OT: RR: CTF: TCM: H037541 TNA
John DeMilt, Associate Counsel
Conair Corporation
1 Cummings Point Road
Stamford, CT 06904
RE: Classification of Stepladder/Hand Truck Combination from China;
NY N021149 Revoked
Dear Mr. DeMilt:
This is in response to your August 11, 2008 request for reconsideration of New York Ruling Letter (“NY”) N021149, made on behalf of Conair Corporation (“Conair”). The National Commodity Specialist Division of U.S. Customs and Border Protection (“CBP”) issued NY N021149 to Conair on January 9, 2008.
The issues addressed by this ruling originated in a request for a ruling made by Conair on December 19, 2007 on the tariff classification of the Flat Folding, Heavy-Duty Stepladder/Full-Utility Hand Truck (Model TSM-31LHT) (“LadderKart”) from China. In NY N021149, CBP classified the LadderKart under subheading 8716.80.5010 of the Harmonized Tariff Schedule of the United States (HTSUS) which provides for “Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof: Other vehicles: Other, Industrial hand trucks.”
You indicate that Conair believes that the correct tariff classification of the LadderKart is subheading 7616.99.5030, HTSUS which provides for “Other articles of aluminum: Other: Other: Other, Ladders” and request reconsideration of NY N021149.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke NY N018967 was published on June 9, 2010, in Volume 44, Number 24, of the Customs Bulletin. CBP received no comments in response to this notice.
FACTS:
The LadderKart is a hand cart combined with a fold-out stepladder made of aluminum and weighing approximately 14 pounds. The stepladder configuration has a 300 pound weight capacity and is equipped with three polypropylene steps measuring 11 inches wide by 9 inches deep. The hand cart configuration has a 250 pound weight capacity and rolls on wheels of 4 inches in diameter.
The LadderKart is marketed on the Conair website as a travel cart and its marketing materials indicate, among other things, that it is a “[g]reat value as a 2-for-1 item.” Various online vendors note that the LadderKart could be particularly useful for homeowners, contractors and photographers. Specifically, online vendors describe the LadderKart as a “Contractor Grade Stepladder & Folding Luggage Cart/Hand Truck Combination,” indicate that the LadderKart is “Fabulous For The Homeowner As Well As The Contractor,” and market the LadderKart as a “dual purpose solution for … [photographers’] various hauling and shooting needs.”
ISSUE:
What is the classification of the LadderKart under the HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides, in part, that classification decisions are to be “determined according to the terms of the headings and any relative section or chapter notes.” If 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 may then be applied, in order. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level (for the four digit headings and the six digit subheadings) and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs. While neither legally binding nor dispositive of classification issues, the ENs provide 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. 35127-28 (Aug. 23, 1989).
In classifying the merchandise, we bear in mind that a product’s classification is determined by first looking to the headings and section or chapter notes. See Orlando Food Corp. v. United States, 140 F.3d 1437 (Fed. Cir. 1998). Only after determining that a product is classifiable under the heading should one look to the subheadings to find the correct classification for the merchandise. Id. We also keep in mind that absent contrary definitions in the HTSUS or legislative history, we construe HTSUS terms according to their common and commercial meanings. See Medline Indus. Inc. v. United States, 62 F.3d 1407 (Fed. Cir. 1995); See also Len-Ron Mfg. Co., Inc. v. United States, 334 F.3d 1304, 1309 (Fed. Cir. 2003).
In NY N021149, CBP classified the merchandise at issue under subheading 8716.80.5010, HTSUS. Conair asserts that the merchandise is classified under subheading 7616.99.5030, HTSUS. Before turning to classification of the LadderKart at the subheading levels, it is necessary to resolve classification of the product at the heading level. Heading 8716, HTSUS, provides for: “Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof” while heading 7616, HTSUS provides for: “Other articles of aluminum.”
The ENs to heading 8716 state, in pertinent part:
This heading covers a group of non-mechanically propelled vehicles (other than those of the preceding headings) equipped with one or more wheels and constructed for the transport of goods or persons.
* * * * *
The vehicles of this heading are designed to be towed by other vehicles (tractors, lorries, trucks, motorcycles, bicycles, etc.), to be pushed or pulled by hand, to be pushed by foot or to be drawn by animals.
This heading includes:
* * * * *
(B) Hand- or foot-propelled vehicles.
* * * * *
Wheelbarrows, luggage-trucks, hopper-trucks and tipping-trucks.
* * * * *
(4) Hand-carts, e.g., for waste disposal.
Meanwhile, the ENs to heading 7616 state, in pertinent part:
This heading covers all articles of aluminum other than those covered by the preceding heading of this Chapter, or by Note 1 to Section XV, or articles specified or included in Chapter 82 or 83, or more specifically covered elsewhere in the Nomenclature.
The LadderKart is in part a hand cart and in part a stepladder made of aluminum. Because headings 8716 and 7616, HTSUS both describe the LadderKart in part, those parts of the product are prima facie classifiable under headings 8716 and 7616, HTSUS. However, the LadderKart as a whole is not prima facie classifiable under either heading. As a result, the LadderKart cannot be classified pursuant to GRI 1 and it is necessary to consider the succeeding GRIs in numerical order.
GRI 2(a) provides guidance for the classification of incomplete or unfinished products. Because the LadderKart is a finished article, GRI 2(a) is inapplicable. GRI 2(b) provides, in pertinent part, that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. The LadderKart consists of more than one substance inasmuch as it is comprised of a hand cart and a stepladder both made primarily of aluminum. Consequently, we turn to GRI 3.
