CLA-2 OT:RR:CTF:TCM H013123 HkP
Port Director
Port of Pembina
U.S. Customs and Border Protection
10980 Highway 29 Pembina, ND 58271
RE: Internal Advice 07/009; Caterpillar Wheel Arrangement Final Drive & Brake Assembly
Dear Port Director:
This is our response to your memorandum, dated May 2, 2007, forwarding a request for Internal Advice (“IA”) initiated at the request of counsel for Caterpillar, Inc. (“Caterpillar”). At issue is the proper classification of an assembly consisting of a final gear drive reduction unit, brake discs and a wheel hub under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The merchandise at issue is the Caterpillar Wheel Arrangement Final Drive and Brake Assembly. Inquirer describes the Final Drive and Brake Assembly as a component of the rear power train arrangement of a Caterpillar Model 797 Off-Highway Truck. Caterpillar both manufactures and remanufactures these assemblies. The assembly under consideration is identified as part no. 0R-9814; it is a remanufactured assembly.
On February 23, 2007, U.S. Customs and Border Protection, Port of Pembina (“CBP”), issued a Notice of Action to Caterpillar informing the company that the essential character of the assembly at issue appeared to be its suspension feature. As such, the assembly should be classified as part of a suspension system under subheading 8708.80.6590, HTSUSA. Counsel for Caterpillar states that the company has consistently classified the assembly at issue in subheading 8708.99.6890, HTSUS (2007) (or its equivalent, in previous versions of the HTSUS), as other parts for power trains, and that this classification is correct.
According to the submitted information, the Final Drive and Brake Reduction Assembly consists of a final drive gear reduction unit, brake discs (or, rotors) and a wheel hub. The final drive gear is the last gear in a drive train before the driven wheels and is usually found in the differential. A wheel hub is the component upon which the wheel is mounted. It fits over the wheel bearings and is also mounted to the brakes. A brake disc, or rotor, usually made of cast iron, is connected to the wheel or the axle. To stop the wheel, friction material in the form of brake pads (mounted in a device called a brake caliper) is forced mechanically, hydraulically or pneumatically against both sides of the disc. Inquirer further explains that the Final Drive and Brake Assembly attaches to the end of the Housing Group-Rear Axle Assembly, which houses the Gear Group-Differential Assembly. The Axle Group Assembly transmits power from the Gear Group-Differential Assembly to the Wheel Arrangement Final Drive & Brake Assembly (the product at issue), to which the rear wheels are mounted.
ISSUE:
What is the correct classification of the Caterpillar Wheel Arrangement Final Drive & Brake Assembly?
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.
The 2007 HTSUS provisions under consideration are as follows:
8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:
* * *
8708.80 Suspension systems and parts thereof (including shock absorbers):
* * *
Parts:
* * *
Other:
* * *
8708.80.65 Other …..
* * *
8708.80.6590 Other …..
Other parts and accessories:
* * *
8708.99 Other:
* * *
Other:
* * *
Other:
* * *
Other:
8708.99.68 Other parts for power trains …..
* * *
8708.99.6890 Other …..
Legal Note 3 to Section XVII, which includes chapter 87, provides, in relevant part: “References 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.”
There is no dispute that the assembly at issue is a part within the meaning of Note 3 to Section XVII because it is solely or principally used with motor vehicles of heading 8701 to 8705, HTSUS. Parts for vehicles of these headings are provided for in heading 8708, HTSUS. There is also no dispute that the assembly at issue is classified under heading 8708.
CBP has previously taken the position that the Final Drive and Brake Assembly should be classified under subheading 8708.80, HTSUS, as a part of a suspension system. The term “suspension system” is not defined in the HTSUS or in the Explanatory Notes for heading 8708. When a tariff term is not defined by the HTSUS or the legislative history, its correct meaning is its common, or commercial, meaning. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). "To ascertain the common meaning of a term, a court may consult 'dictionaries, scientific authorities, and other reliable information sources' and 'lexicographic and other materials.'" Id. (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271, 69 C.C.P.A. 128 (C.C.P.A. 1982); Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)). According to the McGraw-Hill Encyclopedia of Science and Technology, the term “automotive suspension” describes:
The springs and related parts intermediate between the wheels and the frame, subframe, or side rails of a unitized body. The suspension supports the weight of the upper part of a vehicle on its axles and wheels, allows the vehicle to travel over irregular surfaces with a minimum of up-and-down body movement, and allows the vehicle to corner with minimum roll or loss of traction between the tires and the road.
According to the submitted information, the assembly at issue is not a spring or a related part used between the wheels and the frame, subframe or side rails of the off-highway truck, and does not contain any such part. Further, the assembly’s function is not to support the weight of the vehicle or to stabilize its movement over irregular surfaces or to allow the truck to corner with minimum roll or loss of traction. Rather, the assembly at issue facilitates the transmission of engine power to the wheels. For these reasons, we find that the Final Drive and Brake Assembly is not a part of the suspension system and does not assist the suspension system of the vehicle. CBP’s previous determination that the assembly was part of the suspension system of a motor vehicle was incorrect.
Inquirer believes that the correct classification of the assembly is subheading 8708.99.6890, HTSUSA, as other parts for power trains.
We agree. As earlier stated, the term “power train” refers to all the moving parts of a vehicle, that is, the engine, clutch, transmission, driveshaft, differential, axles, and sometimes the wheels. The assembly at issue contains moving parts of the off-highway truck, namely, the final drive gear reduction unit and brake discs. In addition it contains the wheel hub to which the wheel is attached. Based on these characteristics, we find that the Final Drive and Brake Assembly is a component of the rear power train of the off-highway truck.
HOLDING:
By application of GRI 1 and Note 3 to Section XVII, the Final Drive and Brake assembly is classified in heading 8708, HTSUS. It is specifically provided for in subheading 8708.99.6890, HTSUSA, which provides for: “Parts and accessories of motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other: Other: Other: Other parts for power trains: Other.” The 2007 column one, general rate of duty is 2.5% ad valorem.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of International 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