CLA-2 OT:RR:CTF:TCM H074955 GC
Mr. Chester R. Krayton
Customs Trade Consultants
Post Office Box 626
Manalapan, New Jersey 07726
RE: Tariff classification of transmission assemblies
Dear Mr. Krayton:
This is in response to your ruling request of May 19, 2009, on behalf of your client, Dana Limited Holdings Company (Dana), in which you request U.S. Customs and Border Protection (CBP) to issue a binding ruling on the tariff classification, under the Harmonized Tariff Schedule of the United States (HTSUS), for four different custom-made transmission assemblies. Your ruling request was forwarded to this office from the National Commodity Specialist Division in New York for reply. In preparation of this ruling, consideration was also given to the substance of our telephone conference with you and representatives of Dana, on August 13, 2009, as well as your written submission following up our telephone conference, dated August 28, 2009.
FACTS:
At issue are four transmissions incorporated into off-road machinery after importation. You state in your submission that Dana configures and assembles the subject transmissions in a highly specified manner to meet customers’ specifications.
The Taylor transmission assembly (identified by part number 4264737 and model number FHR32337) is stated to be incorporated into the Straight Mast Work Truck. The transmission is configured for “short drop” mounting (the axis of the output shaft is displaced vertically with respect to the axis of the input shaft) for two-wheel drive vehicles. The transmission features three speeds in forward and reverse directions, along with high capacity pump drives that accommodate large housing variable displacement pumps.
The Sandvik transmission assembly (identified by part number 4263941 and model number LMHR32421) is stated to be incorporated into the Underground Work Truck LHD, which is a four-wheel drive vehicle. The transmission features four forward and four reverse speeds with integral torque conversion and high capacity pump drives that power the lifting mechanism and articulate steering.
The Pettibone transmission assembly (identified by part number 4264424 and model number FT20425) is stated to be incorporated into the Rough Terrain Material Handling Work Truck. The transmission features four forward speeds and three reverse speeds, along with large pump drives that allow the operation of a telescopic boom.
The Manitowoc (Grove) transmission assembly (identified by part number 4264736 and model number HR32662) is stated to be utilized in a long drop mounting configuration and will be incorporated into the Rough Terrain Work Truck, which is four-wheel drive. The transmission operates six forward speeds and six reverse speeds with integral torque conversation and features high capacity pump drives that accommodate large housing variable displacement pumps.
ISSUE:
Whether the subject transmission assemblies are provided for under heading 8431, HTSUS, as parts suitable for use solely or principally with machinery of headings 8425 to 8430, or heading 8483, HTSUS, as gear boxes and other speed changers?
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 HTSUS provisions under consideration in this case are as follows:
8431 Parts suitable for sole or principal use with the machinery of headings 8425 to 8430:
8431.20.00 Of machinery of heading 8427...
* * *
Of machinery of heading 8426, 8429 or 8430:
8431.49 Other:
8431.49.10 Of Machinery of subheadings 8426…
* * *
8431.49.90 Other…
* * *
8483 Transmission shafts (including camshafts and crankshafts) and cranks; bearing housings, housed bearings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including pulley blocks; clutches and shaft couplings (including universal joints); parts thereof:
8483.40 Gears and gearing, other than toothed wheels, chain sprockets and other transmission elements entered separately; ball or roller screws; gear boxes and other speed changers, including torque converters:
Gear boxes and other speed changers:
Fixed ratio speed changers, multiple and variable ratio speed changers each ratio of which is selected by manual manipulation:
8483.40.50 Other…
Additional U.S. Rule of Interpretation 1 state, in pertinent part that:
In the absence of special language or context which otherwise requires –
(a) a tariff 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;
* * *
(c) a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for ‘parts’ or ‘parts and accessories’ shall not prevail over a specific provision for such part or accessory…
However, the terms of Additional U.S. Rule of Interpretation apply in the absence of special language or context. When the competing provisions are in Section XVI, HTSUS, Note 2 to Section XVI constitutes such special language or context. See Nidec Corporation v. United States, 18 C.I.T. 821, 861 F.Supp. 136, aff’d 68 F.3d 1333 (Fed. Cir. 1995); see also Headquarters Ruling Letter (HQ) 966854, dated January 16, 2004. Note 2 to Section XVI, HTSUS, state, in pertinent part, that:
Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of articles of heading 8484, 8544, 8546 or 8547) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. CBP believes the ENs should always be consulted. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The General EN to Note 2 to Section XVI, HTSUS, provides, in pertinent part, that:
In general, parts which are suitable for use solely or principally with particular machines or apparatus… or with a group of machines or apparatus falling in the same heading, are classified in the same heading as those machines or apparatus…
* * *
(B) Parts of machinery of headings 84.25 to 84.30 (heading 84.31)
* * *
The above rules do not apply to parts which in themselves constitute an article covered by a heading of this Section…; these are in all cases classified in their own appropriate heading even if they are specifically designed to work as part of a specific machine. This applies in particular to:
* * *
(6) Transmission shafts… gears and gearing (including friction gears and gear-boxes and other speed changers)… (heading 84.83)…
(Emphasis in original)
Accordingly, if the instant transmission assemblies are described by the terms of Heading 8483, HTSUS, then they are properly classified in that heading per Note 2(a) to Section XVI, HTSUS. In its general discussion of the scope of heading 8483, EN 84.83 states, in pertinent part, that:
The goods covered by [heading 8483, HTSUS] are mainly:
(i) Certain mechanical parts which are used in the transmission of power from an external power unit to one or more machines.
