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H099435: Eligibility of certain modular active chilled beam units for preferential duty treatment under NAFTA
Ruling Date: Jul 15, 2010
HQ H099435
July 15, 2010
OT:RR:CTF:VS H099435 EE
CATEGORY: Classification
Michael Cantlay
Twa Panel Systems, Inc.
1201 4th Street
Nisku, Alberta T9E 7L3
Canada
RE: Eligibility of certain modular active chilled beam units for preferential duty treatment under NAFTA
Dear Mr. Cantlay:
This is in response to your letter we received on March 24, 2010, concerning the eligibility of certain modular active chilled beam (“MAC beam”) units for preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”).
FACTS:
You provide that the MAC beam unit, also known as an induction diffuser, is designed to provide cooling, ventilation and/or heating in commercial buildings. The outside air is used to control the latent requirements of the space, provide fresh air to the occupants, and pressurize the beam plenum. The air then passes through an array of formed nozzles along the length of the beam. The jets of air discharging from the nozzles causes the room air to be drawn through the unit mounted coil via induction. The mixture of the outside air and the induced air enters the room through the discharge slots on each side of the beam. You state that approximately 65-75 percent of the cooling effect is provided by the chilled water coil. The difference between the room air temperature and the chilled water temperature determines the MAC beam unit’s ability to absorb heat. The cooler the room, the less heat can be absorbed by the coil. Therefore, the beam’s capacity is self-regulating. The unit has no moving parts and requires no electrical connections.
The MAC beam unit consists of a galvanized steel beam module (casement), a galvanized steel pressurization plenum box, hinged access door with integral perforations, formed induction nozzles, discharge air slots, heat exchanger coil (copper tubing with aluminum fins) for chilled and/or hot water, a flange for duct connection and adjustable mounting brackets. Twa MAC beams are available in sizes that measure 2’ by 2’, 2’ by 4’, 2’ by 6’, and 2’ by 8’. The beam is designed to fit within a standard 2’ wide T-bar ceiling grid that can also be installed within a finished drywall ceiling.
You state that the following operations will take place in Canada:
Pressurization Plenum Body: Unpainted galvanized steel is used in the assembly of the plenum box. The plenum body is shaped, caulked, and the plenum end cap is attached by toxing. A rail bracket is riveted to complete the assembly of the plenum box.
Beam Module: Galvanized steel is used in the assembly of the beam module. The induction nozzles are formed into the beam body. The beam end cap is attached by toxing. The exposed areas are painted and the door latches are screw mounted to complete the beam module.
Door Assembly: Galvanized steel is used in assembly of the door assembly. It is first painted and then the door latch counterparts are attached by riveting.
Deflector Assembly: Galvanized steel is used in the assembly of the deflector assembly. The deflector, with an adhesive foam tape, is attached to the chilled beam.
Chilled Beam: The beam module and the plenum body assembly are riveted. Next, the deflector assembly is mounted by riveting. The coil is then mounted with screws. The access doors are riveted. Final assembly is completed by permanently affixing the mounting rails to the pressurization plenum. The outside of the completed chilled beam is then caulked.
Packing and Crating: The plenum and beam end caps are protected by cardboard and the complete chilled beam unit is lumber wrapped with plastic and then crated.
You submitted a breakdown of the component materials and costs for the MAC beam models MACB222 and MACB288, as well as an advertisement pamphlet. The bill of materials of the goods is as follows:
MAC beam model MACB222
Item
Origin
HTSUS Classification
Beam module
Canada
7326.90
Beam body
Canada
7326.90
Door latch
China
8302.41
Beam end cap
China
7326.90
Heat exchanger coil
UAE
8419.50
Plenum body
China
7326.90
Plenum end cap
China
7326.90
Plenum test port
Canada
8481.80
Standard rail bracket
China
8302.41
Deflector
China
7326.90
Door with round holes
China
7326.90
Roller latch assembly
China
8302.41
Hanging bracket
China
8302.41
Screw pivot
Taiwan
7318.15
T-screw
Other
7318.15
MAC beam model MACB288
Item
Origin
HTSUS Classification
Beam module
Canada
7326.90
Beam body
Canada
7326.90
Door latch
China
8302.41
Beam end cap
China
7326.90
Heat exchanger coil
UAE
8419.50
Plenum body
China
7326.90
Plenum end cap
China
7326.90
Plenum test port
Canada
8481.80
Standard rail bracket
China
8302.41
Deflector
China
7326.90
Door with round holes
China
7326.90
Roller latch assembly
China
8302.41
Hanging bracket
China
8302.41
Screw pivot
Taiwan
7318.15
T-screw
Other
7318.15
ISSUE:
Whether the MAC beam units qualify for preferential tariff treatment under NAFTA.
