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HQ 954785


September 22, 1993

CLA-2 CO:R:C:M 954785 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7308.90.90; 9817.00.50

Ms. Barbara Huffman
Total Shade Structures, Inc.
P.O. Box 70
Vanessa, Ontario
Canada NOE 1VO

RE: Steel structure for shade house system; GRI 2(a); incomplete article; unassembled article; EN Rule 2(a); essential character; condition as imported; U.S. vs. Citroen; steel structure; machinery, equipment and implements to be used for agricultural or horticultural purposes; HRL 083930; three part test; 19 CFR 10.131-10.139

Dear Ms. Huffman:

This is in response to your letter dated July 5, 1993, to Customs in New York, regarding the tariff classification of a steel structure for a shade house system under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was forwarded to this office for a response.

FACTS:

The article under consideration is a shade house system which protects sun-sensitive plants such as ginseng, from direct sunlight. The shade house system consists of a steel structure manufactured in Canada which is covered by a shade cloth. The supporting steel structure consists of poles, anchors, cables and bolts contained in a kit ready for assembly. The shade cloth is a 78 percent leno lath weave manufactured in the U.S. and then shipped directly to the customer. The shade cloth is not imported with the unassembled kit.

ISSUE:

What is the tariff classification of the steel structure for the shade house system under the HTSUS?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, 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...." GRI 2(a), HTSUS, 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 presented, the incomplete or unfinished article has the essential character of the complete or finished article, it shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.

General Explanatory Note (EN) Rule 2(a) of the Harmonized Commodity Description and Coding System (HCDCS) (pg. 2), states that:

(I) The first part of Rule 2(a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.

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).

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, EN Rule 3(b) (pg. 4), provides 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.

The issue to be determined is whether the steel structure as imported has the essential character of the completed shade house system. We are of the opinion that the essential character of the shade house system is the shade cloth. The shade cloth is the component which protects the plants from the sunlight and, therefore, is the component which marks or serves to distinguish the completed shade house system. As the steel structure without the shade cloth does not have the essential character of the completed shade house system, it cannot be classified as an incomplete shade house system.

Classification is based upon the condition of an article at the time of importation. United States vs. Citroen, 223 U.S. 407 (1911). Therefore, classification is based on the steel structure's condition as imported. Pursuant to GRI 2(a), HTSUS, the unassembled steel structure is classified in the same heading as an assembled steel structure. We are of the opinion that the steel structure is classified under subheading 7308.90.90, HTSUS, which provides for "Structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, and roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns) of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel...Other...Other...." This provision is dutiable at the Column 1 rate of 5.7 percent ad valorem.

Moreover, Chapter 98, HTSUS, provides an additional U.S. classification that grants preferential treatment to qualifying articles. Subheading 9817.00.50, HTSUS, provides for machinery, equipment and implements to be used for agricultural or horticultural purposes. This tariff provision is an actual use provision. See, Headquarters Ruling Letter (HRL) 083930 dated May 19, 1989. To fall within this special classification the following three part test must be met:

(1) The article in question must not be excluded from the heading under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS.

(2) The terms of the headings must be met in accordance with General Rule of Interpretation (GRI) 1, HTSUS, which provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

(3) The article must comply with the actual use provision requirements of sections 10.131-10.139, Customs Regulations (19 CFR 10.131-10.139).

The first part of the test is that the articles not be excluded from classification by Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. As stated above, the steel structure is classified under subheading 7308.90.90, HTSUS. This subheading is not excluded from classification under heading 9817, HTSUS, by operation of Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS.

The second part of the test calls for the steel structures to be included within the terms of subheading 9817.00.50, HTSUS, as required by GRI 1, HTSUS. The steel structures must be "machinery", "equipment" or "implements" used for "agricultural or horticultural purposes." Webster's II New Riverside University Dictionary (1988), defines machinery, equipment, implement and agricultural as follows:

Machinery: machines or machine parts in general...the working parts of a machine...a system of related elements that operates in a definable way....

Equipment: the act of equipping or state of being equipped...something with which one is equipped....

Implement: a tool, utensil, or instrument for doing a task...an article used to outfit or equip....

Agriculture: the science, art, and business of cultivating the soil, producing crops, and raising livestock...farming.

Based on the submitted information, the steel structures meet the definition of machinery, equipment and implements to be used for agricultural purposes. The steel structure is an implement which, when used in conjunction with the cloth shade, shades plants from direct sunlight. Growing plants or the production of crops is an acceptable agricultural use. Therefore, the steel structure meets the requirements of the second part of the test.

The third part of the test is that the requirements of 19 CFR 10.131-10.139), be met. If these requirements are satisfied, the third part of the test will be met and the steel structures will be classifiable under subheading 9817.00.50, HTSUS.

HOLDING:

The unassembled steel structure is classified under subheading 7308.90.90, HTSUS. Additionally, the steel structure is eligible for duty free treatment under subheading 9817.00.50, HTSUS, provided the actual use requirements of section 10.131- 10.139, Customs Regulations (19 CFR 10.131-10.139), are satisfied.

Sincerely,

John Durant, Director
Commercial Rulings Division

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