Associated Metals & Minerals Corp. v. United States , 320 F. Supp. 997 ( 1970 )

Newman, Judge:

These three consolidated protests concern the proper rate of duty on certain metal articles imported from West Germany in 1962.

The merchandise is described on the commercial invoices as “Muntz Metal Plates” and “Tube Sheet blanks, Muntz metal, hot rolled” in protests 66/1272 and 66/14957(B) repeotively. These articles were assessed with duty by the Government at the rates of 17 or 19 per centum ad valorem, depending on the date of entry, pursuant to the provisions of paragraph 397 of the Tariff Act of 1930, as modified, covering “Other” articles not specially provided for, whether partly or wholly manufactured, composed wholly or in chief value of brass.

In protest 66/2683, the merchandise is described on the commercial invoice as “Copper-Silicon Alloy Condenser Plates” and was assessed with duty under paragraph 397, as modified, at the rate of 19 per centum ad valorem as “Other” articles not specially provided for, whether partly or wholly manufactured, composed wholly or in chief value of bronze.

The merchandise covered by the instant protests was also assessed with an internal revenue tax based upon'the copper content, but such tax is not in controversy. Plaintiff’s sole claim is that the imported merchandise is properly dutiable at the rate of 2 cents per pound under the provision in paragraph 381, as modified, for brass plates.¹

We sustain the protests.

The Statutes

Classified under:

Paragraph 397 of the Tariff Act of 1930, as modified by T.D. 54108:

Articles or wares not specially provided for, whether partly or wholly manufactured:

* *

Composed wholly or in chief value of iron, steel, copper, brass, nickel, pewter, zinc, aluminum, or other base metal (except lead), but not plated with platinum, gold, or silver, or colored with gold lacquer:

•Je M * *

Other, composed wholly or in chief value of iron, steel, brass, bronze, zinc, or aluminum * * *_ 19% ad val.

Paragraph 397 of the Tariff Act of 1930, as modified by T.D. 55615:

Articles or wares not specially provided for, partly or wholly manufactured, not plated with platinum, gold or silver, and not colored with gold lacquer:

Composed wholly or in chief value of iron, steel, copper, brass, nickel * * *

* * * * * * *

Composed wholly or in chief value of brass or bronze * * *_ 17% ad val.

Claimed under:

Paragraph 381 of the Tariff Act of 1930, as modified by T.D. 51802:

Brass rods, sheet brass, brass plates, bars, and strips, Muntz or yellow metal sheets, sheathing, bolts, piston rods, and shafting_ 2‡ per lb.

Bronze rods and sheets_ 20 per lb.

The Recokd

The record herein consists of the testimony of three witnesses and four exhibits introduced in evidence by plaintiff. Defendant presented no evidence. There appears to be no controversy as to the pertinent facts, which may be summarized as follows:

Plaintiff, an importer of metals and minerals, purchased the involved merchandise from Vereinigte Deutsche Metallwerke of Frankfort, Germany, and sold the merchandise in its imported condition to Ingersoll-Rand Company of Phillipsburg, New Jersey. Plaintiff ordered the merchandise in accordance with drawings and specifications submitted by Ingersoll-Rand.

The imported articles were flat, 1% to iy2 inches thick, and five-sided in shape. They were of substantial size: one for example measuring 11 feet wide at the base, 11 feet 6 inches high on one side, 6 feet across the top, and 3 feet 6 inches on the other “side”, weighing 6,970 pounds. Although the specific dimensions and shape of the imported articles varied in the three shipments, the following drawing illustrates generally their appearance.

The imported articles were produced as follows:

The first step was to melt the “right” alloy and to cast plates having a thickness of about 10 to 12 inches with a weight of about four to six thousand pounds each. The length and width of these cast plates were related to the product to be produced. After casting, the plates were heated in a furnace to a high temperature to give them a certain plasticity for hot working in a rolling mill. The plates were then “cross-rolled,” meaning that the rolling direction was changed during the operation. By cross-rolling, a plate can be produced which has a thickness, length and width close to the desired product. The imported plates were cross-rolled “so close as possible to the trapezoidal shape shown in the drawing,” and were not initially in rectangular shape. After hot-rolling, the next step was the shearing operation by which the plates were cut to size specified in the drawing. After shearing, there was a scrap loss of at least 25 percent.

The imported articles were custom-made or specialized forms produced to plaintiff’s specifications, and were not standard mill products² in the sense that one would find in a warehouse; but they were “mill products” in the sense “that they must be worked subsequently to find a final use” and “are very raw products in comparison to the condenser, what is made from it.”

Ingersoll-Rand, purchaser from plaintiff of the imported articles, manufactures condensers which are sold chiefly to electric utilities. A condenser is employed by the electric utility to reconvert steam “exiting” from a turbine back into water to be recycled into the boiler for reuse.

After the imported articles were received by Ingersoll-Rand, they were manufactured into condenser tube plates, which latter “are used basically as a manifold for a tube bundle.” The size and shape of the plates are dependent upon the power plant arrangement.