(ii) Certain internal parts of a machine, used to transmit power to the various parts of the same machine.
(Emphasis in original)
Regarding gear boxes and other speed changers (including torque converters), EN 84.83(E) states, in pertinent part, that:
These provide a range of speeds which can be varied, either by hand or automatically, according to the requirements of the machine. They include, inter alia:
(1) Gear-boxes consisting of assemblies of gears which can be selected in alternative arrangements; the speed of transmission can thus be varied according to the arrangement of gears set…
(Emphasis in original)
In support of your position that the subject merchandise is not provided for in heading 8483, HTSUS, you argue that the “integration of such power-transmitting components to various operating functions of the machinery, results in an article that, in terms of functionality, goes beyond mere transmission of power”. In HQ 963850, dated November 16, 2000, CBP held that an axle incorporating a transfer gear box and a hydraulically-operated emergency/parking brake system served the function “beyond the mere transmission of power” and thus fell outside the scope of heading 8483, HTSUS. In so doing, CBP distinguished the axle with gear box and brake system from the merchandise of HQ 950930, dated April 22, 1992, which consisted of a fixed ratio transmission coupled with an electric motor on the input shaft side and to the drive wheels on the output shaft side. The transmission, to be installed in a fork lift, was also imported with disc brake rotors.
Neither HQ 963850 nor HQ 950930 stand for the proposition that the power transmitting function of a gear box of heading 8483 is limited to the locomotion of the machine into which it is installed. In HQ 963850, CBP specifically mentioned the integration of a braking system with the subject transmission as advancing the function of the subject merchandise beyond mere transmission of power in the general sense. In HQ 950930, CBP noted that while the merchandise subject to that ruling was imported with disc brake rotors, the merchandise in its condition as imported served only the purpose of transmitting power. As you state in your ruling request, the components integrated into the subject transmissions are indeed power-transmitting components. The fact that they are used to transmit power to operations other than locomotion of the principal machines does not cause the subject transmissions to fall outside the scope of heading 8483, HTSUS. Accordingly, the subject transmissions fit the descriptions of “gear boxes and other speed-changers” in heading 8483, HTSUS.
In your submission, you do not address Note 2(a) to Section XVI, HTSUS, but you do assert that subject transmissions are properly classifiable under heading 8431, HTSUS, by operation of Note 2(b) to Section XVI, HTSUS. Note 2(b) provides, in pertinent part, that, “[o]ther parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading… are to be classified with the machines of that kind…” Your argument, to paraphrase, rests on the fact that the transmissions are designed specifically for use in machines of headings 8425 to 8430, HTSUS. However, to classify on this basis would ignore Note 2(a), which mandates that parts that constitute a good described by a heading in Section XVI are classified in that heading. Since the instant transmissions are described by the terms of heading 8483, HTSUS, as gear-boxes and other speed changers, they are properly classified in that heading.
HOLDING:
By application of GRI 1 and Note 2(a) to Section XVI, HTSUS, the four transmissions subject to your ruling request are classified under heading 8483, HTSUS, as gear boxes and other speed changers. They are specifically provided for under subheading 8483.40.50, HTSUS, which provides for, in pertinent part: “[t]ransmission shafts… gear boxes and other speed changers, including pulley blocks… parts thereof: Gears and gearing; gear boxes and other speed changers, including torque converters… Gear boxes and other speed changers: Fixed ratio speed changers, multiple ratio speed changers each ratio of which is selected by manual manipulation: Other…” The column one, general rate of duty is 2.5 percent ad valorem.
Duty rates 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/tata/hts.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch