Opinion ID: 677923
Heading Depth: 2
Heading Rank: 1

Heading: Proper meaning

Text: 12 It is well settled that [t]he ultimate issue, whether particular merchandise has been classified under an appropriate tariff provision, necessarily depends on the meaning of the terms of that provision, which is a question of law subject to de novo review. Lynteq, Inc., v. United States, 976 F.2d 693, 696 (Fed.Cir.1992). To determine the proper meaning of tariff terms as contained in the statute, the terms are construed in accordance with their common and popular meaning, in the absence of contrary legislative intent. E.M. Chemicals v. United States, 920 F.2d 910, 913 (Fed.Cir.1990). To assist it in ascertaining the common meaning of a tariff term, the court may rely upon its own understanding of the terms used, and it may consult lexicographic and scientific authorities, dictionaries, and other reliable information sources. Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 789, 6 Fed.Cir. (T) 121, 125 (Fed.Cir.) cert. denied, 488 U.S. 943, 109 S.Ct. 369, 102 L.Ed.2d 358 (1988). 13 The two competing provisions of the HTSUS are set forth below. 14 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. 15 8704 Motor vehicles for the transport of goods. 16 There are no legally binding notes to these headings that are relevant to the classification of dual-purpose vehicles such as the Pathfinder; therefore, we need only look to the common meaning of the terms as they appear above. 17 By the express language of 8703, motor vehicle principally designed for the transport of persons, it is clear that the vehicle must be designed more for the transport of persons than goods. Webster's Third New International Dictionary of the English Language, Unabridged (1986) defines principally as in the chief place, chiefly; and defines designed as done by design or purposefully opposed to accidental or inadvertent; intended, planned. Thus, if the vehicle is equally designed for the transport of goods and persons, it would not be properly classified under 8703 HTSUS. There is nothing in the legislative history that indicates a different meaning. 18 The government argues that the correct standard to be utilized in determining the principal design of any vehicle must be its construction--its basic structure, body, components, and vehicle layout--and the proper question to be asked is whether that construction is uniquely for passenger transportation. This standard is clearly at odds with Customs' interpretation in its March 1, 1989, memorandum providing guidance in applying these headings to sports utility vehicles. Customs stated: 2 19 Design features, whether they accommodate passenger transport or cargo transport, or both, are of two types both of which are relevant in determining the proper classification of a sports-utility vehicle. First are what may be regarded as structural, or integral design features such as basic body, chassis, and suspension design, ... style and structure of the body [control access to rear]. The second type of design features, auxiliary design features are also relevant when determining whether, on the whole, the transport of persons was the principal design consideration. Neither type by itself can be considered determinative on the issue of the purpose for which the vehicle was principally designed. (emphasis added). 20 Thus, requir[ing] that the resulting product be uniquely constructed for the purpose of transporting persons, to the exclusion of any other use, is a constrictive interpretation of the terms with which we cannot agree. 21 There is nothing in the statute, legislative history, or prior Customs decisions that would indicate that principally designed refers only to a vehicle's structural design as asserted by the government. To answer the question, whether a vehicle is principally designed for a particular purpose, not uniquely designed for a particular purpose, one must look at both the structural and auxiliary design features, as neither by itself is determinative. 22 The government's exclusionary construction fails on another point. Heading 8703 HTSUS specifically includes station wagons, which are not uniquely designed for transport of persons, rather, they are designed as dual-purpose vehicles for the transport of goods and persons. The Pathfinder, like a station wagon, is a vehicle designed with a dual-purpose--to transport goods and persons. 23 The specific mention of including station wagons in 8703 can affect proper classification when dual-purpose vehicles are at issue. The Explanatory Notes define station wagon as vehicles with a maximum seating capacity of nine persons (including the driver), the interior of which may be used, without structural alteration, for the transport of both persons and goods. Customs Co-operation Council (CCC), 4 Harmonized Commodity Description and Coding System, Explanatory Notes, Heading No. 87.03 (1st ed. 1987). As noted by the CIT, the Pathfinder meets the literal definition of a station wagon. Even so, the CIT accorded proper weight to the definition offered by the CCC when it stated that the Explanatory Note definition of station wagons should not be read too literally. 3 As above, we can look to Customs interpretations for instruction on the intended meaning of including station wagons. Again in its March 1, 1989, memorandum Customs stated: 24 [G]iven the wording of the heading and corroborating indications in the working papers of the Customs Co-operation Council, the correct reading appears to be that the phrase 'including station wagons' was not intended to expand upon or be an exception to the requirement that articles are classifiable in heading 8703 only if they are 'principally designed for transport of persons.' It should be emphasized that this interpretation does not read the station wagon reference out of the statute; its inclusion is necessary to clarify that the cargo-carrying capacity of dual-purpose vehicles does not foreclose a finding that they are principally designed to carry persons. (emphasis added) 25 Therefore, notwithstanding the fact that a vehicle may fit the definition of a station wagon and that the term is expressly included in 8703 HTSUS, that vehicle is not automatically included in or excluded from 8703 HTSUS classification. It necessarily follows that correct interpretation of 8703 HTSUS requires a determination of whether or not the vehicle was principally designed for the transport of persons, and not merely a finding that it is within the definition of a station wagon, unless of course it is unquestionably a station wagon. The Pathfinder is not the latter. 26 In summary, we find that the proper meaning of motor vehicle principally designed for the transport of persons to be just that, a motor vehicle principally designed for the transport of persons. While we find it unnecessary to assign a quantitative value to principally, the statutory language is clear that a vehicle's intended purpose of transporting persons must outweigh an intended purpose of transporting goods. To make this determination, we find that both the structural and auxiliary design features must be considered. This construction comports with Customs' interpretations and the CIT's analysis; and it is equally consistent with the common and popular meaning of the terms. 27