Rone of the plates purchased by Ingersoll-Rand were standard mill shapes, but rather such plates “are bought to a drawing” from a mill. Although any mill would sell plates in the shapes involved herein, they are “not something you can go to a warehouse and pick up.” Condensers usually have rectangular tube plates, and the imported shapes “are definitely in the minority.”

In the course of manufacturing the condenser tube plates the imported articles were drilled with approximately 10,000 holes, so that from 30 to 40 per cent of the area of the plate “is drilled out of it.” The holes were then reamed. One side of the hole was “chamfered to remove any burrs,” and the other side was either beveled or chamfered. Some of the material was counterbored since there was a special sealing device used, and that required an additional operation. Also, some of the imported plates were “radiused” whereby a square corner of the plate was “rerounded.” Around the periphery of the plates, holes were drilled so that the tube plates could be bolted to the condenser. The plates were then shipped to Ingersoll-Rand’s customer to become condenser tube plates on the condenser itself. Tubes were installed between two condenser plates; and water flows through the tubes to condense the steam from the turbine.

Questions Pkesented

Since the provision in paragraph. 381 for “brass plates” is more specific than the basket provisions of paragraph 397, the issue is narrowed to whether the imported merchandise falls within the purview of paragraph 381 as brass plates.

Thus, we are called upon to determine initially whether the merchandise covered by all three protests is classifiable as “plates” within the purview of paragraph 381; and second, if the articles are “plates”, whether the “Copper-Silicon Alloy Condenser Plates” in protest 66/2683 are classifiable as “brass” plates under paragraph 381.³

The MeRQHandise Was Wot Advanced Beyond the Form: oe “Plates.”

Defendent argues that the provision for brass plates in paragraph 381 covers only standard mill product brass plates, and that the imported articles were advanced in condition beyond the initial state as mere mill product brass plates. Specifically, the Government contends, “that only after the desired alloys were melted * * * cast and cross rolled * * * did we have the plates referred to in paragraph 381; and that the subsequent trapezoidal shaping and cutting to size * * * created a specially manufactured shape or article that was * * * more than a plate * * *.”

We disagree.

While there do not appear to be any decisions specifically construing the term “plates” in paragraph 381, we think that the interpretation applicable to tariff provisions covering steel sheets and plates should be applied here.

In United States v. Frank, 15 Ct. Cust. Appls. 97, T.D. 42184 (1927), the appellate court had occasion to construe paragraph 304 of the Tariff Act of 1922, which covered various basic shapes and forms of steel including sheets and plates. There, the court of appeals reviewed several pertinent authorities and commented (15 Ct. Cust. Appls. at 100):

Paragraph 304 and its predecessor paragraphs have been before the courts for construction on various occasions. We think a fair reading of these authorities will lead the mind to the conclusion that this paragraph was not intended to apply primarily to fully manufactured articles, such as were ready for their final use, but rather to articles manufactured to a degree, but material for other subsequent manufacturing 'processes. * * * [Emphasis added.]

Additionally, in Stengel v. United States, 2 Ct. Cust. Appls. 137, T.D. 31663 (1911), the court of appeals held that zinc in the form and shape of, cmd ready for me in its imported condition as, tiles or tiling for walls and ceilings, was classifiable under the provision in the Tariff Act of 1909 for articles of zinc rather than under the provision for zinc in sheets. The latter provision was held to cover “sheets of zinc which retained their form and identity as such and were intended to be used as material for manufactwrmg articles as distinct from articles of mcmafaatwre ready for me” [Emphasis added.] In Stengel, the court emphasized (page 139) that “[t]he articles here in question * * * are articles upon which no further work is necessary to be done to fit them for a specific definite use.”

We find that the provision in paragraph 381 for brass plates similarly was intended to cover articles in the form of plates ⁴ which serve as material for further fabrication into finished articles, as distinguished from finished articles of manufacture ready for use.⁵ See also Universal Shipping Co. et al. v. United States, 4 Ct. Cust. Appls. 245, T.D. 33479 (1913).

Here, the record establishes that although the imported articles were produced to definite specifications of size and shape for subsequent fabrication into condensor tube plates, the articles were not, in their imported condition, advanced beyond the state of plates to the finished articles of manufacture ready for use. The merchandise required substantial further processing by Ingersoll-Band before becoming firmly adapted to its ultimate use. Stated differently, the imported articles constituted a material, viz. plates, for the making of tube manifolds and were not the manifolds per se. Although it was a convenience and saving to Ingersoll-Rand that the merchandise was shaped and sized for its special ultimate use, the merchandise was nevertheless a material in its imported condition.

Hence, although the plates were sheared to size and shape according to specification, we do not regard such shearing as an advancement of the articles beyond the plate stage, as urged by defendant. Sciaky Bros., Inc. v. United States, 40 Cust. Ct. 134, C.D. 1972 (1958).⁶ Instead, it appears that such shearing was necessary to produce plates which met the size and shape specified by the importer.

