Permagrain Products, Inc. v. United States

• Decision Date: 04 September 1985
• Docket Number: No. 81-12-01644.,81-12-01644.
• Citation: 623 F. Supp. 1246,9 CIT 426
• Parties: PERMAGRAIN PRODUCTS, INC., Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. Court of International Trade

623 F. Supp. 1246

9 CIT 426

PERMAGRAIN PRODUCTS, INC., Plaintiff, v. UNITED STATES of America, Defendant.

No. 81-12-01644.

United States Court of International Trade.

September 4, 1985.

Montgomery, McCracken, Walker & Rhoads (Craig E. Ziegler, Philadelphia, Pa., at the trial and on the brief), for plaintiff.

Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch (Judith M. Barzilay, New York City, at the trial and on the brief), for defendant.

RE, Chief Judge:

The question presented in this case pertains to the proper classification, for customs duty purposes, of certain merchandise imported from Canada, and described on the customs invoice as "unfinished hardwood flooring blanks."

The merchandise was classified by the Customs Service as "other hardwood flooring" under item 202.60 of the Tariff Schedules of the United States (TSUS). Consequently, the merchandise was assessed with duty of 6.8 per centum ad valorem.

Plaintiff protests this classification and contends that the merchandise is properly classifiable under item 202.42, TSUS, as "hardwood lumber, rough, dressed or worked" free of duty.

The pertinent statutory provisions of the tariff schedules are as follows:

                   Classified Under
                   Schedule 2, Part 1
                         Wood flooring, whether in strips, planks, blocks, assembled sections or
                         units, or other forms, and whether or not drilled or treated (except
                         softwood flooring classifiable as lumber)
                               Hardwood flooring in strips or planks, whether or not drilled or
                               treated
                   . . . 
                   202.60     Other ...................................................... 6.8% ad val.
                   Claimed Under:
                   Schedule 2, Part 1:
                   Subpart B headnotes:
                       (a) Lumber: A product of a sawmill or sawmill and planing mill derived from a
                   log by lengthwise sawing which, in its original sawed condition, has at least 2
                   approximately parallel flat longitudinal sawed surfaces, and which may be rough,
                   dressed, or worked, as set forth below:
                
                

                         (i) rough lumber is lumber just as it comes from the saw, whether in the
                         original sawed size or edged, resawn, crosscut, or trimmed to smaller
                         sizes;
                         (ii) dressed lumber is lumber which has been dressed or surfaced by
                         planing on at least one edge or face; and
                         (iii) worked lumber is lumber which has been matched (provided with a
                         tongued-and-grooved joint at the edge or ends), shiplapped (provided
                         with a rabbeted or lapped joint at the edges), or patterned (shaped at the
                         edges or on the faces to a patterned or molded form) on a matching
                         machine, sticker, or molder.
                         . . . .
                         Lumber, rough, dressed or worked (including softwood flooring, classifiable
                         as lumber, but not including siding, molding and hardwood flooring):
                         Hardwood:
                   202.42     Oak (Quercus spp.) ................................................. free
                

The question presented is whether, within the meaning of the competing tariff provisions, the imported merchandise is dutiable as "hardwood flooring other than in strips or planks, whether or not drilled or treated," with a duty rate of 6.8 per centum ad valorem, as classified by Customs, or "hardwood lumber, rough, dressed or worked," free of duty, as claimed by plaintiff. It must be noted at the outset that the claimed classification expressly excludes "siding, molding and hardwood flooring." Consequently, if the imported hardwood flooring blanks are "flooring" within the meaning of item 202.60, the Customs classification is correct and the protest must be denied. In order to decide this issue, the court must consider "whether the government's classification is correct, both independently and in comparison with the importer's alternative." Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied, 739 F.2d 628 (Fed.Cir. 1984).

After a careful examination of the merchandise, the exhibits, testimony of record, and relevant case law, it is the determination of the court that the plaintiff has not overcome the presumption of correctness that attaches to the government's classification. See 28 U.S.C. § 2639(a)(1) (1982); Jarvis Clark Co. v. United States, supra; E.R. Hawthorne & Co. v. United States, 730 F.2d 1490, 1490 (Fed.Cir.1984).

The imported merchandise consists of wood parquet flooring tiles or blanks comprised of seven or eight small slats of red oak. These slats, measuring approximately 3/8 inch thick by 7/8 inch wide and 6 3/8 inch long, are assembled by means of two wire splines inserted into grooves cut into the underside of the blank. Each blank measures approximately 6½ by 6½ inches.

