Rollix Bearing, Inc. v. US, Court No. 85-11-01575.

Decision Date24 January 1991
Docket NumberCourt No. 85-11-01575.
Citation757 F. Supp. 1412
PartiesROLLIX BEARING, INC., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Sonnenberg, Anderson, O'Donnell & Rodriguez (Thomas J. O'Donnell, Mary E. Gill, and R. Kevin Williams), Chicago, Ill., for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Div., Civil Div., U.S. Dept. of Justice (Susan Burnett Mansfield), for defendant.

OPINION AND JUDGMENT

CARMAN, Judge:

Plaintiff, Rollix Bearing, Inc. ("Rollix") contests the classification and liquidation of its merchandise, geared slewing rings, pursuant to section 514, of the Tariff Act of 1930, as amended, 19 U.S.C. § 1514 (1982). The United States Customs Service ("Customs") denied the protest pursuant to 19 U.S.C. § 1515(a) (1982), and a summons was timely filed. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(a) (1982). After careful examination of the evidence presented at trial, the arguments of the parties, the tariff schedules, the case law, and other relevant authorities, this Court holds that the United States Customs Service improperly classified the subject merchandise as machinery parts not containing electrical features and not specially provided for as item 681.39, Tariff Schedules of the United States ("TSUS") (1983), dutiable at the rate of 7.6% ad valorem and finds the correct classification to be TSUS item 680.49 (1983) as parts of fixed ratio speed changers, dutiable at the rate of 3.5% ad valorem.

BACKGROUND

The issue presented in this case pertains to the proper classification for customs duty purposes of geared slewing rings imported by Rollix Bearing, Inc., now Defontaine, Inc., from France into the United States. As demonstrated at trial by the samples in evidence, the main components of the merchandise consist of an inner and outer ring, one of which has gear teeth, and bearing elements, such as ball rings or cylindrical rollers.

Initially, the geared slewing rings were classified by Customs under TSUS item 657.25 as articles of iron or steel, not coated or plated with precious metal. Rollix protested Customs' initial determination. Customs, in a decision on application for further review of the protest, ultimately determined that the merchandise should have been classified under TSUS item 681.39 as machinery parts not containing electrical features and not specially provided for based on the reasoning that TSUS item 681.39 is more specific than TSUS item 657.25. Post-Trial Brief for the United States, Defendant at 20 ("Defendant's Brief"). Because the rate of duty required under TSUS item 681.39 was the same as that required under TSUS item 657.25, Customs denied the protest in full.

Subsequent to Customs' reclassification of geared slewing rings, the defendant submitted two alternative classifications in a counter claim which was dismissed by this Court. The defendant advances two alternative classifications to the classifications made by Customs which are TSUS item 680.37 as ball bearings and parts thereof and TSUS item 680.39 as other bearings.

Rollix brought this action and contends that the merchandise is properly classifiable under TSUS item 680.49 as parts of fixed ratio speed changers.

CONTENTION OF THE PARTIES

Plaintiff contends that its merchandise, geared slewing rings, should be reclassified as parts of a fixed ratio speed reducer, a kind of speed changer that operates in fixed ratios, under TSUS item 680.49, because TSUS item 680.49 more specifically describes the geared slewing ring than does Customs' classification TSUS item 681.39. In addition, because Customs has submitted an alternative claim, plaintiff argues that Customs should no longer have the benefit of presumption of correctness, as applied in the holding of Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied, 739 F.2d 628 (Fed.Cir.1984). Finally, plaintiff contends that the Brussels Tariff Nomenclature is applicable to its TSUS classification under TSUS item 680.49.

Defendant contends that the geared slewing rings at issue should be properly classified under TSUS item 681.39 as machinery parts not containing electrical features and not specially provided for. Defendant further contends that the Brussels Tariff Nomenclature does not support plaintiff's classification under TSUS item 680.49.

In the alternative, defendant suggests that the geared slewing rings at issue could be properly classified under either TSUS item 680.37 as ball bearings or TSUS item 680.39 as other bearings.

DISCUSSION
Presumption of Correctness

A presumption of correctness exists in favor of Customs' classification of an imported product and the burden of proof rests upon the party challenging the classification. 28 U.S.C. § 2639(a)(1) (1982); Jarvis Clark, 733 F.2d at 878. This presumption of correctness pertains not only to Customs' final classification, but also to every element necessary to support that determination. United States v. New York Merchandise Co., Inc., 58 CCPA 53, 58, C.A.D. 1004, 435 F.2d 1315, 1318 (1970); Schott Optical Glass, Inc. v. United States, 82 Cust.Ct. 11, 15, C.D. 4783, 468 F.Supp. 1318, 1320, aff'd, 67 CCPA 32, C.A.D. 1239, 612 F.2d 1283 (1979). In order to determine whether Customs' classification is correct, this Court must consider Customs' classification both independently and in comparison with the plaintiff's alternatives. Jarvis Clark, 733 F.2d at 878.

