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HQ 955501

March 15, 1994

CLA-2 CO:R:C:M 955501 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7326.90.90

District Director
U.S. Customs Service
55 Erieview Plaza
Plaza Nine Building, 6th Floor
Cleveland, OH 44114

RE: IA 91/93; Fabricated Steel Base and Acoustic Steel Enclosure; Gas Turbine; Kores Manufacturing Inc. v. U.S.; HQ 065167 (IA 34/80); American Powerail, Inc. v. U.S.; GRI 2(a); Explanatory Notes 2(a)(V) and (VII); 8411.99.90

Dear District Director:

This is in response to your memorandum of October 28, 1993 (CLA-1-CL:DD:CO:TEB AW), relating to a request for internal advice initiated by a letter dated July 27, 1993, from General Electric Company, concerning the classification of a fabricated steel base and an acoustic steel enclosure under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of a fabricated steel base and an acoustic steel enclosure, designed solely for use with the "LM2500 Gas Turbine" in a marine environment. The gas turbine is used in marine and industrial applications.

The enclosure is the acoustical and thermal protection for the gas turbine and is designed to be mated to the corresponding mounting interfaces on the gas turbine. Special features, including the ability to withstand shocks, lateral and torsional motion, and vibration, have been designed into the enclosure to withstand severe marine conditions. It also features noise reduction and corrosion resistance. The enclosure, which measures approximately 315 inches x 104 inches x 77.5 inches, consists of welded panels (four sides and a roof) with steel sheet outer skin framed with 4 inch wide bars and steel zee shaped studs. The walls and roof are filled with insulation wrapped in mylar or kapton bags which are fitted between the zee members. A damping compound is applied to the inner surface of the outer skin. The inner surfaces of the walls and roof are covered with stainless steel. The enclosure is imported into the U.S. in a knock down flat form (KDF), requiring minor assembly after importation.

The base, which measures approximately 315 inches x 104 inches x 18 inches, is the primary structural support of the gas turbine and is designed to be mated to the corresponding mounting interfaces on the gas turbine. The same special features designed into the enclosure are present in the base. The base also features noise reduction. It is a welded structure consisting of 18 inch high double webbed side and end beams, and a 4 inch thick floor made from top and bottom steel sheets separated by structural members (angles and beams).

The subheadings under consideration are as follows:

8411.99.90: [t]urbojets, turbopropellers and other gas turbines, and parts thereof: [p]arts: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 3.7 percent ad valorem.

7326.90.90: [o]ther articles of iron or steel: [o]ther: [o]ther: [o]ther: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 5.7 percent ad valorem.

ISSUES:

Whether the acoustic steel enclosure and fabricated steel base are classifiable under subheading 8411.99.90, HTSUS, as parts of gas turbines, or under subheading 7326.90.90, HTSUS, as other articles of steel.

Whether the acoustic steel enclosure, imported into the U.S. in a complete and unassembled form, imparts the essential character of an assembled acoustic steel enclosure.

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.

To determine the classification of the merchandise, we must ascertain whether the enclosure and the base are parts of gas turbines. Whether an article is a part of another article depends on the nature of the so-called "part" and its usefulness, function and purpose in relation to the article in which it is designed to serve. Kores Manufacturing Inc. v. U.S., 3 CIT 178, 179 (1982), aff'd appeal No. 82-83 (C.A.F.C. 1983).

In HQ 065167 (IA 34/80), dated December 1, 1980, a Tariff Schedules of the United States (TSUS) decision, we held that articles similar to the subject merchandise (base structures and barrier walls) were classifiable under item 657.25, TSUS, as other articles of iron or steel. The importer claimed that the merchandise in that case was classifiable under item 660.54, TSUS, as parts of gas turbine engines.

In explaining our holding in HQ 065167, we stated that:

[t]he base structure, support mount, barrier wall, and exhaust eductor or suitable substitutes for such items are essential to the intended operation of the gas turbine engine when they are assembled into a propulsion system for marine or industrial use. However, in determining whether a component is part of an article the relevant question is whether that component is essential to the completion of the article. See American Powerail, Inc. v. U.S., ___ Cust. Ct. ___, C.D. 4828 (1979). In the case at hand, the gas turbine engine is complete in itself without the support components of modular enclosure. Therefore, the components in issue are not parts of a gas turbine engine for the purposes of tariff classification in item 660.54, TSUS . . .

Decisions under the TSUS are not dispositive in interpreting the HTSUS. However, on a case-by-case basis they should be considered instructive in interpreting the HTSUS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. H. Conf. Rep. No. 576, p.550.

We consider HQ 065167 instructive in this instance because it dealt with similar merchandise, and the nomenclature at issue has remained unchanged. It is our position, therefore, that the acoustic steel enclosure and the fabricated steel base are not parts of the "LM25OO Gas Turbine". Although the components are essential to the operation of the gas turbine in a marine application, they are not essential to the completion of the gas turbine itself. The gas turbine can operate effectively without the use of the enclosure and base.

Consequently, because the enclosure and base are not classifiable elsewhere in the HTSUS, they are classifiable under subheading 7326.90.90, HTSUS.

We must now determine whether the enclosure, imported into the U.S. in a complete and unassembled form, imparts the essential character of an assembled enclosure. GRI 2(a) states that:

[a]ny 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. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

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).

Explanatory Note 2(a)(V) (p. 2) states that:

[t]he second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.

In part, Explanatory Note 2(a)(VII) (p. 2) states that:

[f]or the purposes of this Rule, "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved.

It is our position that the enclosure, imported in a complete and unassembled form, imparts the essential character of an assembled enclosure. Also, we are satisfied that the enclosure is presented unassembled for reasons such as convenience of packing, handling, or transport, and that the enclosure will be assembled by means of simple fixing devices.

HOLDING:

The acoustic steel enclosure and the fabricated steel base are classifiable under subheading 7326.90.90, HTSUS, as other articles of iron or steel.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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