Rausch v. United States

• Decision Date: 24 June 1968
• Docket Number: C.D. 3487,Protests No. 60/19539-91049-60
• Citation: 286 F. Supp. 576
• Parties: Ted L. RAUSCH and Pacific International et al. v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

286 F. Supp. 576

Ted L. RAUSCH and Pacific International et al. v. UNITED STATES.

C.D. 3487; Protests Nos. 60/19539-91049-60, etc.

United States Customs Court, First Division.

June 24, 1968.

Lawrence & Tuttle, Los Angeles, Cal. (George R. Tuttle, Jr., Los Angeles, Cal., of counsel) and Coudert Brothers (Eugene L. Girden, New York City, of counsel), for plaintiffs.

Edwin L. Weisl, Jr., Asst. Atty. Gen. (Richard J. Kaplan, Arthur H. Steinberg, and Charles P. Deem, New York City, trial attorneys), for defendant.

Before WATSON and MALETZ, Judges.

MALETZ, Judge.

These two protests which were consolidated for trial concern "V.I.P." and "Scalextric" miniature auto raceway sets and separately invoiced spare parts and related equipment. The imports were assessed with duty at the rate of 35 percent ad valorem under the provision in paragraph 1513 of the Tariff Act of 1930, as modified, for toys not specially provided for.¹

Protest 60/19539 involves the V.I.P. raceway sets, parts and equipment. In that case it is claimed that the articles are properly dutiable at 13¾ percent ad valorem under paragraph 353 of the tariff act, as modified, which paragraph covers (i) "Articles having as an essential feature an electrical element or device * * * wholly or in chief value of metal * * *"; and (ii) "Parts * * * wholly or in chief value of metal, not specially provided for, of articles provided for in any item 353 of this Part * * *."²

In protest 63/6614 (B)—which involves the Scalextric sets, components and equipment—it is claimed that the articles are properly dutiable either at the rate of 13¾ percent ad valorem under paragraph 353, or alternatively at the rate of 22½ percent ad valorem under paragraph 397 of the act, as modified, as articles in chief value of metal.³

Each V.I.P. and Scalextric model set consists of prefabricated sections of track, fence railings and bridge supports which are designed for assembly into a miniature figure 8 (or other shape) automobile race track. When these sections are assembled, the set is connected to an electrical power source.⁴ Also included in the set are two "ready-to-operate" model automobiles having plastic bodies and so scaled in size as to have linear dimensions of 1/30 or 1/32 of the actual automobiles they are designed to simulate. Each car, in addition, has vertically extended "guide shoes" or "guide pins" which are inserted into one of two slots that run continuously along the length of the track in the form of a two-lane roadway. The car also contains a small electric motor which is connected to two vertically extended brushes. When the set is in operation, these brushes remain in contact with the metal portion of the track and conduct the electrical energy from the track to the motor. The electric impulse so transmitted causes the armature of the motor to rotate, and this motion or mechanical energy is relayed to the rear wheels of the car by means of a gear system, causing the wheels to turn and move the car over the track. The front guide shoe is connected to a segmented horizontal steering mechanism which, when the car is in operation, conforms its direction to the curves or straightaways of the track. The speed of the car is regulated by means of a separate push-button or plunger control device which is, in essence, a rheostat or current regulating mechanism. As the push button is depressed by the operator, an increased flow of current causes the motor's armature to rotate more rapidly, and the car, in turn, picks up speed. Conversely, as the plunger is slowly released, a gradual reduction of speed results, while complete release causes the car to come to an eventual standstill. The plunger control mechanism thus permits the operators to vary the speed of the cars they race.

At the outset, it is basic that in a classification case the plaintiff has the twofold burden of proving that the collector's classification was erroneous and establishing the correctness of its own affirmative claim. E. g., Joseph E. Seagram & Sons, Inc. v. United States, 30 CCPA 150, 157, C.A.D. 227 (1943); United States v. H. V. Albrecht et al., 27 CCPA 112, 117, C.A.D. 71 (1939). It is equally basic that the collector's classification of an imported article under the toy provision gives rise to a presumption that it is chiefly used for the amusement of children. E. g., United States v. L. Oppleman, Inc., 27 CCPA 264, 264-65, C.A.D. 97 (1940); F. W. Woolworth Co. v. United States, 2 Cust.Ct. 1, 2, C.D. 74 (1939). Thus, in the present case plaintiffs, in order to prevail, must not only overcome this presumption by proving that at or immediately prior to the date of importation of articles were not chiefly used for the amusement of children (e. g., New York Merchandise Co., Inc. v. United States, 27 CCPA 117, 121-22, C.A.D. 72 (1939)), they must, in addition, establish that the V.I.P. articles met the requirements of paragraph 353 of the act, and that the Scalextric articles met the requirements of either paragraph 353 or paragraph 397 of the Act. More particularly, to obtain classification of the V.I.P. and Scalextric equipment under paragraph 353, plaintiffs had the burden of establishing (i) that the sets were in chief value of metal; and (ii) that the separately invoiced components were either articles in chief value of metal having as an essential feature an electrical element or device or were parts, in chief value of metal, of such articles.⁵ Further, in order for the Scalextric sets and components to be classified under paragraph 397 of the act, it was incumbent upon plaintiffs to prove that they were in chief value of metal.

