Amersham Corp. v. United States

• Decision Date: 10 February 1983
• Docket Number: Court No. 80-5-00743.
• Citation: 5 CIT 49,564 F. Supp. 813
• Parties: AMERSHAM CORPORATION, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

564 F. Supp. 813

5 CIT 49

AMERSHAM CORPORATION, Plaintiff, v. UNITED STATES, Defendant.

Court No. 80-5-00743.

United States Court of International Trade.

February 10, 1983.

Barnes, Richardson & Colburn, Chicago, Ill. (Robert E. Burke, Chicago, Ill., at the trial and on the briefs; Lynn S. Baker, Chicago, Ill., on the briefs), for plaintiff.

J. Paul McGrath, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, New York City, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch (Susan Handler-Menahem, Teaneck, N.J., at the trial and on the brief), for defendant.

RE, Chief Judge:

The question presented in this case pertains to the proper classification, for customs duty purposes, of certain merchandise described on the invoices as "Americium-241 Alpha Foil."

The merchandise was classified by the customs officials, under item 709.66 of the Tariff Schedules of the United States, as parts of apparatus based on the use of radiations from radioactive substances, and was consequently assessed with duty at the rate of 6 per centum ad valorem.

Plaintiff contests the classification and, hence, the rate of duty assessment. It is plaintiff's primary claim that the merchandise should have been properly classified under item 494.50, TSUS, which provides for chemical compounds, whether or not described elsewhere in schedule 4, which are usefully radioactive. If the imported merchandise is classifiable under item 494.50, it is entitled to be admitted free of duty.

In the alternative, plaintiff contends that, if its primary claim is not sustained, the merchandise is properly classifiable, under item 685.70, TSUS, as parts of fire alarms and other sound or visual signalling apparatus, dutiable at the rate of 4 per centum ad valorem.

Based upon a thorough consideration of the competing tariff provisions, it is the determination of the court that the imported alpha foil disks are properly classifiable under the provisions of item 685.70, TSUS, as parts of "fire alarms, and other sound or visual signalling apparatus," dutiable at the rate of 4 per centum ad valorem.

The following are the pertinent provisions of the tariff schedules:

                Classified by customs officials under
                        Schedule 7, Part 2, Subpart B
                        Apparatus based on the use of
                        X-rays or of the radiations from
                        radioactive substances, whether for
                        medical, industrial, or other uses
                        and parts thereof
                    *      *       *     *       *      *      *
                709.66  Apparatus based on the use of
                        radiations from radioactive substances
                        and parts thereof....... 6% ad val
                Claimed by plaintiff under:
                        Schedule 4, Part 13, Subpart B
                494.50  Chemical elements, isotopes, and
                        compounds, all the foregoing (except
                        natural thorium and uranium
                        in a metallic state, and except
                        compounds of natural thorium and
                
                

                Claimed by plaintiff under:
                        uranium), whether or not described
                        elsewhere in this schedule,
                        which are usefully radioactive ___ Free
                Alternatively claimed by plaintiff under:
                        Schedule 6, Part 5
                685.70  Bells, sirens, indicator panels, burglar
                        and fire alarms, and other
                        sound or visual signalling apparatus,
                        all the foregoing which are
                        electrical, and parts thereof ____ 4% ad val.
                General Headnotes and Rules of Interpretation
                  10. General Interpretative Rules. For the purposes
                of these schedules --
                      *   *   *   *   *   *   *
                  (c) an imported article which is described
                in two or more provisions of the schedules is
                classifiable in the provision which most specifically
                describes it * * *
                      *   *   *   *   *   *   *
                  (ij) 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.
                

Plaintiff's principal contention is that the imported merchandise "fits within the parameters" of the definition of the term "compounds," as found in schedule 4, headnote 2(a) of the tariff schedules, and is specifically described in item 494.50, TSUS, as a usefully radioactive chemical compound.

Plaintiff also contends that, although intended for use as a part, the imported merchandise is not intended to be used as part of an apparatus based on the use of radiations from radioactive substances and, therefore, does not fall within the intended scope of the provisions of item 709.66. Hence, it claims that item 494.50 covering "compounds" specifically describes the imported merchandise and must prevail over the "parts" classification provision of item 709.66, by virtue of General Interpretative Rule 10(ij) of the tariff schedules which states that "a provision for `parts' * * * does not prevail over a specific provision for such part."

