ET Horn Co. v. US, Court No. 84-12-01730.
Decision Date | 27 November 1990 |
Docket Number | Court No. 84-12-01730. |
Citation | 752 F. Supp. 476 |
Parties | E.T. HORN COMPANY, Plaintiff, v. The UNITED STATES, Defendant. |
Court | U.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.
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".
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:
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:
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 () (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.
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).
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.
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