CLA-2 OT: RR: CTF: TCM H257373 ERB
Mr. Michael G. Hodes
Hodes Keating & Pilon
134 North LaSalle Street, Suite 1300
Chicago, Illinois 60602
RE: Reconsideration of NY N243337; Classification of an Extreme Off-Road Electric Scooter
Dear Mr. Hodes:
This is in response to your letter dated October 23, 2013, on behalf of your client Dynacraft BSC, Inc. (Dynacraft), requesting the reconsideration of New York Ruling Letter (NY) N243337, issued on July 16, 2013. In NY N243337, CBP ruled that an electric scooter was classified in heading 8711, of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for motorcycles. You request classification in heading 9503, HTSUS, which provides for tricycles, scooters, pedal cars and similar wheeled toys, and argue that the ruling was issued in error and is not in accord with the current view of CBP.
FACTS:
NY N243337 provides as follows:
In your letter dated June 20, 2013, you requested a tariff classification. The item under consideration has been identified as an electric dirt bike, model 8801-71, “Avigo Extreme Off-Road Electric Scooter.” The Aviago [sic] is powered by a 36 volt 350 watt electric motor and has a maximum speed of between 18-22 miles per hour, depending on the weight of the rider. In your ruling request you did not provide a maximum rider weight. The applicable subheading for the Avigo Extreme Dirt Bike will be 8711.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars: Other. The rate of duty will be Free.
ISSUE:
Whether the instant electric scooter is classified as a motorcycle, under heading 8711, HTSUS, or as a wheeled toy, under heading 9503, HTSUS.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the heading 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 HTSUS provisions at issue are as follows:
8711 Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side cars:
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9503 Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof:
Note 1 to Section XVII, which covers chapter 87 states:
This section does not cover articles of heading 9503…
Thus, if an article is found to be classified in heading 9503, HTSUS, it is excluded from classification in Section XVII, specifically, chapter 87.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN 87.11 states:
This heading covers a group of two-wheeled motorised vehicles which are essentially designed for carrying persons.
In addition to motorcycles of the conventional type, the heading includes motor-scooters, characterised by their small wheels and by a horizontal platform which joins the front and rear portions of the vehicle; moped, equipped with both a built-in engine and a pedal system; and cycles fitted with an auxiliary motor.
This heading also covers two-wheeled, electrically-powered transportation devices, designed for carrying a single person, for use within low speed areas such as pavements (sidewalks), paths, and bicycle lanes….
The EN 95.03 states:
This heading covers:
(A). Wheeled toys.
These articles are usually designed for propulsion either by means of pedals, hand levers or other simple devices which transmit power to the wheels through a chain or rod, or, as in the case of certain scooters, by direct pressure of a person’s foot against the ground. Other types of wheeled toys may be simply drawn or pushed by another person or driven by a motor.
These toys include:
Children’s tricycles and the like, but excluding bicycles of heading 87.12.
Two- or three-wheeled scooters designed to be ridden by children, as well as youngsters and adults, with an adjustable or non-adjustable steering column and small solid or inflatable wheels. They are sometimes equipped with a bicycle-type handle-bar, a hand brake or a foot brake on the rear wheel.
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And it continues:
(D) Other toys.
This group covers toys intended essentially for the amusement of persons (children or adults)….
In Streetsurfing LLC v. United States, 11 F. Supp. 3d 1287 (Ct. Int’l Trade 2014) the CIT noted that heading 9503, HTSUS, is a principal use provision. Principal use provisions are governed by Additional U.S. Rule of Interpretation 1, which states in part that, “a classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States, at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.” See also HQ H233999, dated March 7, 2013 (classifying a Doodle Buddy).
Classification as a toy under heading 9503, HTSUS, requires that the article be principally used as a toy for amusement and should not serve a utilitarian purpose. See StoreWALL, LLC. v. United States, 644 F.3d 1358, 1365-66 (Fed. Cir. 2011). Toys have been found to include “articles whose principal use is amusement, diversion, or play, rather than practicality.” Processed Plastic Co. v. United States, 473 F.3d 1164, 1169 (Fed. Cir. 2006) (quoting Minnetonka Brands, Inc. v. United States, 24 CIT 645, 110 F. Supp. 2d 1020 (Ct. Int’l Trade 2000). See also HQ H236028, dated December 31, 2013 (classifying an Aquadoodle product as a “toy”). As regards the “wheeled toy” provision of the tariff, the CIT also acknowledged in Streetsurfing LLC v. United States, supra the following:
While the court is mindful that in Processed Plastics the Federal Circuit found that “wheeled toys” under HTSUS Heading 9503 must be principally used for amusement, the Explanatory Note accompanying this heading makes clear that the provision is narrower than plaintiff claims. That is, Heading 9503 does not cover every item with wheels that is principally used for amusement…Rather, the Explanatory Notes indicate that, in additional to being principally used for amusement, a wheeled toy properly classifiable under HTSUS Heading 9503 is also characterized by other common features.
Id at 1295. Ultimately, the court applied the ENs to the subject waveboards, at issue there, and held that to be considered a “toy,” specifically a “wheeled toy” under heading 9503, the article must be characterized by the following features: (1) the absence of a training requirement prior to its use; (2) the absence of a meaningful risk of injury involved in its use; (3) the lack of acquired skill to fully utilize the item; (4) the lack of exercise or athletic aspect in the item’s use; and (5) the presence of an assistive device. Streetsurfing LLC v. United States, 11 F. Supp. 3d 1287, 1296-98 (Ct. Int’l Trade 2014). Thus, whether a product shares the same characteristics as “wheeled toys” of heading 9503, HTSUS, requires a fact-intensive analysis.
