us-cbp-cross-rulings-hq-086448•HQ 086448: Protest 2809-89-001332; Toyota 4Runner; vehicle for the transport of goods; established and uniform practice
HQ 086448: Protest 2809-89-001332; Toyota 4Runner; vehicle for the transport of goods; established and uniform practice
us-cbp-cross-rulings-hq-086448HQ 086448: Protest 2809-89-001332; Toyota 4Runner; vehicle for the transport of goods; established and uniform practiceGuidance
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 086448
March 6, 1990
CLA-2 CO:R:CV:G: 086448 JLV
CATEGORY: Classification
TARIFF NO.: 8704.31.00
District Director of Customs
555 Battery Street
San Francisco, California 94126
RE: Protest 2809-89-001332; Toyota 4Runner; vehicle for the
transport of goods; established and uniform practice
Dear Sir:
Protest 2809-89-001332, dated July 3, 1989, and
application for further review were timely filed against your
action in classifying certain motor vehicles in subheading
8704.31.00, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA). The motor vehicles were entered on
January 4, 1989, on Entry No. 304-0023329-9, which was
reliquidated on April 7, 1989, with an increase in duty. This
is our decision on the issues raised in the protest.
FACTS:
The merchandise is identified by protestant as two-door
"4Runner" vehicles which are compact sport utility vehicles,
models RN61LG-MDEA, RN61LG-PDEA, VZN61LG-MSEA, VZN61LG-PSEA,
RN61LG-MSEA and RN61LG-PSEA, and CB61LG-MDEA, CB61LG-PDEA,
CB61LG-MSEA, and CB61LG-PSEA. However, in a review of the
entry information (invoice recap sheet) submitted with the
protest, we only identify VZN61LG-MSEA and VZN61LG-PSEA,
described as "4-Runner Pass. Car V6," as the 4Runner models
actually imported on Entry No. 304-0023329-9, dated January 4,
1989. Additionally, the increase in duty on the reliquidation
is approximately that which would have been assessed on the
total number of VZN61LG-MSEA and PSEA if reclassified in
subheading 8704.31.00 from subheading 8703.23.00, HTSUSA.
Finally, we note that the only other reference to the 4Runner
models on the invoice recap sheet is model CB61LV-MDEA,
described as a "4-Runner Truck DLX," and liquidated as entered
under subheading 8704.31.00, HTSUSA. This classification is
not protested.
- 2 -
In the documents submitted with the protest, the
protestant did not provide a description or factual informa-
tion on the 4Runner, except by reference to a ruling letter of
December 8, 1983 (file 807736), on "sport utility cars." In
that ruling, a two-door four-wheel-drive utility vehicle which
was fitted with a rear seat that folded down and with certain
other features such as carpeting, headliner, rear grips,
sporty wheels, and other accessories, was classified in the
provision for other motor vehicles in item 692.10, TSUS. In
the same ruling, a vehicle with the same dimensions and body
style (and, although not clearly stated, the same chassis),
but without a rear seat and accessories, was classified as an
automobile truck in item 692.02, TSUS. This "sport utility
truck" was described as a vehicle built on the chassis of a
small, four-wheel drive truck.
At the request of this office, additional information was
submitted by protestant. The 4Runner in issue is fitted with
a rear split bench seat, full length carpeting, full vinyl
headliner, and other amenities for comfort of passengers in
the rear area. The rear seat folds down into the foot well to
provide a flat rear load surface. The cargo space in the rear
(with the seat folded down) is approximately 80.9 cu. ft.; the
4Runner model without a rear seat has approximately 82.3 cu.
ft. of load space. Furthermore, the basic body design and
chassis construction of the 4Runner with the rear seating
capability is the same as that of models CB61LV-MDEA, imported
in the same shipment and entered as vehicles for the transport
of goods in subheading 8704.31.00, HTSUSA.
Protestant takes the position that the VZN61LG-MSEA and
PSEA were classified under the Tariff Schedules of the United
States (TSUS) under a uniform and established practice to
classify these vehicles on the basis of certain criteria. The
protestant claims that such a practice existed, in view of (1)
the actual and frequent liquidations over a period of more
than 4 years, (2) the existence of a private ruling to Toyota
on sport utility cars, and (3) acknowledgement by the Customs
Service that an established and uniform practice existed.
Protestant then takes the position that this practice was
not set aside by the change from the TSUS to the HTSUSA. In
support of this, protestant states that (1) the rates of duty
for classes of vehicles under the TSUS remain unchanged under
the HTSUSA and the provisions themselves, to the extent
relevant to this protest, have remained essentially the same,
and (2) no notice of a change in practice has been published
pursuant to section 315(d) of the Tariff Act of 1930, as
amended (19 U.S.C. 1315(d)).
- 3 -
Finally, protestant cites section 1211 of the Omnibus
Trade and Competitiveness Act of 1988, P.L. 100-418, August
23, 1988 (the Act), 19 U.S.C. 3011, as requiring the Customs
Service to leave intact, to the extent practicable, rulings
which were valid under the TSUS.
ISSUE:
Are models VZN61LG-MSEA and PSEA classified under the
HTSUSA pursuant to an established and uniform practice?
If not, are the vehicles properly classified as motor
vehicles for the transport of goods in subheading 8704.31.00,
HTSUSA?
LAW AND ANALYSIS:
The classification of articles under the HTSUSA are
subject to specific principles of classification, the General
Rules of Interpretation (GRI), which require 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 the following provisions: * * * [.]"
GRI 1, HTSUSA, emphasis added. This rule, and the following
rules, do not permit classification to be based on the rate of
duty applicable to merchandise under the former tariff
nomenclature.
