Amity Fabrics, Inc. v. The United States , 435 F.2d 569 ( 1970 )

ALMOND, Judge.

This is an appeal from the decision and judgment of the United States Customs Court, Second Division,¹ holding that the imported twill back velveteen pile fabric is eo nomine provided for in item 346.24 of the Tariff Schedules of the United States (TSUS), 22.5 per cent ad valorem, and is subject to duty as so classified.

Appellant contends that the merchandise is properly classifiable under paragraph 907 of the Tariff Act of 1930, as modified and supplemented by T.D. 51802 and T.D. 54399, respectively, and' as amended by Public Law 86-795, as waterproof cloth, with duty assessable at 11 per cent ad valorem. In the alternative, appellant suggests the applicability of items 355.65, 356.25, 798.00 or 798.50, TSU.S. Appellant further contends that if none of the above are applicable, the assessment is unlawful, and the merchandise should therefore be admitted free of duty.

The statutes involved are set forth in pertinent part. The goods were classified under:

Schedule 3, Part 4, TSUS:

Pile fabrics, in which the pile was inserted or knotted during the weaving or knitting, whether or not the pile covers the entire surface, and whether the pile is wholly or partly cut or is not cut:

Of cotton:

* * * * * * *

Velveteens:

# # # £ ;>< )•(

Other, including twill-back:

* * * ¡¡i * *

346.24 Valued over $1.10 per square yard .................22.5% ad val.

Appellant's claim is asserted under:

Paragraph 907, Tariff Act of 1930, as modified by the General Agreement on Tariffs and Trade, T.D. 51802, as supplemented by Presidential Proclamation, T.D. 54399, and as amended by Public Law 86-795:

Waterproof cloth, wholly or in chief value of cotton or other vegetable fiber, but not in part of India rubber ................n% ad val.

Public Law 86-795:

SEC. 2. In order to insure a correct interpretation of the provision "waterproof cloth" in paragraph 907, Tariff Act of 1930, it is hereby declared that it was and is the true intent and meaning of paragraph 907 to limit the term "waterproof", when applied to cloth, "wholly or in chief value of cotton or other vegetable fiber, whether or not in part of India rubber", to cloths of a kind generally used in the manufacture of articles which are designed to afford protection against water to the extent expected in raincoats, protective sheeting, dress shields, umbrellas, and similar articles. Even when cloth possesses water repelling characteristics, It is not classifiable as waterproof cloth within the meaning of paragraph 907, Tariff Act of 1930, unless it Is of a kind generally used in the manufacture of articles of the class specified in the preceding sentence.

Alternative provisions asserted below:

Schedule 3, Part 4, TSUS:

Woven or knit fabrics (except pile or tufted fabrics) of textile materials, coated or filled with rubber or plastics material, or laminated with sheet rubber or plastics, except foam or sponge sheet:

355.65 Of vegetable fibers .......11% ad val.

Woven or knit fabrics (except pile or tufted fabrics) of textile materials, coated or filled, not specially provided for:

* >¡C -¡5 # * S¡8

Other:

356.25 Of vegetable fibers .......10% ad val.

Schedule 7, Part 14, TSUS:

Any article, not provided for elsewhere in these schedules:

Which Is similar In the use to which it may be applied to any article or articles enumerated In any of the foregoing provisions of these schedules as chargeable with duty:

798.00 Most resembling as to use a particular enumerated article chargeable with duty .................The same rate of duty as the particular article which it most resembles as to use.

798.50 Not most resembling as to use a particular enumerated article chargeable with duty, but equally resembling as to use two or more enumerated articles chargeable with duty ... The rate of duty applicable to that one of such two or more articles which It most resembles In respect to the materials of which it Is composed.

The Tariff Classification Act of 1962, section 101(b), P.L. 87-456, provides In relevant part that:

(b) Such new title I (hereinafter in this Act referred to as the "Tariff Schedules of the United States") shall consist of—

(1) the general headnotes and rules of Interpretation;

(2) schedules 1 to 8, Inclusive; and

(3) the appendix to the tariff schedules; * * * and

(4) subject to subsection (c), such changes In the provisions identified In paragraphs (1), (2), and (3) of this subsection as the Commission decides—

(A) are necessary to reflect changes In tariff treatment made by statute or under authority of law, arising either before the date of the enactment of this Act or on or after such date of enactment and before the date on which the Tariff Schedules of the United States is published pursuant to subsection (d), or

(B) are otherwise necessary.

In its determinations under this paragraph, the Commission shall apply the standards It applied In Its report of November 15, 1960 * * *.

The questions presented by the record are succinctly stated by appellee as follows:

1. Whether section 101(b) (4) (A) of the Tariff Classification Act of 1962 provided for mandatory rather than discretionary action on the part of the Tariff Commission.

2. Whether Public Law 86-795 constituted a change in tariff treatment of such a nature, that the Tariff Commission was compelled under section 101(b) (4) (A), supra, to incorporate the change into the new tariff schedules.

3. Whether Congress had adopted the changes proposed by the Tariff Commission with respect to waterproof cloth.

4. Whether appellant is entitled to the relief which it claims.

The case was submitted for decision below upon written stipulation of counsel to the effect that the merchandise in question consists of first quality twill back velveteen pile fabric similar in all material respects, including waterproofing, to the merchandise in Amity Fabrics, Inc. v. United States, 51 Cust.Ct. 97, C.D. 2416 (1963), appeal dismissed 51 CCPA 129 (1964). In that case the merchandise was held to be dutiable at the rate of 11 per cent ad valorem under paragraph 907, Tariff Act of 1930, as modified, supplemented and/or as amended. The record in C.D. 2416 was incorporated and made a part of the record herein.

