CLA-2 RR:CR:GC 961423 JAS
Port Director of Customs
1000 2nd. Ave., Suite 2100
Seattle, WA 98104-1049
RE: Protests 3004-92-100066, 3004-92-100131; Heading 8703, Motor
Vehicle Principally Designed for the Transport of Persons; Heading 8704, Motor Vehicles for the Transport of Goods; GEO
Tracker, Sport Utility Vehicle; Protest Denied for Failure to Prove Claim, 19 CFR 174.13(a)(6); Extension of Liquidation of Entries Under United States-Canada Free Trade Agreement (CFTA), Election to Average, 19 CFR 10.310
Dear Port Director:
This is our decision on protests 3004-92-100066 and 3004-92-100131, both filed against your classification under the
Harmonized Tariff Schedule of the United States (HTSUS), of GEO
Tracker motor vehicles. The vehicles were entered between
November 22, 1991, and February 28, 1992. Entries the subject of
protest 3004-92-100066 were liquidated between February 28 and
May 22, 1992, and the protest timely filed on May 28, 1992.
Entries the subject of protest 3004-92-100131 were liquidated/
reliquidated between June 26 and July 10, 1992, and the protest
timely filed on September 10, 1992.
FACTS:
The merchandise subject to these protests is a motor vehicle
designated the GEO Tracker. The protestant states they are Jeep-like passenger vehicles, but the record contains no literature,
brochures or further descriptions. The vehicles were entered
under the provision for motor vehicles principally designed for
the transport of persons, with spark-ignition internal combustion
reciprocating piston engines, in subheading 8703.22.00 or
subheading 8703.23.00, HTSUS, depending on cylinder capacity. A
claim for preferential tariff treatment as originating goods
under the U.S.-Canada Free-Trade Agreement (CFTA) was made at the
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time of entry, and an election to average, over its 12-month
financial year, its calculation of the value-content requirement
for the purpose of establishing originating-good status for the
vehicles was made under section 202(e)(2) of the CFTA and section
10.310, Customs Regulations (19 CFR 10.310).
Customs officers in Blaine noted that the classification of
sport utility-type vehicles either in heading 8703 or in heading
8704, involves consideration of both structural and auxiliary
design features. Because the importer provided no information on
the type of GEO Tracker being imported, and to protect the
revenue, they liquidated the entries under subheading 8704.31.00,
HTSUS, as motor-vehicles for the transport of goods. Goods so
classifiable in 1991 and 1992 were dutiable under heading
9903.87.00, HTSUS, at the rate of 25 percent ad valorem.
However, vehicles which qualify as originating goods under the
CFTA are eligible for preferential tariff treatment.
Protestant makes no factual or legal arguments in support of
the heading 8703 classification. Protestant does, however,
assert that the liquidation of the subject entries constitutes an
unauthorized denial of its claim for preferential tariff
treatment under the CFTA because the liquidations contravened the
election to average procedures outlined in section 10.310 of the
Customs Regulations.
The provisions under consideration are as follows:
8703 [o]ther motor vehicles principally designed for the transport of persons...dutiable at MFN rate applicable at time of importation, but duty-free as an originating good under the CFTA
* * * *
8704 Motor vehicles for the transport of goods...dutiable under heading 9903.87.00 at the rate of 25 percent ad valorem, but duty- free as an originating good under the CFTA
ISSUE:
Whether the vehicles were properly classified under
appropriate provisions of heading 8704/9903 as motor vehicles for
the transport of goods; whether the claim for preferential tariff
treatment under the CFTA was improperly denied.
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LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part
that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6.
As to the classification issue, protests against decisions
of the appropriate Customs officers must be in conformity with
applicable statutory and regulatory requirements. Under 19
U.S.C. 1514(c)(1), a protest of a decision under subsection (a)
of section 1514 must set forth distinctly and specifically each
decision as to which protest is made. See United States v. E. H.
Bailey & Co., 32 CCPA 89, C.A.D. 291 (1945), United States v.
Parksmith Corp., 514 F. 2d 1052, 62 CCPA 76 (1975), and related
cases. In addition, the Customs Regulations require that a
protest set forth the nature of, and justification for the
objection distinctly and specifically with respect to each
decision. 19 CFR 174.13(a)(6).
The scope of review in a protest filed under 19 U.S.C. 1514
is limited to the administrative record. Customs will consider
all relevant allegations that are supported by competent
evidence. In acting on a protest, however, Customs lacks the
legal authority to assume facts and arguments that are not
presented and, therefore, not in the official record.
In this case, the protestant properly contested the decision
to liquidate the entries in question under subheading
8704.31.00/9903.87.00, HTSUS. However, protestant has submitted
no evidence in support of the claim that the vehicles are
classifiable under subheading 8703.23.00, HTSUS, nor is there
other evidence of record from which we can independently
determine the validity of the claim.
As to the denial of the claim for preferential tariff
treatment under the CFTA, the file reflects that at the time of
entry the Canadian manufacturer made an election to average under
19 CFR 10.310, Customs Regulations. The liquidation of entries
in which a CFTA claim is made based on the vehicle averaging
method should be extended, in accordance with instructions from
the Director, Office of Trade Operations, in a telex 01189, dated
February 2, 1989. However, the entries under protest were
prematurely liquidated, which necessitated the filing of this
protest.
The record shows that the Canadian manufacturer filed the
annual report required by 19 CFR 10.311(c), in connection with
the election to average. Based on Audit Report No. 331-91-APO-001, which the North Central Region Regulatory Audit Division,
Detroit Branch, issued on October 19, 1993, the Director, Office
of Trade Operations, issued memorandum MAN-1-CO:TO:NVC RD, dated
June 23, 1994, advising all Customs field offices that the motor
vehicles covered by the referenced election to average met the
rule of origin criteria for purposes of the duty preference under
the CFTA, and instructing that all affected entries be liquidated
accordingly.
HOLDING:
Based on protestant's failure to comply with the
requirements of 19 CFR 174.13(a), the protest should be DENIED as
to classification. Based on protestant's compliance with
applicable rule of origin criteria, the protest should be ALLOWED
as to the claim for preferential tariff treatment under the CFTA.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, you should mail this decision, together with the
Customs Form 19, to the protestant no later than 60 days from the
date of this letter. Any reliquidation of the entry or entries
in accordance with the decision must be accomplished prior to
mailing the decision. Sixty days from the date of the decision
the Office of Regulations and Rulings will take steps to make the
decision available to Customs personnel via the Customs Rulings
Module in ACS and to the public via the Diskette Subscription
Service, the Freedom of Information Act and other public access
channels.
Sincerely,
John Durant, Director
Commercial Rulings Division