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Mitsubishi International Corp. v. United States

July 08, 1999

MITSUBISHI INTERNATIONAL CORPORATION, PLAINTIFF-APPELLANT,
v.
UNITED STATES, DEFENDANT-APPELLEE.



Before Mayer, Chief Judge, Rich, *fn1 * Circuit Judge and Smith, Senior Circuit Judge.

The opinion of the court was delivered by: Mayer, Chief Judge.

Appealed from: United States Court of International Trade Chief Judge Gregory W. Carman

Mitsubishi International Corporation ("Mitsubishi") appeals the April 9, 1998 judgment of the United States Court of International Trade, Docket No. 95-05-00695, Mitsubishi International Corp. v. United States, 5 F. Supp. 2d 991 (Ct. Int'l Trade 1998) ("Mitsubishi II"), which granted the United States Customs Service's ("Customs") motion for summary judgment dismissing Mitsubishi's challenge to Customs' classification of its merchandise. Because the Court of International Trade correctly interpreted Note 2(a) of Section XVI of the Harmonized Tariff Schedule of the United States (1990) ("HTSUS") and properly classified Mitsubishi's merchandise, we affirm.

Background

In five shipments during 1990 and 1991, Mitsubishi imported twenty-five parts of a continuous steel casting machine from Japan. Continuous steel casting converts liquid steel into a solid slab without interrupting the production process.

Mitsubishi entered its parts under subheading 8454.90.00 of the HTSUS, which allows importation free of duty for "[c]onverters, ladles, ingot molds and casting machines, of a kind used in metallurgy or in metal foundries, and parts thereof: Parts . . . Of casting machines." See Mitsubishi II, 5 F. Supp. 2d at 995. In contrast, Customs classified the parts under several different subheadings that covered the identity and function of each article. See id. Mitsubishi paid all liquidated duties that were due and challenged the classifications in the Court of International Trade. See id. at 996. In 1997, both Mitsubishi and Customs moved for summary judgment.

Earlier, in a 1993 judgment for Mitsubishi, the Court of International Trade classified similar merchandise as parts of a continuous steel casting machine. See Mitsubishi Int'l Corp. v. United States, 829 F. Supp. 1387 (Ct. Int'l Trade 1993) ("Mitsubishi I"). The parts had been imported pursuant to the Tariff Schedule of the United States ("TSUS"), which provided, under General Rule of Interpretation 10(ij), that "a provision for `parts' of an article covers a product solely or chiefly used as a part of such article, but does not prevail over a specific provision for such part." Because the parts were not specifically provided for under a separate subheading, the Court of International Trade classified them as parts of a continuous casting machine. See id. at 1395.

Mitsubishi argued in its 1997 motion that Mitsubishi I was controlling. However, the Court of International Trade held that the new language of the HTSUS required a different result. See Mitsubishi II, 5 F. Supp. 2d at 1003. In particular, HTSUS Additional Rule of Interpretation 1(c) applies a specificity analysis to classifications only "[i]n the absence of special language or context." The Court of International Trade found that Note 2(a) of Section XVI-"Parts which are goods included in any of the headings of chapters 84 and 85 . . . are in all cases to be classified in their respective headings"-provides such language. Id. Thus, the specificity analysis employed in Mitsubishi I was no longer applicable.

Because all but one of Mitsubishi's parts could be classified under individual headings, the Court of International Trade granted summary judgment to Customs for twenty-four parts and Mitsubishi for one part. See 5 F. Supp. 2d at 1019-20. Mitsubishi appeals. *fn2

Discussion

We review the Court of International Trade's grant of summary judgment "for correctness as a matter of law, deciding de novo . . . whether genuine issues of material fact exist." See New Zealand Lamb Co. v. United States, 149 F.3d 1366, 1367 (Fed. Cir. 1998) (internal citations omitted). Traditionally, we also interpret tariff provisions de novo. See Sharp Microelectronics Tech., Inc. v. United States, 122 F.3d 1446, 1449 (Fed. Cir. 1997). *fn3

Mitsubishi argues that the specificity analysis used to classify its parts in Mitsubishi I is still controlling. We disagree. That judgment interpreted provisions of the TSUS and does not apply to classifications made under differing language of the more recently enacted HTSUS. See Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1367 (Fed. Cir. 1998) ("We can safely assume that Congress changed the language for a reason.").

Mitsubishi also contends that the HTSUS, by itself, requires the use of a specificity analysis when classifying its parts. The HTSUS, in Additional U.S. Rule of Interpretation 1(c), states that "[i]n the absence of special language or context which otherwise requires-(c) a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for `parts' or `parts and accessories' shall not prevail over a specific provision for such part or accessory." The Court of International Trade held that "special language" precluding this specificity analysis exists. We agree.

Note 2(a) of Section XVI provides that "[p]arts which are goods included in any of the headings of chapters 84 and 85 . . . are in all cases to be classified in their respective headings." This provision is "special language or context" that renders Rule of Interpretation 1(c) inapplicable to the extent that they conflict. Cf. Clarendon Mktg., Inc. v. United States, 144 F.3d 1464, 1469 (Fed. Cir. 1998) (holding that "there is no special language or context here that can be said to require a reversal of the ...


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