GRI 3 provides that when, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods; (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable; and (c) when goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
You contend that pursuant to GRI 3(a), the LadderKart should be classified under heading 7616, HTSUS, because the LadderKart is primarily a stepladder whose hand cart feature is secondary to its principle use. In support of this assertion, you state that (1) the hand cart function is ill-suited to serve as an industrial hand cart because its tubular frame cannot slide under heavy objects and cannot carry a load of greater than 250 pounds; (2) Conair does not market the LadderKart for industrial uses; (3) the LadderKart is frequently stocked with other ladders; and (4) internet retailers emphasize the stepladder functions.
Your first and second points imply that while the LadderKart is a hand cart, it should not be classified under heading 8716, HTSUS because it is not “industrial.” We emphasize that whether the LadderKart is “industrial” has no bearing on its classification at the heading level and only affects its classification at the statistical (10-digit) level.
GRI 3(a) is inapplicable here because that GRI only “comes into play when a good, as a whole, is prima facie classifiable under two or more headings.” Conair Corp. v. United States, 29 Ct. Int’l Trade 888, 894 (2005) (citing Bauer Nike Hockey USA, Inc. v. United States, 393 F.3d 1246, 1252 (Fed. Cir. 2004)). Here, headings 7616 and 8716, HTSUS each only describe the product in part.
In applying GRI 3(b), we must determine which component is indispensable to the merchandise in order to determine the essential character of this composite good. See Oak Laminates Div. of Oak Materials Group v. United States, 8 Ct. Int’l Trade 175, 628 F. Supp. 1577, 1581 (1984). Essential character can be determined based upon a variety of factors including 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.
Here, we find that no material or component imparts essential character to the LadderKart. You contend that the LadderKart’s principle function is as a stepladder because the LadderKart is frequently stocked in stores with other ladders and because internet retailers emphasize the stepladder functions. However, Conair itself includes the LadderKart in the “travel carts” section of its website which indicates that the hand cart aspect of the merchandise is just as important as that of the stepladder.
Similarly, both Conair and online vendors emphasize the dual use of the LadderKart as a stepladder and hand cart. The complete name of the LadderKart consistently includes the phrase “Stepladder/Hand Cart” calling attention to the product’s dual uses. In addition, Conair and online vendors provide detailed specifications for both the stepladder and hand cart uses including the weight capacity of each without suggesting that either element of the product is more useful than the other. The fact that some stores may stock the LadderKart in the ladder department does not indicate that its principle function is that of a stepladder; stocking decisions may be made on criteria other than an item’s principle function and the LadderKart’s marketing consistently highlights its dual use. Consequently, neither the stepladder nor the hand cart function constitutes the essential character of the overall product and the LadderKart cannot be classified pursuant to GRI 3(b).
As a result, we progress to GRI 3(c), by which the LadderKart is classified under heading 8716, HTSUS, as it occurs last in numerical order when compared to heading 7616, HTSUS.
To resolve classification of the merchandise at the subheading level, we turn to GRI 6, which provides in pertinent part:
[f]or legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules [GRI 1 to 5], on the understanding that only subheadings at the same level are comparable.
Pursuant to GRI 6, the classification principles enunciated in GRIs 1 thorough 5 apply to the subheadings of heading 8716, HTSUS. By application of GRI 1, the first subheading within heading 8716, HTSUS to accurately describe the hand cart portion of the LadderKart is subheading 8716.80.50 providing for “Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof: Other vehicles: Other.” Consequently, at the ten-digit classification level, we must determine whether the hand cart portion of the LadderKart is classified under subheading 8716.80.5010, HTSUS providing for industrial hand trucks, subheading 8716.80.5020, HTSUS providing for portable luggage carts, or 8716.80.5090, HTSUS providing for all other merchandise.
Beginning with subheading 8716.80.5010, HTSUS, you contend that the LadderKart is not suited for industrial use because its tubular frame cannot slide under heavy objects and cannot carry a load of great than 250 pounds. The term “industrial” is not defined in the HTSUS or in the ENs and therefore must be construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States, 69 CCPA 89, 92, 673 F.2d 380, 382 (1982). Conair’s website indicates that the stepladder’s 300 pound weight capacity is rated “industrial heavy” but the hand cart, with a 250 pound weight capacity, is not rated for industrial use. Because the hand cart portion of the LadderKart is not rated for industrial use, in accordance with the commercial meaning of the term “industrial,” we find that the LadderKart is not an “industrial hand truck” and, therefore, does not meet the terms of subheading 8716.80.5010, HTSUS.
Subheading 8716.80.5020, HTSUS provides for portable luggage carts. Although Conair markets the LadderKart as a “travel cart,” it is also marketed for use by homeowners, contractors, and photographers. Consequently, the entire hand cart portion of the LadderKart cannot be classified as a portable luggage cart. Having exhausted all other subheadings, we now turn to subheading 8716.80.5090, HTSUS which provides for other items and under which the LadderKart is classified.
HOLDING:
By application of GRI 3(c), the LadderKart is classified under heading 8716, HTSUS and by application of GRI 1 applied mutatis mutandis through GRI 6, it is specifically classified under subheading 8716.80.5090, HTSUS, which provides for: “Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof: Other vehicles: Other, Other: Other.” The column one, general rate of duty is 3.2 percent ad valorem.
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 the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N021149, dated January 9, 2008, is hereby REVOKED. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division