Court Opinion

ID: 9724349
Source: CourtListenerOpinion
Date Created: 2023-08-26 10:53:48.182983+00
Date Added: 2024-06-11T18:24:59.585353
License: Public Domain

NEWMAN, Judge,
concurring:
While I join in the opinion of Judge Richardson, which concludes that the remission of the commodity tax on the exportation of the subject Japanese consumer electronic products1 constitutes the bestowal of a bounty or grant under our countervailing duty law, I add this concurring opinion to that of Judge Boe to elaborate on my views concerning the pivotal issues raised in the briefs of the parties.
We are confronted with an issue of grave import affecting a broad spectrum of this nation’s international trade, as well as a substantial segment of the domestic industry in the United States. According to former Assistant Secretary of the Treasury David R. Macdonald, the remission of indirect (viz., consumption) taxes “is a universal practice, and one in which this Country engages, also! ”2 Moreover, Japan is one *250of the most important trade partners of the United States, and indeed is our second largest market for exports. Hence, it is needless to say that the United States has a vital and continuing interest in a harmonious trade relationship with Japan and its exporting community.
The United States has had a general countervailing duty statute since the Tariff Act of 1897,3 and importers have always been accorded the right to a judicial review of countervailing duty assessments by the Treasury Department. However, it was not until the amendment of section 516 of the Tariff Act of 1930 by sections 321(f)(1) and 331(b) of the Trade Act of 1974, Public Law 93-618 (1975), that American producers could obtain judicial review of a negative countervailing duty determination by the Secretary of the Treasury.4 This civil action is the first presented for decision under the court’s expanded jurisdiction under section 516, as amended. In overriding the Secretary’s negative determination, and directing the imposition of countervailing duties on the subject Japanese exports, this court is not oblivious to the possible ramifications concerning this country’s trade relations with Japan.5 However, the proper exercise of our judicial function requires that we interpret and apply the law unrestrained by extra-legal considerations more appropriately addressed to legislative policy. Predicated upon the broad, explicit, and mandatory terms of section 303, as amended, the clear intent of Congress and the unequivocal judicial construction of the statute by the Supreme Court, I agree with the conclusion that the commodity tax exemption or rebate on exportation of the involved electronic products from Japan constitutes the payment or bestowal of a bounty or grant subject to countervailing duties.
LEGISLATIVE HISTORY
Defendant heavily relies upon the legislative history of the countervailing duty provisions in the Tariff Acts of 1890, 1894 and 1897, contending such history demonstrates that nonexcessive tax remissions (i. e., refunds or rebates not exceeding the taxes paid by the producer to the foreign government) were not within the contemplation of Congress, and thus are excluded from the statute.
In the 1890 and 1894 provisions cited by defendant,6 countervailing duties were ap*251plicable only to importations of certain sugar. The 1894 statute contained a proviso which relieved an importer of the countervailing duty if he produced a certificate from the government of the country of exportation to the effect that no indirect bounty was received upon the sugar “in excess of the tax collected upon the beet or cane from which it was produced”, and that no direct bounty had been or was to be paid.
Unlike the countervailing duty'provisions in the Tariff Acts of 1890 and 1894 (which were applicable only to sugar), section 5 of the Tariff Act of 18977 generalized the countervailing duty concept, and made additional duties applicable to all dutiable importations. Further, there was no exception made in the 1897 statute for nonexcessive tax remissions similar to the proviso included in the 1894 sugar schedule provision. This 1897 generalized countervailing duty law was carried over (with certain amendments not pertinent here) into the subsequent Tariff Acts of 1909, 1913, 1922 and 1930.8
Predicated upon congressional debates and various fragments of legislative history, defendant strenuously argues that the 1897 countervailing duty provision, although couched in general terms, was principally intended to compensate for the export bounty system employed by Germany in connection with sugar exports; that Congress was aware that the German government did not collect an internal consumption tax on exported sugar, but nevertheless was concerned only with countervailing the so-called “net bounties” paid to German exporters of sugar, viz., bounties paid in excess of the amount which the exporter was required to pay the German government; that the proviso portion of the 1894 countervailing duty statute shows that the 1897 law was designed only to compensate for the German system of providing for a net bounty; and that the 1897 generalized countervailing duty statute was not intended to change this net bounty concept or to impose a countervailing duty due to the failure of Germany to collect an internal consumption tax on exported sugar.
In short, defendant's position is that the legislative history of the 1894 and 1897 countervailing duty provisions shows that an excessive tax remission directly related to the exported product was the type of indirect bounty or grant which was of principal concern to Congress; and that in utilizing the term “net amount” in section 5 of the 1897 Act, Congress intended thereby to express and incorporate the excessive refund concept of the proviso contained in paragraph 182V2 of the 1894 statute.
I see nothing in the legislative history relied upon by defendant which is persuasive that by using the term “net amount” in the generalized 1897 countervailing duty provision Congress intended to continue the exception in the proviso of the 1894 law for nonexcessive tax remissions. While the legislative history cited by defendant indicates that sugar bounties paid by Germany were of major concern to Congress when the bill which became the Tariff Act of 1897 was debated, Congress nevertheless generalized the countervailing duty provision so that it was no longer specifically addressed to importations of sugar (or any other product) nor specifically addressed to indirect bounties in the form of excessive tax remissions. Looking at the new broad and inclusive language of the 1897 statute as a whole, Congress encompassed therein all dutiable products,9 and any bounty or grant, direct or indirect, however the same be paid or bestowed, with duties to be assessed “in all such cases”. Accordingly, I am not persuaded that by merely inserting the term “net amount” in *252the 1897 statute Congress intended to resurrect the proviso in the 1894 sugar schedule provision or to exclude indirect bounties in the form of a tax exemption or “nonexcessive” rebate.
JUDICIAL CONSTRUCTION
In United States v. Passavant, 169 U.S. 16, 18 S.Ct. 219, 42 L.Ed. 644 (1898), the effect of a tax rebate on the dutiable value of certain goods exported from Germany was considered by the Supreme Court. Although countervailing duties were not involved in the case, Chief Justice Fuller’s economic analysis of the German tax rebate scheme is illuminating (169 U.S. at 22-23, 18 S.Ct. at 222):
The certificate of facts states that the German duty is imposed on merchandise when “sold by the manufacturers thereof for consumption or sale in the markets of Germany;” and “is collected when the finished product goes into consumption in Germany.” As the tax accrues when the manufacturer sells, his wholesale price includes it, and the purchaser who buys these cotton velvets in wholesale quantities in the German markets pays a price covering the tax, and that is the price for the merchandise when bought and sold in those markets.

Doubtless, to encourage exportation and the introduction of German goods into other markets, the German government could remit, or refund the tax, pay a bonus, or allow a drawback.

And it is found that in respect of these goods when “purchased in bond, or consigned while in bond, for exportation to a foreign country, this duty is remitted by the German government, and is called ‘bonification of tax,’ as distinguished from being refunded as a rebate.” The use of the word “bonification” does not change the character of this remission. It is a special advantage extended by government in aid of manufactures and trade, having the same effect as a bonus or drawback. To use one of the definitions of drawback, it is “a device resorted to for enabling a commodity affected by taxes to be exported and sold in the foreign market on the same terms as if it had not been taxed at all.” [Emphasis added.]
Passavant was cited by the Supreme Court in two landmark decisions construing the scope of the 1897 general countervailing duty statute, which is the progenitor of section 303, as amended: Downs v. United States, 187 U.S. 496, 23 S.Ct. 222, 47 L.Ed. 275 (1903); and Nicholas & Co. v. United States, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461 (1919). These decisions have been discussed in the opinions of my colleagues, and it is unnecessary to further elaborate upon them here. Suffice it to state that the Supreme Court has unequivocally enunciated that the rebate or remission of a tax on exported products where such taxes have been imposed on a domestic sale in the country of exportation constitutes a bounty or grant under the countervailing duty statute.10 Defendant, on the other hand, is unable to cite any decision which holds that a nonexcessive tax remission upon exportation is not a bounty or grant under the statute.
After the Downs decision, the countervailing duty provision was periodically reenacted by Congress, but was never amended to except tax remissions from its ambit. Fundamentally, such repeated reenactments without excepting tax remissions is significantly indicative of a congressional intent to approve the judicial construction of the countervailing duty statute. United States v. D. H. Grant & Co., Inc., 47 CCPA 20, C.A.D. 723 (1959); United States v. Loffredo Bros., 46 CCPA 63, C.A.D. 697 (1958); United States v. Astra Trading Corp., 44 CCPA 8, C.A.D. 627 (1956).
*253ADMINISTRATIVE PRACTICE
Citing a number of published decisions of the Secretary of the Treasury dating back to 189811 and other official actions, defendant contends that “the Department of the Treasury has consistently and uniformly interpreted the countervailing duty statute from its inception as not including within the terms ‘bounty or grant’ a remission or refund of taxes which does not exceed the taxes actually imposed.”12 Further, defendant asserts that Congress has been well informed concerning Treasury’s practice since at least 1951, and therefore “must be deemed to have approved the administrative interpretation of the countervailing duty statute”.
Plaintiff does not dispute the existence of the administrative practice relied on by defendant, but urges that the administrative interpretation is entitled to no weight in view of Downs and Nicholas. Plaintiff also denies any congressional approval of the Treasury’s practice.
I find defendant’s reliance upon its administrative construction and the asserted congressional ratification thereof to be misplaced in the instant ease for the following reasons:
First, the Treasury’s administrative practice has been, and presently is, in direct conflict with the teachings of Downs and Nicholas. Fundamentally, where decisions of the Supreme Court and an administrative practice are in conflict, it is the decisions rather than the practice which Congress must be presumed to have ratified when reenacting the statute. Cf. Atalanta Trading Corp. v. United States, 32 Cust.Ct. 19, C.D. 1574, aff’d 42 CCPA 90, C.A.D. 577 (1954); United States v. Douglas & Berry, 6 Ct.Cust.Appls. 100, T.D. 35342 (1915). See also: United States v. Bassichis Co., 16 Ct. Cust.Appls. 410, T.D. 43133 (1928) (legislative approval of judicial interpretation and administrative practice distinguished).
Second, when Congress considered the proposed Customs Simplification Acts of 1950 (H.R. 8304, 81st Cong., 2d Sess.) and 1951 (H.R. 1535, 82d Cong., 1st Sess.),13 the Treasury Department attempted to persuade Congress to amend the countervailing duty law to provide that the exemption or refund of taxes on goods exported to the United States would not be countervailable. The Department’s proposed legislation provided as follows:
*254SEC. 2
******
(e) * * * The exemption of any exported article or merchandise from a duty or tax imposed on like articles or merchandise when destined for consumption in the country of origin or exportation, or the refunding of such a duty or tax, shall not be deemed to constitute a payment or bestowal of a bounty or grant within the meaning of this section.
The purpose of the proposed amendment and Treasury’s rationale in seeking an amendment of the countervailing duty statute were expressed in the Department’s analyses, which reported the following (Analysis of Customs Simplification Act of 1950, 5; Analysis of the Customs Simplification Act of 1951, 5):
* * * Subsection (c) would also add a provision that countervailing duty shall not be levied because of the ordinary remission or refund of taxes and duties allowed on exportation by most nations, including the United States. Under the existing administrative interpretation of section 303 of the Tariff Act, countervailing duty is not imposed in such situations, but some judicial comments on the statutes do not make it clear that the courts would consider such duty or tax exemptions as outside the scope of the countervailing duty provision. The proposed amendment eliminates the possibility of rulings in conflict with the administrative practice which has been followed for over 50 years.
Congress carefully considered, but rejected the Treasury’s proposed amendment, despite the Department’s statement that the proposed amendment would conform the countervailing duty statute to the administrative interpretation and practice.14 It is apparent, then, that Congress could have, but declined to nullify the Supreme Court’s interpretation of the countervailing duty statute insofar as tax remissions are concerned. A reasonable conclusion from the congressional rejection of the Treasury’s proposed amendments in 1950 and 1951 is that Congress was satisfied with the way it had earlier written the statute, and approved of the Supreme Court’s construction of the law.
Third, when Congress was considering what was to become the Trade Act of 1974, Public Law 93-618 (1975), Treasury’s practice under section 303 of applying a “directly related” test to tax remissions was brought to Congress’ attention. The executive branch proposed an amendment to section 203 of the Antidumping Act of 1921, 19 U.S.C. § 162 (purchase price),15 and explained its purpose as follows (Committee on Ways and Means, U. S. House of Representatives, Press Release and Other Material Relating to the Administration Proposal Entitled the “Trade Reform Act of 1973” Transmitted to the Congress on April 10, 1973, 93d Cong., 1st Sess. 89-90 (1973)):
The second amendment deals with the treatment of certain types of tax rebates in computing purchase price. The amendment would conform the standard in the Antidumping Act to the standard under the countervailing duty law, thereby harmonizing tax treatment under the two statutes. With the amendment, no adjustment to the advantage of the foreign exporter would be permitted for indirect tax rebates unless the direct relationship of the tax to the product being exported, or components thereof, could be demonstrated.
The Treasury Department considers rebates or remissions of taxes not directly *255related to an exported product or its components as being bounties or grants within the meaning of the countervailing duty law. Under the Antidumping Act, Treasury is required in its calculation of purchase price to add back to the price at which merchandise is sold to the United States “the amount of any taxes imposed in the country of exportation upon the manufacturer, producer, or seller, in respect to the manufacture, production, or sale of the merchandise, which have been rebated, or which have not been collected, by reason of the exportation of the merchandise to the United States.” The “adding back” of such taxes under the Antidumping Act would have the effect of reducing or eliminating any dumping margins that may exist. The language of the Antidumping Act “in respect to the manufacture, production or sale of the merchandise” is somewhat broader than the standard applied to tax rebates under the countervailing duty law (directly related to the exported product or its components) and could result in inconsistency of treatment of tax rebates under the two laws.
Although Congress adopted the proposed amendment to section 203 of the Antidumping Act (see section 321 of the Trade Act of 1974), significantly the House Ways and Means Committee pointed out (H.R.Rep. No. 93-571, 93d Cong., 1st Sess. 69 (1973):
* * * The amendment would conform the standard in the Antidumping Act to the standard under the countervailing duty law, thereby harmonizing tax treatment under the two statutes. However, your committee, in recommending this amendment, does not express approval or disapproval of the standard employed by the Treasury Department in administering the countervailing duty law with regard to the treatment under that law of rebates or remissions of direct and indirect taxes.
The Senate Finance Committee adopted a similar stance in its report (S.Rep. No. 93-1298, 93d Cong., 2d Sess. 172 (1974), U.S. Code Cong. & Admin.News 1974, pp. 7186, 7309:
* * * The standard in the proposed amendment parallels that standard employed by the Treasury Department under the countervailing duty law in determining whether tax rebates and remissions constitute bounties or grants. However the Committee, in recommending this amendment, does not express approval or disapproval of that Treasury practice.
Consequently, the short of the matter is that Congress has not ratified the Treasury’s practice under the countervailing duty law.
INTERNATIONAL UNDERSTANDING
Pursuant to Article VI(4) of the General Agreement on Tariffs and Trade (GATT), the imposition of countervailing duties is prohibited “by reason of the exemption of such product from duties or taxes borne by the like product when destined for consumption in the country of origin or exportation, or by reason of the refund of such duties or taxes.”16 The effect of Article VI(4) of the GATT is that the rebate or remission of indirect taxes (i. e., consumption taxes) is exempted from countervailing duties, whereas the remission or rebate of direct taxes (i. e., income taxes) is subject to countervailing duties. See: Marks and Malmgren, Negotiating Nontariff Distortions to Trade, 7 Law & Pol. Int’l Bus. 327, 351 (1975); King, Countervailing Duties—An Old Remedy with New Appeal, 24 Bus. Law. 1179, 1185-86 (1969).