The text of heading 9503, HTSUS, provides for “wheeled toys” which must be “similar” to the precedent exemplars, tricycles, scooters, and pedal cars. See heading 9503, HTSUS. The unifying characteristic of these articles is that they are foot-powered. But the subject merchandise is not powered by the user’s foot. Further, the ENs direct that wheeled toys of 9503, HTSUS, are articles, “usually designed for propulsion either by means of pedals, hand levers or other simple devices which transmit power to the wheels through a chain or rod, or as in the case of certain scooters, by direct pressure of a person’s foot against the ground.” (Emphasis added). See EN 95.03(A). Yet the subject scooter is powered by a 36 volt 250 watt electric motor. This is not similar to a simple means of propulsion, such as pedals and a chain, or foot-power.
The scooter features an electric motor, twist grip throttle, and a handbrake. Riders stand on the platform located between the front and rear wheel. Given the high speed this product is capable of going, the scooter requires coordination of a user’s balance, steering, and propulsion in unison, as well as knowledge and understanding of a hand twist throttle and rear friction brakes. Thus, users require training prior to using the product and acquire a skill in the process. These are two characteristics the CIT stated are absent in “wheeled toys” of heading 9503, HTSUS.
The electric scooter is capable of going 22 mph. This is considerably faster than toy products at issue in the myriad rulings Dynacraft pointed to as being similar to the subject merchandise. The instruction manual and safety instructions that come with this product are extensive. Dynacraft highly recommends users wear a helmet, as well as strongly urging parental supervision during use. Specifically, the safety manual states:
The age grade for the electric dirt bike is for ages 14 and older. Just because someone is within the age and weight limitations specified for the electric dirt bike, does not mean that his/her size is appropriate to fit or maintain control of the electric dirt bike or that he/she is capable of safely operating the electric dirt bike. You are the best judge of whether you or your child is at the appropriate developmental stage for safe use of the electric dirt bike….A parent’s decision to allow their child to use the electric dirt bike should be based on the child’s maturity, skill and their ability to follow rules.
Thus, there is a demonstrable risk of injury to users here. It is unclear if the scooter would provide exercise to a user. Certainly it does not provide as much exercise as a scooter propelled by one’s foot. Insofar as the scooter has an assistive device by means of its motor, the subject motor is more powerful than motors in wheeled articles which CBP previously classified as “wheeled toys.” See NY N222337, dated July 11, 2012 (classifying an Avigo Electric Scooter which has a 12V rechargeable battery and can go up to 10 mph); see also NY N244196, dated August 14, 2013 (classifying an Avigo 12 Volt Mega Wheel Quad which reaches a maximum speed of 3mph as a “wheeled toy.”).
In summation, the characteristics of the subject scooters extend well beyond the basic skill or knowledge required for the simple, foot-powered scooters encompassed by the scope of heading 9503, HTSUS, or the scooters the ENs contemplate. As the CIT noted, all articles listed as wheeled toys are propelled “by means of pedals, hand levers or other simple devices which transmit power to the wheels through a chain or rod, … by direct pressure of a person’s foot against het ground,” or by “simply [being] drawn or pushed by another person or driven by a motor.” See Streetsurfer LLC, supra, at 1295, citing EN 95.03. Dynacraft reasons that because the off-road electric scooter was designed to amuse teens and young adults in the same manner as the other exemplars in the ENs to 95.03, then it should be classified as a toy. But the subject merchandise differs considerably in size, weight, complexity, and speed from products Avigo claims are similar. Overall, the subject scooters fall outside the scope of a “wheeled toy” pursuant to the framework crafted by the CIT. As such, the exclusionary language in Note 1 to Section XVI does not apply.
A “scooter” is not defined in the tariff, however, the EN to 87.11 are instructive as to what may be classified therein. The EN states that the heading covers a group of two-wheeled motorized vehicles, essentially designed for carrying persons. See EN 87.11. It continues and clarifies that “motor-scooters” are characterized by their small wheels and by a horizontal platform which joins the front and rear portions of the vehicle. It is characterized by its built-in engine or pedal system. Id. Moreover, speed is not a factor to consider in this heading. Scooters which attain any speed may be classified here. Therefore heading 8711, HTSUS, fully describes the subject merchandise because it is a two-wheeled motorized vehicle, designed for carrying persons.
Further, CBP has consistently classified goods described as such in heading 8711, HTSUS. See NY 876001, dated July 13, 1992 (classifying various motor scooters featuring a primary chain and secondary gear transmission, a centrifugal wet clutch, a 12 volt and 40 watt electrical system, and an electronic CDI ignition, with a maximum speed of 50 km per hour [approximately 31 mph]); NY N008859, dated March 30, 2007 (classifying electric scooters); NY N161585 dated May 6, 2011, (classifying the Razor Ecosmart Metro Electric Scooter, a scooter powered by a 36V (three 12V), batteries which had a maximum speed of 18 mph); and see NY A81574 dated April 15, 1996, (classifying a motorized scooter with a max speed of 15-20 mph requiring a 12V battery, chain drive or belt drive transmission).
HOLDING:
By application of GRI 1, the subject merchandise is properly classified under heading 8711, HTSUS. It is specifically provided for in subheading 8711.90.00, HTSUS, as “Motorcycles (including mopeds) and cycles fitted with an auxiliary motor; with or without side-cars; side-cars: Other.” The general column one rate of duty is free. NY N243337 is thus affirmed.
Duty rate are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division