In attacking the Customs Service's classification of the hardwood flooring blanks, it is the plaintiff's principal contention that item 202.60 must be construed in light of the Tariff Classification Study (1960), which states that "other" wood flooring "includes short strips of accurately milled wood." Plaintiff argues that the blanks are not "accurately milled." It asserts that, since they cannot be used as flooring, they are properly classifiable as lumber.

In order to determine whether the imported flooring blanks are properly classifiable as hardwood flooring, the court must ascertain the meaning of "other" hardwood flooring, classifiable under item 202.60 of the TSUS. It is well established that tariff terms are to be construed in accordance with their common and commercial meanings. See Nippon Kogaku (USA), Inc. v. United States, 69 CCPA 89, 92, 673 F.2d 380, 382 (1982). Likewise, it is clear that the "common meaning of a tariff term is not a question of fact, but a question of law." Schott Optical Glass, Inc. v. United States, 67 CCPA 32, 34, C.A.D. 1239, 612 F.2d 1283, 1285 (1979).

The tariff schedules are written in the language of commerce, and the terms used are to be given their commercial or common meaning. See Ameliotex, Inc. v. United States, 65 CCPA 22, 25, C.A.D. 1200, 565 F.2d 674, 677 (1977). Accordingly, the court may consider expert testimony adduced at trial to determine whether the wood blanks are hardwood flooring. Also, it is well to remember that representative samples of the merchandise may be "potent" witnesses. Marshall Field & Co. v. United States, 45 CCPA 72, 81, C.A.D. 676 (1958). As an aid in determining the meaning of a tariff item, the Tariff Classification Study may also be consulted. See, e.g., Rifkin Textiles Corp. v. United States, 54 CCPA 138, 141, C.A.D. 925, cert. denied, 389 U.S. 931, 88 S.Ct. 294, 19 L.Ed.2d 283 (1967); see Izod Outerwear v. United States, 9 CIT ___, Slip Op. 85-72, at 5 n. 4 (July 23, 1985). The pertinent provision of the study states:

Item 202.60 covers "other" wood flooring

.... This flooring is in blocks, assembled sections or units, or other forms, and includes short strips of accurately milled wood, either separate, in sets, or assembled in sections for parquet and similar types of patterned floors.

Tariff Classification Study, Explanatory Notes and Background Materials, Schedule 2, at 22 (1960), reprinted in 1 Tariff Classification Study 166 (1963) (emphasis added).

At trial, six witnesses testified, four for the plaintiff and two for the defendant. In addition, numerous exhibits were introduced, including representative wood blanks at varying stages of manufacture.

Plaintiff's first witness was Mr. A.E. Witt, president of the plaintiff corporation since it was formed in 1977. He has been in the acrylic flooring industry since 1968, and is the holder of several patents regarding the manufacture of acrylic wood products and flooring. Mr. Witt described the processing of the merchandise prior to importation. He testified that the lumber used to manufacture the merchandise originates in Pennsylvania where it is cut into one-inch thick boards. It is then shipped to Canada where it is kiln-dried. Subsequently, the large boards are ripped to the proper size and cut into blocks. The blocks are planed on two sides before being sawed into small slats or fillets. Finally, the slats are joined by means of two wire splines embedded on the underside of the slats perpendicular to their length. Mr. Witt testified that, in his opinion, the imported merchandise had progressed approximately halfway through a finished wood floor production line.

Mr. Witt also described in detail the plaintiff's manufacturing process after importation. The blanks are placed in a vacuum to extract the air from the wood's pores. Through an impregnation process, the pores are filled with liquid acrylic. Through irradiation, the acrylic is hardened, and the blanks are trimmed to dimension and assembled into 12- by 12-inch tiles. The plaintiff employs several sanding and buffing steps, as well as conditioning, to finish the parquet tile that it sells. Mr. Witt also testified that the cost to plaintiff of the merchandise as imported is approximately seventy-five cents per square foot. Processing the blanks after importation adds approximately one dollar and twenty-five cents per square foot to the cost. Mr. Witt stated that plaintiff uses the wood blanks for flooring except for the manufacture of some novelty items. He was personally aware that others made use of the blanks for making furniture and wall covering. He was unable to state the definition of "accurately milled" within the meaning of the wood flooring industry. He did testify, however, that, according to his company's requirements, the blanks were not accurately milled.

On cross-examination, Mr. Witt testified that in prior business dealings he had referred to parquet flooring blanks like the imported merchandise as "flooring." He also testified that the merchandise as imported could be laid on the floor without sanding or finishing but that, in his opinion, it would first have to be sized.

Plaintiff...