United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1997 HQ Rulings > HQ 958475 - HQ 958870 > HQ 958835

Previous Ruling Next Ruling
HQ 958835




May 16, 1996

CLA-2 RR:TC:MM 958835 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8411.82.80, 8501.61.00 through 8501.64.00

Port Director
U.S. Customs Service
200 St. Paul Place
Baltimore, MD 21202

RE: Protest 1303-95-100455; Steam Turbine; Generator; Generating Set; "Condition As Imported"; Parts; Legal Note 2 to Section XVI; Headings 8501, 8502, 8503; C.S.D. 92-11; HQs 952704, 953231

Dear Port Director:

The following is our decision regarding Protest 1303-95-100455, which concerns the classification of a steam turbine and a generator under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The subject merchandise consists of a steam turbine and a generator, imported separately on different cargo vessels. The subject merchandise was originally intended to be shipped together and imported into the United States as a generating set. However, due to packaging problems, some of the crates for the turbine could not fit on the first vessel and were consequently shipped on a later date on another vessel. This resulted in the generator being imported on March 28, 1995 and entered on March 29, 1995, and the steam turbine being imported and entered on April 5, 1995.

The merchandise was entered under subheading 8502.30.00, HTSUS, as a generating set. The entries were liquidated on July 7, 1995, under subheading 8411.82.80, HTSUS, as other gas turbines, and under subheading 8503.00.95, as parts of generators. The protest was timely filed on October 3, 1995. Classification of the generator under subheadings 8501.61.00, through subheadings 8501.64.00, HTSUS, as AC generators, depending upon their output in kVA, is also under consideration.

The 1995 subheadings under consideration are as follows:

8411.82.80: Turbojets, turbopropellers and other gas turbines, and parts thereof: [o]ther gas turbines: [o]f a power exceeding 5,000 kW: [o]ther. . . .

Goods classifiable under these provisions had a general, column one rate of duty of 5 percent ad valorem.

8501: Electric motors and generators (excluding generating sets):
AC generators (alternators):
8501.61.00: Of an output not exceeding 75 kVA. . . .

8501.62.00: Of an output exceeding 75 kVA but not exceeding 375 kVA. . . .

8501.63.00: Of an output exceeding 375 kVA but not exceeding 750 kVA. . . .

8501.64.00: Of an output exceeding 750 kVA. . . .

Goods classifiable under these provisions had a general, column one rate of duty of 2.9 percent ad valorem.

8502.30.00: Electric generating sets and rotary converters: [o]ther generating sets. . . .

Goods classifiable under these provisions had a general, column one rate of duty of 2.9 percent ad valorem.

8503.00.95 Parts suitable for use solely or principally with the machines of heading 8501 or 8502: [o]ther: [o]ther. . . .

Goods classifiable under these provisions had a general, column one rate of duty of 3 percent ad valorem.

ISSUE:

Whether a steam turbine and a generator, intended to be imported together, can be classifiable together as a generating set, or must classification be determined based upon their condition as imported?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Customs has consistently followed the long-standing classification principle enunciated by the Supreme Court in United States v. Citroen, 223 U.S. 407, 414-415, 32 S.Ct. 259, 56 L.Ed. 486 (1911), which stated that:

[t]he rule is well established that "in order to produce uniformity in the imposition of duties, the dutiable classification of articles must be ascertained by an examination of the imported article itself, in the condition in which it is imported." (cites omitted) This, of course, does not mean that a prescribed rate of duty can be escaped by resort to disguise or artifice. When it is found that the article imported is in fact the article described in a particular paragraph of the tariff act, an effort to make it appear otherwise is simply a fraud on the revenue and cannot be permitted to succeed. (cite omitted)

However, protestant argues that Customs should allow an exception to be applied to this long-standing classification principle on the grounds that they did not intend to import the merchandise separately, and that the merchandise is designed, marketed, and intended to be sold together. In support of the position that Customs should look at the merchandise's post-importation condition and the importer's intent, protestant cites to C.S.D. 92-11 (May 20, 1991), HQ 952704 (February 1, 1993), and HQ 953231 (May 12, 1993). In these rulings, Customs allowed equal number of pants and jackets, imported together but packaged separately, to be classified as track suits so long as the entry documents supported the claim that the merchandise will be sold as a retail set. We find that these rulings are not dispositive to protestant's situation because in those rulings all of the merchandise was imported together. The issue in those rulings was whether or not to allow merchandise to be classified as a "retail set" even though they were not packaged together. In the present situation, the turbine and the generator were not imported together and therefore, they must be classified separately. This is consistent with the principles set forth in Citroen.

Protestant asks that Customs classify the merchandise as an "entirety" or as a set because they did not have the "intent" of shipping the merchandise separately. Protestant believes that this lack of intent is sufficient to apply the doctrine of entireties and classify the merchandise together. This claim violates the fundamental principles of classification. In KMW Johnson, Inc. v. United States, 13 CIT 1079, 1083, the court stated that:

It is fundamental in customs cases that "the dutiable classification of articles imported must be ascertained by an examination of the imported article itself, in the condition in which it is imported." Worthington v. Robbins, 139 U.S. 337, 341 (1981) (Blatchford, J.). Similarly, in cases in which it is contended that imported articles constitute an "entirety," "[c]lassification is determined by the condition of the articles at the time of importation." Miniature Fashions, Inc. v. United States, 54 CCPA 11, 17, C.A.D. 894 (1966).

The doctrine of entireties does not apply where the imported article is not imported with the article with which it is claimed to be an entirety. United States v. Baldt Anchor, Chain & Forge Division of the Boston Metals Co. et al., 59 CCPA 122, C.A.D. 1051, 459 F.2d 1403 (1972). See also Franklin Industries, Inc. v. United States, 1 CIT 349 (1981) (wherein the court held that to enjoy classification under a single tariff item number all components necessary to the completion of a particular article must be imported in the same shipment). Because the courts have not required an "intent" to determine classification under the doctrine of entireties, we refuse to do so here. Customs will continue to adhere to the principle that merchandise must be classified in its condition as imported. Therefore, we find that the steam turbine is eo nomine classifiable under subheading 8411.82.80, HTSUS, as other gas turbines.

Classification of the generator must be determined in accordance with Legal Note 2 to section XVI, HTSUS, which provides for:

Parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:

(a) Parts which are goods included in any of the headings of Chapter 84 and 85 (other than headings 8485 and 8548) are in all cases to be classified in their respective headings;

(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;

(c) All other parts are to be classified in heading 8485 or 8548.

Based upon the application of Legal Note 2(a) to section XVI, HTSUS, we find that the generator is properly classifiable under heading 8501, HTSUS, as a generator. Classification under the proper subheading depends upon the generator's output in kVA.

HOLDING:

The steam turbine is classifiable under subheading 8411.82.80, HTSUS, which provides for: "[t]urbojets, turbopropellers and other gas turbines, and parts thereof: [o]ther gas turbines: [o]f a power exceeding 5,000 kW: [o]ther. . . . " The generator is classifiable under subheadings 8501.61.00 through 8501.64.00, HTSUS, as AC generators, depending upon their output in kVA.

The protest should be DENIED, except to the extent that reclassification of the merchandise as indicated above results in a partial allowance. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision, together with the Customs Form 19, should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification Appeals Division

Previous Ruling Next Ruling

See also: