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HQ 950034


FEBRUARY 3 1992

CLA-2:CO:R:C:M 950034 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8704.10.50, 8708.99.50, HTSUS

Ms. Bridget Hamanaka
Ken Hamanaka Co., Inc.
5777 W. Century Blvd., Suite 760
Los Angeles, California 90045

RE: Off-Highway Dump Hauler; Cab Chassis And Dump Body Shipped Aboard One Vessel But Offloaded At Different Ports; Separate Shipments; Condition as Imported

Dear Ms. Hamanaka:

In a letter dated June 24, 1991, on behalf of Payhauler Corp., Batavia, Ill., you inquire as to the tariff classification of an articulated dump-hauler shipped in two parts. In a subsequent letter dated November 6, 1991, you indicate that the transaction which precipitated the ruling request has become current but that you wish the ruling to apply to prospective transactions as future importations are contemplated.

FACTS:

Both components will be shipped aboard the same vessel but will be offloaded at different ports. The first component consists of the cab with instruments, front frame portion, front axle and suspension, diesel engine, transmission, differential gear, plus electrical and hydraulic system. The value of this component is $94,581. The second component consists of the rear frame portion, dump body, hydraulic cylinders to raise and lower the body, two rear axles and suspension. The value of this component is $30,960. Both components are imported without tires.

The completed dump-hauler has an articulated chassis - the front and rear components are connected by a coupling device - with a drive shaft transmitting power from the engine through the transmission or gearbox to the rear drive axle. It has a gross vehicle weight of 41,838 kg. and a rear dump capacity of 25 metric tons.

ISSUE:

Whether the two components are classifiable together as a motor vehicle of heading 8704; if classifiable separately, whether the first component is an unfinished vehicle of heading 8704; whether either or both components are parts of heading 8708.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) states in part that any reference in a heading to an article includes 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.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the Customs Cooperation Council's official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the notes should always be consulted. See T.D. 89-80.

Regarding the first issue, under section 141.1(a) of the Customs Regulations (19 CFR 141.(a)), duties and the liability for their payment accrue upon imported merchandise on arrival of the importing vessel within a Customs port with the intent then and there to unlade. Merchandise which is not intended to be unladen at the first port of entry, but which is intended to be unladen at a second port of entry, is not considered imported merchandise when it arrives at the first port and a Customs entry will not be accepted there. 14 Cust. Bull. 1145, 1147, C.S.D. 80-235 (1980).

Here, the vessel in question arrives at a port to unlade one of the two sections of the dump truck and then arrives at a second port to unlade the second of the two sections of the dump truck. Separate importations occur. In this respect, the offloading of the separate truck components at different ports constitutes separate shipments. Each component, therefore, must be classified and assessed with duty separately.

Because they are to be classified separately, each component must be viewed in its condition as imported. Both the front and rear sections are incomplete or unfinished. We must therefore determine whether either section has the essential character of a complete dump-hauler so as to qualify as an unfinished motor vehicle of heading 8704. The factor or factors which determine essential character varies with the goods. The nature of a component, its weight or value, or its role in relation to the use of the complete article are often found to be relevant. The first component contains both the motive power source and the cab from which the vehicle is operated, as well as the transmission which reduces the speed between the crankshaft and the rear drive axle and the hydraulic braking system for the entire vehicle. This component represents over 75 percent of the value of the complete vehicle. We therefore conclude that this component contains the aggregate of distinctive component parts that imparts the essential character to a complete dump-hauler. It is therefore an unfinished motor vehicle of heading 8704. This conclusion is supported by relevant ENs at p. 1428, which indicate that motor vehicle chassis fitted with an engine and cab (cab chassis) are to be classifiable in heading 8704.

The second component consists essentially of the dumper body and rear drive axle. Although the dumper body is the actual cargo-carrying part of the dump-hauler, it is incapable of movement and has no independent dumping capability as the lifting cylinders are powered from the engine. Moreover, this component represents less than 24 percent of the value of a complete dump- hauler. We conclude that this component lacks the essential character of a motor vehicle of heading 8704. It is identifiable, however, as being suitable for use solely or principally with vehicles of heading 8704. Therefore, it is classifiable in heading 8708, parts and accessories of the motor vehicles of headings 8701 to 8705. Section XVI, Note 2(b), HTSUS.

HOLDING:

For the reasons stated, each component is considered imported separately. Each is to be classified and assessed with duty in its condition as imported.

Under the authority of GRI 2(a), the first component is classifiable in subheading 8704.10.50, HTSUS, other dumpers designed for off-highway use. The rate of duty under this provision has been temporarily increased to 25 percent ad valorem under subheading 9903.87.00.

Under the authority of GRI 1, the second component is classifiable in subheading 8708.99.50, HTSUS, other parts and accessories of the motor vehicles of headings 8701 to 8705. The rate of duty is 3.1 percent ad valorem. Products of Brazil classifiable in this provision are eligible for duty-free treatment under the Generalized System of Preferences (GSP), upon compliance with applicable law and Customs Regulations. Copies of these provisions are enclosed.

Sincerely,

John Durant, Director
Commercial Rulings Division


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