The tariff classification of Top Drive System and Casing Drive System

N172319 July 19, 2011 CLA-2-84:OT:RR:NC:N1:106 CATEGORY: Classification TARIFF NO.: 8431.43.8060 George M. Keller, Attorney-in-Fact TESCO Corp. 1003 Virginia Ave, Suite 200 Atlanta, GA 30354 RE: The tariff classification of Top Drive System and Casing Drive System Dear Mr. Keller: In your letter dated June 21, 2011, you requested a tariff classification ruling. The items under consideration have been identified as the Top Drive System (TDS) (part number 250-HXI-700) and a Casing Drive System (CDS) (Model 350 ET) used on a land based petroleum drilling rig. The TDS rotates the drill string and bit and is suspended in the derrick by a traveling block or becket adapter. The top drive is equipped with a swivel system so the rotary mechanism is free to travel up and down the derrick. The CDS is used in the drilling process for running casing inside the newly bored well. The process of casing drilling requires only the CDS being attached to a top drive and reaming shoe. This process makes it possible to speed up drilling 20 to 30 percent or more, by eliminating drill string tripping and the problems associated with it. You suggested that TDS would be classifiable under the HTS code 8430.49.8010, which provides for “Other… boring machinery…: Other boring or sinking machinery: Other: Other: For oil well and gas field drilling: Rotary.” This classification would not be applicable because the TDS is only part of a greater machine and does not actually break the crust of the earth on its own. Classification of goods in the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the General Rules of Interpretation (GRIs). GRI 1. states “ ... classification shall be determined according to the terms of the headings ... .” General Note 3. (h) (vi) to the HTSUS states “ ... a reference to “headings” encompasses subheadings indented thereunder.” Subheading 8431.43 of the HTSUS provides for “Parts suitable for use solely or principally with the machinery of headings 8425 to 8430…: Of machinery of…8430: Parts for boring…machinery…”. The applicable subheading for both the TDS and CDS will be 8431.43.8060, HTSUS, which provides for “Parts suitable for use principally and solely or principally with the machinery of headings 8425 to 8430: Of machinery of headings 8426, 8429, or 8430: Parts for boring or sinking machinery…: Other: Of oil and gas field machinery: Other”. The rate of duty will be Free. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Matthew Sullivan at (646) 733-3013. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division