LAW AND ANALYSIS:
General Note (“GN”) 12, HTSUS, incorporates Article 401 of NAFTA into the HTSUS. GN 12(a)(i), HTSUS, provides:
Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.
Accordingly, the MAC beam units will be eligible for the “Special” “CA” rate of duty provided that they are NAFTA originating under GN 12(b), Harmonized Tariff Schedule of the United States (“HTSUS”), and qualify to be marked as a product of Canada under the NAFTA Marking Rules that are set forth in 19 C.F.R. Part 102. GN 12(b), HTSUS, provides, in pertinent part:
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--
they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that—
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. For purposes of this note, the term "material" means a good that is used in the production of another good, and includes a part or an ingredient; or…
In this case, since the MAC beam units are comprised, in part, of non-originating materials, GN 12(b)(i), HTSUS, does not apply. Therefore, we must determine whether the non-originating materials undergo the tariff shift and other applicable requirements provided for under GN 12(b)(ii), HTSUS. You state that in New York Ruling Letter (“NY”) N088615, dated January 11, 2010, U.S. Customs and Border Protection (“CBP”) determined that the MAC beam units are classified in subheading 7326.90.85, HTSUS. The applicable rule set forth in GN 12(t)/73.27, HTSUS, provides “a change to headings 7325 through 7326 from any heading outside that group.”
You state that the beam end cap, the plenum body, the plenum end cap, the deflector, and the door, which are non-originating components, are classified under subheading 7326.90, HTSUS. Since these materials are classified under the same heading as the MAC beam units (heading 7326, HTSUS), the tariff shift rule set forth in GN 12(t)/73.27, HTSUS, is not met.
The next applicable rule is set forth in GN 12(b)(iv), HTSUS. NAFTA Rules of Origin regulations, Appendix to 19 C.F.R. part 181 at section 4, which implement the rules of origin provisions of GN 12, HTSUS, set forth certain exceptions to the change in tariff classification requirement provided for in GN 12(b)(ii). Section 4(4) provides, in pertinent part, that a good originates in the territory of a NAFTA country where:
(a) except in the case of a good provided for in any of Chapters 61 through 63,
(i) the good is produced entirely in the territory of one or more of the NAFTA countries,
(ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because the materials were imported together, whether or not with originating materials, into the territory of a NAFTA country as an unassembled or disassembled good, and were classified as an assembled good pursuant to Rule 2(a) of the General Rules for the Interpretation of the Harmonized System,
(iii) the regional value content of the good, calculated in accordance with section 6, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and
(iv) the good satisfies all other applicable requirements of this appendix, including any applicable, higher regional value-content requirement provided for in section 13 or Schedule I; or
(b) except in the case of a good provided for in any of Chapters 61 through 63,
(i) the good is produced entirely in the territory of one or more of the NAFTA countries,
(ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because
(A) those materials are provided for under the Harmonized System as parts of the good, and
(B) the heading for the good provides for both the good and its parts and is not further subdivided into subheadings, or the subheading for the good provides for both the good and its parts,
(iii) the non-originating materials that do not undergo a change in tariff classification in the circumstances described in subparagraph (ii) and the good are not both classified as parts of goods under the heading or subheading referred to in subparagraph (ii)(B),
(iv) each of the non-originating materials that is used in the production of the good and is not referred to in subparagraph (iii) undergoes an applicable change in tariff classification or satisfies any other applicable requirement set out in Schedule I,
(v) the regional value content of the good, calculated in accordance with section 6, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and
(vi) the good satisfies all other applicable requirements of this appendix, including any applicable, higher regional value-content requirement provided for in section 13 or Schedule I.
