John H. Faunce, Inc. Masonite v. United States

80 Cust. Ct. 139, 1978 Cust. Ct. LEXIS 1025
CourtUnited States Customs Court
DecidedJune 7, 1978
DocketC.D. 4747; Court No. 69/35104
StatusPublished
Cited by2 cases

This text of 80 Cust. Ct. 139 (John H. Faunce, Inc. Masonite v. United States) is published on Counsel Stack Legal Research, covering United States Customs Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John H. Faunce, Inc. Masonite v. United States, 80 Cust. Ct. 139, 1978 Cust. Ct. LEXIS 1025 (cusc 1978).

Opinion

Newman, Judge:

This action concerns the proper tariff classification for a “Mótala” hardboard press speed-up hydraulic system exported from Sweden and entered at the port of Philadelphia in December 1968.

The speed-up system was assessed with duty by the district director at the rate of 9 per centum ad valorem pursuant to item 678.50, TSUS, as modified by T.D. 68-9, which provides for “Machines not specially provided for, and parts thereof”. Defendant now claims, for the first time in its post-trial brief, that the merchandise is classifiable under item 661.70, TSUS, as modifiedj as part of ap industrial machine for [141]*141the ■ treatment of materials by a process involving a change of temperature, which is dutiable at the rate of 11 per centum ad valorem. To assert this newly proposed classification, defendant moves to amend the pleadings to conform to the evidence under rule 4.8(b).

Plaintiffs claim that the merchandise is properly dutiable at the rate of 6 per centum ad valorem, either under the provision in item 668.06, TSUS, as modified, covering “Parts of machines for making cellulosic pulp, paper or paperboard”, or alternatively under the provision in item 668.00, TSUS, as modified, covering “Machines for making cellulosic pulp, paper, or paperboard”. In their reply brief, plaintiffs strenuously object to defendant’s motion under rule 4.8(b).

I*

At the trial, each party presented the testimony of two witnesses and various exhibits. The- official papers were received in evidence, without marking. Plaintiffs’ witnesses were: George Uding, vice president of manufacturing for the Hardboard Division of Masonite Corporation; and Jack Mulholland-, vice president of manufacturing technology and engineering for Masonite Corporation. Defendant’s witnesses were: Harry Radden, president of Miller Hoft, Inc.; and Charles A. Shoudy, vice president of project engineering for Olin Craft.

Portions of the record in F. S. Whelan & Sons v. United States, 40 Cust. Ct. 192, C.D. 1982 (1958), were incorporated in the record of the present case upon defendant’s motion before trial, pursuant to-an order of the court dated November 25, 1975.

In the circumstances of the present case, it is unnecessary to dwell at length on the testimony of record. The pertinent facts are not in dispute, and may be briefly summarized.

It has been clearly established that the imported speed-up hydraulic-system was installed as an integral part of Masonite’s Mótala hardboard press located at its plant in Towanda, Pennsylvania. The-system is designed to speed up the production cycle of the Mótala, hardboard press, thus increasing its efficiency in the production of hardboard. Further, it has been shown that the Motala hardboard. press, by a combination of heat and pressure, consolidates a loose-interfelting of fibers “so that you have a hard dense product which is known as hardboard” (R. 43). Finally, it appears that the Motala, press is of the same class or kind as the hardboard press involved in United States v. Superwood Corporation, 52 CCPA 57, C.A.D. 858 (1965).

II.

In order for plaintiffs to prevail on either of their alternative claims, they were required to establish that the speed-up hydraulic system [142]*142was used for making cellulosic pulp, paper or paperboard. There is no dispute that Masonite’s Mótala press (of which the speed-up system is a part) was used for making hardboard. Consequently, the tariff classification of hardboard itself is pivotal in determining whether the speed-up system is classifiable under either of the claimed provisions.

As dispositive of the issue presented, plaintiffs rely upon the Whelan and Superwood cases, supra, decided under the Tariff Act of 1930. In the 1930 act, there was no specific provision for hardboard. Thus, in Whelan, hardboard was held properly dutiable as pulpboard under paragraph 1413 of the Tariff Act of 1930.1

Again, in Superwood, hardboard was held to be a form of paper, and certain hardboard making equipment (including a hydraulic press) was determined to be properly dutiable under paragraph 372 of the Tariff Act of 1930 as machines for making paper. Accordingly, if this case were governed by the Tariff Act of 1930, Whelan and Superwood would, plainly, be dispositive.

However, defendant contends that Whelan and Superwood are not viable under the TSUS in view of the new eo nomine provisions for hardboard, which defendant emphasizes were included in part 3 of schedule 2 of the Tariff Schedules rather than in part 4 of schedule '2. It should be noted that part 3 covers “Wood Veneers, Plywood and Other Wood-Veneer Assemblies, and Building Boards”, whereas part 4 includes “Paper, Paperboard, and Products Thereof”. Additionally, defendant cites headnote 1, part 1, schedule 2, in support of its contention that in the TSUS Congress recognized hardboard as wood. Pleadnote 1 reads:

1. For the purposes of subparts D, E, and F of this part, hardboard shall be deemed to be wood.

I agree with defendant that Whelan and Superwood are not controlling under the TSUS. Fundamentally, a judicial construction under a prior tariff act is not dispositive in a case arising under the TSUS, where as here, there has been a substantial change in the statutory provisions affecting the product. Cf. Inter-Maritime Forwarding Co., Inc. v. United States, 70 Cust. Ct. 133, C.D. 4419 (1973).

As observed, supra, there was no specific provision for hardboard in the Tariff Act of 1930, whereas in the TSUS, hardboard is covered eo nomine and included in part 3 of schedule 2, rather than in part 4 •of schedule 2. The inclusion of hardboard in part 3 rather than in part 4 •of schedule 2, as well as the insertion of headnote 1, part 1, schedule 2, clearly evinces a congressional recognition that hardboard is wood, and not paper or paperboard.

[143]*143Even prior to the TSUS, Congress recognized hardboard as wood in various bills seeking to reclassify hardboard under the wood schedule of the Tariff Act of 1930. Hence, in Weyerhaeuser Company v. United States (Abitibi Corporation, Party-in-Interest), 71 Cust. Ct. 81, 92, n. 9, C.D. 4479 (1973), Judge Maletz stated:

Although the House passed an amended version of H.R. 9666 in the second session of the 83 d Congress and the Senate in the next session of Congress in 1955 (84th Cong., 1st Sess.) passed a similar provision as an amendment to a tariff bill, the Conference Committee deleted the hardboard reclassification portion of the bill in response to a letter from the President. This letter stated that “[b]y the Customs Simplification Act of 1954, the Congress instructed the U.S. Tariff Commission to review the entire schedule of tariff classifications and to recommend changes needed to remove anomalies and injustices. Action now by the Congress on any specific commodity would directly contravene this process which assures all industries of an orderly method for full consideration of their classification problems.” See Tariff Classification Study, Explanatory and Background Materials, Schedule 2, at 205, 276 (1960).

In S. Rep. No. 387, 84th Cong., 1st Sess. 2 (1955), the Senate Finance Committee reported:

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