ET Horn Co. v. US, Court No. 84-12-01730.

Decision Date27 November 1990
Docket NumberCourt No. 84-12-01730.
Citation752 F. Supp. 476
PartiesE.T. HORN COMPANY, Plaintiff, v. The UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Stein Shostak Shostak & O'Hara, Joseph P. Cox, Los Angeles, Cal., for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty.-in-Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Veronica A. Perry, New York City, for defendant.

AQUILINO, Judge:

This action, which has been designated a test case pursuant to CIT Rule 84(b), challenges classification by the U.S. Customs Service of penta-ethylenehexamine ("PEHA") "bottoms" and bishexamethylenetriamine ("BHMT") residues from Japan under Schedule 4 of the Tariff Schedules of the United States ("TSUS"), Part 2 ("Chemical Elements, Inorganic and Organic Compounds, and Mixtures") as "Mixtures of two or more organic compounds: ..... Other", item 430.20.1

The plaintiff claims that this merchandise should have entered duty free in accordance with TSUS item 793.00, which covered "Waste and scrap not specially provided for".

I

The parties have submitted cross-motions for summary judgment. After review of the pleadings and the papers filed in support of these motions, the court concludes that no material facts are in dispute, that trial therefore is not necessary and that this action can be resolved upon the submissions at hand.

An affidavit attached to plaintiff's motion states, in part:

4) PEHA Bottoms are the residue of manufacturing processes undertaken to produce ethyleneamines.... BHMT Amine Residues are the byproduct of manufacturer's processes undertaken to produce Nylon 66 from hexamethylenediamine.
5) They ... are the residues or "bottoms" which remain in the bottom of the receptacle after distillation and production of these amines. The bottoms are unsatisfactory for use with the ethyleneamines and hexamethylenediamines which are the intended products of the manufacturing process.
* * * * * *
9) The BHMT Amine Residues are purchased for $986/metric ton FOB Japan and the PEHA Bottoms are purchased for $81.62/100 pounds FOB Japan.
* * * * * *
11) After importation, the PEHA Bottoms are sold, in their condition as imported, ... and are reacted with various fatty acids to produce amides, imidazolines, and esters for use as ingredients in the manufacture of oilfield treating chemicals.
12) BHMT Amine Residues are also sold ... in their conditions as imported, and also so used, but additionally are reacted with phosphourous sic acid to produce phosphonates.

The parties agree that the PEHA bottoms are a mixture of di-ethylenetriamine, triethylenetetramine, tetra-ethylenepentamine, penta-ethylenehexamine, hexa-ethyleneheptamine, hepta-ethyleneoctamine and N-aminoethylpiperazine, each of which is a nitrogenous compound. They also agree that the BHMT residues are a mixture of hexamethylenediamine, bishexamethylenetriamine and N-ethyl hexamethylenediamine, each of which is also a nitrogenous compound. An affidavit filed by the defendant adds, among other points:

9. The "PEHA Bottoms" and "BHMT Amine Residues" both contain amines. Amines are nitrogenous organic compounds containing amino groups, designated in chemical formulas, for example, as -NH2 (a primary amine) or -NH- (a secondary amine). Amino groups are polar and hydrophilic.... PEHA has two primary amine groups and four secondary amine groups. BHMT has two primary amine groups and one secondary amine group....
10. These kinds of compounds react with organic acids, specifically so-called fatty acids like oleic acid (C17H33COOH). One of the primary amines in each compound forms an amide with the acid, but the other primary amine group and all the secondary amine groups are unaffected. The result is an aminoalkylamide of a fatty acid....
11. PEHA Bottoms are also used to make ... a kind of compound known as an imidazoline. Again, the aminoalkane (e.g., PEHA) is reacted with a fatty acid, but this time one of the secondary amines also participates in the reaction to form a five-membered ring.
12. Aminoalkylamides of fatty acids and the corresponding imidazolines are, generally speaking, excellent anti-stripping agents. The portion of such compounds which is from the fatty acid is the nonpolar portion which is compatible with the bituminous composition, and the aminoalkyl moiety, which comes directly from the PEHA or BHMT, is the polar portion which is compatible with the mineral aggregate.
13. At one time ..., the preferred amine compounds were relatively pure materials like diethylene triamine. However, in recent years it has been found that mixtures of amine compounds are just as cost effective, and mixtures like "PEHA Bottoms" and "BHMT Amine Residues" are readily available to meet the paving industry's needs. Accordingly, the trend has been to use these kinds of mixtures to prepare anti-stripping agents.2

As stated above, Customs classified both substances at issue as mixtures of two or more organic compounds. However, discovery in conjunction with this action determined that some 5-11 percent of the BHMT residues by weight was sodium hydroxide, which the defendant now admits was and is inorganic. Defendant's Memorandum, p. 2 and n. 3 ("the provision for mixtures of organic compounds is interpreted by Customs as covering only those mixtures which consist entirely of organic compounds") (emphasis in original). Thus, the defendant now takes the position that "the BHMT should have been classified under item 432.25, TSUS, which covers `mixtures not specially provided for: other: other'". Id. at 2.