We hold—for the reasons set out below—that plaintiffs have not met the burden of establishing the correctness of their affirmative claims either under paragraph 353 or paragraph 397.⁶

It is, of course, fundamental that "the proper method of determining component material of chief value is by determining the value of the separate parts of the article at the time they are ready to be combined to make the completed article." United States v. Bacharach, 18 CCPA 353, 355, T.D. 44612 (1931). See also e. g., United States v. Rice-Stix Dry Goods Co., 19 CCPA 232, 234, T.D. 45337 (1931); Ross Products, Inc. v. United States, 52 Cust.Ct. 51, 55, C.D. 2435 (1964); Commercial Adolfo S. Pagan, Inc. v. United States, 48 Cust.Ct. 210, 216, C.D. 2337 (1962). In this context, and considering first the V.I.P. roadway set as an entirety, the parties stipulated that a number of the items, imported as integral parts of the sets, as well as separately (as spares and additional parts), are in chief value of metal. But these items account for only a portion of the roadway set in issue. Moreover, visual examination of the sets shows that many of its components are in fact constructed of plastic. Hence the stipulation fails to establish that the set, as an entirety, is in chief value of metal, and plaintiffs have produced no evidence whatever to support such a claim, let alone evidence of the value of the separate parts of the article at the time they were ready to be combined to make the completed article. Plaintiffs have, therefore, not shown that the V.I.P. sets as an entirety are properly classifiable under paragraph 353 of the act.

With respect to the separately invoiced V.I.P. parts and equipment, save for the push-button control devices, the record fails to establish that they possess an essential electrical element. Consequently, even though such items are in chief value of metal, they do not come within the purview of paragraph 353 as "Articles having as an essential feature an electrical element or device * * *." Nor are the items classifiable under paragraph 353 as parts of V.I.P. sets since the sets themselves (as we have seen) are not dutiable under that paragraph.

Because of this same consideration— that the V.I.P. sets, as an entirety, are not classifiable under paragraph 353— the push-button control devices are like-wise not dutiable under paragraph 353 as parts of V.I.P. sets. But even if the sets themselves were dutiable under paragraph 353, the push-button control devices would still not be classifiable as parts under that paragraph—this for the reason that plaintiffs have made no showing whatever that such devices are in chief value of metal.⁷ The stipulation of the parties concerning component material of chief value did not cover the control devices, and plaintiffs failed to present any cost data concerning them.⁸ Nor are the control devices classifiable under paragraph 353 as articles having an essential electrical element since they have not been shown to be in chief value of metal, as required by that provision.

Additionally, plaintiffs assert in their brief that "taken separately, the * * * V.I.P. cars are clearly classifiable under Paragraph 353, supra." The assertion lacks merit. In the first place, the pertinent commercial invoice discloses that none of the V.I.P. cars here involved were separately invoiced. To the contrary, all such cars were imported as integral parts of the roadway sets and, therefore, constitute entireties for tariff purposes rather than separate entities. See e. g., James Betesh Import Co. v. United States, 40 Cust.Ct. 186, 191, C.D. 1981 (1958); Pez Haas, Inc. v. United States, 46 Cust.Ct. 290, 293, Abstract 65026(1961). Secondly, even if the cars were considered to be separate entities, they would not be dutiable under paragraph 353 in view of plaintiffs' failure to prove that they were in chief value of metal.

Lastly, plaintiffs argue with respect to the V.I.P. equipment that "the metal tracks alone make the entirety classifiable under Paragraph 397, supra, as manufacturer sic of metal nspf." Emphasis added. However, protest 60/19539, covering the V.I.P. equipment, claims classification under paragraph 353 alone; it makes no claim under paragraph 397. Nor have plaintiffs at any time sought to amend the protest— as...