ER HAWTHORNE & CO., INC. v. United States

• Decision Date: 11 July 1983
• Docket Number: Court No. 81-7-00957.
• Citation: 572 F. Supp. 1279
• Parties: E.R. HAWTHORNE & CO., INC., A/C Veped Traffic Controls, Inc., Plaintiff, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

572 F. Supp. 1279

E.R. HAWTHORNE & CO., INC., A/C Veped Traffic Controls, Inc., Plaintiff, v. The UNITED STATES, Defendant.

Court No. 81-7-00957.

United States Court of International Trade.

July 11, 1983.

Rode & Qualey, New York City (John S. Rode and R. Brian Burke, New York City, at trial and on brief), for plaintiff.

J. Paul McGrath, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Lit. Branch, New York City (Deborah E. Rand, Washington, D.C., at trial and on brief), for defendant.

BOE, Judge:

The merchandise involved in the above-entitled action, described on the invoices as "round tapered black steel tubes," was classified as "Illuminating articles and parts thereof" under item 653.39, TSUS, which provides:

Schedule 6, Part 2, Subpart B:

Pipes and tubes and blanks therefor, all the foregoing of iron (except cast iron) or steel:

Welded, jointed, or seamed, with walls not thinner than 0.065 inch, and of circular cross section:

Other than alloy iron or steel:

* * * * * * *

Item 610.32 0.375 inch or more in outside diameter .....0.3¢ per pound

-or-

Schedule 6, Part 2, Subpart B:

Angles, shapes, and sections, all the foregoing, of iron or steel, hot rolled, forged, extruded, or drawn, or cold formed or cold finished, whether or not drilled, punched, or otherwise advanced; sheet piling of iron or steel:

Angles, shapes, and sections:

Hot rolled; or, cold formed and weighing over 0.29 pound per linear foot:

Not drilled, not punched, and not otherwise advanced:

Item 609.80 Other than alloy iron or steel ........0.1¢ per pound

-or-

Schedule 6, Part 3, Subpart F:

Hangars and other buildings, bridges, bridge sections, lockgates, towers, lattice masts, roofs, roofing frameworks, door and window frames, shutters, balustrades, columns, pillars and posts and other structures and parts of structures, all the foregoing of base metal:

Schedule 6, Part 3, Subpart F:

Illuminating articles and parts thereof, of base metal:

* * * * * * *

Other:

* * * * * * *

Other:

* * * * * * *

Item 653.39 Other .............................17.6% ad valorem

Plaintiff challenges the liquidated classification and asserts four alternative classifications for the subject merchandise:

Of iron or steel:

* * * * * * *

Columns, pillars, posts, beams, girders, and similar structural units Not in part of alloy iron or steel:

* * * * * * *

Item 652.94 Other .................................4.3% ad valorem

-or-

Schedule 6, Part 3, Subpart G:

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

* * * * * * *

Other articles:

* * * * * * *

Other:

* * * * * * *

Item 657.25 Other ...............................9% ad valorem

The subject merchandise consists of tapered steel tubes varying in length from 20 to 39 feet, a wall thickness of five millimeters (seven gauge), top diameters ranging from 3.17 inches and base diameters ranging from 7 to 11 inches. The merchandise was manufactured in France by Petitjean & Cie, a producer of various types of steel items, and imported into the United States in 1980 by Veped Traffic Controls, Inc. Products of the kind and character of the subject merchandise are manufactured from coils of steel specifically purchased by Petitjean for a particular order. The steel is then uncoiled and slit into trapezoids according to measurements meeting the specifications of the pole ordered. After the edges are cut, the pieces are bent in a press to achieve a circular shape. Finally, the edges are welded together and the tube is cleaned and straightened.

Upon importation, the tubes are subjected to further processing steps, the nature and extent of which depends upon the purpose for which the tube is to be used. Veped, a manufacturer of traffic signs and signals, designs a support structure to meet the specific needs of each order, taking into account such factors as wind velocity in the area, amount of weight to be carried and the required measurements of the pole. Drawings are made of the desired finished support structures and poles are selected with the proper specifications based on such drawings.

