CLA-2 OT:RR:CTF:EMAIN H308870 PF
Port of Chicago
U.S. Customs and Border Protection
Department of Homeland Security
5600 Pearl Street
Rosemont, IL 60018
Attn: Mark R. Badger, Import Specialist
Re: Protest and Application for Further Review No: 3901-19-104467; Classification and applicability of Section 301 trade remedies of cast iron counterweights from China
Dear Port Director:
The following is our decision as to Protest and Application for Further Review No. 3901-19-104467, which was filed on December 11, 2019 on behalf of Norca Engineered Products (“protestant” or “NEP”). The protest pertains the classification of cast iron counterweights (“counterweights”) and CBP’s determination on the applicability of the exclusion annotated under Chapter 99 U.S. Note 20(q)(90) under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The subject merchandise was entered by protestant on March 24, 2019. On June 14, 2019, CBP at the Port of Chicago liquidated the entry under subheading 8431.49.9044, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). On December 11, 2019, protestant filed a protest and AFR alleging that the subject merchandise is properly classified under subheading 8431.49.9095, HTSUSA. NEP further protests the liquidation of the entry under subheading 9903.88.01, HTSUS, and the 25 percent duty assessment under the Section 301 Trade Remedy. NEP claims that the subject counterweights should be liquidated under subheading 9903.88.14, HTSUS, citing the exclusion annotated under Chapter 99 U.S. Note 20(q)(90) for “Counterweight castings of iron or steel designed for use on excavators and wheel loaders (described in statistical reporting number 8431.49.9095)”
.
FACTS:
The merchandise at issue in this protest is a grey cast iron counterweight that is installed on the back of mini excavators to balance the weight and prevent the excavator from tipping over. According to the protestant, “[w]hile counterweights are used for other types of machines, this counterweight is designed and imported specifically for a mini excavator, and is designed to exact specifications of the requesting customer.” The counterweights at issue are designed for several different models of the Doosan Bobcat Mini Excavators. The counterweights attach to the lower aft portion of the machine acting as a counter-balance for the boom arm bucket equipment on the forward part of the machine.
The protestant provided the following picture of the Doosan Bobcat Mini Excavator (along with the counterweight), which is a depiction of a backhoe excavator:
ISSUES:
Whether the counterweights are described by statistical reporting number 8431.49.9044, HTSUSA, or statistical reporting number 8431.49.9095, HTSUSA.
Whether the counterweights satisfy an exclusion provision pertaining to products described by statistical reporting number 8431.49.9095, HTSUSA and are eligible to claim the secondary tariff number of subheadings 9903.88.14, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a) (2) as decisions on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)). Further Review of Protests No. 3004-17-100339 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of CBP or his designee, or with a decision made by CBP with respect to the same or substantially similar merchandise.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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 may then be applied.
Because the instant classification question occurs beyond the four-digit heading level, GRI 6 is implicated. GRI 6 states:
For legal purposes, the classification of goods in the subheading 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, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires. The HTSUSA provisions under consideration are as follows:
8431 Parts suitable for use solely or principally with the machinery of headings 8425 to 8430:
Of machinery of heading 8426, 8429 or 8430:
8431.49 Other:
8431.49.90 Other.
Other:
* * *
Parts of backhoes, shovels, clamshells, and draglines:
Other:
8431.49.9044 Other.
* * *
Other:
Other:
Other:
8431.49.9095 Other.
Note 2 to Section XVI, HTSUS, provides, in pertinent part, as follows:
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 the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
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;
Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517….
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS 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 General EN to Note 2 to Section XVI, HTSUS, provides, in pertinent part:
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)
. . .
