CLA-2-84:RR:NC:1:102 H80285
Ms. Wendy L. Burns
Northern Customs Services
PO Box 331
Lewiston, New York 14092
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a dual fuel conversion system from Canada; Article 509
Dear Ms. Burns:
In your letter dated March 2, 2001 you requested a ruling on the status of a dual fuel conversion system from Canada under the NAFTA. You specifically inquire as to whether these conversion systems can be considered as “goods put up in sets for retail sale”. Descriptive information, including a detailed parts list, was submitted.
The information submitted identifies the dual fuel conversion system as the “Sequin System” and explains that it is for use in modifying gasoline fueled engines such that they may be alternatively run on propane. You indicate that the conversion system is comprised of all the components necessary to complete the modification, including a fuel injector block, an external fuel pump, a steel tank, fuel lines, and electronic controls. The fuel injector block is essentially an injector manifold incorporating a series of fuel injectors. The fuel injectors are solenoid operated valves designed to control the introduction of gaseous fuel, i.e., propane, into the cylinders of an internal combustion engine. The fuel injector block is assembled in Canada from fuel injectors originating in Germany.
The General Rules of Interpretation (GRI) govern classification under the Harmonized Tariff Schedule of the United States (HTSUS). Under GRI 3 the term "goods put up for retail sale" means goods which:
consist of two different articles which are, prima facie, classifiable in different headings;
consist of products or articles put up together to meet a particular need or carry out a specific activity; and
are put up in a manner suitable for sale directly to users without repacking.
Since the injector block is prima facie classifiable in HTSUS heading 8481, as a form of valve, and at least one other article, the fuel pump, is prima facie classifiable in HTSUS heading 8413, the subject merchandise satisfies criterion (a). The conversion system also satisfies criterion (b), because it "meet(s( a particular need or carr(ies(out a specific activity" by providing a user with all the components needed to effect modification of a gasoline engine for dual fuel use. Further, the articles satisfy criterion (c), because they are presumably put up in a manner suitable for sale directly to users without repacking." Therefore, the conversion system constitutes a "set" within the meaning of GRI 3, HTSUS.
GRI 3(b), HTSUS, provides in part that goods put up in sets for retail sale shall be classified as if they consisted of the component which gives them their essential character. We find that the fuel injector block is the component that gives the set its essential character because of its role in relation to the use of the other items of the set, such as the tank, fuel pump or electronic controls. Without the fuel injectors, propane cannot be introduced into the engine and the remaining components become meaningless to the set. As such, the set takes on the classification of the fuel injector block.
The applicable tariff provision for the duel fuel conversion system will be 8481.80.9005, HTSUS, which provides for solenoid valves. The general rate of duty will be 2 percent ad valorem.
To be eligible for preferential treatment under the NAFTA, goods must be "originating goods" within the rules of origin in General Note 12(b), HTSUS. General Note 12(b), HTSUS, states in pertinent part:
[f]or the purposes of this note, goods imported into the
customs territory of the United States are eligible for
the tariff treatment and quantitative limitations set
forth in the tariff schedule as "goods originating in the
territory of a NAFTA party" only if--
(i) they are goods wholly obtained or produced entirely
in the territory of Canada, Mexico, and/or the
United States; or
(ii) they have been transformed in the territory of
Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this
note, each of the non-originating materials
used in the production of such goods undergoes
a change in tariff classification described in
subdivisions (r), (s) and (t) of this note or
the rules set forth therein, or
(B) the goods otherwise satisfy the applicable
requirements of subdivisions (r), (s) and (t)
where no change in tariff classification is
required, and the goods satisfy all other
requirements of this note...
Since the fuel injectors are non-originating material, we must examine whether these components of the set undergo the required transformation in Canada pursuant to General Note 12(b)(ii)(A), HTSUS.
In this regard, the fuel injectors, the injector block, and the imported Sequin System are all classified under subheading 8481.80.9005, HTSUS. The rules applicable to goods of subheading 8481.80, HTSUS, are provided for in General Note 12(t)/84.239, HTSUS, which provides, in pertinent part, “(a) change to subheadings 8481.10 through 8481.80 from any other heading”.
The merchandise does not qualify for preferential treatment under the NAFTA because the non-originating fuel injectors do not undergo the required transformation.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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 Kenneth T. Brock at 212-637-7026.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division