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Stewart-Warner Corp. v. United States

November 19, 1984

STEWART-WARNER CORPORATION, APPELLEE
v.
THE UNITED STATES, APPELLANT



Appealed from: Court of International Trade

Before Davis, Smith, and Nies, Circuit Judges.

Smith

SMITH, Circuit Judge.

In this customs case, the initial classification by the United States Customs Service of certain speedometers as "other" speedometers was rejected by the United States Court of International Trade, which held that they should be classified as "bicycle" speedometers. Appellant, the United States (Government), appeals the judgment of the Court of International Trade. We reverse.

Issues

The principal issue before this court is whether the trial court erred, as a matter of law, in holding that certain imported speedometers of a "bicycle-type," use primarily on exercisers, are "bicycle speedometers" within the meaning of item 711.93, Tariff Schedules of the United States (TSUS),*fn1 rather than "other" speedometers under TSUS 711.98. A secondary issue is whether the trial court clearly erred regarding certain factual findings concerning the description and use of the subject speedometers.

Background

Appellee Stewart-Warner Corporation (Stewart-Warner) is an American manufacturer of the subject speedometers and is seeking reclassification, on a prospective basis, of competing imported merchandise.*fn2 The judge below referred to this as a "rare event" in his court. We observe that the Government's prosecuting an appeal in this court that will reduced the rate of duty must be equally as rare.

The importer of the challenged entry is not a party to this action, but another importer, Diversified Products Corporation, has participated as amicus curiae. When the product entered this country the Customs Service classified it under TSUS 711.98, "other," a basket category covering certain "revolution counters" and similar items with a 1984 duty of 1.9 percent ad valorem for such products from most countries, as opposed to classifying it under TSUS 711.93, "bicycle speedometers and parts thereof," which carries a 1984 duty of 20.9 percent ad valorem for such items from most countries.*fn3 The lower court, after a 3-day trial on the issue, held against the Customs Service's classification and in favor of Steward-Warner's position that the product should be classified under the higher-duty "bicycle speedometer" provision, because that provision encompasses "bicycle-type" speedometers, including those primarily used on exercisers. The government has appealed here.

Regarding the product itself, we refer to it hereafter as the double-gear hub drive speedometer (double-gear speedometer), as have all the parties and the lower court. We set forth below precisely the factual description of the product as found by the trial court:*fn4

[T]he speedometers which are the subject of this action had not been invented at the time the new TSUS provision for bicycle speedometer was enacted in 1965. In the early 1970's, however, in response to a growing demand for a speedometer which could be mounted on the left side of either a bicycle or an exerciser, the Japanese developed the double-gear hub drive speedometer -- the subject of the present action.

The advantage of the double-gear hub drive speedometer vis-a-vis its single-gear counterpart it is capacity to give a clockwise speed indicator readout when mounted on the left side of a wheel. The single-gear speedometer can only give a clockwise readout when mounted on the right side of a wheel. Since, as a practical matter, the design of exercise cycles precludes mounting a speedometer on the right side of the wheel, the double-gear hub drive speedometer has been used primarily in conjunction with exercises, though it is perfectly suited for use on bicycles. Indeed, in all respects save one, this speedometer is physically identical with a single-gear bicycle speedometer, the one difference being that the former has the additional gear which permits it to function in a clockwise manner when mounted on the left side of a wheel. [Emphasis supplied.]

Stewart-Warner, which urges that this court affirm the lower court's holding that the double-gear speedometers are properly classified as "bicycle speedometers," nevertheless alleges error in a number of that court's factual findings. Hence we discuss further the facts ...


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