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HQ 086448

March 6, 1990

CLA-2 CO:R:CV:G: 086448 JLV


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.


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.

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)).

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.


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?


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.

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

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
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.


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.


John Durant, Director

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