HQ 0952440 - Protests 5301-9-000340, 000359 - 000366; Gear Boxes; Parts of Gear Boxes; Agricultural Use Provisions; Actual Use; Declaration of Intent; Rotary Mowers; Irrigation Systems; Post Hole diggers; 19 CFR 10.133, 10.134, 10.138, 177.9(d)(2), (d)(3); 9817.00.50 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1993 HQ Rulings > HQ 0952379 - HQ 0952469 > HQ 0952440

HQ 952440
August 27, 1992

CLA-2 CO:R:C:M 952440 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8483.40.50, 8483.90.50, 9817.00.60

District Director
U.S. Customs Service
701 San Jacinto, P.O. Box 52790
Houston, TX 77052

RE: Protests 5301-9-000340, 000359 - 000366; Gear Boxes; Parts of Gear Boxes; Agricultural Use Provisions; Actual Use; Declaration of Intent; Rotary Mowers; Irrigation Systems; Post Hole diggers; 19 CFR 10.133, 10.134, 10.138, 177.9(d)(2), (d)(3); 9817.00.50

Dear Madam:

The following is our decision regarding the Protests and Requests for Further Review 5301-9-000340, dated June 12, 1989, and 000359 - 000366, dated June 19, 1989, regarding the duty free eligibility of certain gear boxes imported by Omni U.S.A., Inc.

FACTS:

The articles in question are gear boxes and their parts to be incorporated into rotary mowers, post hole diggers and farm irrigation systems. The importer originally contended that the gear boxes and their parts were classifiable under heading 8432, Harmonized Tariff Schedule of the United States (HTSUS), as "[a]gricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sports ground rollers; parts thereof."

Two New York ruling letters have been issued on these articles. Both NY 839662, dated May 4, 1989, to Omni, and NY 850854, dated April 25, 1990, to counsel on behalf of Omni, classified the gear boxes in subheading 8483.40.50, HTSUS.

The gear boxes were ultimately liquidated under subheading 8483.40.50, HTSUS, which provides for:

[g]earboxes 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 parts of the gear boxes were entered and liquidated under subheading 8483.90.50, HTSUS, which provides for:

[p]arts of gearing, gear boxes and other speed changers.

These protests arise from your refusal to apply subheadings 9817.00.50 or 9817.00.60, HTSUS, to the subject entries. These headings provide duty free treatment to certain agricultural articles. Your report states that the importer has not fulfilled the actual use requirements in order to receive the duty free treatment. To support his case, the importer has submitted descriptive literature, invoices, and affidavits which indicate that the gear boxes in question are to be used solely for agricultural purposes.

ISSUE:

Whether the gear boxes and parts in question are entitled to duty free treatment under the actual use subheadings 9817.00.50 or 9817.00.60, HTSUS, as agricultural articles?

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 importer claims that the gear boxes are entitled to duty free entry under subheadings 9817.00.50 or 9817.00.60, HTSUS, as agricultural articles. Subheadings 9817.00.50 and 9817.00.60, HTSUS, are actual use provisions. To resolve this issue both classification principles within the HTSUS and the Customs Regulations must be utilized.

Subheadings 9817.00.50 and 9817.00.60, HTSUS, provide duty free treatment to certain articles if the articles are used for agricultural or horticultural purposes. Subheading 9817.00.50, HTSUS, describes "[m]achinery, equipment and implements to be used for agricultural or horticultural purposes." Subheading 9817.00.60, HTSUS, describes the following:

[p]arts to be used in articles provided for in headings 8432, 8433, 8434 and 8436, whether or not such parts are principally used as parts of such articles and whether or not covered by a specific provision within the meaning of additional U.S. rule of interpretation 1(c).

Headings 8432, 8433, 8434 and 8436, HTSUS, refer to specific types of agricultural and horticultural machinery.

To fall within either special classification, a three-part test must be met. First, the articles must not be among the long list of exclusions to subheadings 9817.00.50 and 9817.00.60, HTSUS, under section XXII, chapter 98, subchapter XVII, U.S. note 2, HTSUS. Secondly, the terms of the headings must be met in accordance with GRI 1. Thirdly, the merchandise must meet the conditions required under section 10.133, Customs Regulations (19 CFR 10.133). See HQ 086883, dated May 1, 1990, and HQ 087076, dated June 14, 1990.

Subheading 9817.00.50, HTSUS

Subheading 9817.00.50, HTSUS, describes "[m]achinery, equipment and implements to be used for agricultural or horticultural purposes." This determination focuses upon the specific agricultural or horticultural pursuit in question and what machine, equipment or implement fulfills this pursuit.

