation of the parts from the finished cab chassis, and the parts are presented in bulk in the nature of parts inventory for the production of cab chassis.

Therefore, because motor vehicle parts, imported in bulk, are not unassembled, incomplete cab chassis imparting the essential character of finished cab chassis, it is our position that the parts are classifiable under the subheadings of the HTSUS which specifically describe them.

HOLDING:

Under all three alternatives, the motor vehicle parts are classifiable under the subheadings of the HTSUS which specifically describe them.

Sincerely,

John Durant, Director
Commercial Rulings Division