CLA-2-84:OT:RR:NC:1:104
Mr. Michael S. Crowley
Purchasing Manager-Strategic
Flexible Steel Lacing Company
2525 Wisconsin Ave.
Downers Grove, IL 60615
RE: The tariff classification and country of origin marking of components of a belt cutter from Poland
Dear Mr. Crowley:
In your letter dated September 19, 2008 you requested a tariff classification ruling.
The goods in question are components of conveyor belt cutters, i.e., Model ITEC-170/cutting capacity of up to 25mm thick belting and Model ITEC-220/cutting capacity of up to 50mm thick belting. While similar in design, the two models differ in size in order to accommodate different belt thicknesses. The components are as follows:
Article
Composition
Country of Origin
Housing
Stainless Steel
Poland
Bearings
Steel
Poland
Cutting Blade
Steel
Netherlands
Gear reducer
Steel
Italy
Flexible coupling
Steel
Italy
The housing, bearings, gear reducer and cutting blade will be assembled in Poland into an article which you refer to as a belt cutter “sub-assembly”. The flexible coupling is supplied with the sub-assembly but not installed prior to import. It is supplied in a separate plastic bag or box.
Subsequent to importation into the United States, an electric power unit will be installed on the sub-assembly to complete the model for use as an electric belt cutter. The sub-assembly cannot function without the power unit. During the tool assembly in the United States, the chuck is removed from a drill (the power unit) and discarded. Make and type of drill varies according to the model being assembled. User’s manual indicates that Model ITEC-170 incorporates a Hitachi, DV16 V drill (electric power unit) and Model ITEC-220 incorporates a Metabo, SBE 750 drill (electric power unit). However, no country of origin is indicated for the drills. Removing the chuck renders the drill useless as a hand held power drill. It is capable of use only as a power unit for the cutter. It is the power unit that incorporates the self-contained electric motor. During installation of the power unit, the flexible coupling is connected to the power unit and then connected internally to the cutting unit. The flexible coupling acts as a flexible shaft. Once the belt cutter is fully assembled, product identification and safety warning labels will be applied and the complete belt cutter is packaged for resale.
A completed belt cutter is not designed or intended to be bolted to a stationary work table. It is designed to be carried by hand, i.e., brought to the work, and moved by hand during all cutting operations. The device does not cut metal.
The cutting blade is detached from the belt cutter when the blade wears out. Replacement cutting blades are available for installation into the belt cutter. In your supplemental email message received by this office on October 17, 2008, you indicate that the cutter blades are made of M2 High Speed Steel with a cutting part containing by weight (quoted in minimum-maximum range) 3.75-4.50 percent of chromium, 5.50-6.75 percent of tungsten and 1.75-2.20 percent of vanadium. You also stated that you will be asking your supplier in the Netherlands to label the replacement blades as such when they are purchased for replacement purposes.
You have suggested that the correct classification for the goods is subheading 8479.90.9496, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Parts: Other: Other. Classification in said subheading is precluded as the goods are not parts of a machine or mechanical appliance which is itself classified in heading 8479, HTSUS. In addition, it is noted that heading 8479 is a “basket” provision. All other possible classifications must be exhausted before an item can be classified in heading 8479, HTSUS. General Rule of Interpretation 3(a) states that “the heading which provides the most specific description shall be preferred to headings providing a more general description.” In order to be classified in heading 8479, HTSUS, an article must not be classifiable in any specific headings.
In view of the above, consideration was given toward classifying the goods in heading 8467, HTSUS, which provides for Tools for working in the hand, pneumatic, hydraulic or with self-contained electric or non-electric motor. As defined, in pertinent part, in the Explanatory Notes (“ENs”) to heading 8467, HTSUS,
The expression “tools for working in the hand” means tools designed to be held in the hand during use, and also heavier tools (such as earth rammers) which are portable, that is, which can be lifted and moved by hand by the user, in particular while work is in progress, and which are also designed to be controlled and directed by hand during operation.
