E. Dillingham, Inc. v. United States
| Decision Date | 24 July 1968 |
| Docket Number | C.D. 3522 |
| Citation | 61 Cust. Ct. 33 |
| Parties | E. DILLINGHAM, INC. <I>v.</I> UNITED STATES. WALTERS AXE CO., INC. <I>v.</I> UNITED STATES. |
| Court | U.S. Court of Customs and Patent Appeals (CCPA) |
Sharretts, Paley, Carter & Blauvelt (Eugene F. Blauvelt and M. Barry Levy of counsel) for the plaintiffs.
Edwin L. Weisl, Jr., Assistant Attorney General (Samuel D. Spector and Bernard J. Babb, trial attorneys), for the defendant.
Before RAO and FORD, Judges, and OLIVER, Senior Judge
The protests designated above were consolidated for trial and were the subject of a decision in E. Dillingham, Inc., and Walters Axe Co., Inc. v. United States, 52 Cust. Ct. 147, C.D. 2452. On a motion for rehearing, plaintiffs' application was granted. Same v. Same, 53 Cust. Ct. 253, Abstracts 68735.
The merchandise herein is steel axe heads, which were classified by the collector of customs as cutting tools, not specially provided for, under paragraph 396 of the Tariff Act of 1930, as modified by T.D. 52373 and T.D. 52462, and assessed with duty at 22½ per centum ad valorem.
The plaintiffs claimed that the merchandise is properly dutiable under paragraph 319(a) of the Tariff Act of 1930, as modified by T.D. 54108, as forgings of iron or steel, not machined, tooled, or otherwise advanced in condition by any process or operation subsequent to the forging process, at the rate of 10½ per centum ad valorem.
The court held that the axe heads were not forgings within the purview of paragraph 319(a) since they had been subjected to a process, after forging, which advanced them beyond forgings. The classification was affirmed, but not approved, in that the court ruled the axe heads in their imported condition lacked cutting qualities.
On the rehearing, plaintiffs moved to amend their protests to include a claim under paragraph 397 of the Tariff Act of 1930, as modified by T.D. 54108, as articles, not specially provided for, wholly or in chief value of steel, at 19 per centum ad valorem.
Paragraph 396 of the Tariff Act of 1930, as modified by T.D. 52373 and T.D. 52462:
Drills * * * other cutting tools; all the foregoing
if hand tools not provided for in paragraph 352
and parts thereof, wholly or in chief value of metal
not specially provided for ____________________________ 22½% ad val
Paragraph 319(a) of the Tariff Act of 1930, as modified by T.D. 54108:
Forgings of iron or steel, or of combined iron and
steel, not machined, tooled, or otherwise advanced
in condition by any process or operation subsequent
to the forging process, not specially provided
for________________________________________________ 10½% ad val
Paragraph 397 of the Tariff Act of 1930, as modified by T.D. 54108:
Articles or wares, not specially provided for, whether partly or wholly manufactured:
* * * * * * *
Composed wholly or in chief value of iron, steel,
copper, brass, nickel, pewter, zinc, aluminum,
or other base metal (except lead), but not
plated with platinum, gold, or silver, or
colored with gold lacquer:
* * * * * * *
Other, composed wholly or in chief value
of iron, steel, * * *___________________ 19% ad val.
At the trial, the following exhibits were introduced in evidence:
Plaintiffs' exhibits 1, 2, and 3 illustrate the merchandise in its condition upon arrival in the United States.
Plaintiffs' exhibit 4 — sample of a billet or bar from which merchandise, such as exhibits 1, 2, and 3, is fabricated.
Plaintiffs' exhibit 5 — finished product resulting from processes applied to exhibit 2 subsequent to importation.
Plaintiffs' exhibit 6 — illustrates exhibit 2 after it has been completed by processes subsequent to its importation, with handle permanently attached.
John E. Hammell, a well-qualified witness and the only witness in the case, testified for the plaintiffs. His testimony is set forth in full in the reported case, supra. We make reference now only to those facts of record which are deemed pertinent on this rehearing. Mr. Hammell outlined the successive steps in the forging operations which resulted in exhibits 1, 2, and 3. These apparently are rough axe heads which were imported in the condition as we see them before us. They were produced as follows, according to the witness: Starting with a bar or billet (represented by plaintiffs' exhibit 4), heat is applied at a temperature of approximately 2,150 degrees Fahrenheit. The metal is then subjected to a pounding by a drop hammer, weighing about 3,000 pounds, to a desired shape, such as exhibit 2.