The presumption of correctness pertains to Customs' final classification. United States v. New York Merchandise Co., Inc., 58 CCPA 53, 58, C.A.D. 1004, 435 F.2d 1315, 1318 (1970). Defendant agrees that the final classification decision of the Customs Service was that the merchandise was properly classified under TSUS item 681.39. Therefore, a presumption of correctness attaches to Customs' classification of the subject merchandise under TSUS item 681.39 as machinery parts not containing electrical features and not specially provided for, and the plaintiff carries the burden of proving that this classification is not correct.

As to the government's alternative classifications, TSUS items 680.37 and 680.39, there is no presumption of correctness. In J.M. Rodgers Co., Inc. v. United States, 59 Cust.Ct. 91, C.D. 3084 (1967), the court rejected the government's alternate claims by stating:

Where defendant asserts a claim in defense, different from the liquidation classification, the burden is on defendant to prove it. The presumption of correctness ... does not extend to a new claim urged by defendant. citations omitted. It is no part of plaintiff's case to meet every possible unsupported classification defendant can think of.

Id. at 95.

This Court finds that plaintiff has overcome the presumption of correctness attached to Customs' classification under TSUS item 681.39. Furthermore, this Court finds that plaintiff has met its burden in convincing this Court that the subject merchandise, geared slewing rings, should be classified under TSUS item 680.49 as parts of a fixed ratio speed changer.

The following are the pertinent provisions of the Tariff Schedule:

Customs' Original Classification:
Schedule 6, Part 3, Subpart G (1983):

Articles of iron or steel, not coated or plated with precious metal:

Other articles Other 657.25 Other.....7.6% ad val.

Customs' Final Classification:
Schedule 6, Part 4, Subpart J (1983): 681.39 Machinery parts not containing electrical features and not specially provided for ... 7.6% ad val.
Customs' Second and Third Alternative Claim:
Schedule 6, Part 4, Subpart J (1983): Ball or roller bearings, including such bearings with integral shafts, and parts thereof:

680.37 Ball bearings, and parts thereof ..... 11% ad val. 680.39 Other ............... 9.8% ad val.

Plaintiff's Claimed Classification:
Schedule 6, Part 4, Subpart J (1983): Gear boxes and other speed changers with fixed, multiple, or variables, or variable ratios; pulleys and shaft couplings; pillow blocks; flange, take-up, cartridge, and hanger units; torque converters; chain sprockets; clutches and universal joints; all the foregoing (except parts of agricultural or horticultural machinery and implements provided for in item 666.00 and parts of motor vehicles, aircraft, and bicycles) and parts thereof:
Gear boxes and other speed changers, and parts thereof:
Fixed ratio speed changers, multiple and variable ratio speed changers each ratio of which is selected by manual manipulation, and parts thereof:

680.49 Other ........... 3.5% ad val.

According to Plaintiff's Exhibit 1 (Rollix's Company Catalogue on Slewing Rings), slewing rings are an essential element in numerous mechanical assemblies. They are used in the application of amusement rides, concrete pumps, draglines, dock cranes, forklift trucks, hydraulic shovels, loading dock cranes, mobile cranes, offshore cranes, tower cranes, and turntable ladders. Id. at 29.

Plaintiff's Exhibit 2, supra, at 5, defines a geared slewing ring as consisting of an outer and inner ring, one of which has gear teeth; bearing elements (ball rings or cylindrical rollers) separated by spacers; a plug and a retaining pin to keep the rolling elements in position after insertion; and a seal to retain the lubricant in the slewing ring. Rollix's General Catalogue for Slewing Rings at 5 (Plaintiff's Exhibit 2); Rotek's Design Guide and Catalogue on Large Diameter Ball and Roller Bearings at 5, 7 (Defendant's Exhibit F).

The slewing ring has an inner and outer ring; it operates by having one ring attached to a base structure and the other to a rotating structure. Tr. at 119. Plaintiff's witness, Mr. Michael Strand, general manager of Defontaine (formerly known as Rollix), testified that gear teeth are cut into the outside of the outer ring or the inside of the inner ring. Trial Transcript at 23, 199 ("Tr."). Both plaintiff's...

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