Benrus Watch Co. v. United States

Graham, Presiding Judge,

delivered the opinion of the court:

At various times during the years 1928 and 1929, the appellants ' imported shipments of incomplete watch movements from Switzerland. The various parts of the movements were separately invoiced, but each invoice gave a single invoice value for the various parts of the movements contained in that shipment.

The collector in each case classified the same for duty as 15 jewel watch movements, at $2 each, under the appropriate provision of paragraph 367 of the Tariff Act of 1922.

The importers protested, claiming the goods to be dutiable as parts of watches, at 45 per centum ad valorem under said paragraph, or, alternatively, as jewels, at 10 per centum ad valorem under the same paragraph, or at 3 cents per dial and 45 per centum ad valorem under the same paragraph. The two latter claims are not pressed here.

The trial court overruled the protests. In so doing, speaking in a well-considered opinion through Dallinger, Judge, the court held that the watch movements imported were incomplete, and hence were not dutiable as watch movements under said paragraph 367. The court also held that they were not dutiable as parts of watches, relying upon United States v. Hengerer Co., 15 Ct. Cust. Appls. 390, T. D. 42568. The court further held, on the authority of the case last cited, that the goods were dutiable under the provisions of paragraph 368 of said act, under the language—

any device or mechanism having an essential operating feature intended for measuring time * * *, any of the foregoing * * * partly complete * * *.

The trial court, having determined that the goods were so properly classifiable, overruled the protest upon the ground that the protestants had not made the proper claim, and that the collector’s classification must therefore stand. From that judgment the importers have appealed, contending here, as they contended in the court below, that the imported articles are dutiable as parts of watches, under said paragraph 367.

It appears from the testimony that certain of the imported goods, when purchased, were complete watch movements. The importers then caused the balance wheels and main springs to be removed from these movements. These are referred to in the evidence, and stipulated to be as represented by Exhibits A and B. As to another class of the imported articles, illustrated by Exhibit C, the ratchet wheels and ratchet-wheel screws were not parts of the movements which were purchased, but were purchased separately, the intention being to insert *141them into these watch movements after importation. It is stated by the importers, and does not seem to be controverted, that the class of articles covered by Exhibits A and B are those referred to in protest 36161ñ-G, and that the second class of goods is covered by all the remaining protests.

It is stated by the court below, in its findings of fact, and not controverted by either of the parties, that—

The named missing parts were imported as separate entities in a different steamer from that containing the incomplete movements.

The essential portions of paragraph 367 and 368 are as follows:

Pah. 367. Watch movements, whether imported in cases or otherwise, assembled or knocked down, * * * having more than eleven and not more than fifteen jewels, $2 each; * * * watchcases and parts of watches, chronometers, box or ship, and parts thereof, 45 per centum ad valorem; all jewels for' use in the manufacture of watches, clocks, meters, or compasses, 10 per centum ad valorem; enameled dials for watches or other instruments, 3 cents per dial and 45 per centum ad valorem: * * *
Par. 368. Clocks and clock movements, including lever clock movements, and clockwork mechanisms, cased or uncased, whether imported complete or in parts, and any device or mechanism having an essential operating feature intended for measuring time, distance, or fares, or the flowage of water, gas, electricity, or similar uses, or for regulating or controlling the speed of arbors, drums, disks, or similar uses, or for recording, indicating, or performing any operation or function at a predetermined time or times, any of the foregoing whether wholly or partly complete or knocked down (in which condition they shall be appraised at the valuation of the complete article); cases and casings for clockwork mechanisms imported separately; all the foregoing, 45 per centum ad valorem; and in addition thereto, upon any of the foregoing articles or parts thereof, having jewels, but not more than two jewels, in the escapement, $1 each; having more than two but not more than four jewels, $2 each; having more than four jewels, $4 each; * * *.

The burden was upon the importers to show not only that the classification by the collector of the imported goods as watch movements was wrong, but that they should have been.classified as parts of watches, all under said paragraph 367. If they have failed to do so, the protest was properly overruled. Whether this has been done includes the consideration of a number of questions raised by counsel on both sides.

The importers argue, and the trial court held, that the imported goods could not be considered dutiable as watch movements because they were not complete; that said paragraph 367 does not provide for parts of watch movements, and that, hence, such parts must be held to be excluded therefrom. This is the rule, as announced by this court. Murphy & Co. v. United States, 13 Ct. Cust. Appls. 256, T. D. 41201, and cases therein cited.

