HQ 950034
FEBRUARY 3 1992
CLA-2:CO:R:C:M 950034 JAS
Ms. Bridget Hamanaka
Ken Hamanaka Co., Inc.
5777 W. Century Blvd., Suite 760
Los Angeles, California 90045
RE: Off-Highway Dump Hauler; Cab Chassis And Dump Body
Shipped Aboard One Vessel But Offloaded At Different
Ports; Separate Shipments; Condition as Imported
Dear Ms. Hamanaka:
In a letter dated June 24, 1991, on behalf of Payhauler
Corp., Batavia, Ill., you inquire as to the tariff classification
of an articulated dump-hauler shipped in two parts. In a
subsequent letter dated November 6, 1991, you indicate that the
transaction which precipitated the ruling request has become
current but that you wish the ruling to apply to prospective
transactions as future importations are contemplated.
FACTS:
Both components will be shipped aboard the same vessel but
will be offloaded at different ports. The first component
consists of the cab with instruments, front frame portion, front
axle and suspension, diesel engine, transmission, differential
gear, plus electrical and hydraulic system. The value of this
component is $94,581. The second component consists of the rear
frame portion, dump body, hydraulic cylinders to raise and lower
the body, two rear axles and suspension. The value of this
component is $30,960. Both components are imported without
tires.
The completed dump-hauler has an articulated chassis - the
front and rear components are connected by a coupling device -
with a drive shaft transmitting power from the engine through
the transmission or gearbox to the rear drive axle. It has a
gross vehicle weight of 41,838 kg. and a rear dump capacity of 25
metric tons.
- 2 -
ISSUE:
Whether the two components are classifiable together as a
motor vehicle of heading 8704; if classifiable separately,
whether the first component is an unfinished vehicle of heading
8704; whether either or both components are parts of heading
8708.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part
that for legal purposes, classification shall be determined
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. GRI 2(a)
states in part that any reference in a heading to an article
includes 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.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the Customs Cooperation
Council's official interpretation of the Harmonized System.
While not legally binding on the contracting parties, and
therefore not dispositive, the ENs provide a commentary on the
scope of each heading of the Harmonized System and are thus
useful in ascertaining the classification of merchandise under
the System. Customs believes the notes should always be
consulted. See T.D. 89-80.
Regarding the first issue, under section 141.1(a) of the
Customs Regulations (19 CFR 141.(a)), duties and the liability
for their payment accrue upon imported merchandise on arrival of
the importing vessel within a Customs port with the intent then
and there to unlade. Merchandise which is not intended to be
unladen at the first port of entry, but which is intended to be
unladen at a second port of entry, is not considered imported
merchandise when it arrives at the first port and a Customs entry
will not be accepted there. 14 Cust. Bull. 1145, 1147, C.S.D.
80-235 (1980).
Here, the vessel in question arrives at a port to unlade one
of the two sections of the dump truck and then arrives at a
second port to unlade the second of the two sections of the dump
truck. Separate importations occur. In this respect, the
offloading of the separate truck components at different ports
constitutes separate shipments. Each component, therefore, must
be classified and assessed with duty separately.
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Because they are to be classified separately, each component
must be viewed in its condition as imported. Both the front and
rear sections are incomplete or unfinished. We must therefore
determine whether either section has the essential character of a
complete dump-hauler so as to qualify as an unfinished motor
vehicle of heading 8704. The factor or factors which determine
essential character varies with the goods. The nature of a
component, its weight or value, or its role in relation to the
use of the complete article are often found to be relevant. The
first component contains both the motive power source and the cab
from which the vehicle is operated, as well as the transmission
which reduces the speed between the crankshaft and the rear drive
axle and the hydraulic braking system for the entire vehicle.
This component represents over 75 percent of the value of the
complete vehicle. We therefore conclude that this component
contains the aggregate of distinctive component parts that
imparts the essential character to a complete dump-hauler. It is
therefore an unfinished motor vehicle of heading 8704. This
conclusion is supported by relevant ENs at p. 1428, which
indicate that motor vehicle chassis fitted with an engine and cab
(cab chassis) are to be classifiable in heading 8704.
The second component consists essentially of the dumper body
and rear drive axle. Although the dumper body is the actual
cargo-carrying part of the dump-hauler, it is incapable of
movement and has no independent dumping capability as the lifting
cylinders are powered from the engine. Moreover, this component
represents less than 24 percent of the value of a complete dump-
hauler. We conclude that this component lacks the essential
character of a motor vehicle of heading 8704. It is
identifiable, however, as being suitable for use solely or
principally with vehicles of heading 8704. Therefore, it is
classifiable in heading 8708, parts and accessories of the motor
vehicles of headings 8701 to 8705. Section XVI, Note 2(b),
HTSUS.
HOLDING:
For the reasons stated, each component is considered
imported separately. Each is to be classified and assessed with
duty in its condition as imported.
Under the authority of GRI 2(a), the first component is
classifiable in subheading 8704.10.50, HTSUS, other dumpers
designed for off-highway use. The rate of duty under this
provision has been temporarily increased to 25 percent ad valorem
under subheading 9903.87.00.
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Under the authority of GRI 1, the second component is
classifiable in subheading 8708.99.50, HTSUS, other parts and
accessories of the motor vehicles of headings 8701 to 8705. The
rate of duty is 3.1 percent ad valorem. Products of Brazil
classifiable in this provision are eligible for duty-free
treatment under the Generalized System of Preferences (GSP), upon
compliance with applicable law and Customs Regulations. Copies
of these provisions are enclosed.
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosure