FL Smidth & Company v. United States

• Decision Date: 01 May 1969
• Docket Number: Customs Appeal No. 5302.
• Citation: 56 CCPA 77,409 F.2d 1369
• Court: U.S. Court of Customs and Patent Appeals (CCPA)
• Parties: F. L. SMIDTH & COMPANY, Appellant, v. The UNITED STATES, Appellee.

56 CCPA 77, 409 F.2d 1369 (1969)

F. L. SMIDTH & COMPANY, Appellant, v. The UNITED STATES, Appellee.

Customs Appeal No. 5302.

United States Court of Customs and Patent Appeals.

May 1, 1969.

Barnes, Richardson & Colburn, New York City, attorneys of record, for appellant. J. Bradley Colburn and Joseph Schwartz, New York City, of counsel.

William D. Ruckelshaus, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Glenn E. Harris, New York City, for the United States.

Before RICH, Acting Chief Judge, NICHOLS and NEESE, Judges, sitting by designation, and ALMOND and BALDWIN, Judges.

NICHOLS, Judge.

We have before us a petition for review. Appellant, plaintiff below, is dissatisfied with a decision by the Customs Court, Second Division, 59 Cust.Ct. 276, C.D. 3141, holding that an importation of certain "steel tires," which are parts of rotary kilns used in production of cement, were properly classified by customs officials under item 661.30, Tariff Schedules of the United States (TSUS) which provides as follows:

Industrial and laboratory furnaces and ovens, non-electric, and parts thereof ................ 19% ad val.

Appellant limits its case to the claim that the imported articles were properly dutiable at 12.5% ad val., under item 661.70 which provides as follows:

Industrial machinery, plant, and similar laboratory equipment, whether or not electrically heated, for the treatment of materials by a process involving a change of temperature, such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing, or cooling; instantaneous or storage water heaters, non-electrical; all the foregoing (except agricultural implements, sugar machinery, and machinery or equipment for the heat-treatment of textile yarns, fabrics, or made-up textile articles) and parts thereof:

* * * * * *

Other ............. 12.5% ad val.

The court below summarized the record before it in words we find accurate and adopt as our own:

The record herein consists of the testimony of one witness called on behalf of plaintiff and six exhibits received on behalf of plaintiff. Plaintiff\'s exhibit 1 consists of a sketch of a typical rotary kiln while exhibits 2, 3, 4, and 5 are actual photographs of the rotary kiln upon which the tires in question were installed. Plaintiff\'s exhibit 6 is a brochure containing pictures and describing a typical rotary kiln.

Basically, the testimony adduced at the trial was to the effect that the imported steel tires are parts of a rotary kiln and were actually installed at the plant of Southwestern Portland Cement in Victorville, California. The steel tires involved weigh over 100,000 pounds each and the kiln without the imported steel tires weighs over 2,000,000 pounds. The kiln itself is used for the production of cement. The steel tires form part of the kiln and are necessary in order for the kiln to rotate. The kiln itself, while not involved herein, is described to be gasfired. The rotation of the kiln is accomplished by means of a motor — in this instance a 700 horsepower electric motor — which provides its power to a gear rim and drive which consists of two speed reducers and two electric motors. The steel tires involved herein rest upon rollers to permit the rotation of the kiln. They are necessary because of the heavy weight of the kiln. The witness further explained that without the tires, the rotary kiln would collapse.

The evidence also indicates that, in addition to the driving motor, there are other electric motors used for fans for combustion and for blowing cool air through the "hot clinker" and that the cooler itself has a drive for moving the clinker through the cooler. The evidence also establishes that, in addition to the driving motor, an emergency gasoline engine is placed with the unit but used only in the event of an emergency to permit the kiln to rotate temporarily since an interruption during production would cause the kiln to become "crooked."

The witness also testified that the rotary kiln does not have any crucibles, retorts, fire beds, or shelves and that, in the operation, a chemical change of the materials fed into the kiln is caused by the heating, that there is a change of temperature in the kiln, and that said kiln accomplishes cooking, roasting, drying, and evaporating. In further explanation of this, the witness stated that cooking is drying out the CO2, roasting is diffusing into the clinker the calcined material, and that drying is preheating of the material and the evaporation of moisture.

On cross examination, a number of questions were directed to the witness relative to the question of substitution of other forms of power for the electric motors. The sum and substance of this testimony was to the effect that the substitution could be readily accomplished but would not be practical because it would require too large a gasoline engine. The balance of the testimony relates to the terminology and understanding of the terms furnace, oven, and kiln.

We add that the entry was made in 1965 and counsel on both sides stated in oral argument that they were not aware of importations of the type of the involved merchandise at any earlier date, nor did their researches, which we have no doubt were diligent, disclose any decisions, rulings, or practice with respect thereto. We understand this to include any articles, other than the "tires" which might be incorporated as parts of the kilns described in the record. A brochure of appellant's exhibit 6, indicates that the kilns come in varied sizes up to 460 feet in length. There is nothing in the record to show whether the "tires" are standard commercial items or are specially produced on a tailored basis.

The court below first took up the application of item 661.30. It held that as to the rotary kilns before it, the item was ambiguous. This was not because of any doubt that the terms "furnaces and ovens" cover these kilns. The court disregarded testimony that the kilns were never referred to as ovens or furnaces, stating, correctly we believe, that its function was to determine the common meaning of the terms furnace and oven based on its own understanding of those terms. It resorted to dictionaries and encyclopedias, both general and technical, and derived from them what we regard as overwhelming support for the proposition that "ovens" and "furnaces" do include kilns of the kind involved, as well as other kinds. It is needless to review further this part of the opinion below, as appellant does not attack it here and it raises no difficulty. United States, etc. v. Simon Saw & Steel Co., 51 CCPA 33, C.A.D. 834.

The ambiguity rather was derived from the words "non-electric" in item 661.30, in light of the fact that the kiln, though gasfired, uses electric motors, as stated above, to rotate the kiln and to move air into and out of the burning charge. The court said that grammar and prior experience under the superseded Tariff Schedules would indicate that the involved merchandise cannot be called non-electric, but it invoked extrinsic aids to show that, within the intent of Congress, it is non-electric in spite of appearances.

We agree with the result. We believe, however, that in common speech no one would call a gasfired oven or furnace electric because it made use of electric power for auxiliary purposes. The difficulty would occur only to a mind imbued with conceptions valid under the former law, which employed, however, entirely different phraseology, as explained below. We hold that the former schedules have a proper use in interpreting the current ones only to resolve ambiguities, not to raise them. C. S. Emery & Co., et al v. United States, 57 Cust.Ct. 217, C.D. 2767. We find the language of item 661.30 unambiguous in its coverage of the instant merchandise.

Here, the situation parallels Emery, so far as the Tariff Commission apparently has placed a commodity in item 661.30 under a less favorable rate than it enjoyed under the former schedules, while alleging in explanatory notes submitted to Congress in connection with its draft of the new schedules that it made no rate changes in item 661.30. Plaintiff and the court below believe, and we accept arguendo, that under former law the involved kilns would have been dutiable at a lower rate than 19%, either under paragraph 353 or 372. Paragraph 353 covered "articles having as an essential feature an electrical element or device" and under this language it is indeed possible that an electrical element, though auxiliary, may be "essential." It is this memory, of course, very much alive in the minds of all persons experienced in tariff classification under the old schedules, that makes it hard for them to view afresh and de novo the language of item 661.30. However, we note that neither plaintiff nor the court below is sure these kilns would not have fallen under 372 instead of 353. Moreover, there is not here, as in Emery, evidence of an actual, instead of merely hypothetical, more favorable former practice. The Tariff Commission note further said that merchandise under item 661.30 would be classified in par. 397 under the previous law.

Appellant sees in the facts herein evidence that the Tariff Commission could not have intended item 661.30 to apply to the involved kilns. The court below sees it rather as a mere breach by the Tariff Commission of its statutory obligation under Public Law 768, 68 Stat. 1136, not to lay before Congress rate changes in the new Tariff Schedules except upon notice to interested parties and an opportunity to be heard, though the plaintiff could not avail itself of this irregularity because the Congress enacted the new schedules anyway. We do not think the inferences of either the appellant or the court below are fully justified. To show why, we must consider the purpose of the Congress in directing that the Tariff Classification Study be made.

The Tariff...