B-153677, JUN. 26, 1964

B-153677: Jun 26, 1964

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FOR THE SERVICES PERFORMED YOU ORIGINALLY CLAIMED AND WERE PAID CHARGES IN THE AMOUNT OF $4. ON AUDIT OF THE PAYMENT VOUCHER IN OUR OFFICE IT WAS CONSIDERED THE GOVERNMENT HAD BEEN OVERCHARGED IN THE AMOUNT OF $1. YOU REFER TO THE COMBINATION ARTICLES RULE IN ITEM 700 OF THE TARIFF PROVIDING THAT ARTICLES WHICH HAVE BEEN COMBINED OR ATTACHED TO EACH OTHER WILL BE CHARGED AT THE HIGHEST RATE PUBLISHED IN THE TARIFF APPLICABLE ON ANY ARTICLE CONTAINED IN THE COMBINATION OF ARTICLES AND CONTEND THAT THE ARTICLES ARE PROPERLY CLASSIFIED AS FREIGHT HIGHWAY VEHICLES WITH BUILT-IN OR PERMANENTLY ATTACHED MACHINERY OR MACHINES. WE HAVE CONCLUDED THAT THIS ITEM IS A SINGLE INTEGRATED PIECE OF MACHINERY.

B-153677, JUN. 26, 1964

TO SOUTHERN PACIFIC COMPANY:

IN YOUR LETTER OF FEBRUARY 28, 1964, FILE YM 85-D-69121-M, YOU REQUEST REVIEW OF GENERAL ACCOUNTING OFFICE SETTLEMENT CERTIFICATE DATED JANUARY 24, 1963, CLAIM NO. TK-749302, BY WHICH WE DISALLOWED YOUR CLAIM PER SUPPLEMENTAL BILL NO. D-69121-M FOR ADDITIONAL FREIGHT CHARGES IN THE AMOUNT OF $1,564.73 ALLEGED TO BE DUE FOR THE TRANSPORTATION OF TWO SHIPMENTS DESCRIBED AS DISTRIBUTORS WATER, TRUCK MOUNTED, IN SINGLE CARLOAD SERVICE UNDER BILL OF LADING AF-5689598; AND IN MIXED SHIPMENT WITH OUTFITS, PUMPING, TRAILER-MOUNTED, UNDER BILL OF LADING AF-568599, BOTH DATED SEPTEMBER 27, 1955.

FOR THE SERVICES PERFORMED YOU ORIGINALLY CLAIMED AND WERE PAID CHARGES IN THE AMOUNT OF $4,304.15 COMPUTED ON THE BASIS OF A COMMODITY RATE OF $5.22 PER 100 POUNDS APPLYING ON FREIGHT HIGHWAY VEHICLES WITH BUILT-IN OR PERMANENTLY ATTACHED MACHINERY OR MACHINES, N.O.S., AND ON VEHICLE TRAILERS WITH BUILT-IN AND PERMANENTLY ATTACHED MACHINERY OR MACHINES, N.O.S., AS PUBLISHED IN ITEM 8205 OF TRANS-CONTINENTAL FREIGHT BUREAU TARIFF NO. 1-D, I.C.C. 1564, PLUS A 15 PERCENT INCREASE. ON AUDIT OF THE PAYMENT VOUCHER IN OUR OFFICE IT WAS CONSIDERED THE GOVERNMENT HAD BEEN OVERCHARGED IN THE AMOUNT OF $1,564.73, THE AMOUNT PRESENTLY RECLAIMED, COMPUTING FREIGHT CHARGES ON THE BASIS OF COMMODITY RATES OF $3.65 AND $3.05 PER 100 POUNDS, SUBJECT TO MINIMUM WEIGHTS OF 30,000 AND 40,000 POUNDS, RESPECTIVELY, APPLYING ON MACHINERY OR MACHINES, NOIBN, AND ON PUMPING OUTFITS OR PUMPS, LIQUID OR GAS, IN ACCORDANCE WITH ITEM 6150 OF TCFB TARIFF 1 D.

IN YOUR PRESENT LETTER YOU ALLEGE THAT ITEM 6150 WOULD NOT APPLY ON THE ITEMS IN THE PRESENT SHIPMENT PARTICULARLY SELF-PROPELLED WATER DISTRIBUTORS. YOU REFER TO THE COMBINATION ARTICLES RULE IN ITEM 700 OF THE TARIFF PROVIDING THAT ARTICLES WHICH HAVE BEEN COMBINED OR ATTACHED TO EACH OTHER WILL BE CHARGED AT THE HIGHEST RATE PUBLISHED IN THE TARIFF APPLICABLE ON ANY ARTICLE CONTAINED IN THE COMBINATION OF ARTICLES AND CONTEND THAT THE ARTICLES ARE PROPERLY CLASSIFIED AS FREIGHT HIGHWAY VEHICLES WITH BUILT-IN OR PERMANENTLY ATTACHED MACHINERY OR MACHINES, N.O.S., UNDER ITEM 8205 OF TRANS-CONTINENTAL FREIGHT TARIFF NO. 1-D.