The Customs Court observed that while the ultimate question to be determined herein is the proper classification of the subject merchandise, the resolution of this question depends not upon the character and composition of the cloth, which have been stipulated, but upon the fundamental issue of whether in failing to incorporate a specific provision for waterproof cloth into the Tariff Schedules of the United States, the Tariff Commission violated the dictates of the Tariff Classification Act of 1962, Public Law 87-456.

Appellant’s contention is that Public Law 86-795, which interpreted paragraph 907 of the Tariff Act of 1930, was a statutory change in the tariff treatment of waterproof cloth which should have been reflected in the TSUS by virtue of section 101(b) (4) (A) of the Tariff Classification Act of 1962. Appellant submits that the failure of the Tariff Commission to so provide requires classification of the instant merchandise under paragraph 907 of the Tariff Act of 1930, as amended by Public Law 86-795, which allegedly has not been validly superseded. Alternatively, appellant desires classification under various other TSUS items, or as an article entitled to free entry as not one covered by any valid provision of the TSU.S.

Appellee’s position, in essence, is that the Tariff Commission was exercising its discretionary powers pursuant to section 101(b) (4) (A) of the Tariff Classification Act of 1962 when it chose not to include a specific provision for waterproof cloth in the TSU.S. In this connection the Customs Court stated:

Assuming arguendo, though we do not so find, that Public Law 86-795 was a “change in tariff treatment,” we nevertheless are of opinion that the instructions given to the Commission in section 101(b) (4) (A) of the Tariff Classification Act were discretionary rather than mandatory and that plaintiff is without grounds to challenge the Commission’s use of its discretion.

The conclusion that Congress invested the Commission with discretionary powers is amply supported by the explicit language of section 101(b) (4) (A), which provides that the schedules shall include:

* * * such changes * * * as

the Commission decides—

(A) are necessary to reflect changes in tariff treatment made by statute '* * *. [Emphasis added.]

We believe it clear that the words employed by Congress demonstrate that it was conferring specific authorization on the Commission to judge and determine whether statutes passed before the date on which the TSUS were finally published constituted changes in tariff treatment which required modification of the TSU.S. We think it rationally deducible that the Commission decided that Public Law 86-795 was not a change in tariff treatment, or if it were a change, it was not such which required a change in the tariff schedules. It is our view that neither by way of omission or commission did the Commission act beyond the scope of its authority in deciding that Public Law 86-795 did not require the incorporation of a provision for waterproof cloth into the tariff schedules. What it did was in the proper exercise of the powers conferred on it by Congress.

While we do not deem it necessary to a resolution of the issues here presented to discuss in extenso the matter of legislative history including Congressional debate and observations, suffice it to say that in our view the legislative history of section 101(b) amply supports the conclusion that Congress intended that the Commission use its discretion in determining whether certain changes were to be made in the tariff schedules. The joint statement of both the House Ways and Means Committee and the Senate Finance Committee supports this conclusion. That statement is as follows:

The only changes which can be made in the tariff schedules, after the enactment of this bill, will be those which the Tariff Commission finds are required to he made by virtue of legislation, court decisions, or authoritative administrative decisions, all of which necessarily must be reflected in the new tariff schedules. Certain other changes, such as those necessary to correct errors or inadvertent omissions or to clarify language cannot be made until reviewed by Congress. [House Report No. 1415 (87th Cong.), page 4; Senate Report No. 1317 (87th Cong.), page 4, U.S.Code Cong. & Admin.News, p. 1644.] [Emphasis supplied.]

We are of the opinion that the statute itself as well as the Senate and House reports is convincing that it was within the Tariff Commission’s discretion to determine if Public Law 86-795 was a change in the tariff treatment which required a change in the new tariff schedules. It is not within the province of this court to say whether such discretion was prudently conferred or wisely used.

It has long been held that where Congress has authorized a public officer to take some specified legislative action when in his judgment that action is necessary or appropriate to carry out the policy of Congress, the judgment of the officer as to the existence of the facts calling for that action is not subject to review. [United States v. George S. Bush & Co., 310 U.S. 371, 60 S.Ct. 944, 84 L.Ed. 1259 (1940).]

We therefore find that the Tariff Commission had to determine the effects of Public Law 86-795 upon the 1930 provision for waterproof cloth and upon the proposed TSUS, and its use of discretion in not modifying the tariff schedules to provide eo nomine for waterproof cloth is not subject to being judicially disturbed absent an abuse of that discretion.

As to the question of which TSUS item applies to the imported merchandise, we agree with the Customs Court that the importations at bar are properly classifiable as plain back velveteen in item 346.24 of the TSU.S. In regard to alternative items under which appellant seeks classification, we adopt the reasoning of the Customs Court where it was stated:

Since the parties have agreed that the velveteen in question is a pile fabric, it is not classifiable, either directly or by similitude, under item 355.65 or 356.25, which specifically except pile fabrics. Nor is it classifiable under items 798.00, 798.50 * * * since the provision under which the goods were assessed most specifically describes the importation. Nor can they be admitted free of duty for the reason that there is a dutiable provision for velveteen validity [sic] in force.

The judgment of the Customs Court overruling the protest claims and sustaining the classification of the subject importations as plain back velveteen in item 346.24 of the TS.US is affirmed. Affirmed.

1 . 62 Cust.Ct. 572, C.D. 3828 (1969).