Sangamo Capacitor Div. v. United States

• Decision Date: 15 March 1985
• Docket Number: Court No. 78-6-00999.
• Citation: 611 F. Supp. 967
• Parties: SANGAMO CAPACITOR DIVISION, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

611 F. Supp. 967

SANGAMO CAPACITOR DIVISION, Plaintiff, v. UNITED STATES, Defendant.

Court No. 78-6-00999.

United States Court of International Trade.

March 15, 1985.

Barnes, Richardson & Colburn, New York City (David O. Elliott and Jack D. Mlawski), New York City, for plaintiff.

Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office (Saul Davis), New York City, for defendant.

FORD, Judge:

This action involves the proper classification of silvered mica plates in four frame sizes which are designated as D-10, D-15, D-19 and D-30. The merchandise was classified under Item 685.80 as Electrical Capacitors, fixed or variable, which provides for a rate of duty of 10% ad valorem.

Plaintiff claims the merchandise is entitled to entry free of duty under the Generalized System of Preferences under A516.94 as articles not specially provided for, of mica or A656.15 as articles of silver.

The statutory provisions and headnotes involved herein provide, so far as is pertinent, as follows:

Tariff Schedules of the United States, General Headnotes and Rules of Interpretation —

9. Definitions. For the purposes of the schedules, unless the context otherwise requires—

* * * * * * *

(f) the terms "of", "wholly of", "almost wholly of", "in part of" and "containing", when used between the description of an article and a material (e.g., "furniture of wood", "woven fabrics, wholly of cotton", etc.), have the following meanings:

* * * * * * *

(i) "of" means that the article is wholly or in chief value of the named material;

* * * * * * *

10. General Interpretative Rules. For the purposes of these schedules—

* * * * * * *

(f) an article is in chief value of a material if such material exceeds in value each other single component material of the article;

* * * * * * *

(h) unless the context requires otherwise, a tariff description for an article covers such article, whether assembled or not assembled, and whether finished or not finished;

Classified under—

                685.80  Electrical capacitors, fixed or variable ............... 10% ad val
                     Claimed under—
                A516.94 Articles not specially provided for, of mica ............ Free (under
                                                                                Generalized
                

                                                                               System of
                                                                               Preferences)
                Articles of precious metal, including rolled precious metal
                        *       *       *      *      *       *       *
                A656.15 Of silver, including rolled silver ................. Free (under
                                                                             Generalized
                                                                             System of
                                                                             Preferences)
                

The record in addition to the official papers, which were received in evidence without being marked, consists of the testimony of three witnesses called on behalf of plaintiff and the receipt into evidence of fifteen exhibits introduced by plaintiff. Defendant called one witness on its behalf and introduced eight exhibits into evidence.

Plaintiff's witness, Mr. Charles L. Rogers, is the Manager of Quality and Reliability Control of mica capacitors for plaintiff. For twenty-nine years prior he held the same position covering the entire plant. Plaintiff manufactures three types of capacitors —mica, aluminum electrolytic and power factor capacitors. The witness is familiar with the silvered mica plates involved herein and the manufacture of them in India. The supplier, J.V. Electronics, was established in accordance with plaintiff's specifications and utilized plaintiff's equipment, supervisory personnel and training in setting up the manufacturing operation.

Exhibits 1 through 4 were identified as the four sizes of mica plates involved in this litigation. According to the witness, the imported merchandise consists of two basic materials, mica and silver. They are produced by placing a raw mica blank into an oven to remove moisture. It is subsequently stored in a low temperature oven to keep it moisture-free. The mica is thereafter stacked for efficient assembly and silver is applied to one side of the mica by a silk-screening process. It is dried and the silk-screening process is repeated over the first pattern.

After importation the imported merchandise is manufactured into dipped wire lead capacitors. The witness identified Exhibit 5 as a chart he had prepared covering the process of manufacture of the capacitors in the United States. The following steps are covered by Exhibit 5:

Step 1. The imported silver mica plate.

Step 2. Illustrates that the silvered mica plate is electrically inspected to determine whether or not there are any fractures or shorts in the mica itself and is then sorted into various thickness ranges.