The first part of the test is to determine whether the gear boxes are excluded from subheading 9817.00 50, HTSUS. The gear boxes and parts are classified within subheadings 8483.40.50 and 8483.90.50, HTSUS. Section XXII, chapter 98, subchapter XVII, U.S. note 2, HTSUS, lists the exclusions to subheading 9817.00.50, HTSUS, from chapter 84, HTSUS. Subheadings 8483.40.50 and 8483.90.50, HTSUS, are not excluded by subchapter XVII, U.S. note 2, HTSUS. The first prerequisite is met.

Secondly, the gear boxes and parts must be included within the terms of the heading. The gear boxes must be "machinery," "equipment" or "implements" used for an "agricultural or horticultural purpose." For this step in the test, the initial determination to be made is what agricultural or horticultural pursuit is in question. The gear boxes are incorporated into rotary mowers, post hole diggers and irrigation equipment. Therefore, the agricultural or horticultural pursuits in question are mowing, digging and irrigation.

The next determination to be made in order to decide if the terms of the heading are met is what "machinery", "equipment" or "implement" performs the mowing, digging or irrigation. The gear boxes are used in rotary mowers, post hole diggers and irrigation equipment. These larger items are the machines, equipment or implements that mow, dig or irrigate. The gear boxes, although necessary components of the machines, equipment or implements that perform the pursuits, do not themselves fulfill the tasks. The gear boxes by themselves do not accomplish the pursuits of mowing, digging and irrigating, but are merely parts of the machines, equipment, or implements which do so. Therefore, the gear boxes do not meet the terms of subheading 9817.00.50, HTSUS. Whether or not the gear boxes and parts are actually used in an agricultural pursuit does not become an issue since the terms of the heading are not met. Regarding the question of whether the gear box is a part, counsel for the importer argues in its July 9, 1991, submission concerning the gear box for the irrigation system, that "[t]he gear boxes retain their own identity as propulsion machinery because an irrigation system could still work without any motion." Also, in an affidavit submitted by counsel, Craig Daniels, Vice President Gear Products Division, Omni USA, Inc., states that "[i]rrigation systems will still irrigate without the gear boxes, just not effectively." Basically, counsel is arguing that the gear box is not a part because without the gear box, the irrigation system would still propel water, but just in one direction. However, this is not what the irrigation system is designed to do. It is designed to propel water in multiple directions. Also, merchandise is generally marketed as being as "effective" as it can be. The gear box is a part of the irrigation system, an "effective" system that is marketed by the importer.

The conclusive factor in this interpretation is the intent of Congress. When Congress enacted the HTSUS and the two provisions that grant special treatment to articles used for agricultural and horticultural purposes, only subheading 9817.00.60, HTSUS, specifically provided for parts. This specificity of parts within subheading 9817.00.60, HTSUS, establishes that Congress considered the issue of parts of machinery. Since subheading 9817.00.50, HTSUS, has no reference to parts it is evident that Congress did not intend that all items used as a part of agricultural or horticultural equipment should receive duty free treatment. See HQ 086883 and HQ 087076.

Subheading 9817.00.60, HTSUS

Subheading 9817.00.60, HTSUS, provides duty free treatment to parts of articles of heading 8432, 8433, 8434 and 8436, HTSUS. These headings describe the following:

8432 [a]gricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sports ground rollers; parts thereof.

8433 [h]arvesting or threshing machinery, including straw or fodder bales; grass or hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machinery of heading 8437; parts thereof.

8434 Milking machines and dairy machinery, and parts thereof.

8436 Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof.

The gear boxes and parts in question are not excluded from subheading 9817.00.60, HTSUS by section XXII, chapter 98, subchapter XVII, U.S. note 2, HTSUS. If the importer can establish that the rotary mowers, post hole diggers and irrigation systems which incorporate the gear boxes and parts are classified in one of the four mentioned headings of subheading 9817.00.60, HTSUS, then the terms of the heading are met.

Of the three articles, the importer has satisfied this office that only the rotary mowers are possibly classified in one of the four necessary headings. Rotary mowers for the mowing of grass or hay are classified in heading 8433, HTSUS. From the information submitted by the protestant, it is evident that the rotary mowers are used for the cutting of grass or hay. Therefore, the rotary mowers are classified in heading 8433, HTSUS, and the gear boxes and parts of gear boxes to be incorporated into rotary mowers meet the terms of subheading 9817.00.60, HTSUS. Parts of the gear boxes are also included since a part of a part is a part of the whole. Flex Track Equipment, Ltd. and Border Brokerage Co., Inc. v. United States, C.D. 4063 (1970).

