HQ 087736: Bicycles

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 087736

                         August 27, 1990

CLA-2 CO:R:C:G 087736 TLS

CATEGORY: Classification

TARIFF NO.: 732.24; 8712.00.30

T. Randolph Ferguson, Esq.
Glad and Ferguson
625 Market Street
San Francisco, California 94105

RE: Bicycles

Dear Mr. Ferguson:

     This is in reference to a ruling dated April 21, 1989, (our
file 082745), issued to you on behalf of Specialized Bicycle
Components Inc., with regard to the tariff classification of
certain models of bicycles.  For the reasons set forth below, we
have concluded that the ruling was in error and is not in accord
with the current views of the Customs Service.

FACTS:

     The merchandise consists of models known as the Street
Stomper, Hard Rock, Rock Hopper, and the Stump Jumper.  These
bicycles have wheels which are over 25 inches in diameter when
measured to the outer circumference of the tire mounted thereon,
weigh less than 36 pounds complete without accessories and are
valued over $16.66 2/3 each.  They are imported equipped with
tires having a cross-sectional diameter which does not exceed
1.625 inches.

ISSUES:

1.  Whether the bicycles are "not designed for use with tires
having a cross-dimensional diameter exceeding 1.625 inches within
the meaning of item 732.18, Tariff Schedules of the United States
(TSUS).  If not classifiable in item 732.18, the bicycle is
classifiable in item 732.24, TSUS.

2.  Whether the subject bicycle is "not designed for use with
tires having a cross-sectional diameter exceeding 4 cm" within
the meaning of subheading 8712.00.20, Harmonized Tariff Schedule
of the United States (HTS).  If not classifiable in subheading
8712.00.20, the bicycle is classifiable in subheading 8712.00.30.

LAW AND ANALYSIS:

     In a decision dated April 21, 1989, we concluded that the
bicycles were classifiable in item 732.18 TSUS.  That conclusion
was based in significant part on the assumption that a bicycle
designed for off-road use is most likely designed for use with
tires larger than 2.0 inches, while a bicycle designed for street
use is not designed for use with a wide tire, even if it can
accommodate such a tire.  We then considered these bicycles to be
not designed for use with larger tires because they are not
marketed as "true all-terrain bicycles."  This was based on our
belief that only true-all terrain bicycles would be used with
larger tires.  Thus, the decision focused on whether the bicycles
were designed to be used off-road or on paved streets.
For the reasons that follow, we find that whether a bicycle is
designed for street use is not the relevant inquiry in
determining its classification.

The Statutory Standard

     The courts have not had occasion to construe the phrase,
"not designed for use with tires with a cross-dimensional
diameter exceeding 1.625 inches."  The first source of
interpretation of the statute is, of course, the terms of the
language itself.  In examining this language, we find that the
term "not designed for use" is susceptible of different
interpretations.  For example, the phrase, could simply refer to
the subjective intent of the manufacturer in the design of the
bicycle.

     Alternatively, the language may be regarded as requiring an
objective inquiry of suitability for use with larger tires.
Under this test it would not matter whether there was intent to
use larger tires.  Rather the inquiry would be whether the
merchandise is capable of use with larger tires.  Because the
statute is subject to differing interpretations, it is
appropriate to examine its legislative history.  Al Tech
Specialty Steel Corp. v. United States, 10 CIT 743 (1986).

     As originally enacted, paragraph 371, Tariff Act of 1930,
provided simply for bicycles and applied a unitary rate of 30
percent ad valorem.  As the result of a bilateral trade agreement
with the United Kingdom, effective January 1, 1939, this
paragraph was subdivided into three subcategories on the basis of
wheel diameter (i.e., "over twenty-five inches" "over nineteen
but not over twenty-five inches", and "not over nineteen
inches").  Each category was subject to a specific rate of duty
provided that such rate was neither less than 15 percent nor more
than 30 percent ad valorem.

     In 1947, during negotiations concerning the General
Agreement on Tariff and Trade, initially conducted with the
United Kingdom, the record indicates that the U.S. agreed to a 50
percent tariff reduction for the following category:

      Bicycles with or without tires, having wheels over 25
      inches in diameter (measured to the outer circumference of
      the tire), weighing less than 36 pounds complete without
      accessories and not designed for use with tires having a
      cross-sectional diameter exceeding 1-5/8 inches.

     The TSUS created only editorial changes in the formulation
agreed to in GATT.  The Tariff Classification Study issued by the
Tariff Commission provided the following explanation of the
language:

      Items 732.14 through 732.18 cover bicycles having both
      wheels over 25 inches in diameter "if weighing less than 36
      pounds complete without accessories and not designed for
      use with tires having a cross-sectional diameter exceeding
      1.625 inches".  This description is intended to "carve out"
      for separate duty treatment so-called lightweight bicycles.

     Our examination of the legislative history provides two
noteworthy observations.  First, the intent of the language at
issue was to carve out or provide more advantageous tariff
treatment for a particular type of article, lightweight English
style bicycles.  This is evident from the combination of maximum
weight and maximum wheel diameter.  Secondly, to effectuate this
result, Congress employed an unusual negative formulation of "not
designed for use".   Congress could have articulated the
provision affirmatively, so that bicycles designed for use or
imported equipped with smaller tires would have received the
tariff benefit.  That they saddled the importer with proving a
negative indicates an intent to carve out a narrow category
within the provision for bicycles.

     The next question to be examined is the criteria to be used
in determining whether a bicycle has been shown to be not
designed for use with larger tires.  In the absence of decisions
construing the term "not designed for use" we seek guidance from
court decisions of concerning whether an article is specially
designed or specially constructed for a particular purpose.

     In Plus Computing Machines, Inc. v. United States, 44
C.C.P.A. 160, 167, C.A.D. 655 (1957), the issue before the court
was whether the importer's computing machine was specially
constructed for multiplying and dividing.  In fact, the machine
could be used to perform multiplication and division but operated
through addition and subtraction.  In concluding that the
machines were specially constructed for the statutory purpose,
the court stated:  "the statement that an article is specifically
constructed for a particular purpose means merely that it
includes particular features which adapt it for that purpose.
The purpose in question need not be the sole one served by the
article and may not even be the principal one."

     In Porter v. United States, 409 F. Supp. 757, C.D. 4641
(1976),  the issue presented was whether motorcross gloves could
be considered "specially designed for use in sports" under TSUS
item 735.05.  The court, citing Sports Industries, Inc. v. United
States, 65 Cust. Ct. 470, C.D. 4125 (1970) stated "it is well
established that whether an article is 'specially designed' or
'specially constructed' for a particular purpose may be
determined by an examination of the article itself, its
capabilities, and its actual use or uses."  (emphasis added).
The court then concluded that the gloves had features which
satisfied the specially designed requirement.

     Under these cases, the inquiry is whether the article has
features which make it suitable for the statutory purpose.  In
applying the approach followed in these cases to the particular
negative language at issue here, and given the legislative
history cited above, we conclude that in order to qualify for
classification in item 732.18, the importer must demonstrate that
there are important design features in the bicycles that preclude
the use of tires exceeding 1.625 inches in diameter.  In this
regard, it is not enough to prove that a bicycle was designed
with smaller tires in mind.  Rather, the use of larger tires must
be inconsistent with the safe and proper operation of the
bicycle.

     Clearly such a showing requires more than the fact that as
presented for importation, the bicycle is equipped with smaller
tires.  As we observed in our earlier decision, this factor
cannot be dispositive of the classification issue.  To decide
otherwise would mean that identical models equipped with
different size tires would be classifiable in different tariff
provisions.  We do not believe that such a result is consistent
with the statutory test.

