US Industrial Products Corp. v. United States

• Decision Date: 17 June 1968
• Docket Number: Protests 61/10273-137-61.,C.D. 3476
• Citation: 286 F. Supp. 583
• Parties: U. S. INDUSTRIAL PRODUCTS CORP. v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

286 F. Supp. 583

U. S. INDUSTRIAL PRODUCTS CORP. v. UNITED STATES.

C.D. 3476; Protests 61/10273-137-61.

United States Customs Court, Second Division.

June 17, 1968.

Brooks & Brooks, New York City (Thomas J. McKenna, New York City, of counsel), for plaintiff.

Edwin L. Weisl, Jr., Asst. Atty. Gen. (Richard J. Kaplan and Harold L. Grossman, New York City, trial attorneys), for defendant.

Before RAO, FORD, and MALETZ, Judges.

MALETZ, Judge:

These protests, which were consolidated for trial, involved certain moldings and frame sections having wooden cores and metal exteriors. The imports were uniformly assessed with duty by the collector at a rate of 19 percent ad valorem under paragraph 397 of the Tariff Act of 1930, as modified, as articles in chief value of metal.¹ Plaintiff claims that the moldings are properly dutiable at 16 2/3 percent ad valorem under paragraph 412 of the Tariff Act of 1930, as modified, as "manufactures of wood * * * not specially provided for,"² and that the frame sections are likewise classifiable under paragraph 412, as modified, as "mirror frames"³ in chief value of wood dutiable at 14 percent ad valorem.

There is, of course, a presumption that the collector found every fact necessary to sustain his classification. E. g., E. I. du Pont de Nemours & Co. v. United States, 27 CCPA 146, 149, C.A.D. 75 (1939); United States v. Marshall Field & Co., 17 CCPA 1, 5, T.D. 43309 (1929). Plaintiff sought to overcome this presumption by establishing that the articles are, in fact, in chief value of wood. Its sole proof of this at trial consisted of responsive answers to two interrogatories (i. e., interrogatories 10 and 11) it had propounded under a commission to an official of the company that had manufactured and exported the articles in question. At an earlier stage of the case, when the interrogatories to be propounded to this witness had been filed with the court and a copy served on defendant, the latter had interposed no objection to them; however, at the trial, defendant indicated for the first time that it had certain objections relating to the substance of the interrogatories and the answers thereto.⁴ The parties then agreed that the interrogatories and answers were to be received in evidence "subject to the court's reserving its ruling upon those objections until after the defendant has had an opportunity to state those objections in its brief." (The interrogatories and answers were received in evidence upon this basis.) In this setting, defendant in its brief now raises two objections to the answers given to interrogatories 10 and 11 and moves to strike them from the record. Its first objection is that the witness "was neither factually nor administratively qualified to answer said interrogatories"; its second, that the answers are inadmissible as hearsay. For the reasons set out below, we conclude (i) that defendant's first objection lacks merit; and (ii) that its second objection is in reality an objection to the interrogatories rather than to the answers thereto and that it comes too late. We hold, therefore, that plaintiff has established that the articles claimed to be dutiable at 16 2/3 percent and 14 percent ad valorem are in chief value of wood. We hold, in addition, that plaintiff's further proof at trial (which is discussed below) has established that the articles claimed to be dutiable at 14 percent are in fact "mirror frames" under paragraph 412 of the Tariff Act, as modified.

As to the first issue, the background facts are these. In April 1963, plaintiff filed a motion pursuant to our rule 21(a) for the issuance of a commission to take the deposition in Stuttgart, Germany, of one Gerd Simon, an employee of the manufacturer-exporter, regarding the component material of chief value.⁵ Without objection, the commission was issued in May 1963 by the court. In the following month the parties stipulated that Friedrich Schock would be substituted for Simon. Thereafter, on July 26, 1963, plaintiff — in accordance with rule 21(f) — filed with the court and served on defendant 11 interrogatories to be propounded to Schock in Stuttgart.⁶ Defendant filed no objection to any of these interrogatories and advised that it would not file cross-interrogatories "at this time." In these circumstances, the court, on August 12, 1963, pursuant to rule 21(g), appointed the American Consul (or other consular officer) in Stuttgart as a commissioner to examine Schock under oath on the interrogatories.⁷

