Staalkat of America, Inc. v. United States

59 Cust. Ct. 241, 273 F. Supp. 417, 1967 Cust. Ct. LEXIS 2196
CourtUnited States Customs Court
DecidedSeptember 27, 1967
DocketC.D. 3130
StatusPublished
Cited by6 cases

This text of 59 Cust. Ct. 241 (Staalkat of America, Inc. 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
Staalkat of America, Inc. v. United States, 59 Cust. Ct. 241, 273 F. Supp. 417, 1967 Cust. Ct. LEXIS 2196 (cusc 1967).

Opinion

BeckwoRth, Judge:

The merchandise involved in this case is a Staalkat egg handling machine, the same in all material respects as that involved in Staalkat of America, Inc. v. United States, 54 Cust. Ct. 161, C.D. 2526, the record of which was incorporated herein. The machine was assessed with duty at 13¾ per centum ad valorem under paragraph 353 of the Tariff Act of 1930, as modified by the Torquay Protocol to the General Agreement on Tariffs and Trade, 86 Treas. Dec. 121, T.D. 52739, as an article having as an essential feature an electrical element or device. It is claimed that the merchandise is free of duty under paragraph 1604 of said tariff act as an agricultural implement or, alternatively, that it is dutiable at 11½ per centum ad valorem under paragraph 372 of said tariff act, as modified by the Sixth Protocol of Supplementary Concessions to the General Agreement on Tariffs and Trade, 91 Treas. Dec. 150, T.D. 54108, as a machine not specially provided for.

The pertinent provisions of the tariff act are as follows:

Paragraph 353, as modified by T.D. 52739:

Articles having as an essential feature an electrical element or device, * * * wholly or in chief value of metal, and not specially provided for:
⅝ ⅝* ⅛ * ⅜ ⅝ *
Other (except * * *)_!___13%%adval.

Paragraph 1604:

Agricultural implements: Plows, tooth or disk harrows, headers, harvesters, reapers, agricultural drills and planters, mowers, horse-rakes, cultivators, thrashing machines, cotton gins, machinery for use in the manufacture of sugar, wagons and carts, cream separators valued at not more than $50 each, and all other agricultural implements of any kind 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. [Free]

[243]*243Paragraph 372, as modified by T.D. 54108:

Machines, finished or unfinished, not specially provided for:

⅜ ⅜⅞ ⅝⅛ ⅜ ⅜ ⅜ ⅜
Other (except * * *)_ 11½% a(l val.

In the incorporated case, the court described the function of the machine in the words of the witness, Dr. Cliff D. Carpenter, as follows (p.162):

Generally the machine separates — it has 3 functions: It separates the eggs by sorting, by a weighing device, into various weights, for example, a standard dozen eggs, which we call a standard dozen eggs, weighs 24 ounces. A medium egg, a dozen weighs 21 ounces. Small eggs weigh 18 to 21 ounces; and then we can go on down to peewees in the order of some 15 ounces. Then we get on the larger side, extra large might be considered in the range of 26 or 27 ounces to the dozen. Then we get into jumbos. So we set up from peewees to the extreme end, 8 different recognized weights of eggs. So this machine divides those eggs, because hens don’t lay all eggs the same size.

The second thing it does, it provides for viewing by what we call flash candling, the interior quality of the egg, and this is the word “grading.”

And then it provides also as the eggs are rolled off the weighing scales onto the gathering tables or down the lanes, it provides for a marking service or mechanism for any reason if you wish to identify the egg by a specific symbol.

The court stated that the primary issue was whether an article performing the three functions mentioned falls within the intendment of the provisions for agricultural implements in paragraph 1604. It held that it did not on the ground that the sorting, grading, and marking of eggs was a marketing process and not an agricultural pursuit. It stated (p. 164):

Nevertheless, the true test for the determination of whether a machine such as is involved herein, the sole functions of which are the sorting, grading, and marking of eggs, is an agricultural implement is not who owns it or where it is used, but, what is its chief use ? In other words, it is chiefly used for agricultural purposes? Irrespective of who owns the instant machine or where it is located, it seems obvious that it performs the functions of a marketing device, and is not one devoted to the agricultural production of food, to wit, eggs. Therefore, the machine is clearly excluded from the provision for “agricultural implements.” Every article used by a farmer is not necessarily an agricultural implement within the intendment of paragraph 1604, supra. W. J. Byrnes & Co. v. United States, 30 CCPA 166, C.A.D. 229.

It held further that the imported article could utilize power other than electricity without modification or change to the machine fer se, [244]*244but that since the candling process, which was essential to the operation of the machine, required the use of fluorescent lights, the machine was properly dutiable under paragraph 353, as modified, as an essentially electric article.

Plaintiff claims that the record presented in the instant case establishes that the Staalkat machine is utilized in the preparation of eggs for market and is clearly an agricultural implement, and that the Staalkat machine can be and is used without the candling function, and is, therefore, not an essentially electrical article. Defendant claims that the machine is not chiefly used for agricultural purposes but performs the functions of a marketing device, and that the evidence does not establish that the electrical features are not essential to the machine’s intended operation.

It appears from the testimony of Dr. Carpenter in the incorporated case that the purchasers of the Staalkat machine fall into four categories : Producers, that is, independent farmers; farmer-owned coo^)-eratives, that is, a group of farmers marketing through a cooperative association; the farmer-processor, that is, the man who is both a processor and does his own marketing and is also a producer; and the processor who owns no poultry and does not produce any eggs, but buys them and does the function of candling, sorting, packaging, and marketing.

Dr. Carpenter said that about 20 percent of the Staalkat machines are owned by independent processors, market men who own no layers, and the balance by those in the other three categories. He felt that more than half were owned by individual producers and farmer cooperatives and the rest by farmer-processors. He said that only those farmers who had 50 to 100,000 layers were interested in owning Staalkat machines.

According to Dr. Carpenter, some Staalkat machines owned by farmers, farmer cooperatives, and farmer-processors are located on farms. In the case of farmer cooperatives, they may be on farms or they may be in centralized plants that the cooperative general management operates for the farmer. In the case of farmer-processors also, they may be on farms or in centralized plants for collection of large numbers of eggs. The witness thought about 40 percent were in centralized plants and 40 percent on farms.

Dr. Carpenter, who was a consultant to the Staalkat Co., and whose compensation depended on the number of machines brought in, testified that there were 150 Staalkat machines in the United States. Another witness who had the agency for the Western half of the country said 59 of them were in the West.

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Bluebook (online)
59 Cust. Ct. 241, 273 F. Supp. 417, 1967 Cust. Ct. LEXIS 2196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/staalkat-of-america-inc-v-united-states-cusc-1967.