Mita Copystar America v. U.S.

• Decision Date: 11 April 1994
• Docket Number: No. 93-1466,93-1466
• Citation: 21 F.3d 1079
• Parties: MITA COPYSTAR AMERICA, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1079

21 F.3d 1079

16 ITRD 1033

MITA COPYSTAR AMERICA, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 93-1466.

United States Court of Appeals Federal Circuit.

April 11, 1994.

Steven P. Florsheim, Grunfeld, Desiderio, Libowitz & Silverman, New York City, argued for plaintiff-appellant.

John M. Peterson and Peter J. Allen, Neville, Peterson & Williams, New York City, were on the brief for amicus curiae, Xerox Corp.

Barbara M. Epstein, Commercial Litigation Branch, Dept. of Justice, New York City, argued for defendant-appellee. With her on the brief were Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director and Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office. Also on the brief was Stephen Berke, Office of the Asst. Chief Counsel, Intern. Trade Litigation, U.S. Customs Service, of counsel.

Before MICHEL, CLEVENGER and SCHALL, Circuit Judges.

MICHEL, Circuit Judge.

Mita Copystar America (Mita) appeals the May 20, 1993 decision of the United States Court of International Trade, No. 90-05-00260, slip op. 93-76, 1993 WL 179285, granting the government's motion for summary judgment and denying Mita's cross-motion for summary judgment. The court held that the United States Customs Service (Customs) properly classified Mita's toners and developers as "Chemical preparations" under the Harmonized Tariff Schedule of the United States (HTSUS), subheading 3707.90.30. Because no legal error has been shown, we affirm.

BACKGROUND

Mita imports toners and developers for use in its own photocopy machines. These toners and developers are packaged in retail units and designed for use in a specific type or brand of machine such that they are not interchangeable. The toner consists of two different resins, carbon black (or, pigments, in the case of red or blue toners), dye, and silica and/or aluminum oxide. The developers consist of a "carrier" in the form of a combination of various metal oxides, and a small amount of toner. The subject toners and developers are manufactured through an involved process whereby the ingredients of each are mixed together in precise proportions, processed and later pulverized to form particles of the required size.

Mita's imported toners and developers are part of a "two component" system. When used in a photocopy machine, the developer is placed in the "developing unit" of the machine and the toner is placed in the "toner reservoir." During operation, toner is automatically fed into the developing unit, where it is continuously mixed with the developer in a predetermined ratio.

By contrast, a competing electrophotographic process, referred to as a "one component" system, utilizes a single multicomponent toner. In the one-component system, there is no mixing of toner with developer in the photocopy machine.

Customs classified the merchandise under HTSUS subheading 3707.90.30, encompassing "[c]hemical preparations for photographic uses," which carries a duty rate of 8.5 percent ad valorem. Mita claims that the proper classification is HTSUS subheading 3707.90.60, covering "[u]nmixed products for photographic uses, put up in measured portions or put up for retail sale in a form ready for use." Products in the latter category are assessed a duty rate of 1.5 percent ad valorem. ¹ Mita filed timely protests with Customs, which were denied in December, 1989 and March, 1990. Mita then filed a complaint in the Court of International Trade. The parties filed cross-motions for summary judgment.

The trial court reviewed the Explanatory Notes to HTSUS section 3707.90, ² which describe two categories, "(A) single substance" versus "(B) preparation obtained by mixing or compounding together two or more substances." Slip op. at 10. Noting that this distinction mirrored the division between the two HTSUS subheadings, the court concluded that "unmixed products" in subheading 3707.90.60 refers to single substances as described in category (A), and "chemical preparations" in subheading 3707.90.30 corresponds to preparations of more than one substance as described in category (B). The court then referred to various lexicographic and scientific authorities to determine the common meaning of "substance." Based on its review of the materials, the court determined that the chemical dictionary definition of "substance" as "[a]ny chemical element or compound ... characterized by a unique and identical constitution and [ ] thus homogeneous," was most appropriate in this context. Slip op. at 13 (quoting Hawley's Condensed Chemical Dictionary, 1102 (11th ed. 1987)). The court therefore concluded that "products which [sic] are combinations of two or more elements or chemical compounds [such as these toners and developers] are chemical preparations, and are correctly classified under HTSUS subheading 3707.90.30." Slip op. at 14 (emphasis added).

ANALYSIS

We have jurisdiction over this appeal pursuant to 28 U.S.C. Sec. 1295(a)(5) (1988).

