Barnebey-Cheney Co. v. United States

• Decision Date: 21 November 1973
• Docket Number: Customs Appeal No. 5510.
• Citation: 487 F.2d 553,61 CCPA 10
• Parties: BARNEBEY-CHENEY CO., Appellant, v. The UNITED STATES, Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

61 CCPA 10, 487 F.2d 553 (1973)

BARNEBEY-CHENEY CO., Appellant, v. The UNITED STATES, Appellee.

Customs Appeal No. 5510.

United States Court of Customs and Patent Appeals.

November 21, 1973.

Allerton deC. Tompkins, New York City, atty. of record, for appellant.

Irving Jaffe, Acting Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Glenn E. Harris, New York City, for United States.

Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.

MILLER, Judge.

This appeal is from the judgment of the United States Customs Court, First Division, 68 Cust.Ct. 98, C.D. 4343 (1972), overruling appellant's protest against the classification under paragraph 69 of the Tariff Act of 1930, as modified by T.D. 54108, of imported merchandise consisting of spent activated carbon salvaged in Great Britain from canisters of gas masks. We reverse.

The referenced paragraph provides as follows:

                Decolorizing, deodorizing
                or gas-absorbing
                chars and carbons
                whether or not activated
                and all activated
                chars and carbons ..... 19% ad val
                

Appellant claims that the merchandise was properly classifiable under paragraph 1555 of the Tariff Act of 1930, as modified by T.D. 52739, which provides as follows:

                  Waste, not specially provided for ................... 4% ad val
                

FACTS

The merchandise in question was sold to appellant by J & J Maybank, Limited, which had purchased the gas masks from the Ministry of Supply. Some of the masks had been in storage since 1936 and the latest were 1945 manufacture. Maybank invented a machine to open the canisters to release the charcoal they contained through a screen into burlap sacks for storage and shipment. Small slivers of metal and bits of fabric from the canisters also came through the screen and were contained in the imported charcoal, which originally had been impregnated with various metallic salts of copper, silver and chromium (to improve its capacity for military gases). Appellant introduced evidence that the charcoal contained moisture from rain and snow due to open storage of the masks. The Customs Court found it to be "clear" that upon entry the merchandise "had a sufficiently high absorbed moisture content, i. e., 20 percent, to be regarded as `spent' activated charcoal."

Questioning of one of appellee's expert witnesses by the court below brought out the distinction between spent activated charcoal and activated charcoal, namely: that spent activated charcoal is no longer, as such, without further treatment, capable of adsorption.

Testimony by another of appellee's witnesses with respect to tests made in Customs Service laboratory disclosed that activated carbon purchased from a chemical supply house had an adsorbent capacity of 50 to 60 percent, while a representative sample of the merchandise in question (following a heating and drying process) had an adsorbent capacity of 21.9 percent.

In tendering the masks, the British government advised as follows: "CHARCOAL WHICH MAY BE RECOVERED FROM BREAKDOWN OF THE RESPIRATORS MAY NOT BE USED FOR THE PRESERVATION OF FOODSTUFFS OR THE PURIFICATION OF WATER." The invoices covering the merchandise shipped from Maybank to appellant contained the description: "Scrap Charcoal From Gas Masks."

Appellant introduced evidence that the merchandise was used as "raw material" for the production of a low grade of unspent activated carbon. Its process of "regeneration," "rejuvenation," or "revivification" consisted of burning out the absorbed material at high temperature under steam, with some of the carbon being leached to remove the metallic salts. The resulting product was sold as a deodorizer for diaper pails and refrigerators, for testing of the gasoline content of natural gas, and (after grinding) as an ingredient for decolorizing dry cleaning solvent. In its "raw" state, the merchandise was not commercially suitable for any specific purification application.