Step 3. An illustration of the tin lead foil which will be used in a later stage in the process to make contact with the silver. Two foils are actually used in the process but only one illustrated on the chart.

Step 4. Represents plain or clear mica, referred to as a backer, which is used as an insulation material on the top and bottom of the assembly of components in the next step.

Step 5. Illustrates the assembly of the foil, the silvered mica plate, and the insulating mica called the backer.

Step 6. Shows how the multiple sections are put together in the prior step.

Step 7. The assembled section is checked for imperfections by applying voltage to the assembly.

Step 8. A varnish is applied by dipping the entire assembly. The varnish is applied to hold the assembled section together for further processing.

Step 9. The assembled section is placed in an oven to cure the varnish.

Step 10. Illustrates the fully assembled multiple section after oven curing.

Step 11. The assembled section is emersed in a bath to remove any contaminants such as chlorides and sulfides within the section assembly.

Step 12. The multiple sections are sawed into individual sections.

Step 13. Illustrates one of these sections resulting from the sawing of the multiple section.

Step 14. Illustrates the clips and leads that are used in the manufacturing process. There are two clips and two leads for each section.

Step 15. Illustrates how those clips and leads are applied to a section.

Step 16. The clipped section is adjusted and calibrated.

Step 17. The component is then washed again to remove any contaminants.

Step 18. The component is placed in an oven to remove any moisture left within the section.

Step 19. A sealant is applied to the clipped section to improve the moisture resistance of the assembly.

Step 20. The assembled section is oven baked to cure the sealant.

Step 21. An epoxy is applied for the purpose of bonding together any delaminated or fractured pieces of mica which may have occurred during the sawing operation.

Step 22. The product is then placed into an oven to cure the epoxy.

Step 23. The clipped section is encased in epoxy.

Step 24. The clipped assembly is placed in an oven to cure the epoxy.

Step 25. The encased assembly is placed in an oven to stabilize the article.

Step 26. The product is washed.

Step 27. The article is measured for voltage stress, capacitance and dissipation factor.

Step 28. The finished capacitor is marked to indicate the capacitance value or code and the working voltage of the unit. The code system would additionally indicate the size of the capacitor.

Step 29. The mark is cured in an oven.

Step 30. Illustrates the article being packed for shipment to the customer. (R. 20-23.)

With the exception of the packing indicated in Step 30, each of the manufacturing steps is required to produce a commercially saleable mica capacitor which would be in compliance with the EIA (Electronic Industries Association) standards, a copy of which was received in evidence as plaintiff's Exhibit 10. The EIA standards are admittedly the "bible" of the industry. There are other specifications utilized by the military.

Mr. Rogers testified at some length as to the minimal tests required by the EIA standards and related them to the steps set forth in plaintiff's Exhibit 5.

The witness defined a capacitor as an electronic device that is designed to receive, store and release electrical energy as an electric charge. Mr. Rogers was of the opinion that the definition of a capacitor as being a device consisting of two electrodes separated by a dielectric is too general since it would apply to many things that are not capacitors. In a mica capacitor the dielectric material is mica and the electrodes are silver. Plaintiff's Exhibit 11, a 500 OHM T.V. antenna cable, consists of two electrodes separated by a dielectric but is admittedly not a capacitor. Likewise a romex cable used to carry electric housing current also consists of an electrode separated by a dielectric, but admittedly is not a capacitor.

The witnesses for plaintiff, as well as defendant, indicated that the silvered mica plates in their imported condition are never used in the trade as capacitors in an electronic circuit. Mr. Rogers asserted that in its imported condition the silvered mica plates are mere material for use in the manufacture of capacitors. The witness testified that in the manufacturing process in the United States there are twelve materials or parts utilized while only silver and mica are used in the manufacture of the imported merchandise.

Mr. Rogers further testified the imported silvered mica plate is not a capacitor since it has no use or function and would not be recognized in the trade as a capacitor. The capacitance of a capacitor is governed by the quality of the dielectric and the size and number of dielectric distribution and electrodes. In order to obtain the desired capacitance, according to the witness, the plates are stacked in a parallel fashion. The definition of the term...