The Court of International Trade's grant of summary judgment is reviewed for correctness as a matter of law, and the ultimate question of the proper interpretation of a tariff term is also a question of law subject to de novo review. Lynteg, Inc. v. United States, 976 F.2d 693, 696 (Fed.Cir.1992).

Under 28 U.S.C. Sec. 2639(a)(1) (1988), a classification of merchandise by Customs is presumed to be correct. Therefore, the burden of proof is upon the party challenging the classification. Jarvis Clark Co. v. United States, 733 F.2d 873, 876, 2 Fed.Cir. (T) 70, 72, reh'g denied, 739 F.2d 628, 2 Fed.Cir. (T) 97 (Fed.Cir.1984). When a tariff term is not defined in either the HTSUS or its legislative history, the term's correct meaning is its common meaning. Lynteq, 976 F.2d at 697. A court may rely upon its own understanding of terms used, and may consult standard lexicographic and scientific authorities, to determine the common meaning of a tariff term. Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 789, 6 Fed.Cir. (T) 121, 125 (Fed.Cir.), cert. denied, 488 U.S. 943, 109 S.Ct. 369, 102 L.Ed.2d 358 (1988); Trans-Atlantic Co. v. United States, 471 F.2d 1397, 1398 (CCPA 1973). Additionally, a court may refer to the Explanatory Notes of a tariff subheading, which do not constitute controlling legislative history but nonetheless are intended to clarify the scope of HTSUS subheadings and to offer guidance in interpreting subheadings. Lynteq, 976 F.2d at 699.

On appeal, Mita argues that its toners and developers are unmixed products within the common meaning of the term, because they have their own identity in the trade as a single type of substance and they must be mixed together prior to use. Mita relies on H. Reisman Corp. v. United States, slip op. 93-227, 1993 WL 499804, 1993 Ct.Intl.Trade LEXIS 222 (December 1, 1993), involving the classification of an animal feed additive consisting of a mixture of two vitamin B-12 compounds, proteinaceous matter, water, and trace materials, which was occasionally mixed with ground corn cobs or rice hulls to facilitate its incorporation into animal feeds. Noting that the Reisman court stated that the additive was also sold in an "unmixed" form which would have to be mixed prior to its end use, id. 1993 WL 499804 at * 1, at * 4, Mita asserts that the common understanding of "unmixed products" therefore includes those products that must be mixed prior to their end use.

That Mita's products must be mixed together when used is irrelevant. It is well settled law that merchandise is classified according to its condition when imported. United States v. Citroen, 223 U.S. 407, 414-15, 32 S.Ct. 259, 259-60, 56 L.Ed. 486 (1911). If the rule were otherwise, not only could the same product be subject to different duty rates depending on its intended end use, but Customs would be flooded with affidavits or other evidence of differing intended uses. Moreover, Customs would have no way of determining whether the merchandise was actually used for its alleged intended purpose after importation. Mita's reliance on Reisman is unpersuasive because the meaning of the term "unmixed" was not at issue there. Nor is there anything in the instant tariff provision that suggests that it is proper to refer to mixing after importation for purposes of classifying merchandise. For both these reasons, we view this argument as unpersuasive.

Mita and amicus, Xerox Corporation, additionally argue that the trial court erred by unduly restricting the term "unmixed products" to include only elements and compounds. First, Mita relies on the common dictionary definition of "unmixed" as simply "not mixed." Webster's Third New International Dictionary of the English Language, Unabridged (1986), p. 2504. "Mixed," in turn, is defined as "combining the characteristics of more than one kind or class: not conforming to a single type." Id. at 1448. Next, Mita notes that the Explanatory Notes do not define the meaning of the term "unmixed products," but merely indicate that the term is synonymous with a "single substance." Webster's defines "substance" in relevant part as:

b(1): a distinguishable kind of physical matter (2): a piece or mass of such substance ... c: matter of definite or known chemical composition: an identifiable chemical element, compound, or mixture--sometimes restricted to compounds and elements.

Webster's at 2279. Consequently, Mita argues that its toners and developers fit at least two of these common definitions of single substance because they consist of a "distinguishable kind of physical matter" and are "of definite or known chemical composition." Mita asserts that the trial court's reliance on the Condensed Chemical Dictionary definition of substance is overly technical and improperly restrictive because chemical lexicons may not come into play unless the involved provisions in the HTSUS are "chemical" provisions containing technical language.

It is undisputed that...