Orders for support structures fabricated by Veped require the addition of attachments and components to the tube. A base plate is welded onto the bottom of the pole and several clamps to support a mast arm are welded at the top of the pole. More importantly, the pole itself must be further processed; the pole is cut at the top to the exact length specified in the drawing. The ends of the tube are squared. Provisions are made for a handhole ring to be made and attached to the pole so that electrical wiring may be connected to it. The pole must be painted or galvanized to prevent corrosion or rust. If necessary, a transformer base is attached. In sum, approximately one-half of the cost, and one-third of the time, is required to produce the raw tube as is necessary to manufacture a finished support structure.

Perhaps no other area of customs jurisprudence has been the subject of what might appear to be diverse decisions as we find in considering the issues involved herein. In decisions which might initially appear to be contradictory holdings, we find upon closer examination that the determinations therein have been made applicable and/or restricted only to the individual facts involved. General rules of interpretation, as enunciated by the trial as well as by the appellate courts, often become subjected to subsequent interpretations which were neither originally intended nor are presently applicable.

Thus, in determining the proper classification of the imported merchandise it is essential that the questions of law and fact, the principles of statutory construction, and the established rules pertinent to the application of such statutes relating thereto be considered in full complementary perspective.

It is well established that the classification of the imported merchandise is determined by the character thereof at the time of its importation. The Carrington Co., United Geophysical Corp. v. United States, 61 CCPA 77, 497 F.2d 902 (1974). Whether the imported merchandise shall be classified by its generic description, by an eo nomine designation or as parts of an article is dependent upon the specific TSUS provisions as well as the identity and character of the merchandise. John V. Carr & Son, Inc. v. United States, 72 Cust.Ct. 19 (1974). In determining the character and identity of the subject merchandise at the time of its importation the court must necessarily consider the degree of advancement which the merchandise has undergone as well as the use or uses, if any, of the merchandise. Doherty-Barrow of Texas, Inc. v. United States, 3 CIT ___, Slip Op. 82-47 (June 16, 1982); United States v. The Carborundum Co., 63 CCPA 98, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979, 97 S.Ct. 490, 50 L.Ed.2d 587 (1976).

Ultimate use, alone, does not serve as the determining test for the classification of merchandise as imported. The court in John V. Carr, supra, at 27, has well expressed the requirement of initially determining whether such merchandise at the time of importation has been sufficiently advanced so that it can be used as a part of an article without substantial additional processing:

It may well be that most angles, shapes and sections are ultimately dedicated and used as parts of articles and that such ultimate use determines the form in which the angles, shapes and sections are made. See United States v. The Singer Manufacturing Company, 37 CCPA 104, 106, 107, C.A.D. 427 (1950). But this scarcely means that all angles, shapes and sections are parts per se. Thus, if in its imported condition, an angle, shape or section has been processed or advanced in manufacture only to a point where substantial additional processing is necessary before it can be used as a part of a given article, the import would not be classifiable as a `part,' but rather would be considered a material and thus (if meeting the other statutory requirements) classifiable under a provision for angles, shapes and sections. See e.g., United States v. The Singer Manufacturing Company, supra, 37 CCPA 104; Associated Metals & Minerals Corp. v. United States, supra, 65 Cust.Ct. 586. Italics in original; emphasis supplied.

In like manner, our appellate court through Chief Judge Markey has held that merchandise which has "not been sufficiently advanced in its manufacture to have reached a point where it is incapable of being made into other things" and whose "degree of processing had not changed (it), as imported, into a clearly identifiable part of any device," will not be classified as a part of that device. Avins Industrial Products Co. v. United States, 62 CCPA 83, 515 F.2d 782 (1975). See also Terumo-America v. United States, 2 CIT 121 (1981).

The defendant in support of the classification of the subject merchandise, as liquidated, predicates its argument principally on the alleged "chief use" of the merchandise as poles for illuminating articles. In so doing, the defendant relies on General Interpretative Rule 10(ij), TSUS, which provides:

A provision for `parts' of an article covers a product solely or chiefly used as a part of such article, but does not prevail over a specific provision for such part.

In its application of the foregoing rule, however, the defendant fails to give appropriate consideration to the qualifying phrase included therein:

* * * but does not prevail over a specific provision for such part.

The foregoing concluding phrase of the interpretative rule instructs, that notwithstanding what may be the chief use...