Sears, Roebuck & Co. v. US
| Decision Date | 28 September 1989 |
| Docket Number | Court No. 86-10-01297. |
| Parties | SEARS, ROEBUCK & CO., Plaintiff, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Barnes, Richardson & Colburn (Andrew P. Vance, New York City, at trial and on the briefs, appearance by Lonathan D. Hurse, and Josephine Belli, Brooklyn, N.Y., and Melvin E. Lazar, Maplewood, N.J., of counsel), for plaintiff.
Stuart E. Schiffer, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, New York City, International Trade Field Office, Commercial Litigation Branch (Saul Davis) (Sliphen Berke, Gen. Atty., U.S. Customs Service, of counsel), for defendant.
The question presented in this case pertains to the proper classification, for customs duty purposes, of certain merchandise imported from Japan, and described on the customs invoice as "tuner," "amplifier," "turntable," and "dual cassette deck."
The merchandise was classified by the Customs Service as individual components under the Tariff Schedules of the United States (TSUS), as follows:
the "tuner" under item 685.24, dutiable at 7.7% ad val.;
the "amplifier" under item 684.70, dutiable at 5.9% ad val.;
the "turntable" under item 685.36, dutiable at 4.5% ad val.; and
the "dual cassette deck" under item 678.50, dutiable at 4.2% ad val.
Plaintiff protests these classifications and contends that the imported merchandise constitutes an "entirety" that is properly classifiable as "machines not specially provided for, and parts thereof" under item 678.50, TSUS. If properly classifiable as an "entirety" under item 678.50, TSUS, as maintained by plaintiff, the merchandise would be assessed at the rate of 4.2 per centum ad valorem.
The government contends that the merchandise was properly classified by the Customs Service as individual components. In the alternative, the government contends that, if the court were to find that the imported merchandise constitutes an "entirety," it should be classified as "radio-phonograph-tape recorder combinations other than console/consolette," under item 685.50, TSUS. If properly classifiable as an "entirety" under item 685.50, TSUS, pursuant to the government's alternative classification, the merchandise would be assessed duty at the rate of 5.9 per centum ad valorem.
The pertinent statutory provisions of the tariff schedules are as follows:
The question presented is whether the imported merchandise has been properly classified by Customs, and, therefore, is dutiable as separate components as indicated, or whether it should be classified as an "entirety," as "machines not specially provided for, and parts thereof," under item 678.50, TSUS, with duty at 4.2 per centum ad valorem, as contended by plaintiff.
In order to decide this question the court must consider "whether the government's classification is correct, both independently and in comparison with the importer's alternative." Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied, 739 F.2d 628 (Fed.Cir.1984). Pursuant to 28 U.S.C. § 2639(a)(1) (1982), the government's classification is presumed to be correct and the burden of proof is upon the party challenging the classification.
After an examination of the merchandise, the pertinent tariff items, the relevant case law and the testimony of record, it is the determination of the court that the imported merchandise does not constitute an "entirety," within the meaning of that term in customs classification cases. Hence, since plaintiff has not overcome the presumption of correctness that attaches to the government's classification, the classification of the imported merchandise as individual components is sustained. See A & A Int'l, Inc. v. United States, 11 CIT 775, 777, 676 F.Supp. 263, 264 (1987).
The imported articles, classified as a "tuner," "amplifier," "turntable," and "dual cassette deck," consist of four of the six components of the Sears stereo rack system, model number 9291. The stereo rack system also includes a wooden rack, which was imported from Japan together with the contested articles, and a pair of loudspeakers. The loudspeakers, which are not imported, are manufactured in the United States, and are purchased from a wholly owned subsidiary of the Japanese company that supplies plaintiff with the other elements of the Sears model 9291 stereo rack system. The wooden rack, which was imported with the four contested articles, was classified by Customs as "furniture other than chairs," under item 727.35, TSUS, and was assessed with duty at a rate of 3.5 per centum ad valorem. Plaintiff does not contest the classification of the wooden rack.
The case was tried by able counsel, with great care and skill. The testimony of all of the witnesses was helpful and instructive, and explained the nature of the merchandise and the various components.
Mr. Frank Hendrix was the first of plaintiff's four witnesses. Mr. Hendrix, who has recently retired, was an assistant buyer of stereo music systems for plaintiff for forty-one years. He testified that the six units of the stereo rack system were advertised together, as a system, and were sold "always as a system."
According to Mr. Hendrix, all six units of the stereo rack system, consisting of the four contested articles, the loudspeakers, and the wooden rack, are packaged in three boxes, with each box labelled as one of three. He explained that a purchaser of the model 9291 stereo rack system "would receive three cartons, one carton with the electronics, one carton with the rack and one carton with a pair of loudspeakers."
Mr. Hendrix also testified that the four contested articles or components, "as far as the electronics are concerned, ... are married to each other." He stated that although the wooden rack and loudspeakers could be used with other stereo systems, the contested articles "will not operate unless they are operated as a unit." In his testimony, Mr. Hendrix asserted that the four contested articles are connected by a flat wire that "carries both the power and the audio signals." He stated that the four articles cannot be separated and used as parts of other stereo systems because the flat wires are connected by "unique fittings."
Plaintiff's second witness was Mr. Francis McCann, an employee of plaintiff in its marketing department for twenty-eight years, who reviewed contracts for the four contested articles. He explained that he "ordered the complete system from the manufacturer." Mr. McCann also noted that "model 9291 was designed as a complete system," and was advertised and sold as a complete system.
Plaintiff's third witness, Mr. Harry Ruther, is a senior products engineer for plaintiff. In 1984, Mr. Ruther had, as part of his duties as a "group leader" for plaintiff, evaluated the model 9291 stereo rack system before it was purchased for importation. He testified that the four contested articles "are not individual components, and not interchangable sic with other stereo components...." He stated that individual audio components "usually consist of products that are stand-alone and need no internal power supply other than the one contained inside their own cabinet." Mr. Ruther testified that, in contrast, the four...
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