No authority has been cited by defendant which requires plates within the purview of paragraph 381 to be standard mill plates. Moreover, there is nothing inherent in the common meaning of the term “plates” which limits it to material in stock sizes or shapes.

Under all of the facts and circumstances, we hold that the imported articles are “plates” within the meaning of that term in paragraph 381, as modified.

The “Copper-Silicon Allot Condenser Plates” Aee Dutiable as Beass Plates Undee Paragraph 381

Inasmuch as initially we found that the articles covered by these protests are “plates,” we now reach the issue of whether the “Copper-Silicon Alloy Condenser Plates” covered by protest 66/2683 are dutiable as brass plates under paragraph 381, as claimed by plaintiff. This question arises by reason of the collector’s determination that the articles were composed of bronze, and the fact that there is no specific provision in paragraph 381 for bronze plates.

Plaintiff contends that Congress recognized that bronze is a form of brass, and therefore intended the provision for brass plates to include bronze plates. It is defendant’s position that bronze plates are not covered by paragraph 381 since bronze is not a form of brass. The distinction as urged by the Government, between the two terms, appears to be: both brass and bronze are copper alloys with the chief secondary alloying element of brass being zinc, while the chief secondary alloying element of bronze is tin.

Despite that distinction claimed by the Government between “brass” and “bronze”, nevertheless the question remains as to whether Congress regarded bronze to be a form of brass, as argued by plaintiff.

To support its contention that Congress recognized bronze as a form of brass and therefore intended to include bronze plates within the provision for brass plates, plaintiff cites a comment in the 1929 Summary of Tariff Information, page 859. That comment, so far as pertinent, states:

Description and uses. — Brass is an alloy containing usually 60 to 70 per cent copper, the remainder being mostly zinc. Bronze is a form of brass in which tin replaces a considerable portion of the zinc. Muntz or yellow metal is brass. [Emphasis added.]

It is well settled that the 1929 Summary of Banff Information, which was before Congress at the time of the passage of the Tariff Act of 1930, is authoritative for the purpose of resolving questions relating to the meaning and scope of provisions in the 1930 Act. Textile Printing & Finishing Co., Inc. v. United States, 49 CCPA 24, C.A.D. 789 (1962); United States v. J. Eisenberg, Inc., 43 CCPA 105, C.A.D. 616 (1956). Plainly, Congress is deemed to be “chargeable with notice of comments contained in the 1929 Summary of Tariff Information, which was before it at the time of the enactment of the Tariff Act of 1930 * * *.” Edward Hyman Co. v. United States, 52 Cust. Ct. 133, 141, C.D. 2450 (1964), aff'd, 52 CCPA 51, C.A.D. 857 (1965).

In light of the significant comment quoted from the 1929 Summary, we adopted the construction urged by plaintiff that, Congress considered bronze to be a form of brass and intended bronze plates to be included within the scope of “brass plates” in paragraph 381.

The protests are sustained, and judgment will issue accordingly.

1 Plaintiff claimed at the trial and In Its brief that the articles are dutiable under para-se-g graph 381 “either as sheets or plates of brass or bronze.” However, the claim that the cles are sheets was not pursued either by the presentation of evidence or by argument ilalntlff’s brief. Therefore, we shall consider the claim that the Imports are “sheets” iaving been abandoned.

2 The term “mill products” Is a trade designation which refers to standard size warehouse items, and “indicated something which is going to be further processed before end use” (R. 17). Mill plates come in shapes which are rectangular and circular (R. 25).

3 Defendant concedes that the merchandise In protests 66/1272 and 66/14957 (B) described as “Muntz Metal” Is brass, as classified by the collector.

4 Webster’s New International Dictionary, Second Edition (1950), page 1884, defines a plate as : “1. A smooth, often nearly flat, and relatively thin, piece of material, orig. only of metal; a thick sheet, slice of lamina; esp. a perfectly flat sheet of material of uniform thickness throughout, as the back plate of a watch, etc.; a boiler or armor plate. 2. Metal in sheets, whether beaten, rolled, or cast.”

5 Although not necessarily indicative of Congressional intent as to the scope of the term plates in paragraph 381, the following comment appears in the Summaries of Tariff Information, 1948, Vol. 3, Part 5, pages 65-66: “* * * Plates and sheets [brass and bronze] are the materials for high-grade builders' and cabinet hardware, especially hinges, locks, doorplates, sign plates, and similar articles; they are also used for ornamental articles and in the manufacture of electrical equipment. * * *”

6 Cf. B. F. Drakenfeld & Co. v. United States, 15 Treas. Dec. 365, T.D. 28920 (1908), wherein it was held that the provision for copper in plates not manufactured, in paragraph 532, Tariff Act of 1897, did not include plates subjected to a planishing process involving “a somewhat elaborate process of grinding and polishing, which greatly enhances the value of the articles”, and was necessary to make the plates ready for use by engravers. (Bev’d on other grounds, 17 Treas. Dec. 497, T.D. 29811 (1909) ; aff'd, 19 Treas. Dec. 424, T.D. 30549 (1910).)