Commercial Shearing & Stamping Company v. United States

• Decision Date: 07 August 1970
• Docket Number: C.D. 4060
• Citation: 65 Cust. Ct. 91
• Court: U.S. Court of Customs and Patent Appeals (CCPA)
• Parties: COMMERCIAL SHEARING & STAMPING COMPANY <I>v.</I> UNITED STATES (GUADALUPE INDUSTRIAL SUPPLY COMPANY, INC., PARTY-IN-INTEREST).

65 Cust. Ct. 91

COMMERCIAL SHEARING & STAMPING COMPANY

v. UNITED STATES (GUADALUPE INDUSTRIAL SUPPLY COMPANY, INC., PARTY-IN-INTEREST).

C.D. 4060

United States Customs Court, Third Division.

Decided August 7, 1970.

Kane & Koons (Matthew A. Kane of counsel); Lincoln & Stewart (Eugene L. Stewart of counsel) for the plaintiff.

William D. Ruckelshaus, Assistant Attorney General (Mollie Strum, trial attorney), for the defendant.

Hall & Juarez; Clemens, Knight, Weiss & Spencer (George H. Spencer of counsel); Locke, Purnell, Boren, Laney & Neeley (Trevor William Rees-Jones of counsel) associate counsel; for the party-in-interest.

Before RICHARDSON, LANDIS, and WATSON, Judges

LANDIS, Judge:

Plaintiff here sues, as an American manufacturer, for relief under section 516, Tariff Act of 1930 (19 U.S.C., section 1516), protesting the tariff classification of articles of the class or kind produced by it, imported from Mexico, and described on the entry invoice as steel plates, specifications ASTM A-285-C, cut and pressed to hemispherical shape. The importer, Guadalupe Industrial Supply Company, Inc., the party-in-interest, appears with defendant in defense of the customs classification of the hemispherical articles under the heading "angles, shapes, and sections", dutiable under the Tariff Schedules of the United States (TSUS) item 609.80, at the rate of 0.1 cent per pound.

Plaintiff contends that hemispherical shaped articles are not within the class of "angles, shapes, and sections" intended to be classified by TSUS and are properly dutiable as articles of iron or steel, not specially provided for in TSUS, dutiable at 19 per centum ad valorem under TSUS item 657.20.

The complete text of the TSUS classification "angles, shapes, and sections" in schedule 6, part 2, provides as follows:

                                      SUBPART B. - IRON OR STEEL
                   Subpart B headnotes
                        1. This subpart covers iron and steel, their
                      alloys, and their so-called basic shapes and
                      forms, and in addition covers iron or steel
                      waste and scrap
                    *       *      *      *       *      *      *
                      Angles, shapes, and sections, all the foregoing
                         of iron or steel, hot rolled, forged, extruded
                         or drawn, or cold formed or cold
                         finished, whether or not drilled, punched
                         or otherwise advanced; sheet piling of
                         iron or steel:
                            Angles, shapes, and sections:
                             Hot rolled; or, cold formed and
                                weighing over 0.29 pound per
                                linear foot:
                                   Not drilled, not punched, and
                                       not otherwise advanced:
                609.80                   Other than alloy iron
                                             and steel____________  0.1¢ per lb.
                609.82                   Alloy iron or steel _____             * * *
                                   Drilled, punched, or otherwise
                                        advanced:
                609.84                    Other than alloy iron or
                                             steel _______________             * * *
                609.86                    Alloy iron or steel_____             * * *
                

                              Cold formed and weighing not over
                                  0.29 pound per linear foot:
                609.88               Other than alloy iron or steel_      8.5% ad val.
                609.90               Alloy iron or steel____________           * * *
                            Sheet piling:
                609.96        Other than alloy iron or steel________           * * *
                609.98        Alloy iron or steel___________________           * * *
                

Plaintiff's claim under schedule 6, part 3, subpart G, provides in pertinent part as follows:

                     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.
                     *      *     *      *      *      *     *
                      Articles of iron or steel, not coated or plated
                        with precious metal:
                          Cast-iron articles, not alloyed:
                     *      *      *     *      *       *      *
                          Other articles:
                657.15        Of tin plate__________________________         * * *
                657.20        Other_________________________________    19% ad val.
                