You state that the production process of the MAC beam units occurs in Canada; therefore, section 4(4)(a)(i) is met. However, section 4(4)(a)(ii) is not satisfied because the non-originating materials used in the production of the MAC beam units imported into Canada were not imported in an unassembled or disassembled form and, as entered into Canada, were not classified as assembled pursuant to GRI 2(a). The next applicable rule is set forth in section 4(4)(b). The MAC beam units meet the first two requirements of section 4(4)(b), since they are produced entirely in Canada and there are non-originating materials (the beam end cap, the plenum body, the plenum end cap, the deflector, and the door) which do not undergo an applicable change in tariff classification. However, the requirement under section 4(4)(b)(ii)(A) is not met since the said non-originating materials are not provided for under the HTSUS as parts of the finished good. Section 4(5), which interprets section 4(4)(b), provides in pertinent part:
For purposes of subsection (4)(b),
(a) the determination of whether a heading or subheading provides for a good and its parts shall be made on the basis of the nomenclature of the heading or subheading and the relevant Section or Chapter Notes, in accordance with the General Rules for the Interpretation of the Harmonized System; and
(b) where, in accordance with the Harmonized System, a heading includes parts of goods by application of a Section Note or Chapter Note of the Harmonized System and the subheadings under that heading do not include a subheading designated ‘‘Parts’’, a subheading designated ‘‘Other’’ under that heading shall be considered to cover only the goods and parts of the goods that are themselves classified under that subheading.
As previously noted, the non-originating materials are classified under subheading 7326.90, HTSUS. Heading 7326, HTSUS, is not a “parts” provision. Neither the heading text, nor any of the relevant section or chapter notes, refer to parts. Cf. Heading 8201, HTSUS, which provides for “[h]andtools of the following kinds and base metal parts thereof….” Therefore, inasmuch as the non-originating materials are classified are articles of steel, and not as “parts” of the MAC beam units, the MAC beam units do not satisfy the requirements set forth in section 4(4).
HOLDING:
Based upon the facts presented, the MAC beam units are not eligible for preferential tariff treatment under NAFTA.
Reference to this ruling letter should be made in the entry documents filed at the time the subject goods are entered. See CBP Form 7501 - Instructions, Additional Data Elements (available online at: www.cbp.gov). If the entry summary has been filed without reference to this ruling letter, the ruling letter should be brought to the attention of the appraising officer at the port of entry.
Sincerely,
Monika R. Brenner
Chief
Valuation & Special Programs Branch
July 15, 2010
OT:RR:CTF:VS H099435 EE
CATEGORY: Classification
Michael Cantlay
Twa Panel Systems, Inc.
1201 4th Street
Nisku, Alberta T9E 7L3
Canada
RE: Eligibility of certain modular active chilled beam units for preferential duty treatment under NAFTA
Dear Mr. Cantlay:
This is in response to your letter we received on March 24, 2010, concerning the eligibility of certain modular active chilled beam (“MAC beam”) units for preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”).
FACTS:
You provide that the MAC beam unit, also known as an induction diffuser, is designed to provide cooling, ventilation and/or heating in commercial buildings. The outside air is used to control the latent requirements of the space, provide fresh air to the occupants, and pressurize the beam plenum. The air then passes through an array of formed nozzles along the length of the beam. The jets of air discharging from the nozzles causes the room air to be drawn through the unit mounted coil via induction. The mixture of the outside air and the induced air enters the room through the discharge slots on each side of the beam. You state that approximately 65-75 percent of the cooling effect is provided by the chilled water coil. The difference between the room air temperature and the chilled water temperature determines the MAC beam unit’s ability to absorb heat. The cooler the room, the less heat can be absorbed by the coil. Therefore, the beam’s capacity is self-regulating. The unit has no moving parts and requires no electrical connections.
The MAC beam unit consists of a galvanized steel beam module (casement), a galvanized steel pressurization plenum box, hinged access door with integral perforations, formed induction nozzles, discharge air slots, heat exchanger coil (copper tubing with aluminum fins) for chilled and/or hot water, a flange for duct connection and adjustable mounting brackets. Twa MAC beams are available in sizes that measure 2’ by 2’, 2’ by 4’, 2’ by 6’, and 2’ by 8’. The beam is designed to fit within a standard 2’ wide T-bar ceiling grid that can also be installed within a finished drywall ceiling.
You state that the following operations will take place in Canada:
Pressurization Plenum Body: Unpainted galvanized steel is used in the assembly of the plenum box. The plenum body is shaped, caulked, and the plenum end cap is attached by toxing. A rail bracket is riveted to complete the assembly of the plenum box.
