Daisy-Heddon, Div. Victor Comptometer Corp. v. US

Decision Date21 June 1979
Docket NumberAppeal No. 79-5.
Citation600 F.2d 799
PartiesDAISY-HEDDON, DIV. VICTOR COMPTOMETER CORP., Appellant, v. The UNITED STATES, Appellee.
CourtU.S. Court of Customs and Patent Appeals (CCPA)

S. Richard Shostak, Los Angeles, Cal. (Stein, Shostak, Shostak & O'Hara, Inc., Los Angeles, Cal.), attys. of record, for appellant.

Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C., David M. Cohen, Joseph I. Liebman, Saul Davis, New York City, for the United States.

Before MARKEY, Chief Judge, RICH, BALDWIN, and MILLER, Judges, and PENN,* Judge.

RICH, Judge.

This appeal is from the judgment of the United States Customs Court, 81 Cust.Ct. 55, C.D. 4765, 460 F.Supp. 680 (1978), dismissing the importer's action challenging the classification of imported merchandise as fishing reels under item 731.20 of the Tariff Schedules of the United States (TSUS) as modified by T.D. 68-9, rather than as parts of fishing reels under TSUS item 731.26 as modified by T.D. 68-9. We affirm.

Five different articles are involved. They are described variously on exporter's invoices as "Heddon closed face reels," "fishing reel parts" and "Heddon fly reels," and on special customs invoices and consumption entries as "fishing reel parts," "fishing reel * * * housing" and "fishing reels." We shall refer to them by the importer's model number designations associated with the samples in evidence, models 233, 281, 282, 283, and 284.

Each article, as imported, consists of a combination of subassemblies of a particular fishing reel of the spinning reel type roughly comprising the main housing with its internal gearing, the rotating flyer assembly and spool shaft, and the bail and bail lock assembly. Each article lacked certain parts necessary to make a complete reel. Model 233 lacked the spool, drag knob, handle, side plate and three screws; models 281 and 282 lacked the spool, drag knob, handle and handle nut, spool washer, and handle arm shaft washer; models 283 and 284 lacked the spool, drag knob, handle and handle nut, and handle arm shaft washer.

To show the makeup of a typical complete spinning reel we reproduce the exploded drawing of the parts list for model 282, Exhibit 5.

Relevant Statutes

Both the Customs Service and the importer urged that the imported merchandise is properly classifiable under Schedule 7 of TSUS, Part 5, subpart B. The relevant portions read:

SCHEDULE 7.—SPECIFIED PRODUCTS; MISCELLANEOUS AND NON-ENUMERATED PRODUCTS * * * * * * PART 5.—Arms and Ammunition; Fishing Tackle Wheel Goods; Sporting Goods, Games and Toys * * * * * * Subpart B.—Fishing Tackle * * * * * * Fishing reels and parts thereof Reels Item 731.20 Valued not over $2.70 each .............. 23% ad val * * * * * * Item 731.26 Parts .................... 13.5% ad val.

In addition, General Interpretative Rule 10 is relevant and provides in pertinent part:

10. General Interpretative Rules. For the purpose of these schedules—
(h) unless the context requires otherwise, a tariff description for an article covers such article, whether assembled or not assembled, and whether finished or not finished;
(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.
Customs Court

From its examination of the samples in evidence as exhibits, which the court regarded as "potent witnesses," the court stated the following conclusions: (1) "the alleged housings are finished articles insofar as the state of manufacture is concerned," and lack for completion only "mere assembly with various other parts"; (2) all of the omitted parts may be easily incorporated into the importations to complete the reels; and (3) concerning exhibit 1, at least, "all the action that is characteristically associated with the open face spinning reel had been built into that article."

Upon review of the testimony of the two witnesses for the plaintiff-importer and the two government witnesses, all of whom have had experience in the fishing tackle portion of the sporting goods industry, the court further concluded that the importations were considered as "reels" rather than as "parts of reels" by those in the industry.

In order to resolve the competition between the unfinished articles provisions (existing by virtue of General Interpretative Rule 10(h), supra) and the parts provisions of TSUS, the court applied the test in Authentic Furniture Products, Inc. v. United States, C.A.D. 1109, 486 F.2d 1062, 61 CCPA 5 (1973). Under that test, as the court viewed it, the absence of a "substantial or essential part" will preclude classification as the unfinished article and require classification under the parts provision. In applying that test, the court stated (81 Cust.Ct. at ___, 460 F.Supp. at 683):

In the court's opinion, the imported merchandise was properly classified as fishing reels within the purview of item 731.20. It is plain to see that when the exhibit 1 was manipulated manually all the action that is characteristically associated with the open face spinning reel had been built into that article.
Thus, the bail could be cocked. And then it closed upon rotation around the turning flyer. The internal gears moved and rotated the crankshaft in circular motion while at the same time causing the spool shaft to perform its customary reciprocal back and forth motion. This, to the court, constitutes the essence of a spinning reel. This action was imparted to the reel without the addition of the omitted parts. The spool, handle, and drag knob can be used to regulate, retard or refine this action.

The Customs Court rejected the argument that the missing parts were essential because without them the imported merchandise could not be used for fishing. The court said: "The function of a reel of this kind is to spin. And the spinning action is achieved by the imported articles in the condition as imported" (emphasis in original).

Also rejected was appellant's attempt to compare the cost of the omitted parts against the cost of the imported articles. The court said that, while cost is a factor, to determine the substantiality of the omitted parts one "must weigh the relationship of the omitted parts against the included parts" and "assess the significance of the omitted parts in the total scheme of things."

OPINION

We find no error in the decision of the Customs Court. However, we find from a reading of appellant's brief an apparent misunderstanding of the test to be applied.

In Authentic Furniture Products, Inc. v. United States, 68 Cust.Ct. 204, C.D. 4362, 343 F.Supp. 1372 (1972), the Customs Court was faced with the issue of deciding the proper classification between competing unfinished-articles and parts provisions of TSUS, which competition arises by virtue of General Interpretative Rule 10(h). In its decision that the imported merchandise, consisting of unassembled pieces of bunk beds (namely posts, headboards, footboards, ladders, and guardrails, without the side rails necessary to form a complete bunk bed), was properly classifiable as parts of furniture rather than as unfinished furniture, the Customs Court examined prior authority and then stated the existing test, "That parts of an article, when assembled, must result in a substantially...

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