CLA-2 OT:RR:CTF:EMAIN H314740 NVF
U.S. Customs and Border Protection
Port of Laredo
109 Shiloh Drive
Suite 300
Laredo, TX 78045
Attn: John Royea, Import Specialist
RE: Application for Further Review of Protest No. 2304-18-100073; Classification of timing chain guide
Dear Port Director:
This letter is in response to the Application for Further Review (“AFR”) of Protest No. 2304-18-100073, timely filed on behalf of US Tsubaki Holdings, Inc. (“Tsubaki”) on May 14, 2018. The protest pertains to the classification and liquidation by U.S. Customs and Border Protection of timing chain guides under heading 8708 of the Harmonized Tariff Schedule of the United States (“HTSUS”), as parts of vehicles.
FACTS:
The items under consideration are described as various models of timing chain guides, used in automobile engines. The timing chain guide controls the path of the chain between the crankshaft and the camshafts within an engine. It ensures proper function of the timing chain, which in turn provides transmission of rotary power from the crankshaft to the camshafts, allowing the pistons to move in concert with the exhaust side valve and air intake valve.
Tsubaki entered three models of timing chain guides under heading 8409, HTSUS as parts of engines. CBP liquidated the entry under heading 8708, HTSUS as parts of vehicles.
ISSUE:
Is a timing chain guide classified as a part of an engine under heading 8409, HTSUS, or as a part of a motor vehicle under heading 8708, HTSUS?
LAW AND ANALYSIS:
We observe as an initial matter that the matters protested are protestable under 19 U.S.C. § 1514(a)(2) as decisions on classification and amount of duties chargeable. The subject merchandise was entered by Tsubaki on April 7, 2017. On April 27, 2018, CBP liquidated the entry. On May 14, 2018, Tsubaki timely filed a protest and AFR, 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 the protest 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 previous CBP decision concerning substantially similar merchandise. Specifically, Tsubaki alleges that classification under heading 8708 is in conflict with New York Ruling Letter (NY) N266741 (July 28, 2015).
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 subheadings under consideration are as follows:
8409 Parts suitable for use solely or principally with the engines of heading 8407 or 8408
8708 Parts and accessories of the motor vehicles of headings 8701 to 8705
Note 2(e) to Section XVII, which includes Chapter 87, states in pertinent part that:
The expressions “parts” and “parts and accessories” do not apply to the following articles, whether or not they are identifiable for the goods of this section: Machines or apparatus of headings 8401 to 8479, or parts thereof, other than the radiators for the articles of this section.
Therefore, before we can classify the timing chain guide under heading 8708, we must first determine whether it is classified under heading 8409 as a part of an engine.
The term “part” is not defined in the HTSUS. In the absence of a statutory definition, the courts have fashioned two distinct but reconcilable tests for determining whether a particular item qualifies as a part for tariff classification purposes. See Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997). Under the first test, articulated in United States v. Willoughby Camera Stores, 21 C.C.P.A. 322 (1933), an imported item qualifies as a part only if can be described as 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 779. Pursuant to the second test, set forth in United States v. Pompeo, 43 C.C.P.A. 9 (1955), a good is a “part” if it is “dedicated solely for use” with a particular article and, “when applied to that use…meets the Willoughby test.” Bauerhin, 110 F.3d at 779 (citing Pompeo, 43 C.C.P.A. at 14); Ludvig Svensson, Inc. v. United States, 63 F. Supp. 2d 1171, 1178 (Ct. Int'l Trade 1999) (holding that a purported part must satisfy both the Willoughby and Pompeo tests). An item is not a part if it is “a separate and distinct commercial entity.” Bauerhin, 110 F.3d at.779.
For tariff classification purposes, a spark-ignition internal combustion engine of heading 8407 consists only of certain components. See HQ 963386 (June 16, 1999) (accelerator and throttle cables are not part of an engine). The primary components of an engine of heading 8407 generally consist of: a cylinder, piston, connecting-rod, crankshaft, flywheel, inlet and exhaust valves. In order for an engine to function, the piston compresses a mixture of air and fuel in the cylinder and the fuel mixture ignites inside the cylinder. Thus, parts of engines of heading 8407 are limited to the components that directly contribute to the function of internal combustion.
In this case, the timing chain guide is an integral, constituent part of an engine of heading 8407. If the timing chain does not function properly, power cannot be transferred to the camshafts in the precise ratio that is required. Similarly, without the precise functioning of the timing chain, the engine valves will not open and close properly and the engine will fail. The timing chain guide holds the timing chain in place and in addition to enabling the timing chain to function, also prevents it from coming into direct contact the engine block or the engine head. Without the timing chain guide, the timing chain cannot function, and the engine cannot properly ignite the fuel mixture inside the cylinder. Therefore, the timing chain guide is a part of an engine of heading 8407.
In light of the foregoing, we find that the timing chain guide is classified under heading 8409 as a part of an engine and is therefore excluded from classification under heading 8708 by operation of Note 2(e) to Section XVII, supra.
HOLDING:
By application of GRIs 1 and 6, the timing chain is classified under heading 8409, HTSUS, specifically subheading 8409.91.50, HTSUS which provides for “Parts suitable for use solely or principally with the engines of heading 8407 or 8408: Other: Suitable for use solely or principally with spark-ignition internal combustion piston engines (including rotary engines): Other: Other.” The column one, general rate of duty is 2.5% ad valorem.
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/tata/hts/.
You are instructed to GRANT the protest.
You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division