B. Shackman & Company, Inc. v. United States

• Decision Date: 01 December 1971
• Docket Number: C.D. 4300
• Citation: 67 Cust. Ct. 372
• Parties: B. SHACKMAN & COMPANY, INC. <I>v.</I> UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

67 Cust. Ct. 372

B. SHACKMAN & COMPANY, INC.

v. UNITED STATES.

C.D. 4300

United States Customs Court, First Division.

Decided December 1, 1971.

Serko & Sklaroff (Dennis M. Lamber, David Serko, Elizabeth E. Mills and Joel K. Simon of counsel) for the plaintiff.

L. Patrick Gray, III, Assistant Attorney General (Velta A. Melnbrencis, trial attorney), for the defendant.

Before WATSON, MALETZ, and RE, Judges

MALETZ, Judge:

This case involves the proper rate of duty on items of merchandise — covered by the five protests listed below — that were entered at the port of New York in the period from November 18, 1963 to January 30, 1968. The items were classified by the government under item 737.90 of the tariff schedules as toys, not specially provided for, and assessed duty at the rate of 35 percent or 31 percent depending on the date of entry.¹

Plaintiff contends that none of the imported items are toys because, it says, their chief use is for educational purposes rather than for the amusement of children or adults. It therefore claims duty should be assessed on the basis of component material of chief value as follows:

                 Protest         Invoice              Court               Claimed
                   No. Description Exhibit No. Classification
                66/25969   Educational number   Plaintiff's Exhibit   207.00, of wood
                            learner               No. 1                 nspf
                67/37713  Geometrical sorting  Plaintiff's Exhibit    207.00, of wood
                            board                 No. 2                 nspf
                66/20117  Educational lock     Plaintiff's Exhibit   207.00, of wood
                            board                 No. 3                 nspf
                66/11721  Educational time     Plaintiff's Exhibit   658.00, of base
                            learner clock         No. 4                 metal
                69/26719  Educational magnetic Plaintiff's Exhibit   774.60, of rubber
                            spelling game         No. 5                 or plastic
                                                                        nspf
                

The following are the relevant statutory provisions:

                Classified under
                Schedule 7, Part 5
                           SUBPART E. - MODELS; DOLLS, TOYS, TRICKS,
                                        PARTY FAVORS
                  Subpart E headnotes:
                          1. The articles described in the provisions
                         of this subpart (except parts) shall be classified
                        in such provisions, whether or not
                        such articles are more specifically provided
                        for elsewhere in the tariff schedules * * *
                            *     *     *     *     *     *     *
                          2. For the purposes of the tariff schedules
                         a "toy" is any article chiefly used for the
                         amusement of children or adults.
                            *     *     *     *     *     *     *
                         Toys, and parts of toys, not specially provided
                          for:
                            *     *     *     *     *     *     *
                737.90      Other ____________________________________    35% ad val.
                                                                          31% ad val.
                

                Claimed under:
                Schedule 2, Part 1
                         SUBPART F. - ARTICLES NOT SPECIALLY PROVIDED
                                      FOR, OF WOOD
                  Subpart F. headnote:
                           1. This subpart covers all products of
                         wood which are not provided for elsewhere
                         in the tariff schedules.
                207.00   Articles not specially provided for, of
                          wood _________________________________  16 2/3% ad val.
                   Schedule 6, Part 3
                         SUBPART G. - METAL PRODUCTS NOT SPECIALLY
                                      PROVIDED FOR
                  Subpart G headnotes:
                           1. This subpart covers only articles of
                         metal which are not more specifically provided
                         for elsewhere in the tariff schedules.
                             *    *    *    *    *    *    *
                658.00   Articles of base metals not provided for in
                          the foregoing provisions of this subpart,
                          not coated or plated with precious metal__ 18% ad val.
                  Schedule 7, Part 12
                SUBPART D. - ARTICLES NOT SPECIALLY PROVIDED FOR, OF RUBBER
                                         OR PLASTICS
                         Articles not specially provided for, of
                          rubber or plastics:
                            *       *        *       *      *     *     *
                774.60          Other _________________________ 15% ad val.
                  Other relevant statutory provisions:
                  General Headnotes and Rules of Interpretation
                     9. Definitions. For the purposes of the schedules, unless the
                   context otherwise requires —
                       *        *         *      *        *        *         *
                   (f) the terms "of", "wholly of", "almost wholly of", "in part
                   of" and "containing", when used between the description of an
                

