Dow Chemical Co. v. United States, Court No. 83-4-00634.

• Decision Date: 19 August 1986
• Docket Number: Court No. 83-4-00634.
• Citation: 10 CIT 550,647 F. Supp. 1574
• Parties: DOW CHEMICAL CO., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

647 F. Supp. 1574

10 CIT 550

DOW CHEMICAL CO., Plaintiff, v. UNITED STATES, Defendant.

Court No. 83-4-00634.

United States Court of International Trade.

August 19, 1986.

Barnes, Richardson & Colburn, Robert E. Burke, Thomas M. Keating, Lynn S. Baker, Chicago, Ill., for plaintiff.

Richard K. Willard, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Civ. Div., Dept. of Justice, Saul Davis, New York City, for defendant.

MEMORANDUM OPINION AND ORDER

DiCARLO, Judge:

Plaintiff challenges the United States Customs Service (Customs) classification of pyrolysis gasoline imported from Spain (merchandise).

The merchandise was entered in May, 1980 and classified under item 403.90, Tariff Schedules of the United States (TSUS), as a mixture in part of products provided for in Schedule 4, Part 1, Subpart B, covering TSUS items 403.02 through 403.90. Plaintiff seeks classification in Schedule 4, Part 1, Subpart A under item 401.44, TSUS, as "light oil," or under item 401.80, TSUS, as a mixture of Subpart A products, or, alternatively, in Schedule 4, Part 10 under item 475.35, TSUS, as naphtha, or under item 475.65, TSUS, as a mixture of hydrocarbons not specially provided for. Plaintiff also says that classification under item 475.35, TSUS is required by an established and uniform practice under 19 U.S.C. § 1315(d) (1982) or by a uniform practice under 19 C.F.R. § 177.10(b) (1985).

The Court holds that the merchandise is properly classified under item 403.90, TSUS.

I. Plaintiff's Claimed Classifications Under Schedule 4, Part 1, Subpart A

Plaintiff proposes two alternative classifications under Schedule 4, Part 1, Subpart A, providing as follows:

Coal tar, crude (including crude blast-furnace tar crude oil-gas tar, and crude water-gas tar), and organic chemical products found naturally in coal tar whether produced or obtained from coal tar or other source emphasis added . . . . 401.44 Light oil ............................. Free . . . . 401.80 Mixtures consisting wholly of two or more of the foregoing named products ......... Free

The proposed classifications raise the questions (1) whether item 401.44, TSUS is an eo nomine provision covering light oil which contains products not found naturally in coal tar, and (2) whether item 401.80, TSUS, covering mixtures "wholly of" products named in Schedule 4, Part 1, Subpart A, applies to merchandise consisting in part of products not listed in Subpart A.

The Court finds that the following products have not been shown to be found naturally in coal tar light oil: styrene, ethylbenzene, alkylbenzenes other than toluene and xylene, cyclopentadeine, piperylene, isoprene and pentene. These products comprise over 12% of the merchandise by weight. Plaintiff argues that item 401.44, TSUS is an eo nomine provision for light oil, contending that the superior heading to Subpart A should "be interpretated as expanding the scope of the subpart to include... sources of the products set forth therein beyond those chemical products found naturally in coal tar." Reply Brief for Plaintiff at 10 (emphasis in original). The Court does not agree.

General Interpretative Rule 10(c)(i), TSUS, reads:

(c) an imported article which is described in two or more provisions of the schedules is classifiable in the provision which most specifically describes it; but, in applying this rule of interpretation, the following considerations shall govern:

(i) a superior heading cannot be enlarged by inferior headings indented under it but can be limited thereby

Applying this rule, an article is classifiable under item 401.44, TSUS only if it meets all the requirements of the superior heading. See United States v. The Carborundum Co., 63 CCPA 98, 100-101, C.A.D. 1172, 536 F.2d 373, 376-77 (Fed.Cir.1976). A product is classifiable as "light oil" under item 401.44 only if it is light oil "found naturally in coal tar, whether produced or obtained from coal tar or other source." If Congress intended to give the "light oil" provision unlimited eo nomine scope, Congress would have provided for it without any limiting superior heading.

The Court holds that the merchandise is not classifiable as "light oil" within item 401.44, TSUS, since it contains products not "found naturally in coal tar" within the meaning of the superior heading.

Moreover, plaintiff failed to establish that the merchandise comes within the commercial meaning of "light oil." Nothing in the record shows the term "light oil" applied to the merchandise except one article written by plaintiff's expert witness. The same witness testified that the term "light oil" does not cover products derived other than by distillation, which he defined as "the heating up of a material such that the more volatile components vaporize and are separated from the heavier materials." (R. 525-26). The witness stated that distillation normally does not involve chemical and molecular changes in either the feedstock or the final product. Id. The parties stipulated, however, that the pyrolysis process, through which the merchandise was obtained, involved significant changes in the molecular structure of the feedstock and the final product. See Pretrial Order, Schedule C I.

