254 F. Supp. 3d 1297 (2017)
In 2011 Ford Motor Company imported Model Year 2012 Transit Connect vehicles bearing vehicle identification numbers with a 6 or 7 in the sixth digit from its Otosan plant in Kocaeli, Turkey.1 The single entry at issue, Entry Number 300-8620018-3, arrived at the Port of Baltimore on December 26, 2011 and Customs liquidated it on May 3, 2013.2 Ford declared the vehicles under subheading 8703.23.00 at a 2.5 percent duty rate.3
The vehicles were built on the European V227 production line and modified before export to satisfy U.S. Federal Motor Vehicle Safety Standards, including redesign of the underbody support for the second-row seats, addition of side-impact beams and foam blocks, and changes to lighting and labels.4 At importation each Transit Connect 6/7 featured a cost-reduced second-row seat (CRSV-2), seat belts for every position, a LATCH child-seat system, dome lighting throughout, carpeted footwells ahead of the second row, coat hooks, a map pocket, and an optional third cupholder, together with a 5005-pound gross vehicle weight rating and the same chassis and drivetrain as the Ford Focus passenger car.5
After importation, for the Transit Connect 6/7s the second-row seat was unbolted and removed, along with the associated second row safety restraints.6 A steel panel was then bolted into the second row footwell to create a flat surface behind the first rows of seats.7 A molded cargo mat was placed over the floor behind the first row.8 Scuff plates were added inside the second-row doors.9 In some vehicles the sliding door windows were replaced with a solid panel.10 Ford had entered into a contract with its port processor to conduct the post-importation processing prior to the subject merchandise being ordered or manufactured.11
Customs began a trade-compliance review at the Port of Baltimore in late 2011, physically inspected vehicles in February 2012, and requested internal advice.12 On January 30, 2013, in response to Mr. Heffernan's request for Internal Advice, CBP Headquarters issued ruling HQ H220856 to the Baltimore Field Office classifying the vehicles under subheading 8704.31.00 at 25 percent ad valorem. Ford timely and properly protested, CBP denied the protest on June 4, 2013, and on August 19, 2013, Ford timely commenced this case.13 After cross-motions for summary judgment were denied for insufficient information on the rear seat, the parties submitted a joint supplemental statement of undisputed material facts that prompted reconsideration of the motions.14
Whether the MY2012 Ford Transit Connect 6/7 vehicles are properly classifiable under HTSUS subheading 8703.23.00 as motor vehicles principally designed for the transport of persons?15
Classification under HTSUS heading 8703 requires that a vehicle be principally designed for the transport of persons, meaning its intended purpose of transporting persons must outweigh an intended purpose of transporting goods.16 This determination is made by examining structural and auxiliary design features present at the time of importation per Marubeni Am. Corp. v. United States, 35 F.3d 530 (Fed. Cir. 1994).17 Articles are classified based on their condition as imported.18 Legitimate tariff engineering is permitted while disguise or artifice is not.19
Yes. The vehicles share structural features with the Transit Connect 9 passenger wagon, including engine size and type, steel unibody construction, interior volume, front-wheel drive, underbody bracing, permanent bracing in the side pillars, MacPherson strut front suspension, ground clearance, and the same chassis and drivetrain as the Ford Focus passenger vehicle.20 Auxiliary features at importation include the CRSV-2 second-row seat with seatbelts for every position, LATCH child-seat system, dome lighting throughout, carpeted footwells ahead of the second row, coat hooks, map pocket, and optional third cupholder, together with second-row sliding doors with windows, swing-out rear doors, and the absence of any panel or barrier between rows.21 These features align with EN 87.03 criteria and satisfy the Marubeni test that the vehicle's intended purpose of transporting persons outweighs transporting goods.22
The MY2012 Ford Transit Connect 6/7 vehicles are properly classifiable under HTSUS subheading 8703.23.00.23
Whether the MY2012 Ford Transit Connect 6/7 vehicles are properly classifiable under HTSUS subheading 8704.31.00 as motor vehicles for the transport of goods?24
When GRI 1 analyses demonstrate that merchandise is prima facie classifiable under two or more headings, it will be classified under the heading that provides the most specific description per GRI 3(a).25 Heading 8703 affords the most specific description for vehicles principally designed for the transport of persons.26 If the Transit Connect 6/7s satisfy heading 8703 there is no need to discuss heading 8704.27
No. The vehicles' structural features such as the steel unibody, front-wheel drive, MacPherson strut suspension, and shared chassis with the Ford Focus passenger vehicle, combined with auxiliary features including the CRSV-2 seat with full seatbelts and LATCH system, dome lighting, carpeted footwells, and sliding doors with windows, establish that the vehicles are principally designed for transporting persons under heading 8703.28
Because heading 8703 provides the most specific description, GRI 3(a) precludes classification under the more general heading 8704.29
The MY2012 Ford Transit Connect 6/7 vehicles are not properly classifiable under HTSUS subheading 8704.31.00.30
Whether the structural and auxiliary design features present in the Transit Connect 6/7 vehicles at the time of importation indicate a principal design for transporting persons?31
Determining whether a vehicle is principally designed for a particular purpose requires assessment of both structural and auxiliary design features, as neither by itself is determinative, per Marubeni Am. Corp. v. United States, 35 F.3d 530 (Fed. Cir. 1994).32 Structural features include basic body, chassis, suspension design, and style and structure of the body.33 Auxiliary features include comfort and safety elements such as seats with anchor points and fittings for seatbelts, lighting, and carpeting.
Yes. Structural features at importation include the steel unibody, front-wheel drive, MacPherson strut suspension, ground clearance of 8.2 inches, underbody bracing, permanent side-pillar bracing, and shared chassis and drivetrain with the Ford Focus passenger vehicle.34 Auxiliary features include the CRSV-2 seat with seatbelts, LATCH system, dome lighting, carpeted footwells, coat hooks, map pocket, cupholder, sliding doors with windows, swing-out rear doors, and absence of a barrier between rows.35 The GVWR of 5005 pounds and VIN characters are immaterial because EN 87.03 contemplates vehicles under five tonnes and VIN designation merely reflects post-importation plans that do not affect classification at importation.36
The structural and auxiliary design features present in the Transit Connect 6/7 vehicles at the time of importation indicate a principal design for transporting persons.37
Whether Ford's post-importation removal of the cost-reduced rear seat affects the classification of the vehicles based on their condition at importation?38
Classification must be ascertained by examination of the imported article itself in the condition in which it is imported per Worthington v. Robbins, 139 U.S. 337 (1891) and United States v. Citroen, 223 U.S. 407 (1912).39 A manufacturer may purposely manufacture goods to evade higher duties through legitimate tariff engineering.40 Articles cannot escape a prescribed rate by resort to disguise or artifice that makes the article appear other than it is at importation.41
No. The post-importation removal of the CRSV-2 seat and related alterations occurred after the vehicles cleared customs and therefore cannot alter the classification determined by the vehicles' condition at importation.42
Ford's pre-importation decision to install a cost-reduced seat that satisfied FMVSS requirements constitutes legitimate tariff engineering rather than disguise or artifice because the seat was a real, functional component present at importation and the vehicles were not made to appear other than they were.43
Ford's post-importation removal of the cost-reduced rear seat does not affect the classification of the vehicles based on their condition at importation.44