United States v. Ataka America, Inc.
| Decision Date | 10 March 1977 |
| Docket Number | Customs Appeal No. 76-17. |
| Citation | 550 F.2d 33 |
| Parties | The UNITED STATES, Appellant, v. ATAKA AMERICA, INC., Appellee. |
| Court | U.S. Court of Customs and Patent Appeals (CCPA) |
Rex E. Lee, Asst. Atty. Gen., David M. Cohen, Chief, Customs Section, Washington, D.C., Jerry P. Wiskin, New York City, attorneys of record, for appellant.
Rode & Qualey, New York City, attorneys of record, for appellee; Ellsworth F. Qualey, New York City, of counsel.
Satterlee & Stephens, New York City, attorneys of record, for amicus curiae; Henry J. Formon, Jr., New York City, of counsel.
Before MARKEY, Chief Judge, RICH, BALDWIN and MILLER, Judges, and NICHOLS, Judge, United States Court of Claims.
This is an appeal by the Government from a judgment of the United States Customs Court, 76 Cust.Ct. 70, C.D. 4637, 411 F.Supp. 779 (1975), sustaining Ataka's protest of the classification of imported goods known as fiberscopes under item 709.05, Tariff Schedules of the United States (TSUS), as "Other" optical instruments. Ataka claimed, and the Customs Court held, classification to be proper under item 709.17, TSUS, as "Other" electro-medical apparatus. We reverse.
The involved TSUS provisions are:
Medical, dental, surgical and
veterinary instruments and
apparatus (including electro-medical
apparatus and
ophthalmic instruments)
and parts thereof
Optical instruments and
appliances, and parts
thereof
* * * * * *
709.05 Other ................ 25% ad val
* * * * * *
Other
* * * * * *
Electro-medical apparatus,
and parts
thereof:
* * * * * *
709.17 Other ................. 6% ad val.
Description of the Goods
The imported goods were invoiced as "Olympus Upper GI Photofiberscopes, Model GIF-D, without CLE and FIT," that is, direct vision (-D) gastrointestinal fiberscopes without accessory light source-power supply or medical camera.
We reproduce the accurate and concise description of the goods which appears in the Customs Court opinion, with the addition of an illustrative figure taken from Ataka's catalog:
The Customs Court, relying upon our opinion in United States v. Oxford International Corp., 517 F.2d 1374, 62 CCPA 102, C.A.D. 1154 (1975), framed the determinative question to be: "does the article possess `a second significant function * * * justifying the application of the "more than" doctrine.'" Noting that the subject fiberscopes, in addition to their optical function, possessed the additional functions of enabling the performance of biopsies, cytologies, and photography, the court held the fiberscopes to be "more than" medical-optical instruments.
Having determined the liquidation classification to have been improper, the court held that the Government had admitted the correctness of Ataka's claimed classification in its pleadings. Both portions of Ataka's dual burden of proof were thus found to have been satisfied.1
The Government argues that the Customs Court ignored both statutorily and judicially stated law in failing to sustain the classification of the subject fiberscopes as "Other" optical instruments. It urges that the fiberscopes fulfill the statutory definition of optical instruments in headnote 3 and the judicial definition thereof in Engis Equipment Co. v. United States, 62 Cust.Ct. 29, C.D. 3670, 294 F.Supp. 964 (1969). Moreover, the Government argues, the Customs Court failed to consider General Interpretative Rule 10(c)(ii)2 in its application of the "more than" doctrine. The Government's position is that because Rule 10(c)(ii) requires a comparison between tariff provisions of equal status, the Customs Court should have compared the immediately preceding superior headings to items 709.05 and 709.17. Such a comparison would have resulted in comparing "Optical instruments * * *: * * * Other" with "Other * * * Electro-medical apparatus:" i.e., non-optical instruments. The Government argues that a fiberscope "cannot be both `more than' optical, i. e., containing at least one optical feature, and `other' than optical, i. e., containing no optical feature." Accordingly, the Government contends that the Customs Court failed to perceive the correct legal issue herein.
In support of the Government's position, American Cystoscope Makers, Inc., as amicus curiae, points out that the superior heading to items 709.05 and 709.17, TSUS, is virtually identical to Section 90.17, Brussels Nomenclature (1955), and that the Explanatory Notes to the Brussels Nomenclature distinguish between optical medical instruments and electro-medical apparatus.
Ataka argues that headnote 3 (see infra) specifically excludes from the definition of optical instruments those devices in which optical features perform a subsidiary function. Ataka describes the primary function of the imported fiberscopes as the taking of biopsies, cytologies and photographs and the optical function as subsidiary thereto. Because the taking of biopsies, cytologies and photographs are significant non-optical functions facilitated by the fiberscope, Ataka urges that the Customs Court was correct in applying the "more than" doctrine. Additionally, Ataka argues that Congress intended that optical instruments which depend upon electricity for their operation be classified as electro-medical apparatus under item 709.17, RSUS, relying upon a statement by the Tariff Commission (Tariff Classification Study, Second Supplemental Report (1962) at 5) as indicating that otoscopes, the subject of Empire Findings Co. v. United States, 44 Cust.Ct. 21, C.D. 2148 (1960), are to be classified under item 709.17, TSUS.3
OPINIONCongress, in headnote 3, Schedule 7, Part 2, has defined the term "optical instruments":
Respecting headnote 3, the Tariff Classification Study, Schedule 7 (1960) at 140 explains that:
Headnote 3 includes a definition of the term "optical instruments". This definition was not in the draft published for public hearings. It is believed that this definition substantially conforms with existing customs practice.
"Existing customs practice" was summarized by the Customs Court in Engis, supra.4 Therein, the Customs Court found the following characteristics necessary to qualify a device as an "optical measuring instrument":
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