Semperit Indus. Products, Inc. v. US, Court No. 90-10-00566. Slip Op. 94-100.

• Citation: 18 CIT 578,855 F. Supp. 1292
• Decision Date: 14 June 1994
• Docket Number: Court No. 90-10-00566. Slip Op. 94-100.
• Parties: SEMPERIT INDUSTRIAL PRODUCTS, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

855 F. Supp. 1292

18 CIT 578

SEMPERIT INDUSTRIAL PRODUCTS, INC., Plaintiff, v. UNITED STATES, Defendant.

Court No. 90-10-00566. Slip Op. 94-100.

United States Court of International Trade.

June 14, 1994.

Coudert Brothers, Robert L. Eisen, Michelle S. Benjamin, Steven H. Becker, and Robin E. Gruber, New York City, for plaintiff.

Frank W. Hunger, Asst. Atty. Gen. of the U.S., Joseph I. Liebman, Attorney-in-Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Mark S. Sochaczewsky, Washington, DC, on brief (Sheryl A. French, Atty., U.S. Customs Service, of counsel), for defendant.

OPINION

CARMAN, Judge:

Plaintiff initiated this action pursuant to 19 U.S.C. § 1515(a) (1988) to contest the denial of its protest against the United States Customs Service's (Customs) appraisal of certain merchandise that plaintiff had imported from Austria and Korea. This Court has jurisdiction under 28 U.S.C. § 1581(a) (1988) and, for the reasons which follow, enters judgment for plaintiff.

I. BACKGROUND

A. The Merchandise

The merchandise at issue in this case consists of industrial conveyor belts produced from a combination of vulcanized rubber and textile material. The textile material has one or more plies of woven textile fabric that contains only man-made textile fiber. The particular fiber in the fabric is polyester in the warp and nylon in the weft, or only polyester.¹ The width of all of the imported belts exceeds 20 centimeters.

The subject merchandise has a wide range of applications in the handling of bulk materials. The belts are useful in any industry that requires the transportation of bulk merchandise from one location to another. Companies utilize the subject merchandise in steel works, mining operations, lime and cement works, gravel and sand works, and in the paper, building, and chemical industries.

B. Statutory Provisions

Plaintiff relies on the following provisions of the Harmonized Tariff Schedules of the United States (HTSUS):² 1. 4010 Conveyor or transmission belts or belting, of vulcanized rubber . . . . Other Of a width exceeding 20 cm Combined with textile materials . . . . 4010.91.19 Other . . . 2.4% . . . . 2. GENERAL RULES OF INTERPRETATION Classification of goods in the tariff schedule shall be governed by the following principles: . . . . 3. When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 3. ADDITIONAL U.S. RULES OF INTERPRETATION 1. In the absence of special language or context which otherwise requires — . . . . (d) the principles of section XI regarding mixtures of two or more textile materials shall apply to the classification of goods in any provision in which a textile material is named. 4. SECTION XI TEXTILES AND TEXTILE ARTICLES Notes . . . . 2. (A) Goods classifiable in chapters 50 to 55 or in heading 5809 or 5902 and of a mixture of two or more textile materials are to be classified as if consisting wholly of that one textile material which predominates by weight over each other single textile material. Plaintiff also cites to the following item from the Tariff Schedules of the United States (TSUS) (1987):

Belting and belts, for machinery, of textile fibers or of such fibers and rubber or plastics: . . . . Other: . . . . 358.16 Other ... 2.4% ad val. Defendant, in turn, relies on the following HTSUS provision: 4010 Conveyor or transmission belts or belting, of vulcanized rubber: . . . . Other: Of a width exceeding 20 cm: Combined with textile materials: . . . . 4010.91.15 With textile components in which man-made fibers predominate by weight over any other single textile fiber ... 8%. . . .

C. Customs' Classification

The United States Customs Service (Customs) classified the conveyor belts at issue under subheading 4010.91.15, HTSUS. Subheading 4010.91.15 applies to the following merchandise: "Conveyor or transmission belts or belting, of vulcanized rubber: . . . . Other: Of a width exceeding 20 cm: Combined with textile materials: . . . . With textile components in which man-made fibers predominate by weight over any other single textile fiber." Pursuant to this subheading, Customs imposed duties totalling 8% ad valorem.

