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HQ 956576




JUNE 2, 1995

CLA-2 R:C:M 956576 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8607.99.10

District Director of Customs
300 South Ferry Street, Rm. 1001
Terminal Island, CA 90731

RE: PRD 2704-94-100441; Passenger Shuttle Cabin, Part of Shuttle Vehicle; Railway, Tramway Passenger Coach Without Truck or Bogie, Passenger Compartment, Incomplete, Unfinished Shuttle Vehicle, Heading 8605.00.00, GRI 2(a); HQ 957777, HQ 957790

Dear District Director:

This is our decision on Protest 2704-94-100441, filed against your classification of the VSL Shuttle Cabin from Switzerland. The entry under protest was liquidated on November 12, 1993, and this protest timely filed on February 10, 1994.

FACTS:

The article under protest is the Mirage/Treasure Island Metro Shuttle Cabin, also referred to as the VSL passenger shuttle cabin. After importation, the shuttle cabin will be assembled with a truck or bogie into a shuttle vehicle to serve as the passenger-carrying component of a people mover called the VSL-Metro Shuttle System. The completed shuttle vehicle is designed to accommodate 60 passengers, with seating for 22 and standing room for 38. It is not self-propelled and will be pulled horizontally among pre-programmed stops along a monorail by means of an external cable.

As imported, the shuttle cabin will measure 12,000 mm x 2,520 mm x 3,470 mm. It will be fully enclosed and consist of sides, front and rear nose cones, roof, and floor with body frame, with all components being of aluminum-alloy profiles and sheets bolted, welded or riveted. The cabin will have insulated interior walls, one pneumatically operated sliding double wing passenger door, sidewall and corner safety glass windows, emergency exit doors and marker lights on each side of the front end nose cone. The interior of the cabin will be outfitted with molded plastic U-shaped seats arranged along the front and inside walls, carpeted floor, vertical and horizontal holding bars, ceiling panels with integrated air ducts, air conditioning and heating apparatus, and channels for loudspeakers and translucent - 2 -
lighting elements. Both the interior and exterior will be fully painted and the outside accented and a logo applied.

The shuttle cabin is essentially a fully outfitted passenger compartment that will be assembled after importation with a bogie or truck into a shuttle vehicle. The bogie consists of running wheels, guide wheels, suspension with air springs and a guidance/control system that is essentially a controller that operates from the Shuttle System's main computer. The bogie has compartments for battery chargers, batteries, power supply, rectifiers and compressor, all of which will be sourced independently. The shuttle cabin is said to represent 43.8 percent of the cost or value of the completed shuttle vehicle.

The shuttle cabin was entered under a provision in heading 8428 for other lifting, handling, loading or unloading machinery. The local import specialist determined that the shuttle cabin constituted an incomplete or unfinished railway passenger coach and liquidated the entry under heading 8605.00.00, HTSUS. Counsel for protestant advances an alternative claim under a provision in heading 8706 as other parts of railway or tramway rolling stock.

The provisions under consider are as follows:

8428 Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics):

8428.90.00 Other machinery...2 percent

8605.00.00 Railway or tramway passenger coaches, not self-propelled...18 percent

8607 Parts of railway or tramway locomotives or rolling stock:

Other:

8607.99 Other:

8607.99.10 For vehicles of heading 8605 or 8606, except brake regulators
...5.5 percent

ISSUE:

Whether the VSL passenger shuttle cabin is an incomplete or unfinished railway or tramway passenger coach.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 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, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) provides that any 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, whether imported unassembled or not, has the essential character of the complete or finished article.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the Customs Cooperation Council's official interpretation of the Harmonized system. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the notes should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989)

With respect to the claim under heading 8428, relevant ENs indicate that with certain exceptions the heading covers a wide range of machinery for the mechanical handling of materials, goods, etc. (lifting, conveying, loading, unloading, etc.). They remain in heading 84.28 even if specialized for a particular industry. Among the Intermittent Action Machines listed on p. 1198 of the ENs are Funiculars, which are winch-operated coaches that run on rails. The ENs state, however, that heading 84.28 covers only the traction mechanism and winch. It excludes the coach and the track or rail. The VSL passenger shuttle cabin is not a good of heading 8428.

With respect to the liquidated provision under heading 8605.00.00, we noted in HQ 089208, dated December 26, 1991, and in HQ 952234, dated July 23, 1992, that a railway or tramway passenger coach is a wheeled rail vehicle designed to carry passengers, primarily for day travel. As designed, a complete or finished coach would ordinarily comprise the structural shell outfitted with seats and other customary furnishings relative to passenger comfort, sometimes supported by an underframe, and trucks consisting of the wheels, axles and brakes, plus pneumatic - 4 -
and electric subassemblies. We concluded in the cited decisions that the imported components were the aggregate of distinctive component parts which identified the importations as wheeled rail vehicles designed to carry passengers, and that, as imported, the components were clearly dedicated to making completed passenger railcars.

We have reconsidered this matter and are now of the opinion that in the cited decisions undue reliance may have been placed on legal principles developed under the HTSUS predecessor tariff code, the Tariff Schedules of the United States. While we recognize that on a case-by-case basis administrative and judicial decisions under a prior nomenclature can be instructive in interpreting provisions of the HTSUS, this is not the case here. We also believe that the characterization of a railway passenger coach first and foremost as a vehicle capable of a transport function must be more fully considered. In this latter regard, the General Explanatory Notes (EN) to Chapter 86 state, at p. 1414, that incomplete or unfinished vehicles are classified with the corresponding complete or finished vehicles, provided they have the essential character thereof. The note then lists examples of vehicles that would be considered incomplete or unfinished for tariff purposes. However, the EN continues by stating that bodies of motorized railway or tramway coaches, of vans, wagons or trucks, or of tenders, not mounted on underframes, are classified as parts of railway or tramway locomotives or rolling stock (heading 86.07). For these reasons, it is now our position that the VSL passenger shuttle cabin does not have the essential character of a complete or finished railway passenger coach not self-propelled. HQ 957777, dated May 30, 1995, supports this conclusion. This decision revoked HQ 089208 and HQ 952234 and represents Customs current position in the matter. HQ 957790, dated May 30, 1995, is in accord with HQ 957777.

HOLDING:

Under the authority of GRI 1, the VSL passenger shuttle cabin is provided for in heading 8607. It is classifiable in subheading 8607.99.10, HTSUS.

The protest should be ALLOWED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you should mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision - 5 -
available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division


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