Beam Module: Galvanized steel is used in the assembly of the beam module. The induction nozzles are formed into the beam body. The beam end cap is attached by toxing. The exposed areas are painted and the door latches are screw mounted to complete the beam module.
Door Assembly: Galvanized steel is used in assembly of the door assembly. It is first painted and then the door latch counterparts are attached by riveting.
Deflector Assembly: Galvanized steel is used in the assembly of the deflector assembly. The deflector, with an adhesive foam tape, is attached to the chilled beam.
Chilled Beam: The beam module and the plenum body assembly are riveted. Next, the deflector assembly is mounted by riveting. The coil is then mounted with screws. The access doors are riveted. Final assembly is completed by permanently affixing the mounting rails to the pressurization plenum. The outside of the completed chilled beam is then caulked.
Packing and Crating: The plenum and beam end caps are protected by cardboard and the complete chilled beam unit is lumber wrapped with plastic and then crated.
You submitted a breakdown of the component materials and costs for the MAC beam models MACB222 and MACB288, as well as an advertisement pamphlet. The bill of materials of the goods is as follows:
MAC beam model MACB222
Item
Origin
HTSUS Classification
Beam module
Canada
7326.90
Beam body
Canada
7326.90
Door latch
China
8302.41
Beam end cap
China
7326.90
Heat exchanger coil
UAE
8419.50
Plenum body
China
7326.90
Plenum end cap
China
7326.90
Plenum test port
Canada
8481.80
Standard rail bracket
China
8302.41
Deflector
China
7326.90
Door with round holes
China
7326.90
Roller latch assembly
China
8302.41
Hanging bracket
China
8302.41
Screw pivot
Taiwan
7318.15
T-screw
Other
7318.15
MAC beam model MACB288
Item
Origin
HTSUS Classification
Beam module
Canada
7326.90
Beam body
Canada
7326.90
Door latch
China
8302.41
Beam end cap
China
7326.90
Heat exchanger coil
UAE
8419.50
Plenum body
China
7326.90
Plenum end cap
China
7326.90
Plenum test port
Canada
8481.80
Standard rail bracket
China
8302.41
Deflector
China
7326.90
Door with round holes
China
7326.90
Roller latch assembly
China
8302.41
Hanging bracket
China
8302.41
Screw pivot
Taiwan
7318.15
T-screw
Other
7318.15
ISSUE:
Whether the MAC beam units qualify for preferential tariff treatment under NAFTA.
LAW AND ANALYSIS:
General Note (“GN”) 12, HTSUS, incorporates Article 401 of NAFTA into the HTSUS. GN 12(a)(i), HTSUS, provides:
Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.
Accordingly, the MAC beam units will be eligible for the “Special” “CA” rate of duty provided that they are NAFTA originating under GN 12(b), Harmonized Tariff Schedule of the United States (“HTSUS”), and qualify to be marked as a product of Canada under the NAFTA Marking Rules that are set forth in 19 C.F.R. Part 102. GN 12(b), HTSUS, provides, in pertinent part:
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--
they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that—
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. For purposes of this note, the term "material" means a good that is used in the production of another good, and includes a part or an ingredient; or…
In this case, since the MAC beam units are comprised, in part, of non-originating materials, GN 12(b)(i), HTSUS, does not apply. Therefore, we must determine whether the non-originating materials undergo the tariff shift and other applicable requirements provided for under GN 12(b)(ii), HTSUS. You state that in New York Ruling Letter (“NY”) N088615, dated January 11, 2010, U.S. Customs and Border Protection (“CBP”) determined that the MAC beam units are classified in subheading 7326.90.85, HTSUS. The applicable rule set forth in GN 12(t)/73.27, HTSUS, provides “a change to headings 7325 through 7326 from any heading outside that group.”
You state that the beam end cap, the plenum body, the plenum end cap, the deflector, and the door, which are non-originating components, are classified under subheading 7326.90, HTSUS. Since these materials are classified under the same heading as the MAC beam units (heading 7326, HTSUS), the tariff shift rule set forth in GN 12(t)/73.27, HTSUS, is not met.