Plaintiff filed timely protests pursuant to 19 U.S.C. § 1514(a) (1988) to contest Customs' classification. Customs subsequently denied the protests under 19 U.S.C. § 1515 (1988) and, after having paid all liquidated duties, plaintiff commenced this action within the time allowed by law. On March 4, 1992, the Court granted plaintiff's motion to designate this action a test case.

II. CONTENTIONS OF THE PARTIES

A. Plaintiff

Plaintiff advances several arguments in support of its position. First, plaintiff contends subheading 4010.91.15 is inapplicable to the imported belts because the belts' textile components consist only of man-made fibers. Pl.'s Br. at 9. According to plaintiff, subheading 4010.91.15 "explicitly requires that the textile component of the conveyor belts be comprised of more than one class of textile fiber." Id. at 10. In essence, plaintiff asserts the words "predominate by weight over any other single textile fiber" clearly presupposes the existence of two classes of textile fibers — one man-made and the other vegetable or animal — which Customs may measure. See id. at 14-15.

Second, plaintiff maintains the application of subheading 4010.91.15 to the merchandise would render the term "predominate" meaningless. See id. at 15-16. Plaintiff bases this argument on the fact that imported belts contain only one class of fibers, man-made fibers. Id. at 15. According to plaintiff, "when man-made fibers are the only textile fibers present, . . . man-made fibers cannot `predominate over' any other single textile fiber, as required by subheading 4010.91.15, HTSUS." Pl.'s Reply Br. at 3 (emphasis in original). Therefore, plaintiff urges conveyor belts such as those at issue which have only one class of fibers are outside the scope of the subheading and fall under the basket provisions contained in subheading 4010.91.19. Pl.'s Br. at 16. Moreover, plaintiff charges the meaning given to the terms "predominate by weight" by the Additional U.S. Rules of Interpretation 1(d) and Section XI, Note 2(A) further demonstrates the language only embraces merchandise possessing more than one class of fiber. See id. at 16-17.

Third, plaintiff claims the TSUS predecessor of the disputed subheadings and other legislative materials indicate the imported belts are properly classifiable under subheading 4010.91.19. Id. at 19. Plaintiff emphasizes the fact that in changing from the former TSUS to the current HTSUS Congress did not intend to alter a particular import's classification or tariff rate. See id. at 19-20 (citing Conversion of the Tariff Schedules of the United States Annotated into the Nomenclature of the Harmonized System, Submitting Report, USITC Pub. 1400, Inv. No. 332-131, at 2 (1983)) (ITC Report). Because Customs formerly classified the subject merchandise under item 358.16, TSUS,³ and imposed duties of 2.4% ad valorem and has now classified the merchandise under subheading 4010.91.15 and sought duties of 8% ad valorem, plaintiff suggests Customs' current treatment conflicts with the purposes underlying the conversion to the HTSUS. See id. at 19-20, 25-26.

Finally, plaintiff asserts Customs' classification does not accord with cross-reference tables found in the ITC Report which correlate former TSUS items with HTSUS subheadings. Id. at 22-23 (citing ITC Report at 85, 94, 301, 316). According to plaintiff, these tables clearly indicate item 358.16, TSUS, correlates to subheading 4010.91.19, HTSUS and also preclude the application of subheading 4010.91.15 to the subject merchandise. Id. at 22-23. Consequently, plaintiff maintains Customs erroneously classified the imported belts under subheading 4010.91.15.

B. Defendant

Defendant urges the Court to sustain Customs' classification decision on three primary grounds. First, contrary to the interpretation urged by plaintiff, defendant contends "when man-made fibers are the only textile fibers present, as with the imported merchandise, man-made fibers predominate over any other single textile fiber, as required by HTSUS subheading 4010.91.15." Def's Br. at 4. According to defendant, this subheading "does not require the presence of more than one `class of' textile fiber in order for man-made fibers `to predominate by weight over any other single textile fiber.'" Id. at 3 (emphasis in original).

Defendant maintains "the common meaning of the term `predominates' does not require the physical presence of another entity for comparison." Id. at 9. In addition, defendant asserts "even if a comparison is indicated by definition or use of the term `predominate,' neither the definitions nor use of the...