Court Opinion

ID: 8095806
Source: CourtListenerOpinion
Date Created: 2022-09-09 14:19:01.874039+00
Date Added: 2024-06-11T16:38:27.957273
License: Public Domain

DISSENTING OPINION
Cline, Judge:
I regret that I am unable to agree with the decision of my associates herein.
The importation in this case consisted of a 55-foot auxiliary schooner named “Keewatin” containing certain parts, such as, a marine engine, hardware, sails, steering gear, winch, and toilets, which were of American manufacture. It arrived at the port of Bar Harbor, Maine, from Newfoundland under its own power.
It appears from the official papers that the parts which were of American origin were shipped to the plaintiff herein in Newfoundland where they were used for outfitting the yacht. The appraiser found, after making a correction for an error in the invoice, that the value of the American goods returned which had not lost their identity was $4,245 and the value of the goods of foreign origin was $12,755.
The collector assessed duty at the rate of 30 per centum ad valorem on $12,755 under paragraph 370 of the Tariff Act of 1930 and allowed free entry to the balance as American goods returned under paragraph 1615 (a), as amended. The plaintiff claims that duty should have been assessed on the $12,755 at the rate of 15 per centum ad valorem under paragraph 370, as amended by the trade agreement with Canada, T.D. 49752.
The pertinent provisions of said tariff act and trade agreement are as follows:
Par. 370. Airplanes, hydroplanes, motor boats, and parts of the foregoing, 30 per centum ad valorem. The term “motor boat,” when used in this Act, includes a yacht or pleasure boat, regardless of length or tonnage, whether sail, steam, or motor propelled, owned by a resident of the United States or brought *109into the United States for sale or charter to a resident thereof, whether or not such yacht or boat is brought into the United States under its own power, * * *.
Pah. 370 [as amended by T. D. 49752]. Motorboats, including yachts or pleasure boats, whether sail, steam, or motor propelled, valued at not more than $15,000 each, 15% ad val.
Par. 1615 [as amended by the Customs Administrative Act of 1938, 52 Stat. 1092], (a) Articles, the growth, produce, or manufacture of the United States,' when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means.
The issue in tbe case is, therefore, whether the collector properly used the rate applicable to yachts valued at over $15,000 in assessing duty on the portion of the importation of foreign origin valued at $12,755. In allowing free entry to the parts which were of American origin, the collector determined that they were separable and that they had not been advanced in value or improved in condition. Nevertheless, in determining the rate to be applied, he considered the importation as an entirety valued at $17,000.
It has been held that where an importation consists partly of articles which are dutiable and partly of articles which are nondutiable, it should not be considered an entirety provided its component parts may be constructively separated for duty purposes. Hillhouse v. United States, 152 Fed. 163, T. D. 27831, certiorari denied 208 U. S. 615; Denike v. United States, 5 Ct. Cust. Appls. 364, T. D. 34553; T. D. 45320 (4); T. D. 51193 (2).
Hillhouse v. United States, supra, involved a provision of the Tariff Act of 1897 which provided for free entry of household effects of persons from foreign countries if actually used abroad by them not less than 1 year. The importation consisted of an automobile which had been purchased abroad, used 4 months there, brought here, then taken abroad again and used 9 months, then returned here after extensive repairs had been made on it. The court said:
* * * As to so much, of the machine as was a new manufacture which had not been used abroad for a year, duty was properly exacted; but when the value of such new manufacture is easily determinable there seems no good reason for requiring so much of it as has been used abroad for the requisite time to pay duty also.
Denike v. United States, supra, involved an importation consisting of wheels and axles of American manufacture with tires made in Germany attached thereto which had been shipped to Mexico for alterations. It was held that the goods were not dutiable as entireties; that the wheels and axles were entitled to free entry; and that the tires were dutiable. The court said (pp. 365-6):
Having in mind the purpose of Congress to favor goods the growth, produce, or manufacture of the United States, we think that merchandise imported into the country made up in part of American goods entitled to free entry and in part of goods not entitled to free entry should not be assessed for duty as entireties if the components of the importation are in fact distinct articles and so distin*110guished one from the other that their several dutiable quantities, weights, measures, or values may be correctly ascertained. * * * This conclusion is supported by the principle laid down in the case of Hillhouse v. United States (152 Fed., 163), in which it was held that an automobile entitled to free entry when exported from the United States was not dutiable as an entirety on reentry by reason of new parts added while abroad and that the additions only were subject to duty. The Government contends that Hillhouse v. United States was distinguished in United States v. Auto Import Co. (168 Fed., 242), by Judge Lacombe, who announced the opinion of the court in both cases. Judge Lacombe did distinguish the two cases and did say in the Auto Import Co. case that it would be an unreasonable extension of the proposition in the Hillhouse case “to hold that importations dutiable at some particular rate as completed articles may be constructively separated for duty purposes into parts subject to different classifications.” Judge Lacombe did not say, however, that an importation made up in part of dutiable articles of foreign origin and in part of non dutiable articles of American origin was dutiable as an entirety, and the language used by him went no farther [sic], in our opinion, than to indicate that the doctrine of Hillhouse v. United States could not in any event be extended to completed articles, all the constituents of which were dutiable. [Italics quoted.]
Auto Import Co. v. United States, 168 Fed. 242, T. D. 29599, referred to in the Denike case, involved automobiles imported in crates, each crate containing a complete machine including four tires, which were not placed on the wheels. The entire importation, being dutiable and of foreign origin, was held to be dutiable as an entirety.
Since the importation here consists of articles of American origin and articles of foreign origin which are in fact distinct articles and whose quantity, weights, measures, and values may be ascertained, the principles announced in the Denike case apply. Therefore, the merchandise may not be assessed with duty as an entirety.
Section 503 (c) of the Tariff Act of 1930 provides:
For the purpose of determining the rate of duty to be assessed upon any merchandise when the rate is based upon or regulated in any manner by the value of tie merchandise, the final appraised value shall (except as provided in section 562 of this Act) be taken to be the value of the merchandise.
In the instant case the appraiser found the value of the portion of foreign origin to be $12,755. This is the final appraised value of the merchandise upon which duty is to be assessed. The rate to be used, therefore, is the rate applicable to yachts valued at not more than $15,000, namely, 15 per centum ad valorem under paragraph 370 of the Tariff Act of 1930, as amended by the trade agreement with Canada, T. D. 49752.
The protest should be sustained and the collector directed to assess duty on $12,755 at 15 per centum ad valorem under paragraph 370, as amended.