Daido Corp. v. United States

52 Cust. Ct. 43, 1964 Cust. Ct. LEXIS 1402
United States Customs Court·Decided February 19, 1964·No. C.D. 2433·Published

Opinion

LawRENce, Judge:

The two protests enumerated above, and consolidated for purposes of trial and decision, controvert the classification by the collector of customs of certain importations of chain as chains of iron or steel, used for the transmission of power, not over 2-inch pitch, and containing more than three parts per pitch, in paragraph 329 of the Tariff Act of 1930 (19 U.S.C. § 1001, par. 329), as modified by the Presidential proclamation to the protocol of terms of accession by Japan to the General Agreement on Tariffs and Trade, 90 Treas. Dec. 234, T.D. 53865, supplemented by Presidential notification, 90 Treas. Dec. 280, T.D. 53877, and the assessment of duty thereon at the rate of 12% per centum ad valorem.

It is the contention of plaintiff herein that the items of merchandise in issue should properly have been classified as agricultural implements or parts thereof within the purview of paragraph 1604 of the Tariff Act of 1930 (19 U.S.C. §1201, par. 1604), which grants entry free of duty.

For ready reference, we here set forth the applicable provisions of the statute.

Paragraph 329 of the Tariff Act of 1930, as modified, supra:

Chains of iron or steel, used for the transmission of power, of not more than ■2-ineh pitch and containing more than three parts per pitch, and parts thereof, finished or unfinished, valued per pound—
Under 40 cents * * *
40 cents or more_12%% ad val.

Paragraph 1604 of said act, supra:

Par. 1604. Agricultural implements: Plows, tooth or disk harrows, headers, harvesters, reapers, agricultural drills and planters, mowers, horserakes, cultivators, thrashing machines, cotton gins, machinery for use in the manufacture [45]*45•of sugar, wagons and carts, cream separators valued at not more than $50 each, and all other agricultural implements of any hind or description, not specially provided for, whether in whole or in parts, including repair parts: Provided, That no article specified by name in Title I shall be free of duty under this paragraph.

At the call of this case for trial, plaintiff presented the testimony •of two witnesses on its behalf. The first of them was Kinichi Iwata who, for the past 9 years, has been manager of the New York office ■of Daido Corporation, plaintiff herein. • The Daido Corporation is an importer, exporter, and distributor of various merchandise, including roller chain. Witness Iwata is familiar with the merchandise •covered by the three shipments before the court and stated that he has purchased said roller chain specially from the factory in Japan to meet the specifications of the purchaser, Long Manufacturing Co. ■of Tarboro, N.C. The three sales invoices of the items sold 'by Daido Corporation to the Long Manufacturing Co. were received in evidence as plaintiff’s collective exhibit 1. The witness testified that the instant chains are unique, in that they are entirely different from the chains his company usually imports. He stated he has never sold such chain to anyone other than the Long Manufacturing Co., and he has never known of such chains being used by anyone for purposes different from those of the Long Manufacturing Co.

As plaintiff’s collective exhibit 2, there was received in evidence a chain and the container in which it was imported, which was stated to be representative of item part number 05509 on invoice, dated March 29, 1960, covered by entry 02602, accompanying protest 61/11271.

As some of the transmission chains with which he is familiar, Iwata mentioned roller chains, silent chains, and block chains, all of which have three or more parts per pitch. Exhibit 2 in the instant case is one kind of roller chain. A silent chain was received in evidence as plaintiff’s illustrative exhibit 3 and a block chain as plaintiff’s illustrative exhibit 4.

On cross-examination, reference was made to Machinery’s Handbook, 16th edition, 1959, pages 968,969, 970, and 971, photostatic copies of which pages were received in evidence as defendant’s illustrative exhibit A. The witness stated that the imported chains are substantially the same as depicted in defendant’s exhibit A as to pitch, roller dimension, standard chain number, and width, but that the length was different.

The witness testified that the chains represented by exhibit 2 are used for the transmission of power and are standard transmission roller chains. The involved chains are made of iron or steel, are not over 2-inch pitch, consist of more than three parts per pitch, and are valued at over 40 cents per pound. As imported, the chains are finished products, ready for use.

[46]*46Willie Denton was called to testify as plaintiff’s second witness. He stated that he is sales representative for eastern North Carolina for the Long Manufacturing Co. of Tarboro, N.C., which company makes and sells farm machinery to farmers.

When shown the three invoices in evidence as collective exhibit 1, Witness Denton testified that he was familiar with the merchandise and knew how it is used, namely, as a conveyor chain on a tobacco harvester, and as a drive chain on a peanut combine. Denton produced four pamphlets, which were received in evidence as plaintiff’s collective illustrative exhibit 5. Inked markings thereon identified the chains covered by the invoices (collective exhibit 1) and illustrated where they appear on apparatus manufactured by his company, except for the first three items on the invoice of May 15, 1961, which covers chains received and shipped to Herring Manufacturing Co. of Lewisburg, N.C., which manufactures similar peanut combines. Indicated as 5-A on said exhibit is a Silent Flame all-purpose tobacco harvester, with which certain of the imported chains are used and form necessary parts of said harvester, without which the apparatus could not operate efficiently for its intended purpose. The witness identified the mechanism indicated as exhibit 5-B as a peanut combine, a machine used for harvesting peanuts, which is a type of thrashing machine. The apparatus, as illustrated, could not operate efficiently for its intended purpose without the chains indicated thereon, and the witness did not know of any other or different use for such chains. Like testimony was given by Witness Denton as to the essentiality of the chains indicated on exhibits 5-C and 5-D, a Silent Flame standard model tobacco harvester and a Long bale conveyor, respectively, it being the testimony of the witness that said chains are necessary to the efficient use of the machines and that he does not know of any other or different uses for said chains.

Denton testified that he has seen all of the implements illustrated in plaintiff’s collective illustrative exhibit 5 used and that he has personally used said devices. Of his own knowledge and information, all of said apparatus is used by farmers on farms.

Even granting, arguendo, that the imported chains are essential and integral parts of agricultural implements, without which said devices could not function, there would still remain to be determined whether the chains in controversy come within the proviso of paragraph 1604 of the Tariff Act of 1930, which excludes from free entry any articles specified by name in title I.

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Daido Corp. v. United States, 52 Cust. Ct. 43, 1964 Cust. Ct. LEXIS 1402 (cusc 1964).

52 Cust. Ct. 43 (Daido Corp. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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