Commercial Adolfo S. Pagan, Inc. v. United States

• Decision Date: 03 May 1962
• Docket Number: C.D. 2337.
• Citation: 48 Cust. Ct. 210
• Parties: COMMERCIAL ADOLFO S. PAGAN, INC. <I>v.</I> UNITED STATES. INSULAR CONSTRUCTION & SUPPLY CO. <I>v.</I> UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

Page 210

48 Cust. Ct. 210

COMMERCIAL ADOLFO S. PAGAN, INC.

v. UNITED STATES.

INSULAR CONSTRUCTION & SUPPLY CO. v. UNITED STATES.

C.D. 2337.

United States Customs Court, Third Division.

Decided May 3, 1962.

Jaime Pieras, Jr., for the plaintiffs.

William H. Orrick, Jr., Assistant Attorney General (Murray Sklaroff and Richard H. Welsh, trial attorneys), for the defendant.

Before JOHNSON, DONLON, and RICHARDSON, Judges

JOHNSON, Judge:

The merchandise involved in these cases is described on the invoices as china or vitreous china water closet tanks. They are used in connection with flush toilets. The articles were assessed with duty at 31½ per centum or 30 per centum ad valorem under paragraph 212 of the Tariff Act of 1930, as modified by the Sixth Protocol of Supplementary Concessions to the General Agreement on Tariffs and Trade, T.D. 54108, as porcelain sanitary ware. They are claimed to be dutiable at 11½ per centum ad valorem under paragraph 372 of said tariff act, as so modified, as other machines, not specially provided for.

The pertinent provisions of the tariff act, as so modified, are as follows:

                ----------------------------------------------------------------------------------------
                Tariff Act  |                                              |  Rates of Duty
                  of 1930,  |        Description of Products               |
                paragraph   |                                              |----------------------------
                            |                                              |   A     |   B    |    C
                ------------|----------------------------------------------|---------|--------|---------
                  212       |   China, porcelain, and other vitrified      |         |        |
                            |   wares, including chemical porcelain        |         |        |
                            |   ware and chemical stoneware, composed      |         |        |
                            |   of a vitrified nonabsorbent                |         |        |
                            |   body which when broken shows a             |         |        |
                            |   vitrified or vitreous, or semivitrified    |         |        |
                            |   or semivitreous fracture, * * * all        |         |        |
                            |   the foregoing, whether plain white,        |         |        |
                            |   painted, colored, tinted, stained,         |         |        |
                            |   enameled, guilded, printed, or ornamented  |         |        |
                            |   or decorated in any manner,                |         |        |
                            |   and manufactures in chief value of         |         |        |
                            |   such ware, not specially provided for:     |         |        |
                   *        |        *      *      *                       |   *     |   *    |   *
                            |      Sanitary ware and fittings and          |         |        |
                            |        parts therefor ____________________   | * * *   | 31½% |  30%
                            |                                              |         | ad val.| ad val
                   *        |        *      *      *                       |   *     |    *   |   *
                  372       |  Machines, finished or unfinished, not       |         |        |
                            |  specially provided for:                     |         |        |
                   *        |        *      *      *                       |   *     |   *    |   *
                            |    Other (except food preparing              |         |        |
                            |      and manufacturing machinery;            |         |        |
                            |      hydraulic reaction turbines             |         |        |
                            |      and hydraulic impulse                   |         |        |
                            |      wheels; internal-combustion             |         |        |
                            |      engines; and except wrapping            |         |        |
                            |      and packaging machinery)___             |  * * *  |  12%   | 11½%
                            |                                              |         | ad val.| ad val
                ----------------------------------------------------------------------------------------
                

Note: The rates in column A became effective on June 30, 1956; those in column B on June 30, 1957; and those in column C on June 30, 1958.

The merchandise covered by protest No. 60/31400 was entered for consumption on November 27, 1957, and April 29, 1958, and that covered by protest No. 60/31401 on various dates between February 19, 1958, and January 14, 1959.

