Application for Further Review of Protest No. 3304-12-100021; Classification of tracked vehicles from Canada

HQ H235561 June 9, 2014 CLA-2 OT:RR:CTF:TCM H235561 LWF CATEGORY: Classification TARIFF NO.: 8704.21.00; 8704.22.50 Port Director Service Port of Great Falls P.O. Box 789 Great Falls, MT 59403-0789 Attn: Tami Simmons, Import Specialist RE: Application for Further Review of Protest No. 3304-12-100021; Classification of tracked vehicles from Canada Dear Port Director: This is in reference to the Application for Further Review (“AFR”) of Protest No. 3304-12-100021, timely filed on April 18, 2012, by Clean Harbors Environmental Services, Inc. (“Clean Harbors”). The AFR concerns U.S. Customs and Border Protection’s (CBP) classification of two models of tracked vehicles under the Harmonized Tariff Schedule of the United States (HTSUS). In reaching this decision, we have considered Clean Harbors’ supplemental submission, via email dated November 14, 2013, containing a revised factual description of the merchandise at issue. FACTS: The merchandise at issue consists of two models of rubber track crawler carrier vehicles manufactured by Morooka Co., Ltd. (“Morooka”), the Morooka MST 300VD and the Morooka MST 800VD (“the carriers”; pictured below at Figs. 1 and 2). The carriers are described as open-cab, rubber-tracked crawlers that are designed to move cargo over environmentally sensitive, off-road terrain. The carriers feature a metal tilt-cargo deck with collapsible sides. Compared to similar wheeled vehicles, the carriers’ rubber tracks offer low ground pressure and improved traction on uneven terrain and non-improved surfaces. The Morooka website states that the carriers are designed for use in a wide range of applications and can be optionally fitted with a variety of specialized attachments, for example: water tanks, digger derricks, drill rigs, cement mixers, welders, specialty dump bodies, scissor lifts, and personnel carriers. The carriers are operated by single-hand control levers and feature hydrostatic transmissions that allow for increased maneuverability by eliminating the need for clutch and gear controls. Technical specifications available on Morooka’s website state that that MST300VD and MST800VD are capable of operating at a maximum speed of 9.0 and 11.0 kph, respectively. The gross weight of an empty MST300VD is listed at 2,200 kg, and the carrier is capable of carrying a maximum payload of 2,500 kg. The gross weight of an empty MST800VD is listed at 6,500 kg, and the carrier is capable of carrying a maximum payload of 4,800 kg. Both carriers feature a minimum turning radius that is approximately one half of the length of each vehicle.

Fig. 1: MST-300VD/VDR Fig. 2: MST-800VD In this case, Clean Harbors states that prior to importation into the United States, the carriers are shipped to Canada, where metal water tanks are specially designed and manufactured to be fitted onto the tilt-cargo deck of the carriers. However, we are careful to note that the water tanks are imported separately from the carriers—after their manufacture in Canada, the tanks are detached from the tilt-cargo deck before Clean Harbors enters the carriers into the United States. Additionally, although Clean Harbors’ initial Protest and AFR submission emphasizes that the carriers are used with hoses, pumps, and washing units for emergency environmental clean-up applications, we are careful to note that Clean Harbors subsequently amended the merchandise description, via electronic communication dated November 13, 2013, and in their condition as imported, the carriers possess no such equipment or attachments. The instant Protest and AFR concerns two entries of the Morooka carriers that Clean Harbors entered at the Service Port of Great Falls on August 5, 2011 and August 16, 2011, under the claimed classification subheading 8705.90.00, HTSUS, which provides for “Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, wreckers, mobile cranes, fire fighting vehicles, concrete mixers, road sweepers, spraying vehicles, mobile workshops, mobile radiological units): Other.” Clean Harbors’ August 5th entry consists of one Morooka MST800VD carrier and one Morooka MST300VD carrier. The August 16th entry consists of two Morooka MST800VD carriers. On September 8, 2011, CBP issued a Proposed CF-29 Notice of Action (“NOA”) concerning, in pertinent part, Clean Harbors’ August 5, 2011 entry of the carriers and indicated CBP’s proposed reclassification of the carriers under subheading 8704.23.00, HTSUS, which provides for “Motor vehicles for the transport of goods: Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel): G.V.W. exceeding 20 metric tons.” CBP did not receive a response from Clean Harbors to the Proposed NOA, and based on a review of the invoice documentation for the August 5th entry, CBP issued a CF-29 NOA, dated October 7, 2011, reclassifying the Morooka MST800VD under subheading 8704.22.50, HTSUS, which provides for “Motor vehicles for the transport of goods: Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel): G.V.W. exceeding 5 metric tons but not exceeding 20 metric tons: Other,” and the Morooka MST300VD under subheading 8704.31.00, HTSUS, which provides for “Motor vehicles for the transport of goods: Other, with spark-ignition internal combustion piston engine: G.V.W. not exceeding 5 metric tons.” Accordingly, on October 21, 2011, CBP liquidated the August 5th entry of one Morooka MST800VD carrier and one Morooka MST300VD carrier under subheadings 8704.22.50 and 8704.31.00, HTSUS, respectively; additionally, CBP liquidated the August 11th entry of two Morooka MST800VD carriers under subheading 8704.23.00, HTSUS. Clean Harbors timely filed this Protest AFR on April 18, 2012, and asserts that the correct classification of the Morooka carriers is under subheading 8705.90.00, HTSUS. ISSUE: Whether the Morooka carriers are classified in heading 8704, HTSUS, as motor vehicles for the transport of goods; heading 8705, HTSUS, as special purpose motor vehicles, other than those principally designed for the transport of persons or goods; or heading 8709, HTSUS, as works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories warehouses, dock areas or airports for short distance transport of goods. LAW AND ANALYSIS: Initially, we note that the matter protested is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004.  (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 1704-12-100256 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of CBP or his designee or the Customs courts. Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provision of law for all purposes. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. The HTSUS subheadings under consideration are the following: 8704 Motor vehicles for the transport of goods: 8705 Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, wreckers, mobile cranes, fire fighting vehicles, concrete mixers, road sweepers, spraying vehicles, mobile workshops, mobile radiological units): 8709 Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles: * * * * * The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The EN to heading 87.04, HS, provides, in relevant part, as follows: This heading covers in particular: Ordinary lorries (trucks) and vans (flat, tarpaulin-covered, closed, etc.); delivery trucks and vans of all kinds, removal vans; lorries (trucks) with automatic discharging devices (tipping lorries (trucks), etc.); tankers (whether or not fitted with pumps); refrigerated or insulated lorries (trucks); multi-floored lorries (trucks) for the transport of acid in carboys, cylinders of butane, etc.; dropframe heavy-duty lorries (trucks) with loading ramps for the transport of tanks, lifting or excavating machinery, electrical transformers, etc.; lorries (trucks) specially constructed for the transport of fresh concrete, other than concrete-mixer lorries (trucks) of heading 87.05; refuse collectors whether or not fitted with loading, compressing, damping, etc., devices. … The classification of certain motor vehicles in this heading is determined by certain features which indicate that the vehicles are designed for the transport of goods rather than for the transport of persons (heading 87.03). These features are especially helpful in determining the classification of motor vehicles, generally vehicles having a gross vehicle weight rating of less than 5 tonnes, which have either a separate closed rear area or an open rear platform normally used for the transport of goods, but may have rear bench-type seats that are without safety seat belts, anchor points or passenger amenities and that fold flat against the sides to permit full use of the rear platform for the transport of goods. Included in this category of motor vehicles are those commonly known as “multipurpose” vehicles (e.g., van-type vehicles, pick-up type vehicles and certain sports utility vehicles). The following features are indicative of the design characteristics generally applicable to the vehicles which fall in this heading: (a) Presence of bench-type seats without safety equipment (e.g., safety seat belts or anchor points and fittings for installing safety seat belts) or passenger amenities in the rear area behind the area for the driver and front passengers. Such seats are normally fold-away or collapsible to allow full use of the rear floor (van-type vehicles) or a separate platform (pick-up vehicles) for the transport of goods; (b) Presence of a separate cabin for the driver and passengers and a separate open platform with side panels and a drop-down tailgate (pick-up vehicles); (c) Absence of rear windows along the two side panels; presence of sliding, swing-out or lift-up door or doors, without windows, on the side panels or in the rear for loading and unloading goods (van-type vehicles); (d) Presence of a permanent panel or barrier between the area for the driver and front passengers and the rear area; (e) Absence of comfort features and interior finish and fittings in the cargo bed area which are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ashtrays). This heading also covers: (1) Dumpers, sturdily built vehicles with a tipping or bottom opening body, designed for the transport of excavated or other materials. These vehicles, which may have a rigid or articulated chassis, are generally fitted with off-the-road wheels and can work over soft ground. Both heavy and light dumpers are included in this group; the latter are sometimes characterised by a two-way seat, two seats facing in opposite directions or by two steering wheels, to enable the vehicles to be steered with the driver facing the body for unloading. … Subheading Explanatory Notes. Subheading 8704.10 These dumpers can generally be distinguished from other vehicles for the transport of goods (in particular, tipping lorries (trucks)) by the following characteristics: - the dumper body is made of very strong steel sheets; its front part is extended over the driver’s cab to protect the cab; the whole or part of the floor slopes upwards towards the rear; - in some cases the driver’s cab is half-width only; - lack of axle suspension; - high braking capacity; - limited speed and area of operation; - special earth-moving tyres; - because of their sturdy construction the tare weight/payload ratio does not exceed 1 : 1.6; - the body may be heated by exhaust gases to prevent materials from sticking or freezing. * * * * * The EN to heading 87.05, HS, provides, in relevant part, as follows: This heading covers a range of motor vehicles, specially constructed or adapted, equipped with various devices that enable them to perform certain non-transport functions, i.e., the primary purpose of a vehicle of this heading is not the transport of persons or goods. * * * * * The EN to heading 87.09, HS, provides, in relevant part, as follows: This heading covers a group