There is no dispute that the excavators for which the counterweights are designed are classified in subheading 8429.52.10, HTSUS, which provides for “Self-propelled bulldozers, angledozers, graders, levelers, scrapers, mechanical shovels, excavators, shovel loaders, tamping machines and road rollers: Mechanical shovels, excavators and shovel loaders: Machinery with a 360° revolving superstructure: Backhoes, shovels, clamshells and draglines.” There is also no dispute that the counterweights are classified in subheading 8431.49.90, HTSUS, which provides for “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: Of machinery of heading 8426, 8429 or 8430: Other: Other.”
The issue in this case is the classification of the counterweights under the ten-digit statistical suffixes, and specifically whether they are described by statistical reporting numbers 8431.49.9044, HTSUSA or 8431.49.9095, HTSUSA. Counterweights are generally installed on the back of machinery to balance the weight and prevent the machinery from tipping over. They are designed for several different models of the Doosan Bobcat Mini excavators. The picture provided by protestant, when describing the Doosan Bobcat Mini excavator, is a depiction of a backhoe excavator. As a result, the counterweights, which are a part of the Doosan Bobcat Mini excavator, are specifically described by statistical reporting number 8431.49.9044, HTSUSA, which provides for “[p]arts of backhoes, shovels, clamshells and draglines.”
In addition, the protestant contends that New York Ruling (NY) K83392, dated March 4, 2004, where CBP classified a fuel tank strainer for a mini excavator under statistical reporting number 8431.49.9040, HTSUSA (which is now 8431.49.9044, HTSUSA) is not applicable to their merchandise. However, while NY K83392 may pertain to different merchandise than that at issue here, it nevertheless stands for the proposition that parts of certain excavators (i.e. backhoes, shovels, clamshells, and draglines) are described by statistical reporting number 8431.49.9044. CBP has also found that certain other excavator parts are described by statistical reporting number 8431.49.9040, HTSUSA (which is now 8431.49.9044, HTSUS). See NY K82122, dated January 12, 2004 (classifying a fuel tank for a hydraulic excavator under statistical reporting number 8431.49.9094, HTSUSA), NY J87356, dated July 30, 2003 (classifying a radiator shroud for a backhoe excavator under statistical reporting number 8431.49.9040, HTSUSA), NY H81336, dated June 6, 2001 (classifying various parts of backhoe excavators under statistical reporting number 8431.49.9040, HTSUSA), and NY E81922, dated May 19, 1999 (classifying a cast steel point for a hydraulic backhoe excavator bucket under statistical reporting number 8431.49.9040, HTSUSA). As the counterweights are specifically designed for mini excavators and the mini-excavator in this case is a backhoe excavator, they are indeed described by statistical reporting number 8431.49.9044, HTSUSA, which is superior text to statistical reporting number 8431.49.9095, HTSUSA.
The protestant alleges that the counterweights fall under the scope of the exclusion set forth in U.S. Note 20(q)(90) under subheading 9903.88.14, HTSUS: “Counterweight castings of iron or steel designed for use on excavators and wheel loaders (described in statistical reporting number 8431.49.9095).” However, leaving aside the issue of whether the instant counterweights fall under the scope of the term “counterweight castings”, they fall outside of the scope of the aforementioned exclusion because they are not described by statistical reporting number 8431.49.9095, HTSUSA. Consequently, they are not afforded the exclusion under subheading 9903.88.14, HTSUS, and they are properly classified under subheading 9903.88.01, HTSUS.
HOLDING:
By application of GRIs 1 (Note 2(b) to Section XVI) and 6, the counterweights are classified under heading 8431, HTSUS, and specifically described by statistical reporting number 8431.49.9044, HTSUSA, which provides for “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: Of machinery of heading 8426, 8429, or 8430: Other: Other: Other: Parts of backhoes, shovels, clamshells and draglines: Other: Other.” The general, column one rate of duty is Free.
Products of China classified under subheading 8431.49.90, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8431.49.90, HTSUS, listed above. See U.S. Note 20 to Subchapter III, Chapter 99, HTSUS.
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 Section 301 trade remedy, 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 the internet at www.usitc.gov/tata/hts/.
You are instructed to DENY the Protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division