CLA-2 OT:RR:CTF:TCM H270928 ALS
Mr. Paul Stephan Mongillo
Area Port Director
U.S. Customs and Border Protection
237 West Service Road
Champlain, New York 12919
RE: Internal Advice Request concerning the tariff classification of BRP Manual Reverse Kit; Harmonized Tariff Schedule of the United States subheading 8479.89.94
Dear Mr. Mongillo:
This letter responds to the April 10, 2015 request for Internal Advice submitted by BRP USA, Inc. that you forwarded to this office on September 4, 2015. The request concerns the legal tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of BRP’s Manual Reverse Kit (also referred to herein as “MRK”). Our decision is set forth below.
FACTS:
BRP describes the MRK as an after sale accessory for BRP personal watercraft. The MRK is installed onto the spark-ignition piston engine of the personal watercraft to reverse the water propulsion from the engine output. The MRK consists of a Housing Lever Assembly (“HLA”) (which is attached to the watercraft’s console), a Reverse Cable that leads from the HLA, and the Reverse Gate (which is attached to the jet pump housing), which is where the Reverse Cable leads into. When the housing lever is manually engaged, the MRK redirects the water flow coming out of the back of the watercraft towards the bow (front) of the watercraft, allowing the watercraft to reverse course. The MRK is shipped unassembled to a BRP retailer who installs the MRK for the customer.
BRP had entered a number of MRKs under subheading 8479.89.9899, HTSUS. Your office disagreed with that classification and proposes classifying the MRK under subheading 8412.90.1000, HTSUS.
ISSUE:
Is the BRP Manual Reverse Kit, as described above, properly classified under heading 8412, HTSUS, which provides for “Other engines and motors, and parts thereof,” or under heading 8479, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof”?
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation 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.
The HTSUS provisions at issue are as follows:
8412 Other engines and motors, and parts thereof:
8412.90 Parts:
8412.90.10 Of hydrojet engines for marine propulsion...
* * *
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
8479.89 Other:
8479.89.94 Other…
* * * * * * * * *
BRP contends that the MRK is not a part of a personal watercraft engine because it is an after-purchase accessory that is not required to operate the personal watercraft as purchased. The BRP personal watercraft does not, as designed and sold in stock form, operate in reverse. The MRK adds that functionality to the personal watercraft as an option, not a necessity. The MRK performs the individual function of directing the flow of water from the engine output of the BRP personal watercraft. This function is distinct from that of the personal watercraft or its engine and likewise does not constitute an integral and inseparable part of the operation of such, for the reasons already expressed. See EN 84.79(B); see also EN 84.79(III)(22) (listing “steering and rudder equipment for ships” as an example of a product covered by heading 84.79). Consequently, the MRK is an accessory that has an individual function that is distinct from the personal watercraft’s engine. Thus, we conclude that the MRK is prima facie classifiable under heading 8479, HTSUS.
With regard to whether or not the MRK is a part, we have previously addressed the issue of what is considered part for HTSUS purposes. In CBP Ruling HQ H173197 (November 13, 2012), we stated the following:
The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Techs. Ltd. P’ship. v. United States (“Bauerhin”), 110 F. 3d 774 (Fed. Cir. 1997). The first, articulated in United States v. Willoughby Camera Stores, Inc. (“Willoughby”), 21 C.C.P.A. 322, 324 (1933), requires a determination of whether the imported item is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 778 (quoting Willoughby, 21 C.C.P.A. 322 at 324). The second, set forth in United States v. Pompeo (“Pompeo”), 43 C.C.P.A. 9, 14 (1955), states that an “imported item dedicated solely for use with another article is a ‘part’ of that article within the meaning of the HTSUS.” Id. at 779 (citing Pompeo, 43 C.C.P.A. 9 at 13). Under either line cases, an imported item is not a part if it is “a separate and distinct commercial entity.” Bauerhin, 110 F. 3d at 779.
More recently, the Court of International Trade applied the Willoughby and Pompeo tests when it addressed the issue of whether two vase-shaped glass structures were classifiable as glassware in heading 7013, HTSUS, or as parts of lamps in heading 9405, HTSUS. Pomeroy Collection, Ltd., v. United States, 783 F. Supp. 2d 1257, No. 11-78 (Ct. Int’l Trade 2011). In applying Willoughby to the first article, the court ruled that “[w]hen imported, the claimed article is dedicated solely for use in such article, and, when applied to that use, the claimed part meets the Willoughby test.” Ibid, at 1261-1262. In Pomeroy, the court found that first article satisfied the Willoughby test because the hurricane lamp “clearly could not function without the first article in question” since the lamp relied upon the glass structure to hang upon. Id. at 1262. The court found that the second glass structure satisfied Pompeo because the evidence showed that the glass structure contained the flame and enabled the candles to remain lit and to prevent open flames. Thus, the court also found that the second article at issue also satisfied the Willoughby precedent because “when applied to that use” the lamp could not function without the glass structures. Id. In other words, to satisfy the Pompeo test, two prongs must be satisfied: (1) the article must be solely dedicated for use with the product it claimed to be a part of and, (2) when applied to that use, the article cannot function without the article at issue.
As applied to the case at hand, the MRK is “solely dedicated for use with the product it claimed to be a part of”, satisfying the first prong of the Pompeo test. The MRK, however, is not an article without which the watercraft cannot function, even after installed. The watercraft can still operate as designed and sold even if the MRK fails to function after installed. Consequently, the MRK fails to satisfy the second prong of the Pompeo test. Thus, we conclude that the MRK is not a part of the BRP personal watercraft for the purposes of classification under heading 8412. In this respect, the MRK is distinguished from the Feedback Cables that we classified under heading 8412 as a part of a marine waterjet propulsion system (CBP Ruling NY N113026 (July 26, 2010)) and from the Stainless Steel Distance Sleeves that we classified under heading 8412 as a part of a marine propulsion system (CBP Ruling NY N067095 (July 23, 2009)).
Therefore, the BRP Manual Reverse Kit is properly classified under heading 8479, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof”. Specifically, the MRK is to be classified under subheading 8479.89.94, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other: Other…”
HOLDING:
By application of GRI 1, the BRP Manual Reverse Kit is properly classified under heading 8479, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof”. Specifically, the MRK is to be classified under subheading 8479.89.94, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other: Other…” The general column one rate of duty, for merchandise classified under this subheading is 2.5%.
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