CLA-2 OT:RR:CTF:TCM H243798 ALS
Port Director
U.S. Customs and Border Protection
5600 Pearl Street
Rosemont, Illinois 60018
RE: Internal Advice; Tariff Classification of Non-woven Rotor Radial and Chordal Brake Segments
Dear Port Director:
This letter is in reply to your request for internal advice of May 20, 2013, initiated by counsel, on behalf of Honeywell International and its Honeywell Aerospace-South Bend Division, regarding “the proper tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of certain rotor radial and chordal brake segments.” This letter also takes into consideration the contents of our discussion during an in-person meeting with Honeywell representatives on October 27, 2016.
FACTS:
Honeywell describes the articles at issue as such: They are radial and chordal brake segments, which are manufactured by needling web and unidirectional tow fabrics together to form a duplex fabric of a specific areal weight and width specified for the segment. The width and final cut of the fabric has a radial orientation of the unidirectional fibers for a radial segment and a chordal orientation of the unidirectional fibers for a chordal segment. The unidirectional tow fabric is produced to a specific areal weight by needling specific numbers of bundles of untwisted continuous filament oxidized polyacrylonitrile (PAN) tow fibers where the tow count is a function of the specified areal weight, mass of the PAN fiber, and width of the fabric. The fabric is non-woven. Honeywell states that the brake segments are “specifically designed for their dedicated end-use with aircraft brake systems at the time of entry...”
Before importation, the segments have been cut into particular shapes for use with aircraft braking systems with carbon discs. The diagrams and the sample submitted with Honeywell’s request indicate that a segment is formed as if cut from a doughnut shaped circle, similar to that of a vehicle’s brake disc.
After importation, the brake discs are “laid up with alternating layers of radial and chordal segments”, six per layer, with the segments being needled together in a process referred to as “preform needling.” After preform needling, the discs with the segments laid up upon them are carbonized, densified, and heat treated. The discs are then final machined and antioxidant is applied.
CBP issued a Notice of Action to Honeywell on March 29, 2012, in which it notified Honeywell that the tariff classification for radial and chordal brake segments, which Honeywell had entered under HTSUS subheading 5603.94.9070 on March 7, 2012, was being changed to HTSUS subheading 6307.90.9889, which in 2012 provided for “Other made up articles, including dress patterns: Other: Other... Other...” In doing so, CBP found that the radial and chordal brake segments are in fact non-woven but not cut into either squares or rectangles.
Honeywell now acknowledges that “classification within HTSUS heading 5603 may not be the most appropriate heading given that the segments are not square or rectangle.” Honeywell now asserts that the radial and chordal brake segments are classifiable under HTSUS heading 8803.
ISSUE:
Are radial and chordal brake segments, as described above, properly classified under HTSUS heading 6307, which provides for “Other made up articles, including dress patterns”, or under HTSUS heading 8803, which provides for “Parts of goods of heading 8801 or 8802”?
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order. GRI 2(a) provides that--
[a]ny reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
The following headings and subheadings of the HTSUS are under consideration in this case:
6307 Other made up articles, including dress patterns:
6307.90 Other:
Other:
6307.90.98 Other...
* * *
8803 Parts of goods of heading 8801 or 8802:
8803.30.00 Other parts of airplanes or helicopters...
* * * * * * * * * * * *
Honeywell contends that heading 8803 is the more appropriate HTSUS provision for the radial and chordal brake segments than heading 6307 because they are “specifically designed for their dedicated end-use with aircraft braking systems at the time of entry, as well as being a necessary and fundamental component of an aircraft braking system.” Honeywell argues that the subject articles are not excluded from heading 8803 as parts of general use because they do not meet the definition of such as provided in Note 2 of Section XV of the HTSUS. See HTSUS Section XVII, Note 2(b), referring to HTSUS Section XV, Note 2.
Honeywell further contends that the radial and chordal brake segments are suitable for use solely or principally with articles of heading 8803 because they are specifically designed for the respective braking systems in which they will be installed, and they “are generally not interchangeable between end uses and braking systems, with each part number designed, manufactured, and intended for use with a respective braking system.”