However, the gear boxes used with irrigation systems and post hole diggers are not included in subheading 9817.00.60, HTSUS. Irrigation systems are classified in heading 8424, HTSUS, as "[m]echanical appliances...for projecting, dispersing or spraying liquids..." See Explanatory Note 84.24(E), Vol. 3 Harmonized Commodity Description and Coding System (HCDCS), p. 1189. Post hole diggers are classified in heading 8430, HTSUS, as "[o]ther moving, grading, leveling, scraping, excavating, tamping, compacting, extracting, or boring machinery..." See Explanatory Note 84.30(III)(G), Vol. 3, HCDCS, p. 1206, and Explanatory Note 84.36(c), Vol. 3, HCDCS, p. 1218. Headings 8424 and 8430, HTSUS, are not listed in the language of subheading 9817.00.60, HTSUS. Therefore, the gear boxes to be used with irrigation systems and post hole diggers are not entitled to duty free entry.

The gear boxes which are used with rotary mowers have met the first two requirements. First, these specific gear boxes are not excluded from subheading 9817.00.60, HTSUS. Secondly, the gear boxes used with rotary mowers meet the terms of subheading 9817.00.60, HTSUS. Thus, to gain duty free entry these gear boxes must meet the last requirement, that the merchandise must meet the conditions of 19 CFR 10.133.

Sections 10.131 - 10.139, Customs Regulations (19 CFR 10.131 - 10.139), provide the requirements which must be met when the rate of duty is dependent upon the actual use of the article being imported. Three conditions which must be met to receive duty preferences for actual use are set forth in 19 CFR 10.133. The three conditions are:

(1) Such use is intended at the time of importation;
(2) The article is so used; and
(3) Proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption.

The intention of use at the time of importation must be evidenced by a declaration of intent that is filed with the entry for consumption or for warehouse, or by entering the proper actual use subheading of the HTSUS on the entry form. Section 10.134, Customs Regulations (19 CFR 10.134). We are satisfied with counsel's proof that all of the entries in question evidence the required declaration of intent at the time of importation. Therefore, the importer has complied with the first requirement under 19 CFR 10.133.

We are also convinced that counsel has satisfied the second and third requirements. 19 CFR 10.138 states that:

Within 3 years from the date of entry or withdrawal from warehouse for consumption, the importer shall submit in duplicate in support of his claim for free entry or for a reduced rate of duty a certificate executed by (1) the superintendent or manager of the manufacturing plant, or (2) the individual end-user or other person having knowledge of the actual use of the imported article. The certificate shall include a description of the processing in sufficient detail to show that the use contemplated by the law has actually taken place. A blanket certificate covering all purchases of a given type of merchandise from a particular importer during a given period, or all such purchases with specified exceptions, may be accepted for this purpose, provided the importer shall furnish a statement showing in detail, in such a manner as to be readily identified with each entry, the merchandise which he sold to such manufacturer or end-user during such period.

Based upon new information which has come to our attention through your office, we are satisfied that the importer has complied with this requirement. The importer has supplied an array of affidavits by many manufacturers who have purchased the subject gear boxes from the importer. In the affidavits, the manufacturer lists the number and type of gear boxes purchased. In this instance, these affidavits are sufficient in proving actual use.

Therefore, the gear boxes and parts for gear boxes for use in rotary mowers are classifible under subheading 9817.00.60, HTSUS. The gear boxes for use in the irrigation systems and post hole diggers are classifiable under subheading 8483.40.50, HTSUS, and the parts for these gear boxes are classifiable under subheading 8483.90.50, HTSUS.

HOLDING:

The gear boxes and parts for gear boxes for use in rotary mowers are classifible under subheading 9817.00.60, HTSUS, which provides for: "[p]arts to be used in articles provided for in headings 8432, 8433, 8434 and 8436, whether or not such parts are principally used as parts of such articles and whether or not covered by a specific provision within the meaning of additional U.S. rule of interpretation 1(c)."

The gear boxes for use in the irrigation systems and post hole diggers are 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 parts for these gear boxes are classifiable under subheading 8483.90.50, HTSUS, which provides for: "[p]arts of gearing, gear boxes and other speed changers."

The protests should be denied in part and granted in part. 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 protests.

Effect On Other Rulings:

NY 839662 is modified to reflect the reasoning in this ruling. NY 850854 is affirmed in full.

This response to Protests and Requests for Further Review 5301-9-000340 and 000359 - 000366 constitutes notice to the applicants of both NY 850854 and NY 839662, since the New York rulings were requested by the protestant in this ruling and the protestant's counsel.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: