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NY M81990

April 26, 2006

CLA-2-84:RR:NC:1:102 M81990


TARIFF NO.: 8708.99.6790

Mr. Shane Nicholson
ZF Industries, Inc.
1261 Palmour Drive SW
Gainesville, GA 30501

RE: The tariff classification of transmission shafts from Brazil

Dear Mr. Nicholson:

In your letter dated March 17, 2006 you requested a tariff classification ruling on behalf of ZF Industries.

The articles in question are described as a main shaft, an intermediate shaft and an output shaft used in transmissions that are installed in passenger vehicles made by Ford. The main shaft extends from the transmission and is designed to connect with a drive shaft to transmit power to the rear wheels of the vehicle. The input shaft extends from the opposite end of the transmission and is designed to connect to and be driven by the vehicle’s engine. The counter shaft, in conjunction with gearing, transmits power within the transmission from the input to the output shaft.

The issue raised by your request is whether the transmission shafts are properly classified under heading 8483, Harmonized Tariff Schedule of the United States (HTSUS), as other transmission shafts, or under HTSUS heading 8708, as parts of a motor vehicle.

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1 states that classification shall be determined according to the terms of the headings and any relative section or chapter notes. The headings in contention are headings 8708 and 8483, HTSUS.

Heading 8708 provides for parts of the motor vehicles of 8701 to 8705. Heading 8483 provides for other transmission shafts. While both headings appear to describe the articles in question, classification must be determined in accordance with section and chapter notes. Heading 8708 is within section XVII and chapter 87 of the HTSUS, while heading 8483 is within section XVI and chapter 84. There are three relevant legal notes.

Section XVI, note 1(l), HTSUS, excludes articles of section XVII from classification within section XVI. Section XVII, Note 2(e), HTSUS, excludes articles of heading 8483 from section XVII, if the articles constitute integral parts of engines or motors. Note 3 to HTSUS section XVII limits the term "parts" in chapter 87 to include only those parts used solely or principally with the vehicles of chapter 87.

Because the transmission shafts in question are used in passenger vehicles made by FORD, presumably the shafts are "solely or principally" used in the motor vehicles of chapter 87. Accordingly, the shafts are “parts” within the meaning of note 3 to HTSUS section XVII. Thus, if the shafts, being articles of HTSUS heading 8483, are not integral parts of engines or motors, then they are articles of HTSUS section XVII and cannot be classified in section XVI .

In your request you assert that the shafts are integral parts of an engine because the shafts attach to or are mounted onto an engine and complete the engine by enabling the engine to transfer power. We disagree.

For tariff purposes, a part is an integral, constituent component necessary to the completion of the article with which it is used, and which enables that article to function in the manner for which it was designed. Internal combustion engines convert energy into mechanical motion. In this case, the internal combustion engine is a discrete article of commerce, fully complete and functional in and of itself. Power generated by the engine is transmitted through the rotary motion of the crankshaft to a transmission. The function of the transmission, which is separate and distinct from the function of the engine, is to transfer power from the engine to a drive train. The shafts in question allow the transmission to transfer power and are integral parts of the transmission, not integral parts of the engine.

We find that the subject transmission shafts are articles of HTSUS section XVII. Accordingly, the transmission shafts are excluded from heading 8483, HTSUS, by note 1(l) to section XVI and fall to be classified in HTSUS heading 8708.

The applicable subheading for the transmission shafts will be 8708.99.6790, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other parts of power trains of the motor vehicles of headings 8701 to 8705. The rate of duty will be 2.5 percent ad valorem.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

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 Kenneth T. Brock at 646-733-3009.


Robert B. Swierupski

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