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HQ 954926


February 2, 1994

CLA-2 CO:R:C:M 954926 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 8703.23.00

Mr. Bruce Aitken
Aitken & Irvin
1101 15th Street, N.W.
Suite 450
Washington D.C. 20015

RE: Motor Vehicle; HQRLs 083081, 083589, 083412, 082591, 088971, 088664, 950714

Dear Mr. Aitken:

This is in response to your August 9, 1993, letter to the Customs office in New York requesting the classification of a newly designed motor vehicle under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter has been forwarded to this office for reply.

FACTS:

According to the information provided, the motor vehicle will have a three and five door version. Both versions will have the option of either two or four-wheel drive. The vehicle's body structure will be smooth rather than boxy and substantially similar to a station wagon. It will have limited off-road capabilities and a body that will mount to a separate frame. This new frame will cause the vehicle to have a higher ground clearance than most passenger cars, and lower than most sports utility vehicles. The tires, wheels, and suspension will be optimized for passenger comfort rather than cargo payload. The vehicle is designed to hold no more than 900 lbs. payload, of which 750 lbs. will be allocated for passengers.

You state that the vehicle will contain a 4 cylinder engine, with 1998 cylinder capacity (cc), and transport up to 5 people and their occasional effects. It will have several amenities designed for passenger comfort including interior carpeting, cloth-type door trim, a full display panel, passenger assist handles, full cloth seats and a carpeted cargo area. The passenger area will also include two front bucket seats and a platform seat in the rear designed to seat three passengers. The platform seat will not be capable of folding down flat. In addition to the passenger space, the vehicle will contain a small flat cargo floor, however it will not have a tailgate. Finally, some of the cargo space available will be occupied by a spare tire.

The total enclosed volume of the three door version will be approximately 128 cubic feet, and 158.4 cubic feet for the five door version. The three door version will consume 117.5 cubic feet in passenger room leaving approximately 9.4 cubic feet for cargo space. The five door version will consume 129 cubic feet in passenger space with the remaining 29.4 cubic feet for cargo space. Should a spare tire be installed on the floor, cargo space decreases to 26.8 cubic feet.

ISSUE:

Whether the motor vehicle is classifiable as a motor vehicle principally designed for the transport of people, or as a motor vehicle principally designed for the transport of goods?

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, 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.

The headings under consideration are as follows:

8703 [m]otor cars and other motor vehicles principally designed for the transport of persons (other than that of heading 8702), including station wagons and racing cars...................................2.5% ad valorem

8704 [m]otor vehicles for the transport of goods.....duties vary according to subheading classification.

There are no relevant chapter or section notes which address the headings at issue. By express language of heading 8703, motor vehicles which are principally designed for the transport of persons are described by heading 8703, HTSUS. Therefore, a vehicle which is equally designed for the transport of persons and goods cannot be classified in heading 8703, HTSUS. See HQRL 083081 dated January 4, 1989, where Customs ruled that a multipurpose or sports-utility vehicle, which has a dual design for the transport of people and goods was not "principally designed for the transportation of persons", and therefore not classifiable in heading 8703, HTSUS.

The present vehicle has the ability to transport both persons and a limited amount of cargo. Therefore, there is a possibility that it could be described as a multipurpose or sports-utility vehicle, if it has certain characteristics.

HQRL 083589, dated May 11, 1989, stated that sports-utility vehicles have certain characteristics which are unique to this type of vehicle. For example, they are designed to carry passengers, as well as cargo, and are usually constructed on a truck chassis. They have a boxy body structure which allows for considerable interior volume, and flat cargo floors, which facilitate the loading and unloading of cargo. Finally, sports- utility vehicles also have a higher ground clearance which allows them to be used both on and off the road. (See also: HQRLs 083412 dated May 19, 1989, 082591 dated October 31, 1991, 088971 dated May 23, 1991, 088664 dated June 3, 1991, and 950714 dated May 12, 1992).

While the subject vehicle is capable of carrying both persons and cargo, we think the features of the vehicle indicate that they it is principally designed for the transport of persons. The cargo applications are extremely limited by the presence of the spare tire and the ground clearance is not as high as most sports-utility vehicles. In addition, the vehicle uses a new chassis design not a truck design. Finally, it has a smooth not boxy body structure.

For the foregoing reasons, we find that this vehicle is classifiable in heading 8703, HTSUS, as a motor vehicle principally designed for the transportation of persons. Classification to the eight digit subheading level is dependant upon the vehicle's cylinder capacity. The vehicle has a 4 cylinder engine with a cylinder capacity of 1998 cc and is therefore classifiable in subheading 8703.23.00, HTSUS.

HOLDING:

The vehicle is classifiable in subheading 8703.23.00, HTSUS, which provides for [m]otor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars: [o]ther vehicles, with spark-ignition internal combustion reciprocating piston engine: [o]f a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc: [o]ther: [n]ew: [h]aving engines with not more than 4 cylinders. The general column one rate of duty for this subheading is 2.5 percent ad valorem.

Sincerely,

John Durant, Director

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