They could not, either, be considered as entireties for dutiable-purposes, under the authorities. As to those parts which were-separately purchased and imported, there can be little question. As. *142to those completely assembled movements from which parts were abstracted, the record establishes that the movements and parts were imported at different times on different vessels. The dutiable status of these goods, as entireties, is controlled by the leading case, United States v. Schoverling, 146 U. S. 76. There, gunstocks were imported, which were classified for duty as guns. It was shown they were to be fitted with barrels, separately imported. The Supreme Court held they were not dutiable as guns. In the course of the opinion by Blatchford, Judge, this was said:

* * * It nowhere appears that these gunstocks had formed part of completed guns in Europe, nor was the question of the importation of the barrels for the guns involved. In the present case, the dutiable classification of the gun-stocks imported must be ascertained by an examination of them in the condition in which they are imported. Worthington v. Robbins, 139 U. S. 337.

The doctrine of entireties is a familiar one in customs laws.' However, we are unaware of any case where parts of articles, even though originally assembled, which were imported at different times and on different vessels, were ever held to be entireties for tariff purposes. Examples of the cases where the doctrine has been applied are Altman & Co. v. United States, 13 Ct. Cust. Appls. 315, T. D. 41232; Salemi & Sons v. United States, 19 C. C. P. A. (Customs) 43, T. D. 44892; United States v. Irwin, et al., 78 Fed. 799.

In the case last cited, the court thus commented upon the administrative and legal difficulties involved in an attempt to classify as entireties parts of an article, separately imported:

When the barrels and stocks are shipped upon different vessels, it may happen that they can never be assembled together again as a complete gun. The dangers of navigation and other contingencies may intervene to prevent it. It is not for the customs officers, in imposing duties, to speculate upon these contingencies. They must take the articles as they find them to be upon examination. If they can not, by assembling them together, discover that they are really a different thing, it is their duty to classify them as the article they purport to be.

The goods could not, therefore, be properly classified as watch movements, under the entireties doctrine.

Said paragraph 367, it will be observed, provides for “watch movements * * * assembled or knocked down.” It may be suggested that when the importers bought completely assembled watch movements, partially disassembled them, and imported them, they were importing “knocked down” watch movements. This might well be true if all parts were imported at the same time, even in separate packages. When, however, only a part of the disassembled movement is imported, it is not a complete movement, but a part thereof, and hence is not provided for in this paragraph as watch movements, “knocked down.” See United States v. Hannevig, 10 Ct. Cust. Appls. 124, T. D. 38384.

*143We next inquire as to tbeir dutiability as “parts of watches,” under said paragraph. That they are, in fact, parts of watches, can not be denied. But are they, in a tariff sense, parts of watches? We have held to the contrary in United States v. Hengerer Co., 15 Ct. Cust. Appls. 390, T. D. 42568. In that case we called attention to the fact that a clear tariff distinction had been made by the Congress between watch movements and watch parts, and said:

The merchandise involved is conceded to be watch movements. They are not, therefore, parts of watches for tariff purposes.

It is true, in the case last cited, the watch movements were completely assembled. But it can not be discerned wherein this distinguishes that case from the one at bar. The articles imported here are watch movements, incomplete, but watch movements nevertheless. They have ceased to be mere “parts,” but are assembled with gearing, jewels, plates, and other parts, until they have become those entities known as watch movements.

In United States v. Hengerer Co., supra, referring to the language of said paragraph 3#68—

* * * any device or mechanism having an essential operating feature intended for measuring time, * * * wholly or partly complete * * * having more than four jewels, * * *,

we held that “a watch movement answers exactly to that description.” It will be observed, also, that said paragraph 368 provides for such mechanisms “partly complete.” Therefore, the language applies exactly to an incomplete watch movement.

The goods were therefore properly classifiable under said paragraph 368. However, the importers having failed to make a proper protest, the original classification of the collector must stand, without approval of its correctness.

It is argued by the importers that by such a conclusion, in other cases, the importers might be compelled to pay a higher duty upon an incomplete watch movement than upon a complete one. The importers have a right to so prepare their goods for importation that they may obtain a more favorable rate of duty. It may be observed, however, that in so doing, they should also have in mind the. other provisions of the law, which may apply to such goods, when so altered in dutiable character.

The judgment of the United States Customs Court is in all things affirmed.