of self-propelled vehicles of the types used in factories, warehouses, dock areas or airports for the short distance transport of various loads (goods or containers) or, on railway station platforms, to haul small trailers. Such vehicles are of many types and sizes. They may be driven either by an electric motor with current supplied by accumulators or by an internal combustion piston engine or other engine. The main features common to the vehicles of this heading which generally distinguish them from the vehicles of heading 87.01, 87.03 or 87.04 may be summarised as follows : (1) Their construction and, as a rule, their special design features, make them unsuitable for the transport of passengers or for the transport of goods by road or other public ways. (2) Their top speed when laden is generally not more than 30 to 35 km/h. (3) Their turning radius is approximately equal to the length of the vehicle itself. Vehicles of this heading do not usually have a closed driving cab, the accommodation for the driver often being no more than a platform on which he stands to steer the vehicle. Certain types may be equipped with a protective frame, metal screen, etc., over the driver’s seat. The vehicles of this heading may be pedestrian controlled. Works trucks are self-propelled trucks for the transport of goods which are fitted with, for example, a platform or container on which the goods are loaded. … Parts of this heading include: … (2) Bodies, platforms, detachable sides, tipping bodies. … The heading excludes: … (c) Dumpers (heading 87.04). * * * * * Protestant asserts in its memorandum supporting AFR that the carriers are properly classified in heading 8705, HTSUS, as special purpose motor vehicles. Heading 8705, HTSUS, provides for “Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, wreckers, mobile cranes, fire fighting vehicles, concrete mixers, road sweepers, spraying vehicles, mobile workshops, mobile radiological units)” (emphasis added), and the EN to heading 87.05, HS, states that the heading covers a “range of motor vehicles, specially constructed or adapted, equipped with various devices that enable them to perform certain non-transport functions, i.e., the primary purpose of a vehicle of this heading is not the transport of persons or goods.” (Emphasis original). As an initial matter, we note that it is well settled law that merchandise is classified according to its condition when imported. Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994) (citing United States v. Citroen, 223 U.S. 407, 414-15, 56 L. Ed. 486, 32 S. Ct. 259 (1911)). In their condition as entered, each of the Morooka carriers possesses a metal, tilt-cargo rear deck with collapsible sides that is specifically designed for the transport of goods and cargo. Technical specifications on Morooka’s website state that the MST 300VD and MST 800VD are capable of hauling a maximum cargo of 2,200 kg and 4,800 kg, respectively. Furthermore, as clarified in Clean Harbors’ November 14, 2013 supplemental merchandise description, the imported carriers do not possess any accessories or specialized equipment that would enable the vehicles to perform any function beyond the conveyance of cargo over environmentally sensitive, off-road terrain. Consequently, because the carriers are principally designed for the transport of goods, heading 8705, HTSUS, does not describe the instant merchandise, and the carriers are prima facie classifiable elsewhere in the Nomenclature. The remaining headings under consideration—headings 8704 and 8709, HTSUS—provide, respectively, for motor vehicles for the transport of goods and certain self-propelled works trucks of the type used in factories, warehouses, dock areas, or airports for the short-distance transport of goods. GRI 1 states, in relevant part, that “classification shall be determined according to the terms of the headings” (emphasis added), works trucks of heading 87.09, HS, must be “of the type used in factories warehouses, dock areas or airports.” See also EN 87.09 (“This heading covers a group of self-propelled vehicles of the types used in factories, warehouses, dock areas or airports for the short distance transport of various loads (goods or containers) or, on railway station platforms, to haul small trailers.”). Here, although the tilting cargo platforms make the instant Morooka carriers suitable for the short-distance transport of goods, we note that the vehicles are primarily identified by their rubber tracks that offer low ground pressure and improved traction on uneven terrain and non-improved surfaces. Additionally, the Morooka website advertises its carriers for “soft, sandy, and rough terrain,” and although it displays numerous pictures of the carriers at use in off-road locations and on unimproved surfaces, the advertising pictures do not show the carriers at use in factories, warehouses, dock areas, or airports. See “Morooka Products: Carriers,” http://www.morooka.co.jp/en/products/vd/. Based on these features, we conclude that the Morooka carriers do not belong to the class or kind of vehicles used in factories, warehouses, dock areas, or airports. Consequently, we find no support for identifying the Morooka carriers as belonging to the type of works trucks described by heading 8709, HTSUS. Heading 8704, HTSUS, provides for “Motor vehicles for the transport of goods,” and the EN to heading 87.04, HS, states that the classification of motor vehicles in this heading “is determined by certain features which indicate that the vehicles are designed for the transport of goods rather than for the transport of persons.” The U.S. Court of International Trade (CIT) has provided guidance on the classification of certain self-propelled, track type all-terrain vehicles. F.W. Myers, Inc. v. United States, 12 C.I.T. 566 (1988). In F.W. Myers, the CIT considered whether the primary function of the Bombardier BR-200—consisting of an engine, drive train,