CLA-2 RR:CR:GC 961431 JAS
Port Director of Customs
610 S. Canal Street
Chicago, IL 60607-4523
RE: PRD 3901-97-102069; Internal Combustion Engines for Use With Agricultural Machinery; Internal Combustion Piston Engines; Heading 9817.00.60, Parts to be Used in Agricultural
Machines and Implements, Actual Use; Sections 10.112, 10.131-10.139, Customs Regulations; Chapter 98, U.S. Note 1
Dear Port Director:
This is our decision on Protest 3901-97-102069, filed against your classification under the Harmonized Tariff Schedule of the United States (HTSUS), of certain internal combustion piston type engines. The entries under protest were liquidated on May 9, 1997, and this protest timely filed on August 7, 1997.
The Customs Form 6445 identifies the M65M13 Engine Assembly and the M65M08 Engine EP0408. These are internal combustion piston engines described in the commercial invoice as being for use with agricultural tractors and other agricultural machinery and implements. They were consigned and delivered to a production facility that manufactures agricultural machinery.
The engines were entered under a provision in HTS heading 8408 for internal combustion piston engines. The entries were liquidated, dutiable, under the entered provision. The protestant now maintains the goods should have been entered free of duty under HTS heading 9817.00.60, a provision for parts to be used in articles provided for in headings 8432, 8433, 8434, and 8436. These provisions describe agricultural or horticultural machinery of various kinds.
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The provisions under consideration are as follows:
8408 Compression-ignition internal combustion piston engines (diesel or semi-diesel engines):
8408.20 Engines of a kind used for the propulsion of vehicles of chapter 87:
8408.90 Other engines:
8408.90.10 To be installed in agricultural or horticultural machinery or equipment
* * * *
9817.00.60 Parts to be used in articles provided for in headings 8432, 8433, 8434 and 8436...
Whether the engines under protest are eligible for free entry under heading 9817.00.60.
LAW AND ANALYSIS:
Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.
Heading 9817.00.60, HTSUS, is a duty-free provision for parts of machinery, equipment and implements to be used for agricultural or horticultural purposes. The provisions of Chapter 98 are not subject to the rule of relative specificity in GRI 3(a). Any article described in a provision of Chapter 98 is classifiable in that provision if the conditions and requirements
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thereof and of any applicable regulations are met. See Chapter 98, U.S. Note 1, HTSUS. The internal combustion engines in issue are not within the exclusions from heading 9817.00.60 listed in Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. Their stated use is in a legitimate agricultural or horticultural pursuit. However, there must be compliance with the actual use regulations in sections 10.131 through and including 10.139 of the Customs Regulations (19 CFR 10.131-10.139). Section 10.133(a), Customs Regulations, requires as one condition of free entry under an actual use provision that such use be intended at the time of importation. Section 10.134, Customs Regulations, states, in relevant part, that the showing of intent as to actual use shall be made by filing with the consumption entry a declaration of intended use or by entering the proper subheading of an HTS actual use provision on the entry form.
An examination of the entries under protest indicates that the appropriate subheading which would have indicated intent as to actual use is 8408.90.10, HTSUS, whereas the entry summary indicates the engines were entered under subheading 8408.90.90, HTSUS, as other compression-ignition internal combustion piston engines. A declaration of intent was filed, but it is dated February 26, 1997, twenty one days after the February 5, 1997, date of the entry summary. This is insufficient proof of the required intent at the time of importation. However, section 10.112, Customs Regulations, states, in relevant part, that any free entry or a reduced duty document, form, or statement required to be filed in connection with the entry may be filed at any time prior to liquidation of the entry or, if the entry was liquidated, before the liquidation becomes final. Therefore, protestant’s failure to file the declaration required by section 10.134, Customs Regulations, with the entries is not fatal to the claim under heading 9817.00.60, HTSUS, provided there is compliance with the actual use requirements in section 10.133, Customs Regulations.
We note that the February 26, 1997, declaration specifically refers to engines used in windrowers classifiable in subheading 8433.30.00, HTSUS, in combines classifiable in subheading 8433.51.00, HTSUS, and in bale wagons classifiable in subheading 8716.20.00, HTSUS. Thus, a claim for duty-free entry under heading 9817.00.60 cannot be sustained for engines to be used in bale wagons of heading 8716, as this heading is not among those listed in heading 9817.00.60.
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Under the authority of GRI 1, the compression-ignition internal combustion piston engines in issue to be used in windrowers and in combines are provided for in heading 9817. They are classifiable in subheading 9817.00.60, HTSUS. The protest should be ALLOWED with respect to these engines, upon satisfactory compliance with the actual use requirements in section 10.133, Customs Regulations.
The compression-ignition internal combustion piston engines in issue to be used in bale wagons are provided for in heading 8408. They are classifiable in subheading 8408.20.90, HTSUS. Since the rate of duty under this provision is higher than the liquidated rate, the protest should be DENIED as to these engines.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs 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 Regulations and Rulings will make the
decision available to Customs personnel, and to the public on
the Customs Home Page on the World Wide Web at www.customs. ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
John Durant, Director
Commercial Rulings Division