Honeywell also cites CBP Ruling NY N258524 (October 24, 2014) to assert that “[l]ike the brake parts at issue in NYRL N258524, Honeywell’s imported brake segments have the essential character of the finished brake discs as they have been produced to a specific shape, size, and technical specification which are dedicated for use on a particular aircraft.” NY N258524 held that wheel halves and the brake piston housing forgings have the essential character of the finished article, citing GRI 2(a). Honeywell also cites CBP Ruling NY N953014 (April 12, 1993) to assert that because the subject radial and chordal brake segments have the “essential character of the finished article” they are most appropriately classified in heading 8803.
Note 7(a) of Section XI, HTSUS, under which heading 6307 is provided, notes in part the following:
7. For the purposes of this section, the expression "made up" means:
(a) Cut otherwise than into squares or rectangles…
With regard to whether or not the radial and chordal brake segments have the essential character of aircraft braking systems pursuant to Note 2(a), we have previously addressed the question in a similar case and stated the following:
You cite Baxter Healthcare Corp. of Puerto Rico v. U. S., 182 F.3d 1333 (CAFC, 1999) for the proposition that the P.E.S./P.E.T. fiber bundles impart the "essential character" to the hollow fiber dialyser because their dimensions, and therefore, their identity, is fixed with certainty at the time of importation. In Baxter, monofilament was imported in rolls for use in oxygenators. In deciding whether the merchandise is classified as a material or as an unfinished part, the court discussed only the dimensions of the article to decide that the monofilament bundles there did not impart the "essential character" to the oxygenator.
However, the court also mentioned other factors, such as whether the monofilament had to undergo substantial transformation in order to function within the oxygenator to oxygenate blood, in deciding the "essential character" question. In this regard, the Baxter court cited with approval the case of Benteler Indus., Inc. v. United States, 17 C.I.T. 1349, 840 F. Supp. 912 (1993), wherein articles used exclusively as side door impact beams were classified as "parts" rather than "material" even though they were cut to length subsequent to importation because the imported pipes required no additional parts or assembly. Baxter, supra. (emphasis added).
In stark contrast to the impact beams in Benteler, supra, the instant merchandise requires substantial additional assembly to become a semipermeable membrane functional within the dialyser. It must be unwrapped, inserted into a dialyser jacket, separated by application of a potting compound, cured and trimmed. The addition of the potting compound and resulting separation of the fibers is an essential, time-consuming and costly process in producing a functioning dialyser. Without this process, the diffusion of elements between blood and dialysate solution could not occur across the membrane because the solutions would mix instead of traveling alternatively through and around the membranes which allows for the exchange of elements to occur. As such, the imported fiber bundles do not function as useable dialysis membranes and hence, lack the essential character of a complete or finished semipermeable membrane. They are simply fibers. Encyclopedia of Chemical Technology, supra.
CBP Ruling HQ 964676 (January 7, 2002).
We again note that the radial and chordal brake segments are textile articles that are cut into non-square and non-rectangular shapes and are imported in that condition. As such they are, in the condition in which they are imported, “made up” as the term is used in note 7(a) to Section XI, HTSUS. As made up textiles, the brake segments do not have the characteristics of aircraft braking systems, even unfinished or incomplete versions of such. Although shaped to be processed into brake discs, which are then incorporated into an aircraft braking system, the subject brake segments must undergo several steps of processing after importation before even becoming parts of aircraft braking system. Consequently, we find, consistent with Benteler, supra, that the brake segments are not, in their condition as imported, unfinished or incomplete aircraft braking systems. Thus, GRI 2(a) is inapplicable to this case.
With regard to whether the instant brake segments are considered “parts” of aircraft braking systems to be classified in heading 8803, HTSUS, the U.S. Court of International Trade (CIT) has held that a subpart of a particular automotive part should not be classified in heading 8708, HTSUS, if that subpart is more specifically provided for elsewhere in the Nomenclature. See Mitsubishi Electronics America, Inc. v. United States, 19 CIT 378 (1995). Specifically, the CIT in Mitsubishi addressed the classification of an automotive “starter drive assembly” and noted that:
[I]f the subject merchandise is not a clutch, but rather a part of a starter motor, then it cannot be classified as a part of an automobile, even though it is used solely in automobiles. This is because a subpart of a particular part of an article is more specifically provided for as a part of the part than as a part of the whole. Id. at 383 n.3.