The commission and interrogatories were forwarded to the American Consulate in Stuttgart and on October 9, 1963, Schock appeared there before a consular officer to give his deposition. In response to the first nine interrogatories, he testified under oath that he was associated with the manufacturer-exporter since 1948; that the firm was engaged in the manufacture of "decorative moldings of plastics, metal, and wood"; that in the years 1959 and 1960 (which are the revelant ones here) he was vice president of the firm; that his duties were "general supervision and organization of the entire factory and of the sale, of the entire commercial and technical management" sic; that he was familiar with the shipments involved here "but not in detail"; that the shipments in issue were manufactured under his supervision but not in detail "because the extent was too large"; and that the cost records pertaining to the merchandise involved were kept "under my supervision, not by me personally." The tenth and eleventh interrogatories and Schock's initial answers thereto are reproduced below:

10. If the cost records * * * covering the merchandise in issue were kept either by you personally or under your supervision will you please state if said records indicate the actual cost, in the currency of purchase, of the wood component material and the metal component material of the molding exported to U. S. Industrial Products Corp. as of the time when nothing remained to be done to said materials except to join them together into the finished product?

A. Yes, but in D-Mark, not in US $; calculated in D-Mark, charged in US $; the main thing here is whether just the costs are clearly evident, and that is what they are.

11. If your answer to question "10" is in the affirmative please indicate, with respect to items shipped to the said U. S. Industrial Products Corp. during the period June 15, 1959 to December 31, 1960, what your records disclose as to the actual cost of the wood component material and the actual cost of the metal component material in each item of molding having a wood cost in excess of the metal cost. In supplying this information be sure not to include any item —

(a) in which the cost of the metal component material exceeds the cost of the wood component material, or

(b) which is composed in part of any material in addition to wood and metal.

Also, please use the following headings in furnishing the information required by this question:

SCHOCK INVOICE Cost of Cost of Wood Metal No. Date Item No. Component Component

A. I am not able now to give the different items, but I am willing to give a list of all these different invoices and profiles according to the above scheme in the years as indicated in the question. It will take about two weeks. If I had known that you want the different figures, I had brought them with me.

On February 27, 1964, Schock again appeared before the consular officer in Stuttgart and submitted under oath a written schedule of the different items of molding and frame sections, composed only of wood and metal and in chief value of wood, shipped to plaintiff from June 15, 1959, to December 31, 1960. The schedule covered 113 items of moldings and frame sections, each identified by both a code and invoice number, and listed for each such item the actual cost of the wood and the actual cost of the metal, in the currency of purchase (deutsche marks), at a time when nothing remained to be done to the component materials except to join them together.⁸ The evidence thus adduced established that wood was the component material of chief value with respect to each of the 113 items. For that evidence satisfied the requirement — uniformly imposed — that "the proper method of determining component material of chief value is by determining the value of the separate parts of the article at the time when they are ready to be combined to make the the completed article." United States v. Bacharach, 18 CCPA 353, 355, T.D. 44612 (1931). See also e. g., United States v. Rice-Stix Dry Goods Co., 19 CCPA 232, 234, T.D. 45337 (1931); Ross Products, Inc. v. United States, 52 Cust. Ct. 51, 55, C.D. 2435 (1964); Commercial Adolfo S. Pagan, Inc. v. United States, 48 Cust.Ct. 210, 216, C.D. 2337 (1962).

We consider now defendant's motion to strike this evidence, starting with its first objection that "plaintiff has failed to satisfactorily and adequately establish that * * * Schock had sufficient personal or specific knowledge of or definite factual familiarity with, the imported articles, their construction, and the costs of the metal and wood components from which they were produced, at the time when nothing remained to be done to said materials except to join them together into the finished product as imported." This objection is clearly without merit considering that Schock's deposition disclosed without contradiction (i) that he was responsible for general supervision of the entire plant and its sales; (ii) that the shipments were manufactured under his supervision; and (iii) that the cost records covering the merchandise were kept under his supervision. To be qualified to testify about business records, it is not necessary that the witness have personally prepared or examined each record; it is sufficient if the witness had supervision of the records. American Express Company v. United States, 30 Cust.Ct. 333, Abstract 57048 (1953); United States v. Mortimer, 118 F.2d 266, 269 (2d Cir. 19...