David W. Shenk & Co. v. U.S.
| Decision Date | 19 March 1997 |
| Docket Number | Slip Op. 97-33.,Court No. 93-08-00434. |
| Citation | 960 F.Supp. 363 |
| Parties | DAVID W. SHENK & CO., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Peter S. Herrick, Miami, FL, for Plaintiff.
Frank W. Hunger, Assistant Attorney General, Washington, DC; Joseph I. Liebman, Attorney in Charge, International Trade Field Office; John J. Mahon, Civil Division, Dept. of Justice, Commercial Litigation Branch; Mark G. Nackman, Office of Assistant Chief Counsel, U.S. Customs Service, of counsel, for the Defendant.
This case is before the court on motions for summary judgment. Plaintiff, David W. Shenk & Co., challenges the decision of the United States Customs Service ("Customs") denying the plaintiff's protest against Customs' classification of the subject merchandise. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a)(1988).
Plaintiff, David W. Shenk & Co., ("Shenk") is the importer of record of certain acoustic couplers and parts of acoustic couplers from Japan. Upon importation, Customs classified the merchandise under subheadings 8517.82.00, 8517.90.55, 8517.90.60, HTSUS, which provide as follows:
8517. Electrical apparatus for line telephony or
telegraphy, including such apparatus for
carrier-current line systems; parts thereof
Other apparatus
8517.82.00 Telegraphic ................. 4.7%
8517.90 Parts
Of telegraphic apparatus
8517.90.55 Of articles of subheading
8517.40.10 ............... 4.7%
8517.90.60 Of telegraphic switching
apparatus ................ 4.7%
The plaintiff claims that the merchandise should have been classified under subheading 8471.99.15, as control or adapter units for automatic data-processing machines, or, alternatively, under 8473.30.40, as parts and accessories of machines of Heading 8471, not incorporating a cathode ray tube; in other words, parts or accessories of automatic data-processing machines or units:
8471. Automatic data-processing machines and
units thereof; magnetic optical readers
machines for transcribing data onto data
media in coded form and machines for
processing such data, not elsewhere specified
or included:
Other:
Other:
8471.99.15 Control or adapter units .. Free
8473. Parts and accessories (other than covers,
carrying cases and the like) suitable for
use solely or principally with machines of
headings 8469 to 8472:
Parts and accessories of machines of
heading 8471:
8473.30.40 Not incorporating a cathode
ray tube ................... Free
UNDISPUTED FACTS
The acoustic couplers are telecommunication devices used for connecting computer modems to telephone handsets. They allow the transmission of data over public telephone lines between two points when no direct connection can be made. They are attached to a telephone handset and held in place by a hook-and-loop strap. They have a telephone-type cord which is connected to a modem, which, in turn, is connected to the central processing unit of a computer.
The telecouplers' principal function is to connect telephone handsets to computer modems when no modular jacks are available. They eliminate communication problems posed by RJ-11 jacks, digital phone systems, and foreign telephones.
The telecouplers use sending and receiving elements for modem communications and convert electronic analog (audio) signals into acoustic tone signals and vice versa. They can work with both analog and digital phone systems.
The ultimate issue as to whether imported merchandise has been classified under the correct tariff provision entails a two-step process: (1) ascertaining the proper meaning of specific terms in the tariff provision; and (2) determining whether the merchandise in question comes within the description of such terms as properly construed. Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1391 (1994). The first step is a question of law; the second, a question of fact. EM. Chem. v. United States, 9 Fed. Cir. (T) 33, 35, 920 F.2d 910, 912 (1990).
Rule 56 of this Court permits summary judgment when "there is no genuine issue as to any material fact ..." USCIT R. 56(d) (emphasis added); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed.Cir.1987). Similarly, Rule 56 of this Court specifically requires that the Court determine "what material facts are actually and in good faith controverted." USCIT Rule 56(e).
On the question of genuineness, the standard for determining whether there is a genuine issue of fact mirrors the standard for a directed verdict which requires the trial judge to direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict. "[T]he determination of whether a given factual dispute requires submission to a jury must be guided by the substantive evidentiary standards that apply to the case." 477 U.S. at 255, 106 S.Ct. at 2514; see Sweats Fashions, Inc. v. Pannill Knitting Co., Inc., 833 F.2d 1560, 1562-63 (Fed.Cir.1987); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) ().
Since there are no genuine issues of material fact to be resolved by a trial, the legal questions are ripe for determination by this Court. Accordingly, summary judgment is appropriate.
The Chapter Notes to Section 85 do not offer specific guidance on its scope. However, the Explanatory Note1 to this section states in pertinent part:
[t]he term `electrical apparatus for line telephony or line telegraphy' means apparatus for the transmission between two points of speech or other sounds (or symbols representing written messages, images or other data), by variation of an electric current or of an optical wave flowing in a metallic or dielectric (copper, optical fibers, combination cable, etc.) circuit connecting the transmitting station to the receiving station ... The heading covers all such electrical apparatus designed for this purpose, including the special apparatus used for carrier-current line systems.
The same Note also addresses telegraphic apparatus, stating that it "is essentially designed for converting texts or images into appropriate electrical impulses, for transmitting those impulses, and at the receiving end, receiving these impulses and converting them either into conventional symbols or indications representing the text, or into the text of the image itself."
The telecouplers convert signals from computer modems to acoustic tone signals that can be accepted by telephone handsets and transmitted over telephone lines to another point. The telecouplers transmit data between two computer systems by connecting the transmitting station to the receiving station and, therefore, meet the requirements of an "electrical apparatus" in Heading 8517. They also assist computer modems, classified under subheading 8517.40.10, HTSUS, in performing their communication functions.
For the separately entered merchandise to be classified under the subheadings for automatic data-processing machines, the merchandise must satisfy the two-prong test found in Note 5(B) of Chapter 84 setting forth the criteria for classification as a unit of a data-processing machine, or meet the definition of a part or accessory "suitable for use solely or principally with an automatic data processing (ADP) machine." 8473.30 HTSUS.
Note 5(B) states:
Automatic data processing machines may be in the form of a variable number of separately housed units. A unit is to be regarded as being a part of the complete system if it meets all the following conditions: (a) it is connectable to the central processing unit either directly or through one or more other units; and (b) it is specifically designed as part of such a system (it must, in particular, unless it is a power supply unit, be able to accept or deliver data in form (code or signals) which can be used by the system).
Note 5(B), Chapter 84, HTSUS. Additionally, Note 5(B) excludes from the scope of Chapter 84 Id. (emphasis added). Thus, the question before the Court is whether the couplers are designed as part of automatic data-processing systems, or work in conjunction with such systems to perform some specific function.
If the imported acoustic telecouplers perform specific telegraphic functions so that they work in conjunction, rather than as part of an ADP system, they would be excluded from heading 8471 by operation of Chapter Note 5(B), and Customs' classification would stand. If, on the other hand, the acoustic telecouplers function as part of an ADP system, as adapter units,2 they should be classified under heading 8471.
"Adapter" is not specifically defined in the HTSUS. However, the NEW WEBSTER COMPUTER DICTIONARY 4 (1984) defines an adapter as "a connecting device that enables different parts of one or more systems or subsystems to interact with each other."
The defendant maintains that the telecouplers cannot be units of an automatic data-processing machine because they are connected to...
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