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HQ 965708




September 5, 2002

CLA-2 RR:CR:GC 965708 GOB

CATEGORY: CLASSIFICATION

TARIFF NO.: 8704.10.50

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

RE: Protest 1303-01-100260; Dump Trucks

Dear Port Director:

This is our decision regarding Protest 1303-01-100260, filed on behalf of Stevenson Equipment Ltd. (“protestant” or “Stevenson”) concerning the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of certain dump trucks.

FACTS:

The file reflects the following. The four entries at issue were filed between December 29, 1997 and August 12, 1998. The entries were liquidated between August 10, 2001 and August 17, 2001. The protest was filed on November 7, 2001.

The file further reflects the following facts. Transactions relevant to the subject entries involved the sale of dump trucks by four foreign suppliers to Stevenson. Stevenson paid the suppliers for the entire dump trucks. The dump trucks were disassembled prior to being laden aboard a vessel destined for the United States. The disassembled dump trucks were imported into the United States on one vessel and were reassembled after importation. During this period, Stevenson resold the dump trucks to Aring Equipment Company (“Aring Equipment”).

The four entries at issue in this protest involve merchandise (i.e., pieces of the disassembled dump trucks) which were entered by Stevenson under subheading 8704.10.10, HTSUS, as: “Motor vehicles for the transport of goods: Dumpers designed for off-highway use: Cab chassis.” The entries involving merchandise entered under name of Aring Equipment are not the subject of this protest. The Aring Equipment entries involved the components of the dump trucks which were not entered on the Stevenson entries.

ISSUE:

What is the classification under the HTSUS of the goods at issue?

LAW AND ANALYSIS:

We note initially that the protest was timely filed under the statutory and regulatory provisions for protests, 19 U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1).

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s may then be applied.

GRI 2(a) provides as follows:

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 has the essential character of the complete or finished article. It shall also include a reference to that article incomplete or finished (or failing to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled. [Emphasis supplied.]

GRI’s 3 through 5 are not applicable here. GRI 6 provides in pertinent part : “For legal purposes the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable.

The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

The EN for GRI 2(a) provides in pertinent part that: “The 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.”

The HTSUS provisions under consideration are as follows:

8704 Motor vehicles for the transport of goods:

8704.10 Dumpers designed for off-highway use:

8704.10.10 Cab Chassis

8704.10.50 Other

Stevenson’s Claim

In its protest, Stevenson states in pertinent part as follows:

The purchases and sales of the imported chassis and bodies were made pursuant to agreement between the two parties. Both Aring and Stevenson had significant independent interests in the imported vehicles. Stevenson invested significant time and expense in travel, locating suppliers, contracting with service suppliers, and arranging transportation, forwarding and customs clearance. Aring provided cash investments in the form of “floor money” for deposits on, and the purchase of the trucks. Both companies engaged in sales and marketing activities, retained a right to the profits of any sale, and indeed participated in any profits, costs or losses related to the imported vehicles. As indicative of their separate interests, the transactions were split so that Aring imported and entered the dumper body, and Stevenson imported and entered the chassis.

Stevenson has not included with its protest any documentary evidence in support of these factual assertions.

Our Analysis and Determination

In HQ 956607 dated December 1, 1994, the basic facts of that ruling were described as follows:

The merchandise is four motor chassis with enclosed cabs for dump trucks or dumper cab chassis, and five dumper bodies. Originally, five Euclid R50 off-highway dump trucks were manufactured in Canada, shipped to Australia where they were used for some time, then disassembled and the components sold to the importer/protestant. Whether by coincidence, design or inadvertence, the individual components were shipped aboard the same vessel, so that they arrived and were offloaded at Savannah at the same time.

The four cab chassis were entered separately under the provision in heading 8704 for cab chassis, and the five dumper bodies entered as other bodies of heading 8707.

In finding at GRI 2(a) that the dumper cab chassis and dumper bodies were unassembled dumpers of heading 8704, and were classified in subheading 8704.10.50, HTSUS, we stated in pertinent part as follows:

In this case protestant has not conclusively demonstrated that at the time of importation the cab chassis and dumper bodies were strictly bulk component parts destined for inventory. In fact, the record here may reasonably be interpreted as supporting the opposite conclusion. In two instances cab chassis and dumper bodies were reassembled after importation and sold as off-highway dumpers. Unlike the cited cases, there are only two components involved here, with cab chassis being complete subassemblies clearly dedicated to receiving dumper bodies. Moreover, the cab chassis and dumper bodies at one time comprised complete and fully functional dump trucks which were later disassembled into their constituent component parts.

The facts of this case are consistent with the statement in the Explanatory Note to GRI 2(a) that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article.

We find HQ 956607 to be controlling precedent here. According to the information in the file, Stevenson purchased dump trucks, had them disassembled, and arranged for the importation of the disassembled goods into the United States. After importation, the imported goods were assembled into dump trucks. Given the facts of the Aring Equipment entries, we believe that the subject merchandise imported by Stevenson should have been entered as disassembled dump trucks. We find that, at GRI 2(a) and GRI 6, the subject goods are classified in subheading 8704.10.50, HTSUS, as: “Motor vehicles for the transport of goods: Dumpers designed for off-highway use: . . . Other.”

HOLDING:

At GRI 2(a) and GRI 6, the subject goods are classified in subheading 8704.10.50, HTSUS, as: “Motor vehicles for the transport of goods: Dumpers designed for off-highway use: . . . Other.”

You are instructed to DENY the protest.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to 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 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.treas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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