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HQ 950312


December 31, 1991

CLA-2 CO:R:C:M 950312 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9406.00.40

District Director
U.S. Customs Service
Main and Stebbins Streets, P.O. Building
P.O. Box 1490
St. Albans, Vermont 05478

RE: Protest No. 020191100273; prefabricated home package; GRI 2(a); Note 4 to Chapter 94; EN 94.06; essential character

Dear District Director:

This is in response to the Application for Further Review of Protest No. 020191100273, dated March 26, 1991, which pertains to the classification of a prefabricated home package under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise under consideration is a prefabricated home package. Customs personnel interviewed the protestant, Linwood Homes Ltd., in August 1991, and ascertained that, normally, prefabricated home packages are shipped in two truckloads. Usually, the first shipment contains the material for the main building structure, and the second shipment contains builders' fittings such as doors, windows and similar products.

Upon importation into the U.S., you liquidated the prefabricated home package under subheading 9406.00.40, HTSUS, as "Prefabricated buildings...Of wood." The protestant contends that the articles entered into the U.S. do not represent a complete prefabricated home and, therefore, the items should be entered and classified separately. A breakdown of the items and protestant's proposed tariff classification were submitted.

ISSUE:

How are the prefabricated homes to be classified when imported in separate shipments; the first shipment consisting of material for the structure and the second shipment consisting of builders's fittings such as doors, windows, and similar articles?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, requires that classification be determined first according to the terms of the headings of the tariff and any relative section or chapter notes and, unless otherwise required, according to the remaining GRI's, taken in order. GRI 2(a), HTSUS, states that:

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....

Subheading 9406.00.40, HTSUS, provides for "Prefabricated buildings...Of wood." Note 4 to Chapter 94, HTSUS, states that:

For the purposes of heading 9406, the expression "prefabricated buildings" means buildings which are finished in the factory or put up as elements, entered together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings.

Explanatory Note (EN) 94.06 of the Harmonized Commodity Description and Coding System (HCDCS) states that prefabricated buildings are generally presented in the form of:

- complete buildings, fully assembled, ready for use; - complete buildings, unassembled;
- incomplete buildings, whether or not assembled, having the essential character of prefabricated buildings.

HCDCS, Vol. 4, p. 1582. Therefore, heading 9406, HTSUS, includes complete assembled and unassembled buildings, and incomplete, whether or not assembled, buildings having the essential character of prefabricated buildings.

In general, essential character has been construed to mean the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article. In addition, the Explanatory Notes provide further factors which help determine the essential character of goods. Factors such as bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods are to be utilized, though the importance of certain factors will vary between different kinds of goods. See, HCDCS, Vol. 1, p. 4.

An analysis of the facts of the case and the items shipped indicate that the product imported has the essential character of a prefabricated building. The shipment at issue contains all the major parts of a building such as wall sections, glulam beams, siding, rafters, log-look cedar, etc. We note that, contrary to the information supplied by the seller, this shipment also contained framed windows and patio doors. The prefabricated home package at issue is classified under subheading 9406.00.40, HTSUS. Furthermore, even if the shipment did not contain the framed windows and patio doors, we would still find it classifiable under subheading 9406.00.40, HTSUS. EN 94.06 is quite clear as to what the provisions for prefabricated buildings in heading 9406, HTSUS, covers. An incomplete building, whether or not assembled, having the essential character of a prefabricated building is properly classified under heading 9406, HTSUS. See, EN 94.06, HCDCS, Vol. 4, p. 1582. The Explanatory Notes, although not dispositive are to be looked to for the proper interpretation of the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989).

HOLDING:

The prefabricated home package is properly classified under subheading 9406.00.40, HTSUS, which provides for "Prefabricated buildings...Of wood." This protest should be denied. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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