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HQ 950930

April 22, 1992

CLA-2 CO:R:C:M 950930 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8483.40.50

District Director
U.S. Customs Service
55 Erieview Plaza
Cleveland, OH 44114

RE: Protest No. 4102-91-100114; Drive Units for Lift Trucks; Gear Boxes; Braking Assembly; EN 84.83; Section XVI, Note 2(a); U.S. v.Citroen; 8431.20.00

Dear Sir:

This is our response on Application for Further Review of Protest No. 4102-91-100114, dated September 26, 1991, concerning your action in classifying and assessing duty on drive units for lift trucks under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The subject merchandise, model TW 500, is a fixed ratio transmission. It is coupled to an electric motor on the input shaft side, and to the drive wheels on the output side. The motor provides a certain rotational input speed which the gear arrangement in the model TW 500 then steps down, trading off rotational speed for torque. Bevel gears located in the rear of the unit then take this higher-powered rotation and change its direction into two 90 degree outputs. This is the transmitted power that turns the wheels of the fork lift and causes movement. At the end of the drive axles are wheel hubs, small flange-type units which mount onto the axle and have four or five wheel lugs. Disc brake rotors are in turn mounted onto these lugs.

ISSUE:

What is the proper classification of the lift truck drive units under the HTSUS?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

The merchandise was entered under subheading 8431.20.00, HTSUS, which provides for: "[p]arts suitable for use solely or principally with the machinery of heading 8427." Heading 8427, HTSUS, provides for: "[f]orklift trucks; other works trucks fitted with lifting or handling equipment." However, the merchandise was liquidated under subheading 8483.40.50, HTSUS, which provides for: "[g]ear boxes and other speed changers: [f]ixed ratio speed changers, multiple and variable ratio speed changers each ratio of which is selected by manual manipulation:

The importer argues that the merchandise is properly classifiable as a part of a lift truck, because:

[w]hile this assembly does have a gear box, the speed changing function is only one of many performed by the TW 500. The TW 500 serves as a drive unit for lift trucks. It is mounted directly to the frame of the lift truck and serves as a structural support. The TW 500 as imported also incorporates a braking assembly. These are disc brakes which obviously perform the very important function of stopping or slowing down the lift truck. The drive unit is also bidirectional which means that it serves the function of changing the direction of the lift truck.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 84.83 (pp. 1325, 1327) states that:

[t]he goods covered by this heading are mainly:

(i) Certain mechanical parts which are used in the transmission of power from an external power unit to one or more machines.

(ii) Certain internal parts of a machine, used to transmit power to the various parts of the same machine. . . .

(E) GEAR BOXES AND OTHER SPEED CHANGERS, INCLUDING TORQUE CONVERTERS

These provide a range of speeds which can be varied, either by hand or automatically, according to the requirements of the machine. They include, inter alia:

(1) Gear-boxes consisting of assemblies of gears which can be selected in alternative arrangements; the speed of transmission can thus be varied according to the arrangement of gears set.

The importer first argues that the merchandise acts as the drive unit for the lift truck, and therefore is not classifiable as a gear box. We fully agree with the importer's description of the merchandise, but not with the importer's argument regarding its classification. The principal function of the drive unit is to transmit power from the engine to the drive wheels, an operation that is described in Explanatory Note 84.83, HTSUS. The drive unit of the lift truck is used to transmit power to the various parts of the same lift truck. This is the definition of a gear box.

The importer next argues that the drive unit gives structural support to the lift truck. This argument has no legal relevance to the classification of the subject merchandise. Many parts of machinery give structural support, but this fact does not alter their classification under eo nomine provisions.

The importer's main argument is that the drive unit incorporates a braking system. However, we note that only the disc brake rotors are imported attached to the drive unit. The hydraulic brake calipers, which are the actual braking mechanisms, are attached to the unit after importation. It is a basic tenet of customs classification that condition at the time of importation is dispositive. U.S. v. Citroen, 223 U.S. 407, 32 S.Ct. 256, 56 L.Ed. 486 (1911). Because the hydraulic calipers, to which the braking system is directly tied, are not present upon importation, the model TW 500 does not incorporate a braking system at the time of importation.

The importer's final argument is that because the drive unit is bidirectional, it cannot be classified as a gear box. In its description of a gear box, Explanatory Note 84.83, HTSUS, does not limit it to unidirectional movement. Just because the drive unit is bidirectional does not mean that, for tariff classification purposes, the drive unit is not a gear box.

Therefore, based upon the description supplied by the importer and given in Explanatory Note 84.83, HTSUS, it is our position that the drive unit is classifiable as a gear box.

Section XVI, note 2(a), HTSUS, states that:

[p]arts which are goods included in any of the headings of chapters 84 and 85 are in all cases to be classified in their respective headings.

Even though the subject drive unit is a part of a lift truck, because we find that it is classifiable as a gear box, under section XVI, note 2(a), HTSUS, the drive unit is classifiable under subheading 8483.40.50, HTSUS.

HOLDING:

The subject drive unit is classifiable under subheading 8483.40.50, HTSUS, which provides for: "[g]ear boxes and other speed changers: [f]ixed ratio speed changers, multiple and variable ratio speed changers each ratio of which is selected by manual manipulation: [o]ther."

The protest should be denied in full. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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