United States v. Carborundum Co.
| Decision Date | 17 June 1976 |
| Docket Number | Customs Appeal No. 75-26. |
| Citation | 536 F.2d 373 |
| Parties | The UNITED STATES, Appellant, v. The CARBORUNDUM COMPANY, Appellee. |
| Court | U.S. Court of Customs and Patent Appeals (CCPA) |
Rex E. Lee, Asst. Atty. Gen., Washington, D. C., Andrew P. Vance, Chief, Customs Section, Herbert P. Larsen, New York City, for the U. S.
Barnes, Richardson & Colburn, New York City, attorneys of record, for appellee; Joseph Schwartz, New York City, of counsel.
Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.
This is an appeal from the judgment of the United States Customs Court, 74 Cust.Ct. 50, C.D. 4584, 393 F.Supp. 211 (1975), holding that certain iron-silicon alloy powder is classifiable as "ferrosilicon" under item 607.50, TSUS, as contended by the importer, rather than as alloy iron or steel powders, other than stainless steel powders, under item 608.08, TSUS, as originally classified. We reverse.
The imported merchandise is an iron-silicon alloy powder which contains 75.94 percent iron, and 16.33 percent silicon. It has been specially processed in Canada by pulverizing lump ferrosilicon to a 65 mesh particle size. The powder is imported as a special ferrosilicon for use in the heavy-media separation process.1
The pertinent portions of the Tariff Schedules of the United States involved in this appeal with rates of duty in effect at the time of importation read as follows:
Schedule 6. — Metals and
Metal Products
Part 2. — Metals, Their Alloys
and Their Basic Shapes
and Forms
* * * *
Subpart B. Iron or Steel
Subpart B headnotes
* * * *
2. Grades of Iron, Steel and
Ferroalloys. — For the purposes of
the tariff schedules, the following
terms have the meanings hereby
assigned to them
* * * *
(e) Ferroalloys: Alloys of iron
(except spiegeleisen and ferronickel
as defined in headnotes
2(c) and 2(d), supra, respectively)
which are not usefully
malleable and are commonly used
as raw material in the manufacture
of ferrous metals and which
contain one or more of the
following elements in the quantity
by weight, respectively indicated
over 30 percent of manganese,
or
over 8 percent of silicon, or
over 30 percent of chromium,
or
over 40 percent of tungsten, or
a total of over 10 percent of
other alloy elements, except
copper, and
which, if containing silicon, do
not contain over 96 percent of
nonferrous alloy elements, or, if
containing manganese but no
silicon, do not contain over 92
percent of nonferrous alloy
elements, or if containing no
manganese and no silicon, do not
contain over 90 percent of nonferrous
alloy elements. For the
purposes of this subpart —
* * * *
(v) ferrosilicon is a ferroalloy
which contains, by weight,
not over 30 percent of
manganese and over 8 percent
of silicon;
Ferroalloys:
* * * *
Ferrosilicon:
607.50 Containing over 8 percent
but not over 60 percent
by weight of silicon .......0.4¢ per lb.
on silicon
content
* * * *
Sponge iron; iron or steel
powders:
Sponge iron, including powders
thereof:
* * * *
Other powders:
Other than alloy iron or
steel ...........
Alloy iron or steel:
Stainless steel powders
608.08 Other ............................... 15% ad val.
Customs Court Opinion
The Customs Court relied on the headnote 2(e)(v) definition of ferrosilicon and the Government's concession that the imported goods possessed the requisite weight requirements of that definition, in finding that the imported merchandise was dutiable as ferrosilicon under item 607.50, TSUS. The court did not view the provision for ferrosilicon as limited by the definition of the term ferroalloys, viz., "alloys of iron * * * commonly used as raw material in the manufacture of ferrous metals," given in headnote 2(e), even though the provision for ferrosilicon was indented under the term ferroalloy in the TSUS. However, the court also found that even if the definition of ferroalloy was determinative of classification, then the evidence of record showed that the imported merchandise was, eo nomine, ferrosilicon, which was a class or kind of iron alloy commonly used as raw material in the manufacture of ferrous metals.
OPINIONAs noted above, the dispute in this case centers about the applicability of the provision claimed by the importer, namely, item 607.50, TSUS, to the imported merchandise. The Government argues that in order for the imported merchandise to fall within the purview of item 607.50, TSUS the merchandise must not only meet the criteria for ferrosilicon, as defined in headnote 2(e)(v), but it also must meet the criteria for ferroalloys, as defined in headnote 2(e). The Government contends that the imported merchandise is not a ferroalloy because it is not an alloy of iron which is "commonly used as raw material in the manufacture of ferrous metals."
We believe that Congress, by indenting provisions for ferrosilicon, such as item 607.50 in question, under the term "Ferroalloys:" in Schedule 6, Part 2, Subpart B, intended that the term ferrosilicon, as used in the TSUS, be limited to those iron-silicon alloys which not only meet the statutory requirements for ferrosilicon set forth in headnote 2(e)(v), but also meet the statutory requirements for ferroalloys set out in headnote 2(e). That is, the term ferrosilicon should be construed as a further limitation on the term ferroalloys, incorporating therein all the requirements for the definition of ferroalloys. In harmony with this view is General Interpretative Rule 10(c)(i) which reads:
which is to say that the imported merchandise must meet all the requirements for the superior heading, here "ferroalloy," in order to be classified under the inferior heading, here "ferrosilicon."
We find further support for this view in the Tariff Classification Study (1960), Schedule 6, Part 2, at 91, in its comment on ferronickel. In particular we note the following language:
Moreover, it is not entirely clear that it ferronickel would always conform to the proposed definition of ferroalloy in that some of it may be usefully malleable.
In part because of this concern that ferronickel would not always fit the proposed definition for ferroalloy, a separate provision was established for ferronickel; that is, it was not indented under the term ferroalloy. We believe that implicit in this action is a recognition that all alloys which remain enumerated under ferroalloys in the TSUS must fit the three-part definition of ferroalloys given in headnote 2(e).
Since we have found that the imported merchandise must be "commonly used as raw material in the manufacture of ferrous metals" in order for classification under item 607.50 to be proper, we now turn to a consideration of the question of whether the imported merchandise fit this criterion.
As part of its dual burden of proving that the assigned classification is incorrect and proving the proposed classification correct,2 the importer has the burden of proving that the imported merchandise is commonly used as raw material in the manufacture of ferrous metals.
General Interpretative Rule 10(e)(i) defines how use requirements (other than actual use) are to be construed:
Therefore, on the record before...
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