Ross Products, Inc. v. United States
Decision Date | 12 March 1964 |
Docket Number | C.D. 2435. |
Citation | 52 Cust. Ct. 51 |
Parties | ROSS PRODUCTS, INC. <I>v.</I> UNITED STATES. |
Court | U.S. Court of Customs and Patent Appeals (CCPA) |
Siegel, Mandell & Davidson (David Serko, Allan H. Kamnitz, and Joshua M. Davidson of counsel) for the plaintiff.
John W. Douglas, Assistant Attorney General (Alfred A. Taylor, Jr., James F. O'Hara, and Herbert L. Warren, trial attorneys), for the defendant.
Before LAWRENCE, RAO, and FORD, Judges
The collector of customs at the port of New York invoked the provision for manufactures of paper, not specially provided for, in paragraph 1413 of the Tariff Act of 1930, as modified by the Annecy Protocol to the General Agreement on Tariffs and Trade, 84 Treas. Dec. 403, T.D. 52373, and supplemented by Presidential proclamation, 85 Treas. Dec. 116, T.D. 52462, to assess duty at the rate of 17½ per centum ad valorem upon an importation of articles described as model ships.
It is the contention of plaintiff that said merchandise is more properly provided for in paragraph 1403 of said act, as modified by said Annecy protocol and supplemented by Presidential proclamation, 85 Treas. Dec. 138, T.D. 52476, as manufactures of papier mache, not specially provided for, and that, therefore, duty at the rate of 12½ per centum ad valorem should have been assessed.
As the case has been presented for decision, there are two questions which require determination. In the first instance, the inquiry is whether or not the involved model ships are composed in any part of papier mache. If they are, the question then arises as to whether paper or papier mache is the component material of chief value.
The collector has adopted a classification which presumes that said ships are in chief value of paper, and the presumption is that his classification is correct. F. H. Kaysing v. United States, 49 C.C.P.A. 69, C.A.D. 798. Consequently, the burden was upon the plaintiff to show that the instant ships were composed, at least in part, of papier mache and that such part was the material of chief value in the finished article.
Plaintiff sought to shoulder this burden through the testimony, taken pursuant to letters rogatory, of one Taimaru Kobayashi of Funabashi City, Japan. His deposition shows him to be the owner and manager of the company which manufactured the instant merchandise, a sample of which is in evidence as plaintiff's exhibit 1. Actually, it appears that much of the work of the company was performed by so-called subcontractors — individuals who worked at their various homes under instructions from the company.
The witness gave the following description of the manufacturing process:
The paper-mache [sic] is used for the hull. In order to make a mold of the hull, firstly the cardboard is soaked in the water and when it becomes fairly soft, it is punched out into the form of the hull. Six or seven sheets of the cardboard in case of thick ones, six sheets in case of not so thick ones are pasted together one by one with adhesive, placed in the mold of gun-metal and pressed while heating, and then filed away the part which jutted out and given the last finish. For the sail, Japanese paper is used and cut into the form of sail. The two sheets of the paper are pasted together, placed in the gun-metal mold, and pressed while heating. In that manner, the sail will look like swelling. The same process is employed in manufacturing small flags. A base upon which the "model ship" is placed is made of cardboard. A fine enameled wire is used as a sail rope, and at the same time serves as decoration.
The [sic] all parts as stated above are assembled finally and painted with lacquer.
Although the witness admitted that the model ships in issue had been made some years before and that records "were not kept in books in detail from the beginning," he, nevertheless, gave a complete breakdown of all costs involved in the production of these articles. These figures show the following:
Cost of materials Yen cardboard for the hull__________________________ 2.20 adhesive _______________________________________ .15 Japanese paper__________________________________ 1.20 enameled wire___________________________________ .25 wood ___________________________________________ .25 cardboard for the base__________________________ .30 lacquer ________________________________________ 4.30 _______ 8.65 Cost of fabrication hand pressing of hull___________________________ 3.00 mold for sail___________________________________ 1.80 painting _______________________________________ 3.20 assembling _____________________________________ 1.75 _______ 9.75 Other costs Packing _________________________________________ 4.20 shipping ________________________________________ 1.60 cartage _________________________________________ 1.50 breakage _______________________________________ 1.482 profit __________________________________________1.998 ________ 11.780 Total costs and profit _______________________Yen 30.18
It further appears that, at the time these model ships were sold, the price was 4,200 yen per gross and that the witness, who supervised all phases of the business, had personally designed this item and had negotiated its sale to a buyer for the plaintiff.
Under the circumstances of the witness' familiarity with every aspect of the production of the merchandise at bar and his knowledge of all operations of his company, the court is of opinion that the figures he quoted are adequate to reflect the costs involved and are acceptable as a prima facie showing thereof.
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