Similarly, because Note 3 of Section XVII provides that, “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”, CBP must first examine whether the subject radial and chordal brake segments are suitable for use solely or principally with the articles chapters 86 to 88, HTSUS, before the merchandise can be classified as “parts and accessories” in heading 8803, HTSUS.
Chapter 88, HTSUS, covers “aircraft, spacecraft, and parts thereof.” It is clear that the subject radial and chordal brake segments will be, upon importation, further processed into carbon brake pads, laid up upon brake discs, and thereby installed on aircraft as a component of the aircraft braking system. It is equally clear, however, that we are compelled by the reading of Mitsubishi, supra, to note the distinction between aircraft and aircraft braking systems. The radial and chordal brake segments are, after being further processed and laid up upon brake discs, clearly parts of aircraft braking systems, and that aircraft braking systems are parts of aircraft. Just as the part of the starter motor in Mitsubishi is a subpart of the motor vehicle and therefore “is more specifically provided for as a part of the part than as a part of the whole,” so are the radial and chordal brake segments in this case. So while we acknowledge that the subject brake segments might be recognized as parts of aircraft braking systems, aircraft braking systems are not specifically covered by name in Chapter 88. Consequently, by application of Note 3 of Section XVII, HTSUS, the radial and chordal brake segments are not suitable for use solely or principally with the articles chapters 86 to 88, HTSUS, specifically of heading 8803. Therefore, heading 8803 is inapplicable to the subject radial and chordal brake segments.
Honeywell also cites GRI 3 and Additional U.S. Rules of Interpretation (ARI) 1(c) to assert that the radial and chordal brake segments are more specifically provided for in heading 8803 than heading 6307. GRI 3(a) provides the following:
3. 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.
ARI 1(c) provides the following:
1. In the absence of special language or context which otherwise requires--
(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;...
The radial and chordal brake segments are not prima facie classifiable in heading 8803 because they are not parts of aircraft. Thus, GRI 3(a) is inapplicable in this case. The radial and chordal brake segments are not specifically provided for in chapter 88, HTSUS, thus ARI 1(c) is inapplicable in this case.
Heading 6307, HTSUS, is a basket provision, and classification therein is only appropriate if the merchandise is not included elsewhere more specifically in the Nomenclature. See, e.g., CBP Ruling H266607 (February 19, 2016). We note at this point that in understanding the language of the HTSUS, the Explanatory Notes of the Harmonized Commodity Description and Coding System (“ENs”), which constitute the official interpretation of the Harmonized System at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN for heading 6307 states “this heading covers made up articles of any textile material which are not included more specifically in other headings of Section XI or elsewhere in the Nomenclature.” [Emphasis in original.] There is no eo nomine provision in HTSUS for non-woven radial and chordal brake segments of untwisted continuous filament oxidized PAN tow fibers, or any other HTSUS provision that describes the subject brake segments. Chapter 63, HTSUS, covers, among other things, “other made up textile articles.” There is no dispute that the radial and chordal brake segments consist of textile material, specifically non-woven untwisted continuous filament oxidized PAN tow fibers. Thus, given that no other HTSUS provision more specifically includes the radial and chordal brake segments, we conclude that they are properly classified under heading 6307, HTSUS, as “Other made up articles, including dress patterns.” Specifically, the radial and chordal brake segments are to be classified under subheading 6307.90.98, HTSUS, as “Other made up articles, including dress patterns: Other: Other: Other...”
HOLDING:
The subject radial and chordal brake segments are properly classified under heading 6307, HTSUS, as “Other made up articles, including dress patterns.” Specifically, the radial and chordal brake segments are to be classified under subheading 6307.90.98, HTSUS, as “Other made up articles, including dress patterns: Other: Other: Other...” The general column one rate of duty, for merchandise classified in this subheading is seven percent (7%).
Duty rates 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.
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