CLA-2 OT:RR:CTF:EMAIN HQ H301947 TPB
Director Lisa Wallace
Automotive & Aerospace Center for Excellence and Expertise
477 Michigan Ave., Room 281
Detroit, MI 48226
Attn: Louis Smith, Senior Import Specialist
Re: Request for internal advice regarding the classification of certain light-emitting diode (LED) tail lights for trucks
Dear Director,
This is in response to your request for Internal Advice (“IA”), dated October 3, 2018, made pursuant to § 177.11 of Title 19 of the Code of Federal Regulations (19 CFR 177.11). The IA was made at the bequest of Neville Peterson LLC (“Counsel”), representing Yourtruckstopshop Inc., d/b/a Trux Accessories of Laval, Quebec (“Trux”). The IA concerns the tariff classification of certain light-emitting diode (LED) tail lights for trucks under the Harmonized Tariff System of the United States (“HTSUS”).
FACTS:
The articles at issue are described as various light-emitting diode (LED) tail lights for trucks. The lights all use LEDs to generate light when an electrical current is directed through a semiconducting material. The lamps are covered by a colored plastic lens, conforming to standards of the National Highway Traffic Safety Administration (NHTSA). When current is directed through them, they generate a colored safety light which makes a truck visible to surrounding drivers and pedestrians at night or in dark or low-visibility conditions. The lights also contain a switch which can be activated to cause the lights to turn on and off, thus providing a blinking or flashing signal, for example, when the driver intends to make a turn, or if the vehicle is operating under "flasher" safety lights. They are designed exclusively for use on trucks.
Trux entered the goods under Harmonized Tariff Schedule (HTS) subheading 8512.20.20, a duty-free provision for “Electrical lighting or signaling equipment (excluding articles of heading 8539), windshield wipers, defrosters and demisters, of a kind used for cycles remoted vehicles; parts thereof: Other lighting or visual signaling equipment: lighting equipment”. Upon further examination, CBP took the position that the products are more properly classified under HTS subheading 8512.20.40, a competing provision for “Visual signaling equipment”, subject to duty at the rate of 2.5% ad valorem.
Counsel for Trux now argues that neither of the previous subheadings were correct and the products at issue are properly classified under heading 85.39, which provides, inter alia, for LED lamps.
ISSUE:
Are the LED tail lights at issue classified under heading 8512, which provides for electrical lighting or signaling equipment (excluding articles of heading 8539), of a kind used for motor vehicles; or heading 8539, which provides for light-emitting diode (LED) lamps?
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 are as follows:
8512 Electrical lighting or signaling equipment (excluding articles of heading 8539), windshield wipers, defrosters and demisters, of a kind used for cycles or motor vehicles; parts thereof:
8512.20 Other lighting or visual signaling equipment:
8512.20.20 Lighting equipment
8512.20.40 Visual signaling equipment
* * *
8539 Electrical filament or discharge lamps, including sealed beam lamp units and ultraviolet or infrared lamps; arc lamps; light-emitting diode (LED) lamps; parts thereof:
8539.50.00 Light-emitting diode (LED) lamps
* * *
As counsel notes in the submission, on January 1, 2017, a new provision for LED lamps was created in heading 85.39, HTSUS. Prior to that date, heading 85.39 provided for “Electrical filament or discharge lamps, including sealed beam lamp units and ultraviolet or infrared lamps; arc lamps; parts thereof”. Because lamps that utilized LEDs as their light source (a recent technological development as compared to incandescent lamps) were not described by the text of heading 85.39 and because that heading does not contain a residual subheading, those devices were classified under heading 85.43, HTSUS, as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, Other, Other”. See, for example, HQ H024869, dated February 12, 2014 and HQ H237734, dated August 6, 2014. Consequentially, the matter was addressed in the Harmonized System (HS) Convention for the 2017 amendments.