The next applicable rule is set forth in GN 12(b)(iv), HTSUS. NAFTA Rules of Origin regulations, Appendix to 19 C.F.R. part 181 at section 4, which implement the rules of origin provisions of GN 12, HTSUS, set forth certain exceptions to the change in tariff classification requirement provided for in GN 12(b)(ii). Section 4(4) provides, in pertinent part, that a good originates in the territory of a NAFTA country where:
(a) except in the case of a good provided for in any of Chapters 61 through 63,
(i) the good is produced entirely in the territory of one or more of the NAFTA countries,
(ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because the materials were imported together, whether or not with originating materials, into the territory of a NAFTA country as an unassembled or disassembled good, and were classified as an assembled good pursuant to Rule 2(a) of the General Rules for the Interpretation of the Harmonized System,
(iii) the regional value content of the good, calculated in accordance with section 6, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and
(iv) the good satisfies all other applicable requirements of this appendix, including any applicable, higher regional value-content requirement provided for in section 13 or Schedule I; or
(b) except in the case of a good provided for in any of Chapters 61 through 63,
(i) the good is produced entirely in the territory of one or more of the NAFTA countries,
(ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because
(A) those materials are provided for under the Harmonized System as parts of the good, and
(B) the heading for the good provides for both the good and its parts and is not further subdivided into subheadings, or the subheading for the good provides for both the good and its parts,
(iii) the non-originating materials that do not undergo a change in tariff classification in the circumstances described in subparagraph (ii) and the good are not both classified as parts of goods under the heading or subheading referred to in subparagraph (ii)(B),
(iv) each of the non-originating materials that is used in the production of the good and is not referred to in subparagraph (iii) undergoes an applicable change in tariff classification or satisfies any other applicable requirement set out in Schedule I,
(v) the regional value content of the good, calculated in accordance with section 6, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and
(vi) the good satisfies all other applicable requirements of this appendix, including any applicable, higher regional value-content requirement provided for in section 13 or Schedule I.
You state that the production process of the MAC beam units occurs in Canada; therefore, section 4(4)(a)(i) is met. However, section 4(4)(a)(ii) is not satisfied because the non-originating materials used in the production of the MAC beam units imported into Canada were not imported in an unassembled or disassembled form and, as entered into Canada, were not classified as assembled pursuant to GRI 2(a). The next applicable rule is set forth in section 4(4)(b). The MAC beam units meet the first two requirements of section 4(4)(b), since they are produced entirely in Canada and there are non-originating materials (the beam end cap, the plenum body, the plenum end cap, the deflector, and the door) which do not undergo an applicable change in tariff classification. However, the requirement under section 4(4)(b)(ii)(A) is not met since the said non-originating materials are not provided for under the HTSUS as parts of the finished good. Section 4(5), which interprets section 4(4)(b), provides in pertinent part:
For purposes of subsection (4)(b),
(a) the determination of whether a heading or subheading provides for a good and its parts shall be made on the basis of the nomenclature of the heading or subheading and the relevant Section or Chapter Notes, in accordance with the General Rules for the Interpretation of the Harmonized System; and
(b) where, in accordance with the Harmonized System, a heading includes parts of goods by application of a Section Note or Chapter Note of the Harmonized System and the subheadings under that heading do not include a subheading designated ‘‘Parts’’, a subheading designated ‘‘Other’’ under that heading shall be considered to cover only the goods and parts of the goods that are themselves classified under that subheading.
As previously noted, the non-originating materials are classified under subheading 7326.90, HTSUS. Heading 7326, HTSUS, is not a “parts” provision. Neither the heading text, nor any of the relevant section or chapter notes, refer to parts. Cf. Heading 8201, HTSUS, which provides for “[h]andtools of the following kinds and base metal parts thereof….” Therefore, inasmuch as the non-originating materials are classified are articles of steel, and not as “parts” of the MAC beam units, the MAC beam units do not satisfy the requirements set forth in section 4(4).
HOLDING:
Based upon the facts presented, the MAC beam units are not eligible for preferential tariff treatment under NAFTA.
Reference to this ruling letter should be made in the entry documents filed at the time the subject goods are entered. See CBP Form 7501 - Instructions, Additional Data Elements (available online at: www.cbp.gov). If the entry summary has been filed without reference to this ruling letter, the ruling letter should be brought to the attention of the appraising officer at the port of entry.
Sincerely,
Monika R. Brenner
Chief
Valuation & Special Programs Branch