HQ 960150 - I.A. 41/96; BioTech Shelter, Farm Enclosure; Structure of Steel Covered with Aluminum-Coated UV-Treated Polyethylene Knit Fabric; Structures of Iron or Steel, Heading 7308; Articles of Plastic, Heading 3926; Prefabricated Buildings, Heading 9406.00; Composite Goods, GRI 3(b), Essential Character; HQ 959649, HQ 086548, NY 894119, NY 830211 - United States International Trade Commision Rulings

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HQ 960150

JUNE 26, 1997

CLA-2 RR:TC:MM 960150 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3926.90.95

Port Director of Customs
P.O. Box 610
Pembina, ND 58271

RE: I.A. 41/96; BioTech Shelter, Farm Enclosure; Structure of Steel Covered with Aluminum-Coated UV-Treated Polyethylene Knit Fabric; Structures of Iron or Steel, Heading 7308; Articles of Plastic, Heading 3926; Prefabricated Buildings, Heading 9406.00; Composite Goods, GRI 3(b), Essential Character; HQ 959649, HQ 086548, NY 894119, NY 830211

Dear Port Director:

This is our decision on Internal Advice 41/96, which you initiated on the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of the BioTech Shelter, a product of Canada.

FACTS:

The article in issue is the Innovator 2000 BioTech Shelter, imported unassembled. The importation consists of a framework of tubular galvanized steel, a 30 ft. x 70 ft. rectangular tarpaulin, and lengths of rope. The tarpaulin is made of knit textile fabric, polyethylene coated on both sides, to which a thin layer of aluminum and an ultraviolet light protective coating have been added. The tarpaulin, which is edge worked and has grommets called D-rings stitched to the edges every 18 inches, forms a semicircular roof, open at both ends, that curves down and attaches to walls of either wood or concrete, both of which are sourced domestically. These, together with the lengths of rope, anchor the Shelter to the ground. We are informed that the wood and/or concrete foundations are at the option of the user and that simpler assemblies utilize the ropes attached to metal stanchions in the ground. The BioTech Shelter is commonly used on farms to provide protection from the elements for livestock, crops and equipment. You state that the invoices - 2 -
attribute the the following costs or values to the components of the Shelter: slightly over 54% for the tubular pipe sections, nearly 40% for the tarpaulin, and less than 10% for the rope. The tubular sections represent 80% of the total weigh of the Shelter, while the tarpaulin and rope represent less than 20% and less than 4%, by weight, respectively.

You cite two administrative rulings, NY 830211, dated June 17, 1988, and NY 894119, dated February 9, 1994, on merchandise felt to be substantially similar to the BioTech Shelter, but which classify the merchandise differently. In your opinion, the BioTech Shelter's ease of assembly and semi-permanent nature are significant, and its essential character is imparted by the tarpaulin. You note the possibility that the BioTech Shelter may be a prefabricated building, classifiable in heading 9406.00, HTSUS. Your report does not indicate how the BioTech Shelter was entered or whether the importer has a position in the matter.

ISSUE:

Whether the BioTech Shelter is a good of heading 9406.00; whether it is a good of heading 3926 or of heading 7308.

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 3 provides classification criteria where goods are prima facie classifiable under two or more headings.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, 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 ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

As to the possible heading 9406.00 classification, tariff terms that are not defined either in the text of the HTSUS or in an equivalent Explanatory Note are to be construed in accordance with their common and commercial meanings, which are presumed to be the same. In this case, the term "Prefabricated buildings" is not defined as indicated above. However, relevant ENs at pp. 1706 and 1707 state in part that the goods of heading 9406.00, also referred to as industrialized buildings, are of all materials and can be designed for a variety of uses, among which are worksite accommodation, shops and sheds. When presented unassembled, these "buildings" may include walls, trusses, beams, joists, sills and insulation. When imported equipped, only built-in equipment normally supplied is classified with the building. This equipment includes electrical fittings, heating, air conditioning, sanitary and kitchen equipment, and items of furniture which are built in or designed to be built in, such as cupboards. The ENs continue by stating materials for finishing such buildings are to be classified with the building, provided they are imported in appropriate quantities. These materials include nails, glue, plaster, mortar, electric wire and cables, paint, wallpaper, carpets, etc. In our opinion, the BioTech Shelter is not the type of construction described in these ENs and is not encompassed by the term "Prefabricated buildings." In addition, there is no indication that the BioTech Shelter is bought and sold or commonly regarded in the industry as a building. See HQ 959649, dated April 1, 1997, on heading 9406.00 merchandise.

The BioTech Shelter is prima facie classifiable in several headings, each of which describes part only of the good. Under GRI 3(a), each heading is deemed to be equally specific. Under GRI 3(b), the BioTech Shelter is a composite good made up of different materials and/or components which is to be classified as if consisting only of that material or component which imparts the essential character to the whole. We will discuss only those headings which, in our opinion, merit consideration in determining essential character: the tarpaulin is provided for in heading 3629, as an article of plastics; the unassembled steel tubular sections in heading 7308, as structures of iron or steel; the aluminum coating component is provided for in heading 7616, as articles of aluminum. We conclude that heading 7326, articles of iron or steel and heading 7616, articles of aluminum, are less specific provisions and do not merit consideration. In this case, the knit textile fabric component is not considered because - 4 -
textile fabrics completely embedded in plastics or entirely covered on both sides by plastics, such plastics being visible to the naked eye, are regarded as articles of Chapter 39. See HQ 086548, dated April 12, 1990.

In essential character determinations, Customs may consider the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the good. Other factors may be considered relevant, depending on the particular merchandise. In this case, the steel tubular components clearly predominate by cost or value and by weight. In addition, they provide strength and support to the tarpaulin and give form and shape to the Shelter. However, the nature of the polyethylene tarpaulin and its role in relation to the use of the Shelter are equally compelling factors. Considering bulk or size, the tarpaulin clearly predominates over the steel tubulars. More importantly, however, the Shelter is designed to provide a safe haven for farm animals, crops and equipment. This is how it is marketed and why users purchase it. The polyethylene tarpaulin is the component that affords farm equipment, animals, and crops protection from inclement weather. It has a special ultraviolet light protective coating, specifically designed to shield animals and humans from the sun's harmful rays. For these reasons, we conclude that in this case it is the 30 ft. x 70 ft. tarpaulin whose role is critical and which imparts the essential character to the BioTech Shelter. The Shelter is to be classified as if it were an article of heading 3926.

In NY 894119, dated February 9, 1994, one of the administrative decisions you cite, substantially similar merchandise was held to be classifiable in subheading 3926.90.95, HTSUS. The other decision you cite, NY 830211, dated June 17, 1988, in considering a similar article, found that the base metal components imparted the essential character, and classified the good in subheading 7308.90.90, HTSUS, as a structure of iron or steel. In that case, however, in addition to the steel framework, a substantial number of other steel articles, to include ventilation hardware, cables, bolts, turnbuckles, screws, and other miscellaneous hardware, were present. On the basis of the particular facts in that case, the decision in NY 830211 is legally supportable.

HOLDING:

Under the authority of GRI 3(b), the BioTech Shelter is provided for in heading 3926. It is classifiable in subheading 3926.90.95( now 98), HTSUS.

No later than 60 days from the date of this letter 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 to the public via the Diskette Subscription Service, the Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification

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