At the trial, counsel for the Government moved to consolidate the two protests. Protest No. 60/31400 is in the name of Commercial Adolfo S. Pagan, Inc. (hereinafter called Pagan) and protest No. 60/31401 is in the name of Insular Construction & Supply Co. (hereinafter called Insular). Counsel for the Government stated that these companies are one and the same, but counsel for the parties plaintiff stated that they are separate and distinct corporations, and he, therefore, objected to the consolidation.

Rule 38 of the rules of this court provides:

When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

In the instant case, it appears that the merchandise covered by the two protests is the same; that it was assessed with duty under the same paragraph; that the same claim is made in both protests; and that the parties plaintiff are represented by the same attorney. Since the actions involve a common question of law and fact, they may properly be consolidated in order to avoid unnecessary costs and delay. The motion for consolidation is granted.

At the opening of the trial, counsel for the Government stated that the water tanks such as those involved herein had been held to be semiautomatic machines in C.D. 1778 (The Durst Mfg. Co., Inc. v. United States, 36 Cust. Ct. 220, C.D. 1778) and that this classification would have been applied in the instant case, except for the fact that toilet bowls were imported at the same time on the same vessel. The collector, therefore, considered the bowls and tanks entireties, properly dutiable under paragraph 212, supra. Counsel stated:

MR. SKLAROFF: I already have conceded for the record that the tanks the subject of these two protests, if they had been imported alone, separately, would be subject to the principles set down in C.D. 1778, classifiable as a machine under 372, semi-automatic machine under 372.

* * * * * * *

MR. SKLAROFF: I would like to make one further observation. When I said the tanks, if imported alone would be subject to the principle of law set down in C.D. 1778, I meant assuming they were in chief value of metal. I hope the court did not take my words as meaning that we concede that it is so. It must be chief value of metal. That is what the importer will have to establish.

Efrain Picon, called as a witness on behalf of the defendant, stated that he was a customs examiner in San Juan, Puerto Rico, and that he was familiar with the merchandise covered by these protests. He testified that when he was working on the advisory classification thereof, he had before him a copy of a letter from Pagan to the Bureau of Customs and a copy of the Bureau's reply. The letter from Pagan states that Insular is a wholly owned subsidiary and asks whether one concern may import toilet bowls and the other tanks at the same time on the same vessel and have them assessed with duty separately. The Bureau's reply is to the effect that, under the circumstances, they would be considered entireties and dutiable accordingly. These letters were received in evidence as defendant's collective exhibit A only for the purpose of showing the reason for the examiner's action. The examiner testified that, at the time of classification of this merchandise, he also had before him certain entries of bowls which he ascertained were imported on the same vessel and on the same day and which he thought corresponded with the tanks covered by these protests. For instance, he stated that entry No. 3912 corresponded to entry No. 3913 covered by protest No. 60/31400. The latter is in the name of Pagan and covers 71 crates containing water tanks, imported on November 23, 1957, on the SS "Sunamelia." According to the witness, entry No. 3912 covered 71 vitreous china water closet bowls and 21 vitreous china lavatories, imported on the same date on the same vessel for the account of Insular.

Entry No. 3912 and the other so-called companion entries were offered in evidence by the Government, but, upon objection by counsel for the plaintiffs, decision was reserved for the division. In its brief, counsel for the Government concedes that the offer is unsound and has withdrawn it.

A motion that the official papers in the cases before us be deemed in evidence was also taken under advisement to be passed upon by the division. This motion is granted.

Mr. Picon testified further that he advisorily classified the tanks and the bowls as units on the ground that one importing corporation was a subsidiary of the other and that they were going to put the articles together and use them as single entities. In his opinion, one was not a complete article without the other.

Raul H. Carcache, called as a witness for the plaintiffs, testified that he is the manager of the plumbing division of Pagan; that he is a salesman and has been dealing with merchandise such as that involved herein for 13 years. He had at one time worked for a sanitary fixtures manufacturer in the United States. He stated that he was acquainted with the values of the components of these water tanks and that the tanks were in chief value of metal. He testified:

In this particular instance, the water closet of this semi-automatic machine, although it has been given a commercial value for breaking down or arriving at the price of the...