CLA-2-84:OT:RR:NC:N1:103
Lisa Murrin
Expeditors Tradewin
795 Jubilee Drive
Peabody, MA 01969
RE: The tariff classification of the Atlas 1D and Atlas 2D warehouse racking system from Belgium
Dear Ms. Murrin:
In your letter dated May 9, 2022, you requested a tariff classification ruling on behalf of your client, Stow Group USA.
The first item under consideration is the Atlas 1D warehouse pallet racking system. The Atlas 1D system is imported unassembled but includes all of the separate components necessary to assemble a complete pallet racking system. Each system consists of a steel racking structure, a pallet shuttle, and remote. Operating within the racking structure is a remote controlled Atlas 1D pallet shuttle that lifts and moves pallets on dedicated channels within the storage lanes of the racking structure. The Atlas 1D pallet shuttle is battery-powered, wheeled, and moves in only one direction (front to rear). Each shuttle features a platform that can be raised or lowered, allowing the shuttle to lift, load, retrieve, and transport a palletized load within the racking structure. The Atlas 1D warehouse pallet racking system is a semi-automated solution, requiring a worker to operate each shuttle using a remote controller. In addition, a forklift is used to move the shuttle among the lanes of the racking structure before a pallet can be retrieved or loaded.
The second item under consideration is the Atlas 2D warehouse pallet racking system. The Atlas 2D system is imported unassembled but includes all of the separate components necessary to assemble a complete pallet racking system. Each system consists of a steel racking structure, a pallet shuttle, and electrical cabinet. Within the electrical cabinet is the Shuttle Traffic Control, a programmable logic controller that controls each Atlas 2D pallet shuttle. The Atlas 2D warehouse pallet racking system functions as an automated storage system, where the Atlas 2D pallet shuttle never leaves the racking structure. Each Atlas 2D pallet shuttle is wheeled and battery-powered, capable of moving in two directions (front to rear and left to right). The Atlas 2D pallet shuttle lifts and moves pallets along dedicated channels within the storage lanes of the racking structure.
You suggest both the Atlas 1D warehouse pallet racking system and the Atlas 2D warehouse pallet racking system are classified as industrial robots under subheading 8428.70.0000, Harmonized Tariff Schedule of the United States (“HTSUS”). While we agree each complete system is classified in heading 8428, HTSUS, we disagree on the subheading. As imported, each racking system is not an industrial robot, but an entire system dedicated to retrieving, lifting, and transporting pallets.
Due to the size of both the Atlas 1D and 2D warehouse pallet racking systems, you state each system is shipped unassembled in multiple containers but in the same shipment. Upon importation, the parts are assembled to form the Atlas 1D pallet racking system or the Atlas 2D pallet racking system.
Classification of goods in the tariff schedule are governed by the General Rules of Interpretation (GRIs). GRI 2(a) states “any reference in a heading to an article shall be taken to include 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. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.” Explanatory Note 2(a)(V) to the GRIs further states that “the second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.”
In accordance with GRI 2(a), the applicable subheading for the Atlas 1D warehouse pallet racking system and the Atlas 2D warehouse pallet racking system will be 8428.90.0390, HTSUS, which provides for “Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics): Other machinery: Other.” The rate of duty will be free.
Merchandise is to be classified according to its condition as imported. Should the requirements of 19 CFR §141.51 and 19 CFR §141.58 not be met, each component of the system would be separately classified in its own respective heading.
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 the World Wide Web at https://hts.usitc.gov/current.
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 Paul Huang at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division