Court Opinion

ID: 8109117
Source: CourtListenerOpinion
Date Created: 2022-09-09 14:36:45.343577+00
Date Added: 2024-06-11T16:38:44.325616
License: Public Domain

DISSENTIN' G OPINION
Mollison, Judge:
The issue in the case at bar is whether the quota or nonquota rate under paragraphs 1108 and 1109(a), Tariff Act of 1930, as modified by the Presidential proclamation relating to the General Agreement on Tariffs and Trade, T.D. 51802, is to be used in the liquidation and payment of the duties on merchandise as to which privileged status was secured under the first proviso to section 3 of the Foreign-Trade Zones Act, as amended (19 U.S.C. § 81c), at a time when an annual import quota had not been filled.
In the determination of the issue, the majority has adopted the view of the defendant, that is to say, that because the merchandise was not, at the time privileged status was secured, being then “entered, or withdrawn from warehouse, for consumption,” it was not entitled to be liquidated at the quota rate, although the quota at that time had not been filled. I do not agree with this view, nor do I agree with the view taken by the plaintiff that the Foreign-Trade Zones Act and the regulations promulgated pursuant thereto required liquidation and payment of duties at the quota rate regardless of whether the quota had been exhausted at the time when the merchandise actually entered the United States.
*116I agree with the majority in its view that in the disposition of this matter the Foreign-Trade Zones Act must be read in connection with the Trade Agreements Act and the proclamations issued thereunder in order properly to arrive at the intent of the legislature with respect to the rates of duty to be applied to quota merchandise.
It is clear that the first proviso to section 3 of the Foreign-Trade Zones Act was intended to give to importers who complied with its provisions the benefit of the rates of duty in force and effect at the time privileged status was secured. In my view, however, that means that such importers were to be saved from the effects of future changes in tariff rates which might be made by legislative action or by Presidential proclamation subsequent to the time when the privileged status was secured. It was not intended to “freeze” any rates which were, at the time the privileged status was secured, subject to future change by reason of the filling of annual quotas or the passage of time, which rates and which changes had previously been fixed, by legislative action or by Presidential proclamation.
It might be made to appear, from a very strict, literal reading of the Foreign-Trade Zones Act, as amended, alone, that what is required thereby is the unconditional adoption of the precise rate of duty which is in effect at the time of filing the proper papers with the collector to secure privileged status. This is, in fact, just what the plaintiff claims in this case.
However, it must be kept in mind that the Foreign-Trade Zones Act and the Trade Agreements Act and its various amendments and extensions, and the proclamations issued thereunder (including that relating to the General Agreement on Tariffs and Trade, which is directly involved in this case), must be read together, and, if possible, interpreted so as to avoid conflict with each other.
Having done this, I conclude that it was not the intention of the act later in date, the Foreign-Trade Zones Act, to repeal or nullify the provisions of the earlier acts or the proclamations issued thereunder, and, specifically, I do not think that any of the acts or proclamations involved contemplated that the benefit of the reduced quota rates should be extended to any merchandise which is not actually “entered, or withdrawn from warehouse, for consumption” at the time the reduced quota rates are in effect.
The reduced quota rate applicable to wool such as that at bar, as set forth in the Presidential proclamation relating to the General Agreement on Tariffs and Trade, reported in T.D. 51802, and quoted in the majority opinion, is specifically and expressly, by the terms of the proclamation itself, made applicable only to merchandise which has been entered, or withdrawn from warehouse, for consumption.
At the conclusion of the recitals in the said proclamation, the announcement sets forth that—
*117* * * I, Harry S. Trtjman, President of the United States of America, to the end that said trade agreement may be carried out and acting under the authority of the said sections 304 and 350 of the Tariff Act of 1930, as amended, do hereby proclaim, * * * such modifications of existing duties and other import restrictions of the United States of America and such continuance of existing customs or excise treatment of articles imported into the United States of America as are specified or provided for in parts I, II, and III, annexes D, H, and I, and part I of, and the general notes in, schedule XX of said general agreement * * *. [Italics added.]