Further, if the tariff provision for "light oil" were interpreted to encompass any hydrocarbon mixture that possesses a boiling range of up to 210-220°C, as plaintiff also argues, the provision would cover virtually all naphthas and motor fuels and many kerosenes. That interpretation would render items 475.25 475.35, TSUS superfluous and result in a partial nullification of item 475.30, TSUS. It is axiomatic that "Congress is presumed not to have used superfluous words in a statute." Ameliotex, Inc. v. United States, 65 CCPA 22, 25, C.A.D. 1200, 565 F.2d 674, 677 (Fed.Cir. 1977).

Plaintiff's claim under item 401.80, TSUS also fails. Item 401.80, TSUS provides for:

Mixtures consisting wholly of two or more of the foregoing products those provided for in Subpart A.

General Headnote 9(f)(ii), TSUS defines "wholly of" as follows:

"wholly of" means that the article is, except for negligible or insignificant quantities of some other material or materials, composed completely of the named material.

Plaintiff's Exhibit 2 shows that the merchandise consists of 62.5% Subpart A compounds and 37.5% non-Subpart A compounds. The non-Subpart A compounds are present in sufficient quantity so that the merchandise cannot be said to be composed completely wholly of Subpart A materials within the meaning of General Headnote 9(f)(ii).

II. Plaintiff's Claimed Classifications Under Schedule 4, Part 10

Plaintiff claims that the merchandise is classifiable in Schedule 4, Part 10, under item 475.35, TSUS, as naphtha, or alternatively under item 475.65, TSUS, as a mixture of hydrocarbons not specially provided for. The merchandise is described by the term "naphtha" under item 475.35, TSUS, and is classifiable under that provision unless it is also described under Schedule 4, Part 1, and classifiable thereunder by operation of headnote 1 to Schedule 4, Part 10, which states:

Any product described in this part and also in part 1 of this schedule is classifiable in said part 1, except fuel oils, motor fuel, and lubricating oils and greases, containing by weight not over 25 percent of any product described in said part 1.

The questions to be decided are (1) whether headnote 1 applies to products containing benzenoids which are not "added," but are created during synthesis of the petroleum feedstock, and (2) whether the merchandise is described in part 1.

The Tariff Classification Study states that "products described in part 10 would be classified in part 1 if they contained any `benzenoid' additives." 6 Tariff Classification Study, 167 (1960) (emphasis added). Since it has been stipulated that the benzenoids were created during the cracking process and were not added to the merchandise, plaintiff argues that headnote 1 to Part 10 does not require classification of its merchandise in Part 1 if it is described under that part.

The Court does not agree that the Tariff Classification Study requires that benzenoid compounds be "additives" to be described within Part 1, and governed by headnote 1 to Part 10. Headnote 1 to Part 1 states that unless there is a conflicting headnote elsewhere in Schedule 4, "all products described in this Part shall be classified hereunder even if more specifically described elsewhere in this schedule." Headnote 1 to Subpart B of Part 1 states that Schedule B applies to "products having a benzenoid, quinoid, or modified benzenoid structure artificially produced by synthesis...."

Since the headnotes, taken together, show that benzenoids produced by synthesis are classifiable in Part 1, Subpart B, products containing benzenoids produced by synthesis are classified in Part 1, rather than Part 10. Where the language of a statute is clear, an allegation of ambiguity will not transform the statute into an ambiguous provision. See United States v. James, ___ U.S. ___, ___, 106 S.Ct. 3116, 3121-23, 92 L.Ed.2d 483 (1986); Amoco Oil Co. v. United States, 749 F.2d 1576, 1579 (Fed.Cir.1984).

The Court must now decide whether the merchandise is "described ... in Part 1" within headnote 1 to Part 10. The merchandise was classified in Part 1, Subpart B, under item 403.90, TSUS, which covers:

Cyclic organic chemical products in any physical form a benzenoid, quinoid, or modified benzenoid structure not provided for in subpart A or C of this part 403.90 Mixtures in whole or in part of any of the products provided for in this subpart ... 1.7¢ per lb. + 12.5% ad val.

Plaintiff argues that item 403.90 does not encompass synthesized mixtures since the Tariff Classification Study, Schedule 4, at 21, says that item 403.90, TSUS was "based on" Paragraphs 27(a)(4) and 27(b) of the Tariff Act of 1930, and Paragraph 27(a)(5) says that these products...