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NY C82303

December 19, 1997

CLA-2-44:RR:NC:SP:230 C82303


TARIFF NO.: 9406.00.4000

Frank M. Murphy
Norman G. Jensen, Inc.
P.O. Box 8008
Port Huron, MI 48061-8008

RE: The tariff classification of "home kits" from Canada. Subheading 9406.00.40; Note 4 to Chapter 94; Explanatory Note 94.06; NY 857348; HQ 950312; HQ 960165.

Dear Mr. Murphy:

In your letter dated November 24, 1997, you requested a tariff classification ruling on behalf of Fox Companies, Hamilton, MT.

Fox Companies is considering importing "house kits" from Winnipeg Forest Products, Inc., Manitoba, Canada. The kits are for specific models of pre-designed homes. Furthermore, you indicate that a typical kit consists of four packages; each package contains sufficient pre-cut pieces to construct a specific section of the house. For some models with basements, the joists and sub-floor material are obtained locally in the United States.

You have attached the bills of materials for two representative plans, the Tampico Plan and the Blaylock Plan. You state that many of the wood pieces are "cut to finish" dimension. We assume that this means that they are cut to length. You also note that due to the nature of these projects a minor amount of cutting must occur at the job site. Furthermore you state that the package includes the bottom plate sills, which are treated lumber, subfloor sheathing made of OSB (oriented strand board), OSB wall bracing, construction adhesive, ceiling joists, rafters, OSB roof sheathing, joist hangers, and plyclips.

We have reviewed the bills of materials for the two representative plans, the Tampico Plan and the Blaylock Plan. Each "house kit" consists of four packages labeled as follows: Package #1, Wall Frame Kit Complete; Package #2, Wall Frame Bracing Kit Complete; Package #3, Ceiling Joist/Rafter Kit Complete; Package #4, Roof Sheathing.

We have found that the four packages essentially contain two products: lumber and OSB. The adhesive, joist hangers and plyclips are minor items of the "house kit".

In addition, we have found that the lumber is shipped in sizes of 2 x 4 and 2 x 6 and various lengths. Some standard length lumber has been "cut to finish". This lumber appears to have been cut to length, e.g., a 2 x 4 x 10' is cut to 117" length. The OSB is shipped in sheets of 4' x 8'. The above constitute the materials in size and shape being imported in the "house kits" in question.

You claim that the subject "house kits" are incomplete and unassembled prefabricated buildings of heading 9406, HTSUS. You have reached this conclusion based on the belief that the majority of the components contained in the kit are manufactured to specified dimensions, and the presentation of these materials in sufficient quantities to frame, floor, and roof a structure will result in an identifiable building. Furthermore, you cite ruling NY 857348 has being applicable to the subject "house kits".

The Explanatory Notes to the HTS constitute the official interpretation of the tariff at the international level. In the Joint Committee on the Omnibus Trade and Competitiveness Act of 1988, it is stated as follows (See T.D. 89-80):

The Explanatory Notes constitute the Customs Cooperation Council's official interpretation of the Harmonized System. They provide a commentary on the scope of each heading... Although generally indicative of proper interpretation of the various provisions of the convention, the Explanatory Notes,...are not legally binding...Thus while they should be consulted for guidance, the Explanatory Notes should not be treated as dispositive.

The ENs to heading 94.06 state as follows:

In the case of buildings presented unassembled, the necessary elements may be presented partially assembled (for example, walls, trusses) or cut to size (beams, joists, in particular) or, in some cases, in indeterminate or random lengths for cutting on the site (sills, insulation, etc.).

Chapter 94, Note 4 states:

For the purposes of heading 9406, the expression "prefabricated buildings" means buildings which are finished in the factory or put up as elements, entered together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings.

The Explanatory Notes and the Chapter Note clearly state that the articles of heading 9406 must be buildings, specifically, "prefabricated buildings". This term is defined as buildings which are finished in the factory or put up as elements, entered together, to be assembled on site. Thus, an article of heading 9406, HTSUS, is a building which has been fabricated at the factory; however, it may be presented unassembled. The elements of the factory finished building may be in various forms depending on the required assembly of each element; however, the elements should be recognizable, e.g., wall sections and trusses. The article can not be a collection of materials that are simply cut to size without any further prefabrication. Some of the elements may be presented in indeterminate form when entered with prefabricated sections. In all cases, the imported product must have the essential character of a building finished at the factory.

A review of the bills of materials clearly shows that the "house kits" in question are not buildings finished at the factory. The kits are a partial collection of materials needed in the construction of a house. They do not display the core features of structures built in factories. The materials in the "house kits" packages do not have the essential character of "prefabricated buildings".

In the ruling that you cite, NY 857348, as well as HQ 950312, basic sections and recognizable elements of a building were imported to the United States. Only a small portion required trimming or construction on site. The house packages imported displayed the core features of structures built at the factory.

In ruling HQ 960165 dated September 18, 1997, Customs had occasion to consider the classification of "house packages" similar to the present "house kits". In that ruling Customs found the "house packages" to be a collection of materials which did not display the core features of structures built in factories, and thus, they were found not to be "prefabricated buildings".

In our opinion the "house kits" that Fox Companies is considering importing into the United States are not prefabricated buildings of heading 9406, HTSUS. The materials in the "house kits" are separately classifiable.

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 Paul Garretto at 212-466-5779.


Robert B. Swierupski

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