      You contend that the front fork would have to be replaced
if the specified clearances are to be maintained with the use of
2.125 inch tires, which were offered on some bikes sold by
Specialized.  In addition, with respect to the Rockhopper, you
have contended that removal of the front reflector bracket is
necessary to accommodate such a tire.  Such alterations would,
you state, void the manufacturer's warranty.

     We find that the bicycles can easily accommodate tires
exceeding 1.625 inches.  Nothing about the bicycles' frames or
components would have to be altered or modified to accommodate
the larger tires.  A survey of representatives at bicycle shops
in the Washington D.C. area revealed that a rim measuring 26" by
1.5" would easily accommodate a tire measuring 26" by 1.75"
without any modifications to the rim.  All representatives stated
that this is routinely done.  All stated that these bicycles can
be used with such tires without any changes to the bicycles
themselves and are in fact used that way regularly.  Thus,
whether alterations would be necessary for a tire as large as
2.125 inches is irrelevant since no such alteration would be
needed for a tire larger than 1.625 inches as specified in the
tariff.  With respect to the reflector bracket on the Rockhopper,
assuming arguendo that repositioning would be required, we do not
find this to be significant for classification purposes.  The
basic framework and components of the bike remain intact and
would permit the larger tire to be used.

     In our previous decision we noted that the bicycles had
features added for street use.  These features are new fork
crowns, repositioning the brake pivots, implementation of a spoke
structure, and the adjustment of the brakes to adapt to the new
tire and rim combinations employed.  These changes are not
inconsistent with the use of the larger tires.  The rims imported
with the bicycles can be used to hold the larger tires, making
the need to further adjust the brakes unnecessary.  None of the
cited adjustments preclude the use of larger tires.  Accordingly,
we do not regard these features as significant for classification
purposes.

     You suggest that use with larger tires would constitute a
fugitive use which should be disregarded for classification
purposes.  Based on our interpretation of the statute, it need
not be shown that the bicycles are principally used with larger
tires.  See Plus Computing Machines v. United States, supra.
Rather, the relevant consideration is whether or not the bike can
be used in its proper manner with the larger tires."

     In our original ruling, we relied in part on CIE 1784/58, as
support for the proposition that a bicycle equipped with a
smaller tire was designed for use with such a tire.  Upon further
review, we find the previous decision to be inapposite.  The
issue in that ruling was simply whether the statutory diameter
could be regarded as having been met because the tires with which
the bicycle was equipped were so close in size (1.6535 inches) to
the standard.  The decision merely held that the standard was to
be applied exactly as written.  It did not examine how to
evaluate whether or not a bicycle met the standard.

CONCLUSION:

      In view of their suitability for use with large tires, it
has not been demonstrated that the bicycles are not designed for
use with tires exceeding 1.625 inches.  Accordingly, they are
classifiable in item 732.24, TSUS, dutiable at the rate of 11
percent ad valorem.

     In our previous decision, we indicated the classification of
this merchandise under the Harmonized Tariff Schedule of the
United States (HTS).  In accordance with the analysis above, we
find our conclusion to have been in error.  The language of the
HTS tracks directly the provision in the TSUS.  Therefore, the
proper classification of this merchandise under the HTS is
subheading 8712.00.30, providing for bicycles and other cycles
(including delivery tricycles), not motorized:  bicycles having
both wheels exceeding 65 cm in diameter:  other, dutiable at the
rate of 11 percent ad valorem.

     Pursuant to section 177.9(d)(1), Customs Regulations, (19
CFR 177.9(d)(1)), Ruling letter 082745, dated April 21, 1989, is
found to be in error and is hereby revoked.

     To the extent that you believe that you may have relied to
your detriment on the foregoing ruling, you may, at your
discretion, apply for temporary relief from the binding effects
of this revocation pursuant to 19 CFR 177.9(d)(3), Customs
Regulations.


                              Sincerely,





                              Harvey B. Fox
                              Director
                              Office of Regulations and Rulings