ALTHOUGH THE RECORD HERE DOES NOT DISCLOSE THE MANUFACTURER OF THE WATER DISTRIBUTORS SHIPPED, THE SPECIFICATIONS FOR SIMILAR WATER DISTRIBUTORS PURCHASED BY THE GOVERNMENT INDICATE THAT THEY CONSTITUTE A SPECIALIZED PIECE OF MACHINERY DESIGNED PRIMARILY TO OPERATE AS A SINGLE UNIT FOR SOIL STABILIZATION WORK ACCOMPLISHED BY THE APPLICATION OF MEASURED QUANTITIES OF WATER OR OTHER LIQUID OF SIMILAR VISCOSITY TO SURFACES PREPARED WITH CEMENT OR OTHERWISE. WE HAVE CONCLUDED THAT THIS ITEM IS A SINGLE INTEGRATED PIECE OF MACHINERY, AND THAT THE COMBINATION ARTICLES RULE DOES NOT APPLY UNDER THESE CIRCUMSTANCES. SEE HARRISON CONSTRUCTION COMPANY V. CINCINNATI N.O. AND T.P.RY.CO., 266 I.C.C. 313; OAKLAND TRUCK SALES CO. V. BALTIMORE AND O.RR.CO., 270 I.C.C. 548; AUGUST PLANTS, INC. V. LONG ISLAND RR.CO., 281 I.C.C. 172.

THIS ISSUE CONCERNING WHETHER WATER DISTRIBUTORS ARE PROPERLY CLASSIFIED UNDER MACHINERY OR MACHINES, NOIBN, OR AS FREIGHT HIGHWAY VEHICLES WITH BUILT-IN OR PERMANENTLY ATTACHED MACHINERY OR MACHINES IS PRESENTLY INVOLVED IN LITIGATION IN GREAT NORTHERN RY.CO. V. UNITED STATES, CT.CL. NO. 76-62, UNION PACIFIC RR.CO. V. UNITED STATES, CT.CL. NO. 27-62, AND ATCHISON, T. AND F.RY.CO., V. UNITED STATES, CT.CL. NO. 238-62. A SIMILAR ISSUE IS ALSO INVOLVED IN SEABOARD AIR LINE RR.CO. V. UNITED STATES, CT.CL. NO. 119-62, AND ATLANTIC COAST LINE RR.CO. V. UNITED STATES, CT.CL. NO. 91-62. THE COURT OF CLAIMS HAS REFERRED THIS ISSUE IN THESE TWO LETTER CASES TO THE INTERSTATE COMMERCE COMMISSION FOR ADMINISTRATIVE DETERMINATION AS TO THE APPLICABLE CHARGE BASIS, AND THE QUESTION IS BEING HANDLED UNDER I.C.C. DOCKET NOS. 34284 AND 34282, SUB. 1.

NO NEW EVIDENCE OR ARGUMENT HAS BEEN PRESENTED WHICH WOULD WARRANT A MODIFICATION OF OUR PREVIOUS CONCLUSIONS AS TO THE BASIS PROPERLY APPLICABLE ON WATER DISTRIBUTORS PARTICULARLY IN VIEW OF THE PENDING LITIGATION. ACCORDINGLY OUR DISALLOWANCE OF YOUR CLAIM FOR THE TRANSPORTATION FREIGHT CHARGES, ON SUCH WATER DISTRIBUTORS, APPEARS TO BE CORRECT AND IS SUSTAINED. HOWEVER, SHOULD THE FINAL DECISION OF SUCH ISSUE IN THE COURTS BE ADVERSE TO THE GOVERNMENT'S POSITION, WE WILL BE PLEASED TO GIVE THE MATTER FURTHER CONSIDERATION AT YOUR REQUEST.

CONCERNING THE PROPER CHARGE FOR THE TRANSPORTATION OF THE PUMPING OUTFITS, THE RECORD HAS BEEN RETURNED TO OUR TRANSPORTATION DIVISION FOR FURTHER DEVELOPMENT AND YOU WILL BE ADVISED OF OUR CONCLUSION RELATIVE THERETO AFTER FURTHER CONSIDERATION OF THE EXPANDED RECORD.