II

Classification of the BHMT residues under that item would not have changed the rate of duty owed (pursuant to TSUS item 425.52) in view of the other component compounds, but the plaintiff properly argues that no statutory presumption of correctness supports defendant's present position on this particular merchandise, citing for support United States v. Magnus, Mabee & Reynard, Inc., 39 CCPA 1, C.A.D. 455 (1951). When an error such as the one at bar is discovered, the burden of persuasion rests on Customs as to any alternative classification claimed. See, e.g., Abbey Rents v. United States, 79 Cust.Ct. 103, C.D. 4720, 442 F.Supp. 540 (1977), aff'd, 585 F.2d 501, 66 CCPA 2 (CCPA 1978). On the other hand, the presumption set forth in 28 U.S.C. § 2639(a)(1) does apply to defendant's classification of the PEHA bottoms. And, in either instance, the court is mindful of its responsibilities in an action like this, as elucidated by the court of appeals in Jarvis Clark Co. v. United States, 733 F.2d 873, reh'g denied, 739 F.2d 628 (Fed.Cir.1984).

A

Headnote 1 to TSUS Schedule 4, Part 2 (1983) stated that it covered "chemicals, except those provided for elsewhere in this schedule and those specially provided for in any of the other schedules." The defendant claims that "for merchandise which is chemicals to be classified outside of Schedule 4, the chemical must be specially provided for." Defendant's Memorandum, p. 6 (emphasis in original). Since the plaintiff admits that the imports can be described as chemicals, and since its claimed classification was a not-specially-provided-for ("nspf") provision, the crux of the matter according to the defendant is whether the headnote operated to "preclude classification of the imported merchandise in the nspf provision for waste and scrap, item 793.00, TSUS." Id. at 11.

The plaintiff attempts to frame the issue as one of relative specificity under General Interpretive Rule 10(c), the substance of which is that an article described in two or more provisions is to be classified under the one which describes the merchandise more specifically. See, e.g., J. Gerber & Co. v. United States, 62 Cust.Ct. 368, C.D. 3773, 298 F.Supp. 516 (1969), aff'd, 436 F.2d 1390, 58 CCPA 110 (CCPA 1971). The plaintiff argues that the aforementioned basket provision for waste and scrap did specially provide for the subject imports, was more specific than the basket provision for chemicals, and therefore satisfied the relevant headnote. It refers to the Tariff Classification Study of November 15, 1960 ("TCS") explanatory notes to Schedule 4, which state (at page 55):

... Part 2 is essentially a "basket" part of schedule 4 in that it includes all important inorganic and organic chemicals itemized separately which are not specially provided for elsewhere in the schedules.

The plaintiff reasons that, since there was no separate itemization for "bottoms" and "residues" in Part 2, the merchandise was not classifiable thereunder.

The defendant responds that General Interpretive Rule 10(c) is inapposite but that, even if it were applicable, the doctrine of relative specificity favors the Service's classification because the item the plaintiff proffers was under "Products Not Elsewhere Enumerated", Schedule 7, Part 13, whereas the item(s) on which Customs relies were subsumed in "Chemical Elements, Inorganic and Organic Compounds, and Mixtures".

When an article is determined to be "clearly described" in two or more items, "selection of the controlling item by relative specificity is mandatory and takes precedence over other judge-evolved methods of resolving ambiguity, including resort to extrinsic aids such as legislative history." F.L. Smidth & Company v. United States, 409 F.2d 1369, 1376, 56 CCPA 77, C.A.D. 958 (CCPA 1969). In this action, the question, of course, is whether the merchandise was so described in the provisions pressed by each side. Phrased another way, were those provisions independently apposite? The answer depends primarily on whether "chemicals", as used in headnote 1, encompassed waste and scrap thereof.

The word "chemical" is defined in The Oxford English Dictionary (2d ed.1989) (at page 82 of volume III) as, among other things, "relating or belonging to the practice of chemistry; (of substances) obtained by the operations of chemistry" and as a ...

To continue reading

Request your trial
4 cases
  • Precision Specialty Metals, Inc. v. U.S.
    • United States
    • U.S. Court of International Trade
    • September 20, 2000
    ...has a valuable practical use, is not waste or old junk." Harley, 14 Ct. Cust.App. at 115. The decision in E.T. Horn Co. v. United States, 14 CIT 790, 752 F.Supp. 476 (1990), aff'd and adopted, 945 F.2d 1540 (Fed.Cir. 1991), articulates part of the rationale for the distinction between waste......
  • Conoco, Inc. v. US Foreign-Trade Zones Bd., Slip Op. 95-62. Court No. 90-06-00289.
    • United States
    • U.S. Court of International Trade
    • April 13, 1995
  • Trent Tube Div. v. US, Court No. 87-12-01189.
    • United States
    • U.S. Court of International Trade
    • November 27, 1990
  • E.T. Horn Co. v. U.S.
    • United States
    • U.S. Court of Appeals — Federal Circuit
    • September 18, 1991
    ...and the carefully considered and detailed opinion of the Court of International Trade (Aquilino, J.) dated November 27, 1990, 752 F.Supp. 476 (1990), is hereby adopted as the opinion of this AFFIRMED. UNITED STATES COURT OF INTERNATIONAL TRADE Opinion Decided: November 27, 1990 AQUILINO, Ju......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT