OT:RR:CTF:EMAIN H333131 NVF
TARIFF NO: 8716.80.50
David Murphy
GDLSK LLP
599 Lexington Ave
36th Floor
New York, NY 10022
RE: Tariff Classification of a Mule Mobile Workshop
Dear Mr. Murphy:
This letter is in reply to your June 14, 2023 request for a binding ruling submitted on behalf of your client, HKC-USA, Inc., regarding the tariff classification of a Mule Mobile Workshop. In arriving at our determination, we have considered the information submitted in your ruling request, additional information submitted via email, and information provided in a conference held on August 10, 2023. We have also examined the sample provided by your office.
FACTS:
The mobile workshop is a hand truck with an attached fan, light-emitting diode (LED) light, power strip, and small tool organization tray. The fan is a 14 inch diameter 3-speed adjustable fan, the LED light pivots, and the power strip has three power outlets and 2 universal serial bus (USB) ports with a 10 foot cord. The toe-plate of the hand truck is 14 inches deep, sits 3.5 inches above the ground, and has a total load carrying capacity of 200 pounds. The toe-plate can be flipped up and locked against the frame when not in use.
ISSUE:
Whether the mobile workshop is classified as a fan of heading 8414, HTSUS or as a hand truck of heading 8716, HTSUS.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all classification purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
Goods that are prima facie classifiable under two or more headings are classifiable in accordance with GRI 3. GRI 3(b) states that composite goods or sets which cannot be classified by reference to GRI 3(a) are to be classified as if they consisted of the component that gives them their essential character.
It is well-established that a determination as to “essential character” is driven by the particular facts of the case at hand. See, e.g., Alcan Food Packaging (Shelbyville) v. United States, 771 F.3d 1364, 1366 (Fed. Cir. 2014) (“The ‘essential character’ of merchandise is a fact-intensive issue.”); see also EN VIII to GRI 3(b) (“The factor which determines essential character will vary as between different kinds of goods.”). That said, essential character has traditionally been understood as “that which is indispensable to the structure, core or condition of the article, i.e., what it is” and as “the most outstanding and distinctive characteristic of the article.” Structural Indus. v. United States, 360 F. Supp. 2d 1330, 1336 (Ct. Int’l Trade 2005).
The HTSUS headings under consideration are:
8414 Air or vacuum pumps, air or other gas compressors and fans; ventilating or recycling hoods incorporating a fan, whether or not fitted with filters; parts thereof.
8716 Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof.
In this case, the mobile workshop is a composite good comprised primarily of a hand truck with an attached fan. While the workshop also contains an LED light and a power strip, they are clearly secondary features by function, size, and cost. In addition, you do not put forth the argument that the LED light or power strip impart the essential character of the good. Therefore, we focus our analysis on whether the fan or the hand truck components impart the essential character of the mobile workshop.
The Court of International Trade has stated that essential character is “that which is indispensable to the structure, core or condition of the article, i.e., what it is” and as “the most outstanding and distinctive characteristic of the article.” Structural Indus. v. United States, 360 F. Supp. 2d at 1336. Under this guidance, we find that the hand truck provides the framework and overall shape of the mobile workshop, thus forming its “most outstanding and distinctive characteristic.” The shape of the mobile workshop is unmistakably that of a hand truck, and the only way that it has any mobility is due to the wheel components. Moving the mobile workshop around a room involves the same set of steps as using a hand truck. While the fan is a bulky and noticeable component of the mobile workshop, it is not the first thing one notices about the mobile workshop, nor is it the most significant. From virtually every visual angle, the mobile workshop strikes one as a hand truck with added features.
Additionally, the mobile workshop is rated to carry up to 200lbs, which is not a negligible weight, and thus can be used to carry bulky and/or heavy items that would be difficult to move without assistance. While the hand truck is somewhat limited in its ability to slide under loads due to its raised toe plate, its size and heft is such that the good still overwhelmingly presents as a hand truck. Furthermore, the fan cannot stand up on its own without the hand truck frame, thus rendering it useless as a fan without the hand truck components. Finally, the mobile workshop is being marketed for sale under the trademarked name, Mule Mobile Workshop, which indicates that your client wants consumers to think of it as an item that can be used to move heavy loads. This weighs in favor of the hand truck component imparting the essential character rather than the fan.
In your ruling request, you argue that the fan imparts the essential character of the mobile workshop. In support of this argument, you assert that the fan is the highest value component and dominates the appearance and functionality of the mobile workshop. You also contend that consumers would not purchase the item unless they wanted a mobile fan.
We find your assessment unconvincing. Cost data you submitted indicates that the value of the fan is nearly the same as that of the frame, wheels and fasteners used to make up the hand truck. While the fan is a noticeable aspect of the mobile workshop’s appearance, the hand truck forms the overall shape of the good and is larger than the fan. The mobile workshop is sizable due to its frame and wheels, and its footprint is considerably greater than that of a typical standing fan, therefore it is unlikely that a consumer would purchase this item to use primarily as a fan. Lastly, we note that in addition to providing mobility to the fan component, the hand truck component also provides mobility to the remainder of the mobile workshop, in addition to any other items that it must transport, such as paint containers, boxes, or other cargo.
In light of the foregoing, we conclude that the essential character of the mobile workshop is imparted by the hand truck component, and that the merchandise is therefore properly classified under heading 8716, HTSUS, as an other vehicle, not mechanically propelled. We observe that this is consistent with prior decisions where we classified substantially similar merchandise in heading 8716, HTSUS. NY N059817 (May 28, 2009) and NY N326840 (July 13, 2022).
HOLDING:
By application of GRIs 3(b) and 6, the mobile workshop is classified in subheading 8716.80.50, HTSUS which provides for “Trailers and semi-trailers; other vehicles, not mechanically propelled; and parts thereof: Other vehicles: Other.” The column one rate of duty is 3.2% ad valorum.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8716.80.50, 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 8716.80.50, 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, including information on exclusions and their effective dates, 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 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.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gregory Connor, Chief
Electronics, Machinery, Automotive,
and International Nomenclature Branch