THE ISSUE OVER WHAT THE CLASSIFICATION WAS

The record clearly shows that the Deputy Collector of Customs, in his reports dated February 7, 1964, (filed with the U. S. Customs Court February 10, 1964), on the various protests involved herein classified the merchandise in question as "non-activated decolorizing, deodorizing, or gas absorbing carbon," although by letter dated January 20, 1960, from the Chief, Division of Classification and Drawbacks, appellant was advised that in the opinion of the Bureau of Customs the merchandise was classifiable "under the provision for decolorizing, deodorizing, or gas absorbing carbons and chars, whether or not activated." The government (appellee), on the other hand, argues that in its opening statement before the U. S. Customs Court it made it clear that it was supporting the classification as "a gas absorbing carbon or an activated carbon" and that this statement was not disputed by appellant during the trial. The government further argues, without citation of authority, that the main purpose of the Customs reports was to indicate the paragraph, rather than specific language within the paragraph, under which the merchandise under protest was classified.

THE ISSUE OVER THE WORD "ABSORBENT"

The parties have devoted considerable argument over whether the Congress intended adsorbent carbons to be included when the word absorbent was used in paragraph 69. The Summary of Tariff Information, 1929, which was compiled by the U. S. Tariff Commission and printed for use of the Committee on Ways and Means of the House of Representatives, described decolorizing and deodorizing carbons as activated by special processes so that they are capable of absorbing much greater quantities of coloring matter than ordinary charcoal or bone char. (Vol. 1, p. 334.) The conclusion could thus be drawn that "absorbent" was used by Congress in a non-scientific sense to include carbons having adsorbent qualities. On the other hand, the principal testimony during the hearings before the Ways and Means Committee stated that activated carbons have superior decolorizing, deodorizing, and adsorptive properties. Hearings on Tariff Readjustment—1929 Before the Committee on Ways and Means, House of Representatives, 70th Cong., 2d Sess., Vol. I, p. 805 (1929). Accordingly, it could be argued that the distinction between absorbing and adsorbing had been brought to the attention of those who drafted the legislation and that both words would have been used if it had been intended to include both types of carbons.

OPINION

As will appear below, we do not believe it necessary to decide the above issues. Taking the government's classification, as set forth in its opening statement before the U. S. Customs Court, namely: "a gas absorbing carbon or an activated carbon," and assuming that the word "absorbing" was intended to include "adsorbing," the question is whether or not Congress, in its enactment of paragraph 69, intended to reach merchandise consisting of spent activated carbons possessing no commercial use except as a raw material.

A study of the legislative history of paragraph 69 of the Tariff Act of 1930 discloses that the one witness before both the House Ways and Means Committee and the Senate Finance Committee who contended for an increase in the duty on decolorizing and deodorizing carbons was a representative of Darco Corp. of Wilmington, Delaware, one of the two U. S. manufacturers of activated decolorizing and deodorizing carbons. Hearings on Tariff Readjustment—1929 Before the Committee on Ways and Means, House of Representatives, supra, Vol. I, pp. 803-808; Hearings on H.R. 2667 Before A Subcommittee of the Senate Committee On Finance, 71st Cong., 1st Sess., Vol. I, pp. 298-301 (1929). He complained of greatly expanded imports of activated carbons—a 300 percent increase in four years, and estimated to equal 30 to 50 percent of domestic production; said that in the last seven years the number of U. S. producers of decolorizing carbons had been reduced from four to two, and that the present rate of duty was not sufficient to enable his company to operate at a profit. He submitted a brief before the Ways and Means Committee warning of higher prices to consumers should domestic industry be destroyed and pointing out that factories capable of producing activated carbon for gas masks should be available in case of emergency.

The brief described decolorizing carbons as follows:

Decolorizing carbons are made by chemically treating raw materials such as wood, peat, lignite, black ash from paper mills, rice hulls, kelp, etc., and heating in nickel alloy retorts to temperatures of approximately 2,000° F. (1,100° C.). After cooling the charred material, it is ground and then given a further chemical treatment. . . . The process employed in making decolorizing carbon is called activation, and the carbons so produced are referred to as activated carbons.

Nowhere in the legislative history of paragraph 69 is there to be found any concern over importation of spent activated carbons or raw materials used in making activated carbons, although a passing reference to revivifying a "spent Norit carbon" was made in a statement from the Dutch General Norit Co. in opposition to the proposed increase in duty. Hearings Before Subcommittee of Senate Comm. on Finance, supra, Vol. XVIII, p. 158. From a scientific point of view, it could be said that spent activated carbons are "activated carbons." However, it is a familiar rule that a thing may be within the letter...