Counsel argues that the legal texts of the HS preclude classification of the products at issue under heading 85.12, HTSUS. He notes that heading 85.12 covers “Electrical lighting or signaling equipment (excluding articles of heading 8539)” (emphasis added). As such, they must be classified under heading 85.39, HTSUS, subheading 8539.50, which provides for “Light-emitting diode (LED) lamps”.
We disagree with Counsel’s conclusion that the goods in question are articles of heading 85.39. Heading 85.39 provides for “lamps”, an international term which may also be understood as “bulbs” in the U.S. The heading covers, inter alia, replacement incandescent or filament bulbs, as well as the next generation of these products, LED bulbs. The LED tail lights at issue are beyond the scope of the products intended for this heading.
The Harmonized System (HS) does not provide a definition for “Light-emitting diode (LED) lamps” in the legal texts. A tariff term that is not defined in the HTSUS is construed in accordance with its common and commercial meaning. Nippon Kogasku (USA), Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982). As such, we look to the common definition of the term. The common dictionary definition of a lamp (noun) is a “vessel containing oil, which is burnt at a wick, for the purpose of illumination. Now also a vessel of glass or some similar material, enclosing the source of illumination, whether a candle, oil, gas-jet, or incandescent wire. Often preceded by some defining word, as arc lamp, Argand lamp, Davy lamp, electric lamp, gas lamp, spirit lamp, sun lamp, Vesta lamp”. (Oxford English Dictionary, online, www.oed.com, accessed October 15, 2019). In this case, we could also precede it with the term “LED” (light-emitting diode).
Our understanding of the scope of heading 85.39, HTSUS is supported by the Explanatory Notes (ENs) to heading 85.39. In understanding the language of the HTSUS, the ENs of the Harmonized Commodity Description and Coding System, constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). In this case, the ENs to heading 85.39 state that LED lamps “consist of a glass or plastic envelope, one or more light-emitting diodes (LED), circuitry to rectify AC power and to convert voltage to a level useable by the LEDs, and a base (e.g., screw, bayonet or bi-pin type) for fixing in the lamp-holder. Certain lamps may also contain a heat sink. These lamps are of various shapes, e.g., spherical (with or without a neck); pear or onion shaped; flame shaped; tubular (straight or curved); special fancy shapes for illuminations, decorations, Christmas trees, etc.”
This position is further supported by the subheading structure of heading 85.39. Subheadings 8539.50.0010 – 40, HTSUS, provide for LED lamps of a type specified in statistical note 8 to Chapter 85. Statistical note 8 (a) – (d) to Chapter 85 states that for statistical reporting purposes under subheading 8539.50.00, the types of light-emitting (LED) lamps are defined by American National Standards Institute (ANSI) for Electric Lamps of various ANSI shapes, A, B, BT, C, CA, etc. These ANSI lamps are what we would refer to as “bulbs”. Subheading 8539.50.0050 provides for LED lamps with a straight linear tube and subheading 8539.50.0090 is a residual subheading for LED lamps of other shapes.
The products in question are finished LED tail lights for trucks. The LEDs are covered by a lens specifically colored to meet NHTSA standards, they are shaped for use with a vehicle and connect to the vehicle’s power by virtue of a wire harness. They are marketed and sold through the auto accessory market. They are beyond the scope of the goods of heading 85.39 and thus are not precluded from classification under heading 85.12, which provides for electrical lighting or signaling equipment of a kind used for cycles or motor vehicles.
HOLDING:
For the foregoing reasons, by application of GRIs 1 and 6, the subject LED tail lights for trucks are classified in subheading 8512.20.20, HTSUS, which provides for Electrical lighting or signaling equipment (excluding articles of heading 8539), other lighting or visual signaling equipment: lighting equipment. The rate of duty will be Free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8512.20.20, HTSUS, unless specifically excluded, are subject to an additional 25-percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8512.20.20, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 World Wide Web at https://hts.usitc.gov/current.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division