While the complete belt cutter is a device designed essentially “for working in the hand”, it does not feature a self-contained electric or non-electric motor. The ENs to heading 8467, HTSUS, provide guidelines on the treatment of combinations consisting of a tool holder with one or more tools and a separate electric motor with a flexible shaft. The exclusionary language found in the cited ENs reads as follows:
The heading further excludes combinations consisting of a tool holder with one or more tools, and a separate spark-ignition internal combustion piston engine or a separate electric motor with a flexible shaft; the tool holder is classified in heading 84.66, the motor with its flexible shaft in heading 84.07 or 85.01, as the case may be, and the tools in their own appropriate headings.
The applicable subheading for the subassembly, i.e., the toolholder consisting of the housing, bearings and gear reducer, will be 8466.10.0175, HTSUS, which provides for Parts and accessories suitable for use solely or principally with the machines of headings 8456 to 8465, including work or tool holders, self-opening dieheads, dividing heads and other special attachments for machine tools; tool holders for any type of tool for working in the hand: Tool holders and self-opening dieheads: Other. The rate of duty will be 3.9 percent ad valorem.
The applicable subheading for the flexible coupling will be 8483.10.5000, HTSUS, which provides for other transmission shafts and cranks. The rate of duty will be free.
The applicable subheading for the cutting blades, whether imported assembled as described above or as replacement blades, will be 8207.90.3085, HTSUS, which provides for Interchangeable tools for handtools, whether or not power-operated, or for machine-tools (for example, for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screwdriving), including dies for drawing or extruding metal, and rock drilling or earth boring tools; base metal parts thereof: Other interchangeable tools, and parts thereof: Other: Cutting tools with cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium…Other. The rate of duty will be 5 percent ad valorem.
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 World Wide Web at http://www.usitc.gov/tata/hts/.
In your letter, you also requested a country of origin marking ruling on the imported goods. A marked sample was not submitted with your letter for review.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See, 19 CFR 134.35.
The "ultimate purchaser" is defined generally as the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d). If an imported article will be used in domestic manufacture, the manufacturer may be the "ultimate purchaser" if he subjects the imported article to a process which results in a substantial transformation of the article. However, if the manufacturing process is a minor one which leaves the identity of the imported article intact, the consumer or user of the article, who obtains the article after the processing, will be regarded as the "ultimate purchaser." 19 CFR 134.1(d)(1) and (2). The issue of whether a substantial transformation occurs is determined on a case-by- case basis. The assembly operations performed in the United States are relatively simple (e.g., removing chuck, attaching flexible coupling, etc.) as opposed to complex (machined, welded, heat treated, etc.). While the operations require skill and time, the sub-assembly remains unchanged after the assembly operation. The imported subassembly does not undergo changes in name, character or use. The imported subassembly is the most costly component and largest component used in the completed belt cutter and remains visible after assembly. The subassembly is not substantially transformed when merely assembled with the power unit and the flexible coupling. The subassembly retains its original shape, form and chemical composition after the US assembly. The subassembly and the flexible coupling imported into the U.S. and assembled with the power unit into a finished belt cutter are not substantially transformed into new and different articles. Accordingly, neither article is excepted from country of origin marking.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
Section 134.43 (e), Customs Regulations (19 CFR 134.43 (e)), requires that where an article is produced as a result of an assembly operation and the country of origin of such article is determined under this chapter to be the country in which the article was finally assembled, such article may be marked, as appropriate, in a manner such as the following: (1) Assembled in (country of final assembly): (2) Assembled in (country of final assembly) from components of (name of country or countries of origin of all components); or (3) Made in, or product of, (country of final assembly).
Furthermore, as a result of 19 CFR 134.43 (e), Customs has determined that the terms "Made in," “Product of,” and "Assembled in" are words of similar meaning and that it is not acceptable to use "Made in," "Product of," or words of similar meaning, along with the words "Assembled in" in a single country of origin statement on articles of foreign origin imported into the United States.
Each subassembly and flexible coupling is required to be conspicuously, legibly and permanently marked with its country of origin as follows: (1) the subassembly is to be marked “Assembled in Poland from components of Italy, the Netherlands and Poland”, (2) the flexible coupling is to be marked “Made in Italy”. In addition, the blades are to be marked “Made in the Netherlands”.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patricia O’Donnell at (646) 733-3011.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division