The record consists of 907 pages of transcribed testimony from thirteen witnesses; eight for plaintiff; one for defendant and four for the party-in-interest. There are 32 exhibits, numbered for the record as plaintiff's exhibits 1 through 22, defendant's exhibits A-1 through A-4, and party-in-interest's exhibits I through VI. We shall refer to the exhibits where pertinent to our discussion of the facts. At the outset we can say that exhibit 1 consists of the correspondence between plaintiff and customs officials showing compliance with the jurisdictional requirements for an American manufacturer's protest under section 516, supra. Exhibit 11 is a sample of the hemispherical article imported in this case. Its inside diameter measures 37 inches. The term "hemispherical" denotes that the shape of the article is that of half a sphere formed by a plane through a sphere's center.

Somewhat crucial, yet undisputed as we read the record, are the facts with respect to the process by which these hemispherical articles were produced by Altos Hornos de Mexico, S. A. Monclova Coahuila. Exhibits, modified in size for convenience in handling, illustrate the changes which took place in the form and shape of the metal used in that process. To start with a rectangular piece of ASTM 285 grade C flat steel plate, produced in a hot rolling process but which, when used, is a piece of plate metal in a cold state or condition (exhibit 2), is cut into a round or circular piece of flat steel plate (exhibit 3). The circular piece of plate is placed in a hydraulic press and the surface of the plate is lubricated to facilitate the pressing process which follows. As the press is engaged, it presses a male die into the circular plate causing the metal to plastically deform into a female die and cold form the hemispherical shape which, when removed from the press, has around its base a horizontal collar or flange (exhibit 4). The flange, which is cut off, has no useful purpose and is discarded as waste or scrap metal. When the lubrication is washed off, the hemispherical article is ready for shipment (exhibit 6).

The issue is whether the imported article, produced in the process described above, is within the class of "angles, shapes, and sections" hot rolled or, cold formed and weighing over 0.29 pound per linear foot, not drilled, not punched, and not otherwise advanced, dutiable under TSUS item 609.80.

Plaintiff argues that a hemispherical article is not within the class of "angles, shapes, and sections" covered by schedule 6, subpart B, because Congress intended to limit the term "angles, shapes, and sections" to angles, shapes, and sections produced in a basic steel mill and to exclude articles further advanced in condition by a process of manufacture in a so-called fabricating plant. On this record, we are of the opinion that plaintiff has failed to overcome the presumption of correctness attaching to the customs classification under TSUS item 609.80 and overrule the protest. F. H. Kaysing v. United States, 49 CCPA 69, C.A.D. 798 (1962).

There is little or no ground for quarrel with plaintiff's statement that the intrinsic structure of TSUS schedule 6 discloses an intent on the part of Congress to provide a classification system based upon "the state of advancement of metal articles" (plaintiff's brief, page 86). To say that, does no more than recognize that "Schedule 6 provides for a logical arrangement of metals and metal products and takes cognizance of the many developments in metals and metal products since 1930."¹ What we take exception to is plaintiff's contention that the classification in part 2 of schedule 6 provides only for metal in primary forms, including "angles, shapes, and sections", "produced in basic iron and steel mills" (plaintiff's brief, page 86, emphasis added).

The purpose of part 2, schedule 6, was to cover completely, in an organized systematic manner, the classification of base metals.² Subpart B of part 2, schedule 6, covers iron and steel, their so-called basic shapes and forms and in addition covers iron or steel waste and scrap. It "sets forth in an orderly systematic arrangement the provisions which would apply to * * * [those] products", and, in effect, brings together "the existing provisions * * * set forth in paragraphs 5,301-317, 319, 322, 327, 328, 335, 389, 397, and 1786" of the Tariff Act of 1930.³ An important and new feature of TSUS, not contained in any of the earlier tariff acts, is the system of legal interpretative headnotes intended to clarify the relationships between the various classification descriptions. The headnotes are in close proximity to the tariff classification to which they relate. Where the headnotes relate to an entire schedule such as schedule 6, they are schedule headnotes. When they relate only to a part, such as part 2, they are part headnotes. Subpart B of part 2, schedule 6, contains its own related headnotes.⁴ There, in subpart B, the relationship of the TSUS classification "angles, shapes, and sections" to the other so-called basic shapes and forms of iron and steel, classified in subpart B, is explained in a legal headnote as follows:

3. Forms and Condition of Iron or Steel. — For the purposes of this subpart, the following terms have the meanings hereby assigned to them:

* * * * * * *

(b) Blooms and billets: Semifinished products generally of rectangular or circular cross section, having a length several times greater than the maximum cross-sectional dimension, and, if rectangular, a width less than 4 times the thickness. A bloom is at least 36 square inches in cross-sectional area; a billet is less than 36 square inches but not less than 3 square inches in cross-sectional area.

(c) Slabs and sheet bars: Semifinished...