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HQ 955882


May 17, 1994

CLA-2 CO:R:C:M 955882 LTO

CATEGORY: CLASSIFICATION

TARIFF NO.: 7315.11.00; 8713.93.30; 8714.94.60; 8714.96.50; 8714.99.10; 8714.99.50; 8714.99.90

Mr. John Porter
The Merry Sales Co.
1415 San Mateo Avenue
South San Francisco, California 94080

RE: Bicycle parts; Shimano New Deore XT Group Kit A (1994); GRI 3(b) sets; GRI 3(c); HQ 087303

Dear Mr. Porter:

This is in response to your letter of November 3, 1993, to Customs in New York, requesting the classification of the Shimano New Deore XT Group Kit A (1994) under the Harmonized Tariff Schedule of the United States (HTSUS). This letter and your additional submission of January 11, 1994, were forwarded to this office for a response.

FACTS:

The merchandise under consideration is the Shimano New Deore XT Group Kit A (1994), which includes the following components: rear derailleur; front derailleur; integrated shifter/brake lever; brake calipers; cassette; hubs; crank set; bottom bracket; chain; and headset. The components, which are individually boxed, are packaged in a cardboard shipping carton. The kits are used to repair older model bicycles, make complete bicycles from frame sets, tires, etc., or broken up and the components sold individually.

The rear derailleur allows the chain to move from one chain wheel to another when activated by the shifter. The front derailleur allows the chain to move from one cassette cog to another when activated by the shifter. The integrated shifter/brake lever, which is generally two separate components, activates the brake and controls which gear the bicycle is in. The brake calipers make contact to the bicycle rim to slow and - 2 -
stop the bicycle when the brake lever is applied. The cassette is a cluster of cogs that the chain travels on. It attaches to the rear hub and transfers the energy to the rear wheel. The hubs hold the cassette and allow the wheel to spin on an axle. The crank set transfers the power from the pedals to the chain by use of chain wheels attached to the crank. The bottom bracket holds the crank set together while also holding onto the frame. The chain transfers the power from the crank set to the rear cassette. The head set provides the link between the fork stem and frame of the bicycle.

ISSUE:

Whether the individual components of the Shimano Deore XT Group Kit A (1994) are separately classified under the HTSUS.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states in pertinent part that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ."

You suggest that the individual components of the kit should be classified as if imported separately. GRI 3(b) states that "[w]hen, by the application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable [underlining added]."

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the Customs Co-operation Council's official interpretation of the Harmonized System. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed.Reg. 35127, 35128 (Aug. 23, 1989).

The Explanatory Notes to GRI 3(b), pg. 4, state that "[f]or the purposes of this Rule, the term 'goods put up in sets for retail sale' shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings . . .;
(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and
(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards) [emphasis in original]."

The Shimano kits meet part (a) of the above stated test, as the chain is prima facie classifiable under heading 7315, HTSUS (chain, of iron or steel), while the remainder of the components are prima facie classifiable under heading 8714, HTSUS (bicycle parts and accessories). Furthermore, as the kits' components are packaged together in a cardboard box (labeled, "Shimano," "GRP- XTA"), they meet part (c). However, while the kits' components are clearly related, they do not consist of articles put up together to meet a particular need or carry out a specific activity. See HQ 953472, dated March 21, 1994. In fact, the kits are often broken up and the components, which are individually packaged, sold separately. Therefore, they fail part (b). Because the kits are not "goods put up in sets for retail sale," nor are they classifiable together by any other means, the components of the kits must be classified individually.

The front and rear derailleurs are classifiable under subheading 8714.99.50, HTSUS, which provides for derailleurs. The brake calipers are classifiable under subheading 8714.94.60, HTSUS, which provides for parts of brakes. The hubs and cassettes are classifiable under subheading 8714.93.30, HTSUS, which provides for other hubs. The crank sets and bottom brackets are classifiable under subheading 8714.96.50, HTSUS, which provides for cotterless- type crank sets and parts thereof. The roller chains are classifiable under subheading 7315.11.00, HTSUS, which provides for roller chain. The headsets are classifiable under subheading 8714.99.90, HTSUS, which provides for other bicycle parts.

The integrated shifter/brake levers are classifiable under subheading 8714.99.10, HTSUS, which provides for click twist grips and click stick levers. In HQ 087303, dated August 17, 1990, Customs considered the classification of an earlier model, Shimano integrated shifter/brake lever. We determined that the integrated lever, which was both a brake lever and click twist lever, was a GRI 3(b) composite good. However, we held that neither the brake lever nor the click lever provided the essential character of the article, and therefore, resorted to GRI 3(c). GRI 3(c), which is made applicable at the subheading
level by GRI 6, states that when an article cannot be classified according to GRI 3(a) or 3(b), the article must be classified in the subheading which falls last in numerical order. Accordingly, the integrated shifter/brake lever was classified under subheading 8714.99.10, HTSUS, rather than under subheading 8714.94.15, HTSUS, which provides for caliper and cantilever bicycle brakes.

HOLDING:

The front and rear derailleurs are classifiable under subheading 8714.99.50, HTSUS. The corresponding rate of duty for articles of this subheading is 6% ad valorem.

The integrated shifter/brake levers are classifiable under subheading 8714.99.10, HTSUS. The corresponding rate of duty for articles of this subheading is 6% ad valorem.

The brake calipers are classifiable under subheading 8714.94.60, HTSUS. The corresponding rate of duty for articles of this subheading is 10% ad valorem.

The hubs and cassettes are classifiable under subheading 8714.93.30, HTSUS. The corresponding rate of duty for articles of this subheading is 10% ad valorem.

The crank sets and bottom brackets are classifiable under subheading 8714.96.50, HTSUS. The corresponding rate of duty for articles of this subheading is 6% ad valorem.

The roller chains are classifiable under subheading 7315.11.00, HTSUS. The corresponding rate of duty for articles of this subheading is 4.2% ad valorem.

The headsets are classifiable under subheading 8714.99.90, HTSUS. The corresponding rate of duty for articles of this subheading is 10% ad valorem.

Sincerely,

John Durant, Director

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