HQ 084845: Carbodies for Railway Passenger Coaches

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

	HQ 084845

	NOV 24, 1989



  CLA2:CO:R:C:G  084845 JAS

  CATEGORY:   Classification

  TARIFF NO.: 8607.99.5000

  Allan H. Kamnitz, Esq.
  Sharretts, Paley, Carter & Blauvelt, P.C.
  67 Broad Street
  New York, N.Y. 10004

  RE:  Carbodies for Railway Passenger Coaches

  Dear Mr. Kamnitz:

       	In your submission of June 15, 1989, on behalf of your  client, C. Itoh Company (America) Inc., you inquire as to the  tariff classification of merchandise described as carbodies or  shells for selfpropelled and nonself propelled railway  coaches or passenger vehicles, from Japan.  Our ruling follows.

  FACTS:

       	Both the selfpropelled and nonself propelled railway  coaches will be imported in one of three component packages,  with components to be added in the U.S. dependent on what
component package is imported.  We will discuss the three  component packages with respect to both vehicle types.

       	Nonself propelled railway coaches may be imported in one of three ways.  In situation one, the importation will consist  of the carbody shell and certain of its component parts.  The
  shell will consist of two sides, two ends, and roof, all on a  frame, of aluminum and/or steel construction.  The shell will  be outfitted with component parts identified as thermal and
  acoustic wall and ceiling insulation, flooring panels, wiring  and piping, and glass side windows.  The remaining component  parts of the shell consist of interior wall panels, lighting
  fixtures and air diffusers, toilets, doors, hardware, couplers,  seats, and miscellaneous parts will be installed in the U.S. Complete electrical and pneumatic subsassemblies, truck (the
  assembly of parts comprising the structure which supports a car

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body at each end and which provides for attachment of the wheels and axles) and the brakes, wheels and axles will also be added in the U.S.  The estimated cost of the imported  components is $299,000, while the estimated cost of the  components added domestically is $451,950.

       	In situation two, the importation will consist of the  carbody shell, as described above, a portion of the flooring  panels with acoustic insulation, all the wiring and piping,  glass side windows, and miscellaneous parts.  Ceiling and wall  thermal insulation, a portion of the acoustic insulation,  interior wall panels, lighting fixtures and air diffusers, toilets, doors, hardware, couplers, seats, and some miscellaneous parts are added in the U.S.  Complete electrical
  and pneumatic equipment, truck, and the brakes, wheels and axles will also be added in the U.S.  The estimated cost of the imported components is $233,950, while the estimated cost of
  the components added domestically is $517,300.

       	In situation three, the importation will consist only of  the described carbody shell, the estimated cost of which is   $160,700.  The remainder of the components will be added in the
 U.S.  The estimated cost of these components is $590,550.

       	Selfpropelled railway coaches may be imported in one of  three ways.  In situation one, the importation will consist of  the carbody shell, as previously described, and carbody parts
  consisting of flooring panels, ceiling and wall thermal  insulation, all wiring and piping, glass side windows, interior  wall panels, doors, and some miscellaneous parts.  Also imported will be a portion of the electrical and pneumatic equipment consisting primarily of communication equipment,  console and switch panels for the cab.  The estimated cost of  these components is $445,000.  Added in the U.S. will be the light fixtures and air diffusers, seats, miscellaneous parts,  and that portion of the electrical and pneumatic equipment described as the air conditioner and pantograph.  Also added in  the U.S. will be the complete propulsion and underframe
equipment, as well as truck subassembly, traction motor, brakes and hardware.  The estimated cost of these components is  $827,000.

       	In situation two, the importation will consist of the carbody shell, wiring and piping, glass for the windows, doors,  and miscellaneous parts.  The estimated cost of these
  components is $265,000.  Added in the U.S. will be the  flooring, thermal insulation, side windows minus glass,  interior wall panels, lighting fixtures and air diffusers,  seats, miscellaneous parts, all electrical, pneumatic,  propulsion and underframe equipment, as well as the trucks.   The estimated cost of these components is $1,007,000.

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       	In situation three, the importation will consist only of  the carbody shell, the estimated cost of which is $139,000.    The remainder of the components, as described in situations one
and two, will be added in the U.S.  The estimated cost of these  components is $1,133,000.

  ISSUE:

       	Are the component packages for the nonself propelled and  selfpropelled railway coaches, or any of the packages,  classifiable as unfinished railway or tramway coaches, either
  in heading 8603 or heading 8605, or as parts of railway rolling  stock, in heading 8607?

  LAW AND ANALYSIS:

       	General Rule of Interpretation (GRI) 1, Harmonized Tariff  Schedule of the United States Annotated (HTSUSA), provides that  for legal purposes, classification shall be determined
  according  to the terms of the headings and any relative  section or chapter notes and, provided such headings or notes  do not otherwise require, according to Rules 2 through 6.  GRI
  2(a) provides that 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, whether imported unassembled   or not, has the essential character of the complete or finished  article.

       	Determining an article's essential character will depend,  of course, on the merchandise.  As the merchandise changes, so,  too, may the factor or factors which determine its essential
  character.  Factors found to be relevant in other contexts are  the significance of the imported components or their role in   relation to the use or overall functioning of the completed
  article and, to the extent that it validates that comparison,   the cost or value of the completed article versus the cost or  value of the imported components.

       	A railway or tramway passenger coach, whether self propelled or not, is a wheeled rail vehicle designed to carry  passengers primarily for day travel.  As designed, a complete
  coach would ordinarily comprise the structural shell outfitted  with seats and other customary furnishings relative to  passenger comfort, an underframe and trucks to support the
  shell, wheels, axles and brakes, pneumatic and electric  subassemblies plus, in the case of selfpropelled vehicles, the  mode of propulsion.

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       	We have compared each of the six component packages to a  complete railway passenger coach both selfpropelled and nonself propelled.  These packages do not contain seats and other
 accoutrements of passenger comfort, nor do they contain  complete electrical and pneumatic assemblies.  Moreover, these packages do not contain trucks, the structure which supports
 the carbody, or the rolling gear.  None of the packages of  selfpropelled rail cars contains the means of propulsion.  In  our opinion, none of these packages, ranging in complexity from
 carbody shell and frame (without seats) for a selfpropelled  vehicle, outfitted with wall and ceiling insulation, floor  panels, wiring and piping, and glass side windows, interior
 wall panels and doors, to the bare carbody shell for both selfpropelled and nonself propelled vehicles, possess the aggregate of distinctive component parts which identify the components in general as a wheeled rail vehicle and in  particular as one designed to carry passengers.  None of these  component packages, therefore, have the essential character of  a complete railway passenger coach.  That the cost or value of  each importation of nonself propelled rail coach components  represents between 21 and 38 percent of the cost or value of  the completed coach, and each importation of selfpropelled  rail coach components represents between 10 and 34 percent of  the cost or value of the completed coach further supports this conclusion.  Therefore, the described component packages are  not classifiable as unfinished railway coaches, either in
heading 8603 or heading 8605.

  HOLDING:

       	Components for railway passenger coaches, both self propelled and nonself propelled, in each of the six described  component packages, are classifiable under the provision for
  other parts of railway or tramway locomotives or rolling stock,  in subheading 8607.99.5000, Harmonized Tariff Schedule of the  United States Annotated (HTSUSA), dutiable at the rate of 3.9   percent ad valorem.

                              				Sincerely,

                              				John Durant, Director
                              				Commercial Rulings Division