Backhoe Excavators; Disassembled; Incomplete; Knocked Down

HQ 088524 August 27, 1991 CLA-2 CO:R:C:M 088524 CMS CATEGORY: Classification TARIFF NO.: 8429.52.10, 8431.41.00 8431.49.90 Mr. Martin W. Dooley, President Multimodal International, Ltd. 2258 Landmeier Road Elk Grove, IL 60007 RE: Backhoe Excavators; Disassembled; Incomplete; Knocked Down Dear Mr. Dooley: This is in response to your request dated January 8, 1991, for a classification ruling on certain disassembled, incomplete backhoe excavators. FACTS: The merchandise consists of six models of disassembled and incomplete Kobelco backhoe excavators (Models SK 120, SK 200, SK 220, MD 140, MD 200 and MD 240). The disassembled excavators are missing the link-buckets, arms, booms, arm and boom cylinders, lower frames and upper frames. The lower frames connect the two tracks and support the slewing ring. The upper frames consist of a center section and two side decks. The missing components comprise 20.99% to 23.19% of the total value of the complete excavators, depending on the model. ISSUE: Is the merchandise classified as excavators in Heading 8429, or as parts of excavators in Heading 8431? LAW AND ANALYSIS: The Harmonized Tariff Schedule of the United States Annotated (HTSUSA) provides that the classification of articles is governed by the General Rules of Interpretation (GRI's). GRI 1 states in pertinent part that "...classification shall be -2- 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 2(a) in pertinent part provides that a reference in a heading includes a reference to that article incomplete, provided that as entered the article has the essential character of the complete article. GRI 2(a) also provides that a reference to an article includes that article entered disassembled. Heading 8429 in pertinent part describes excavators. The merchandise as entered does not have the essential character of complete excavators. Not only is the merchandise missing the components which connect the bucket to the propelling base, the merchandise is missing key structural components of both the lower track portion of the propelling base and the upper cab/power plant portion of the propelling base. Without the lower and upper frames, the tracks could not be connected, the slewing ring would have no support and the cab/power plant portion would have no frame onto which other components could be mounted and supported. In HQ Ruling 086555 (April 16, 1990), we held that excavators which were missing the link-bucket, arm, boom, counterweight and cab assembly were classified as excavators in Heading 8429. The components missing from the merchandise under consideration, however, have a substantially greater value and more integral functions than the components missing from the merchandise in Ruling 086555. In addition to the link-bucket, arm and boom, the merchandise under consideration is missing the arm and boom cylinders which actuate the arm and boom and thus aid in moving the excavating bucket. Without the lower frames, the tracks cannot be connected and slewing ring supported. Without the upper frames, the components of the cab/power plant portion do not have the structural frame onto which they can be mounted and supported. Without the missing components, the merchandise under consideration does not even consist of a base which can be self-propelled. The merchandise under consideration does not have the essential character of complete excavators, and cannot be classified in Heading 8429. The excavating buckets are classified as parts of the machinery of Heading 8429, buckets, in subheading 8431.41.00, HTSUSA. The remaining components are classified as parts of the machinery of Heading 8429, other, other, in subheading 8431.49.90, HTSUSA. -3- HOLDING: The excavating buckets are classified as parts of the machinery of Heading 8429, buckets, in subheading 8431.41.00, HTSUSA, currently subject to a General Column 1 rate of duty of 2.5%. The remaining components are classified as parts of the machinery of Heading 8429, other, other, in subheading 8431.49.90, currently subject to a General Column 1 rate of duty of 2.5%. Sincerely, John Durant, Director Commercial Rulings Division