                   article and a material (e.g., "furniture of wood", "woven fabrics,
                   wholly of cotton", etc.), have the following meanings:
                         (i) "of" means that the article is wholly or in chief value
                      of the named material;
                           *       *       *        *       *       *        *
                     10. General Interpretative Rules. For the purposes of these
                   schedules —
                       *        *        *        *         *         *       *
                     (e) in the absence of special language or context which
                   otherwise requires —
                        (i) a tariff classification controlled by use (other than
                     actual use) is to be determined in accordance with the use
                     in the United States at, or immediately prior to, the date
                     of importation, of articles of that class or kind to which the
                     imported articles belong, and the controlling use is the chief
                     use, i.e., the use which exceeds all other uses (if any)
                     combined;
                         *       *        *        *        *       *        *
                

Component Material of Chief Value.

At the outset, it is basic that in a tariff classification case the plaintiff has the twofold burden of proving that the government's classification is erroneous and that its own claimed classification is correct. On this latter aspect it was thus part of plaintiff's burden to establish the component material of chief value of the five importations. More particularly, it was incumbent upon plaintiff to prove (1) that the three imported articles represented by plaintiff's exhibits 1, 2 and 3 are in chief value of wood; (2) that the article represented by plaintiff's exhibit 4 is in chief value of base metal; and (3) that the article represented by plaintiff's exhibit 5 is in chief value of rubber or plastic.

Generally, the proper method of determining the component material of chief value of an article is to ascertain the costs to the manufacturer of the separate parts of the article at the time they are ready to be combined into the completed article. Plastic Service Co. v. United States, 63 Cust. Ct. 528, 530, C.D. 3947 (1969), and cases cited. However, proof of the costs of each component need not be presented where even a casual examination of the sample discloses the material of chief value, John S. Connor, Inc. v. United States, 54 Cust. Ct. 213, 218, C.D. 2536 (1965), or "a prima facie showing is made by broad, conclusory statements of a witness who should know." Broadway-Hale Stores, Inc. v. United States, 63 Cust. Ct. 194, 199, C.D. 3896 (1969). In this latter situation, "[c]ounsel for defendant could then, as the circumstances may suggest, either (a) object that the testimony is opinion without a proper foundation, or (b) develop by cross-examination that the statement is not based on facts, or that an incorrect way of determining value was used. Omission to do either would connote a willingness that component material of chief value might be decided on the basis of the prima facie showing and if nothing further transpired would for practical purposes be tantamount to a stipulation." Chas. Kurz Co. v. United States, 57 Cust. Ct. 73, 79, C.D. 2733 (1966).

In this case the record is completely devoid of any proof as to the cost to the manufacturer of the separate parts of the various imported articles at the time they were ready to be assembled. However, defendant concedes — and it is obvious from the samples — that "such proof of costs need not be presented as to the merchandise represented by plaintiff's exhibits 1 and 2 since [they] appear to be composed entirely of wood and hence * * * would be wholly and in chief value of wood."

With respect to plaintiff's exhibit 3 — the "educational lock board" — examination shows that it consists of a wooden board about nine inches long, six inches wide, and three-quarters of an inch thick. It has three cutouts in the shape of doors and three wooden pieces, each about one-half of an inch thick, which are fastened to the board with hinges and fit into the cutouts. In addition there are three latches of varying design and three different types of screws, one with a nut. The hinges, screws and nut are of metal. The important consideration is that it is not possible to tell from examination whether the article is in chief value of wood, as claimed, or in chief value of metal.

As for plaintiff's exhibit 4 — the "educational time learner clock" — examination shows that it consists of gears, a plate, a housing and hands, all of metal, and an obviously inexpensive plastic dial cover. Thus, it would appear from such examination that this item is in chief value of metal. However, to obtain classification under item 658.00, as claimed, plaintiff was required to show not only that the import is in chief value of metal but also the specific kind of metal it is. This additional requirement is necessitated by the language of item 658.00 which covers articles of base metal that are "not provided for in the foregoing provisions of this subpart * * *" — i.e., items 657.09 through 657.90 which cover articles of iron, steel, copper, nickel, lead, etc. [Emphasis added.] Thus to obtain classification under item 658.00, plaintiff was required to negate the applicability of items 657.09 through 657.90 by showing that none of the metals covered by those tariff items comprised the import's component material of chief value. And this showing plaintiff has not made — or even attempted. In fact, the record is devoid...