Paragraph 3 of the general notes in schedule XX reads as follows:
3. Wherever in this Schedule the word “entered” is used in any quota or seasonal-rate provision, it shall mean “entered, or withdrawn from warehouse, for consumption.”
Quite obviously, therefore, it was intended to apply the reduced quota rate only to merchandise which was actually entered, or withdrawn from warehouse, for consumption, and I am satisfied that it was not the purpose of the Foreign-Trade Zones Act to make any change in this intention.
The constructions of the laws sought here by both the plaintiff and the defendant must result in a frustration of one law or the other. The construction sought by the plaintiff would nullify that part of the Presidential proclamation relating to the general agreement which extends the reduced quota rate only to merchandise which has been entered, or withdrawn from warehouse, for consumption. The construction sought by the defendant would nullify that part of the proclamation which extends the reduced rate to merchandise which has been actually entered, or withdrawn from warehouse, for consumption prior to the time when the quota was exhausted, and would also nullify that part of the Foreign-Trade Zones Act which requires liquidation of the duties on privileged merchandise on the basis of the rates in effect at the time privileged status is secured.
I believe that there is a way both laws may be construed to be in harmony with each other and which assures the benefits of both laws to all parties.
It is a familiar device of tariff legislation to accord reduced rates of duty, or even free entry, to imported merchandise upon the condition of the happening of some act or event in the future. It is my view that what was intended by the laws here in question, when read and construed together, calls for the application of such treatment to the quota situation in respect of merchandise which has secured privileged status under the Foreign-Trade Zones Act.
In other words, a procedure which would have been correct under all the laws in question would have been to liquidate the zone customs entry at the reduced quota rate as to both bales involved, subject to the conditions that, prior to the expiration of the quota, the merchandise (1) be sent into customs territory, and (2) the duties so liquidated be paid.
*118As to all merchandise concerning which the two conditions were not met prior to the expiration of the quota, payment would be required to be made, under the same liquidation, at the nonquota rate when, or if, the merchandise was sent into customs territory.
As indicated in Bureau of Customs circular letter, dated March 3, 1958 (reference C.C. 343.3), referred to in paragraph (9) of the stipulation herein, the plaintiff’s woven woolen fabrics were assessed with duty at the nonquota rates of 45 per centum ad valorem plus 37% cents per pound whether or not the said merchandise was “entered” during the life of the 1958 quota. Bale No. 9522 was assessed by the collector at the higher, nonquota, rate at a time when the quota had not been exhausted, even though bale No. 9522 had a status as “privileged foreign merchandise” and, having met the conditions of entry into customs territory and payment of duties, was entitled to the benefit of the lower trade agreement quota rate.
In conformity with the departmental or Bureau circular letter, referred to above, the collector of customs denied the plaintiff the benefit of the reduced quota rate as to the woven woolen fabrics in bale No. 9522. The collector arbitrarily and unlawfully applied the higher nonquota rate to the plaintiff’s goods and gave to some other importers (i.e., those who entered or withdrew their goods from warehouse for consumption) the benefit of the lower quota rate, while denying the plaintiff the benefit of the same rate, thus depriving the plaintiff of the equal protection of the laws and, likewise, due process of law as required by the fifth amendment to the Constitution.
By the aforesaid action, the plaintiff was likewise deprived of the benefit of the Foreign-Trade Zones Act and the privileged status of merchandise under the said statute and the regulations made and , promulgated thereunder. Cf. Truax v. Corrigan, 257 U.S. 312, 332, 333, 339. See also Iowa-Des Moines National Bank v. Bennett, Chairman, 284 U.S. 239.
For the foregoing reasons, I would support a judgment in favor of the plaintiff in respect of the merchandise contained in bale No. 9522, and in favor of the defendant in respect of the merchandise contained in bale No. 9523. To the extent indicated, I therefore dissent from the decision and judgment rendered by my colleagues.