Next is an operation in what is known as a punch press, by which the excess metal that accumulates around the edges of the drop die cavity is sheared off. The article is then placed in what is referred to as a forging upset machine, by means of which the "eye" of the forging is pierced while the metal is still hot. The resulting product is in the form of exhibit 2, except that, before shipment to the United States, another operation is performed to remove any sharp burrs or slivers of steel resulting from the forging operations. This is done by a grinding operation on a stone.
This last operation of grinding on a stone to remove the sharp burrs or slivers of steel resulting from the forging process presents the issue for our determination. Does this step constitute an advance in condition by a process or operation on the roughly forged axe heads subsequent to the forging process within the meaning of paragraph 319(a) of the Tariff Act of 1930, supra? Or, is this only a further essential manipulation of the crude object, performed prior to its acquiring status as a merchantable forging? In the latter event we would consider this step of grinding integral to the forging operation itself. Obviously it could not then be said that the grinding constituted either an advance in condition or an operation subsequent to the forging process.
After outlining the forging operations at the trial, the witness added (R. 16):
Q. These operations that you have described, do they have a generic name in the trade, in the industry? — A. Well, I think they are all classified as a forging operation. I am definite of that. They are all forging operations.
Q. Is anything further done to Exhibit 2 before it is shipped to the United States? — A. Yes, the only other operation is to take off any sharp burrs, because sometimes we get needle-sharp slivers of steel coming out from the shearing and the forging operations, and this is just done once over a stone to remove any sharp edges that would possibly sever a man's finger.
Q. Is that the only purpose of that operation? — A. That is the only purpose, because they are then finished, everything else is done in the United States.
The above testimony portrays the operation, the significance of which we must determine.
Counsel for the defendant cites an early case, Saltonstall v. Wiebusch, 156 U.S. 601 (1895), wherein controversy arose over an imported consignment of certain carpenters' pincers, scythes, and grass hooks which had been manufactured by a forging process and then further processed. They were held properly classifiable as manufactures of metal, rather than as forgings, under the provision in the Tariff Act of 1883, which provided for "forgings of iron or steel, or forged iron, of whatever shape, or in whatever stage of manufacture, not specially enumerated or provided for in this act." The Supreme Court stated the following at page 603:
* * * we do not understand the term "forgings" to be applicable to articles which receive treatment of a different kind than hammering before they are complete; such, for example, as grinding, tempering, or polishing, although the witnesses agreed that welding and punching are properly forging processes. . . . The fact that the further process, which the articles specified in this case underwent, represented but three or four percent of the total labor expended upon them, is by no means decisive, when it is a question of classification, since the very object of Congress may have been to protect the additional labor. The lines between different articles enumerated in the tariff law are sometimes very nicely drawn, and a trifling amount of labor is often sufficient to change the nature of the articles, and determine its classification. * * *
It was the opinion of the Court, even in the face of the tariff provision's broad language as compared to the pertinent provision of paragraph 319(a), supra, that any operation which was performed on a forging subsequent to the forging process, and which advanced its condition, removed the article subjected thereto from the category of forgings for classification purposes.
Difficulties arose regarding the interpretation of the statutory provision for forgings, which was reenacted in similar language in paragraph 127 of the Tariff Act of 1897, and in the Tariff Act of 1909. The language of the forgings provision (paragraph 123) was changed to what it is in paragraph 319(a), supra, in order to clarify any interpretive confusion as to what constitutes forgings for tariff purposes. In the Notes On Tariff Revision, 1908, the following was reported on forgings to the House Ways and Means Committee for consideration in connection with the Tariff Act of 1909 at page 154:
Forgings
* * * * * * *
COMMENTS AND SUGGESTIONS —
The contention between the Government and the importers is as to the interpretation of the phrase, "forgings * * * of whatever shape or whatever degree or stage of manufacture;" the former insisting that this refers only to various steps or stages of heating, pressing, or hammering in the process of forging, and that work bestowed on forged articles after the completion of the forging process advances them beyond the class of goods known as forgings. On the other hand, the importers' claim is that this provision includes forged art...
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