Furthermore, we note that in the legislative history to
the Act at page 549 of the House Conference Report No. 100-576
on H.R. 3 (predecessor bill to P.L. 100-418), April 20, 1988,
which is to be treated as the legislative history to accompany
P.L. 100-418, reads as follows:
Prior Administrative and Judicial Decisions
In light of the significant number and
nature of changes in nomenclature from the
TSUS to the HTS, decisions by the Customs
Service and the courts interpreting
nomenclature under the TSUS are not to be
deemed dispositive in interpreting the HTS.
Nevertheless, on a case-by-case basis prior
decisions should be considered instructive
in interpreting the HTS, particularly where
the nomenclature previously interpreted in
those decisions remains unchanged and no
dissimilar interpretation is required by the
text of the HTS.
- 4 -
In this case, the texts of headings 8703 and 8704, HTSUSA, and
items 692.02 and 692.10, TSUS, and the superior language to
the TSUS items, are different. This was stated in a notice
published in the Federal Register by the Customs Service on
November 17, 1988 (53 FR 46474). The purpose of the notice
was to inform the public that Customs would no longer review
the criteria for classification of certain vehicles under the
TSUS because the TSUS would be replaced as the U.S. tariff
nomenclature, and that the classification under the HTSUSA
would be according to principles and nomenclature of the
HTSUSA. The Customs Service then held an open information-
gathering session in December in order to obtain relevant
information on the design and construction of the vehicles
referred to as "sport utility vehicles." The Toyota 4Runner
is considered to fall within this descriptive term as it was
used for purposes of that session.
Under the TSUS, the tariff provisions were as follows:
Motor vehicles (except motorcycles) for the
transport of persons or articles:
Automobile trucks valued at $1,000 or
more, and motor buses:
692.02 Automobile trucks
* * * * * *
692.04 Motor buses
692.10 Other
Under the HTSUS, the headings in issue are as follows:
8703 Motor cars and other motor vehicles
principally designed for the transport of
persons (other than those of heading 8702),
including station wagons and racing cars
* * * * *
8704 Motor vehicles for the transport of goods
- 5 -
Assuming, but only for the sake of argument because the
Customs Service has never made such a finding, that a practice
did exist under the TSUS, and, assuming, also for the sake of
argument, that the 4Runner models in question are not
materially different from the vehicle that was described in
the ruling of December 8, 1983 (file 807736), we conclude that
the classification of the 4Runner models imported on or after
January 1, 1989, could not be subject to a prior practice or
ruling on the merchandise because of a significant change in
tariff language. Specifically, heading 8703 requires that a
motor vehicle, to be classified in that heading, must be
principally designed for the transport of persons. Under the
TSUS, the language claimed to be the same in item 692.10 was
"[motor vehicles] other [than automobile trucks valued at
$1,000 or more and motor busses]." Classification in item
692.10, TSUS, was often found to be appropriate if a motor
vehicle was a dual-purpose or multipurpose vehicle that was
fitted in the cargo area with seats to transport persons and
which was not merely a truck with additional seating, such as
the double-cab pickup truck in Volkswagen of America, Inc. v.
United States, 490 F.2d 977 (CCPA, 1974).
However, by the express language of heading 8703, motor
vehicles must be "principally designed" for the transport of
persons in order to be classified within that heading.
Station wagons, which are described in the Explanatory Notes
(EN) to heading 8703 as vehicles, "the interior of which may
be used, without structural alteration, for the transport of
both persons and goods," are included in this heading.
Station wagons, in contrast to the 4Runner, are modifications
or "extensions" of vehicles that were originally designed as
vehicles for the transport of persons. The 4Runner is built
on a truck chassis and has the structural features of a
vehicle designed for the transport of goods: boxy body which
maximizes interior volume, flat rear cargo floor, box frame or
similar construction using a separate frame, and a significant
payload capability for off-the-road transport. As noted
earlier, the addition of a rear seat and other accessories in
the five passenger version does not significantly impair its
functional utility for carrying goods: the cargo capacity
with the seat folded down is 80.9 cu. ft.; the two passenger
"truck" version has a cargo capacity of 82.3 cu. ft., a
difference in volume of less than 2 percent.
We conclude that the 4Runner, in its basic design and
origin, is not a vehicle principally designed for the
transport of persons. The addition of a rear seat and other
accessories which do not significantly impair its functional
design (for the transport of goods) are not sufficient to
result in a vehicle "principally" designed for the transport
- 6 -
of persons. Therefore, heading 8703 is not applicable.
Absent a significant change which alters the basic cargo-
carrying structure of the two-door 4Runner sport utility
vehicle, the 4Runner in issue is a dual-purpose vehicle that
is classified as a vehicle for the transport of goods in
subheading 8704.31.00, HTSUSA.
HOLDING:
For purposes of classification under the HTSUSA, the
Toyota 4Runner models VZN61LG-MSEA and PSEA would not be
subject to an established and uniform practice to classify the
vehicle as "other than an automobile truck valued at $1,000 or
more" in item 692.10, TSUS, or to a ruling letter issued on
the basis of the language of the TSUS, because there has been
a significant change in the relevant tariff provisions.
These 4Runner models were correctly classified in
subheading 8704.31.00, HTSUSA, and dutiable at 25 percent ad
valorem pursuant to the temporary modification in subheading
9903.87.00, HTSUSA.
You should deny the protest in full. A copy of this
decision should be given to the protestant at time notice of
action on the protest is given on Customs Form 19.
Sincerely,
John Durant, Director
Commercial Rulings Division
6cc: AD NY Seaport
2cc: Chief, CIE
1cc: NIS DeSoucey (NIS-101)
1cc: RC, Pacific Region
1cc: AC, CO
1cc: Durant
1cc: Director, Trade Ops
1cc: Reading File
1cc: Myles Harmon, Nomenclature
LIBRARY: valentin
FILE NAME: 086448
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