Defendant maintains that the imported merchandise was properly classified, and that the merchandise does not fall within the statutory language of the term "compound," since in its imported condition, it is more than a "compound." It is defendant's contention that it is a new and distinct article of commerce being sold to manufacturers of apparatus based on the use of radiation.

Plaintiff has the burden of overcoming the statutory presumption of correctness which attaches to the classification of the customs officials. See 28 U.S.C. § 2639(a)(1).

It is also basic in customs jurisprudence that classification of imported merchandise is determined by its condition as imported. Mitsubishi International Corp. v. United States, 78 Cust.Ct. 4, C.D. 4686 (1977).

Plaintiff submits that the uncontroverted testimony of its witnesses, judicial precedent, legislative history, and the administrative practice of Customs, clearly establish that the imported merchandise is a chemical compound which is usefully radioactive and embraced by the statutory language in item 494.50, TSUS.

The parties are in agreement that the imported merchandise is "usefully radioactive." Thus, the initial question presented is whether plaintiff has borne its burden of proving that the imported merchandise is a "compound," as provided in item 494.50, and as defined in schedule 4, headnote 2(a) of the tariff schedules, precluding its classification under item 709.66, TSUS.

Schedule 4, headnote 2(a) states that:

2. (a) The term "compounds", as used in this schedule, means substances occurring naturally or produced artificially by the reaction of two or more ingredients, each compound —

(i) consisting of two or more elements,

(ii) having its own characteristic properties different from those of its elements and from those of other compounds, and

(iii) always consisting of the same elements united in the same proportions by weight with the same internal arrangement.

The presence of impurities which occur naturally or as an incident to production does not in itself affect the classification of a product as a compound.

Plaintiff's first witness was Dr. Edgar Lorch, who holds a masters degree in reactor physics and a Ph.D. in neutron physics from the University of Birmingham in the United Kingdom. Dr. Lorch, director of marketing sales, radiation sources department of Amersham Corporation, plaintiff, was responsible for the sale of this product in the United States since 1980. He testified that he was also familiar with the imported merchandise, having been assistant manager of the production department of Amersham International in the United Kingdom, the manufacturer, for a period of ten years.

Dr. Lorch stated that americium is an element, and that americium 241 is an isotope of that element. When americium 241 is combined with oxygen it forms a compound, americium oxide. Americium oxide is a highly radioactive material, and if ingested or inhaled would cause severe medical problems. He explained that in order to protect the environment from its radioactivity, while allowing the radiation to escape, americium oxide must be encapsulated. It would not be allowed in this country for the purposes licensed by plaintiff's customers without encapsulation. He stated that a common means for encapsulating americium oxide is with alpha foil.

Dr. Lorch further testified that the encapsulation process consists of combining americium oxide with a gold powder loaded into a silver container, on the top of which would be placed a thin, gold window. He stated that "this would be hot forged to forge the window on to the silver backing," and "then be powder rolled many thousands of times." He also testified that the gold window and silver backing effectively envelope and encapsulate the americium oxide. The alpha foil at that point is the capsule around the isotope.

Significantly, however, when asked on cross-examination whether it is "accurate to state that the foil is a compound," Dr. Lorch replied, "Well — do you mean in a chemical sense? It is a compound, but not in a chemical sense of the chemical definition of a compound — it is not."

Plaintiff's witness, Dr. John L. Kuranz, a scientific consultant, testified that in his opinion americium oxide is a "compound." However, when asked whether alpha foil is a "compound," he replied, "I wouldn't speculate. It is a metallurgical process and I am not acquainted with the manufacture." When asked by the court if he was able to answer that question, he replied that he could not. Plaintiff's exhibit 4, its "Product Specification," describes that metallurgical process as follows:

"The manufacturing process begins with the production of a small billet consisting of an intimate mixture of americium oxide and pure gold. The billet is first sintered and then hot forged in a silver case with a gold-palladium alloy face. Repeated rolling of this composite, under carefully controlled conditions, produces a continuously welded metal strip of the required dimensions with the active layer confined between inactive borders protected by a thin gold alloy face."

Defendant's witness, Mr. Glenn...