Defendant urges that “[a] construction of the term ‘bounty or grant’ so as to exclude the remission of the Japanese commodity tax is consistent with international understandings”.
*256When the United States and other signatories acceded to GATT, they agreed to undertake Part II thereof (which includes Article VI(4)) “ * * * to the fullest extent not inconsistent with existing legislation ”. (Emphasis added.) Protocol of Provisional Application of the GATT, 61 Stat. A2051 (1947).17 Unlike the GATT our countervailing duty law contains no exception for exemptions from or rebates of taxes— direct or indirect. Therefore, Article VI(4) of the GATT is inconsistent with the preexisting countervailing duty law, and must yield to the statute. Moreover, GATT could not in any event modify or rescind an existing act of Congress (viz., section 303), as Congress never delegated any authority to the executive branch to amend the countervailing duty law. See American Express Company v. United States, 67 Cust.Ct. 141, 152, C.D. 4266 (1971), aff’d C.A.D. 1087, 472 F.2d 1050, 60 CCPA 86, 97 (footnote 14) (1973).
Additionally, it is noted that economists and legal commentators have increasingly challenged the economic underpinnings for the administrative adherence to the distinction between remissions of direct and indirect taxes. The administrative policy distinguishing between remissions of direct and indirect taxes is explained by defendant in its brief in opposition to plaintiff’s motion (pages 41-42):
The non-countervailing of non-excessive remissions of taxes directly related to the imported product is based on the principle that since exports are not consumed in the country of production, they should not be subject to consumption taxes in the country of production. This leaves the importing country free to impose its taxes on the imported merchandise. Otherwise, the same goods would be subject to double taxation on its consumption, first in the manufacturing country, then in the importing country. The different treatment of different types of taxes rests further on the longstanding assumption that certain so-called indirect taxes (those levied directly on the sale of products, such as excise, sales, and turnover taxes and only indirectly on income or profits) are shifted forward to the ultimate consumer, while so-called direct taxes (those levied directly on income or profit rather than on products) are absorbed by the producer, i. e., are shifted backward and do not affect the price of the product sold to the consumer. The general assumption, in international trade treatment, is that the indirect taxes (which affect the sales price) should be levied in the country of sale of the product while the direct taxes (which do not affect the sales price) should be levied in the country where the product is produced. [Footnote omitted.] By the same token, it is the almost universal assumption that the exemption of an article from a general consumption tax in the country of manufacture gives no incentive to the manufacturer to seek the foreign market as opposed to the domestic.
It is emphasized that the foregoing quotation is accepted as an explanation of Treasury’s position but not as a justification.
In a paper for the Twenty-First Annual Conference of the Canadian Tax Foundation, Toronto, November 20, 1968, former Assistant Secretary of the Treasury John R. Petty stated:18
Modern economic theory suggests that the distinction implicit in the GATT treatment of direct and indirect taxes is an extreme and arbitrary assumption which does not stand the test of economic reality. While economists and businessmen may disagree on the extent of the forward shifting of indirect and direct taxes, they do agree that the extreme assumptions which are necessary to make the present GATT rules trade neutral are an inadequate approximation of reality. Therefore, a border adjustment equivalent to the full internal indirect tax tends to stimulate exports and provide protection against imports. In brief, the present provisions of GATT divert trade *257and thereby disadvantage countries such as the United States and Canada which rely primarily on direct taxes. [Footnotes omitted.]
Marks and Malmgren, in their article cited supra, commented (7 Law & Pol. Int’l Bus. at 351):
Under GATT Article VI(4), any rebates, upon exportation, of direct taxes, e. g., income and social security taxes, are impliedly countervailable, while rebates of indirect taxes are not countervailable. The Treasury, in its administrative actions, has followed the GATT rules.' The GATT distinction between rebates of direct and indirect taxes was established at a time when most economists made the working assumption that indirect taxes are fully passed on to the consumer, while direct taxes are not. Following this rationale, the GATT, with the concurrence and drafting assistance of the U.S. negotiators, provided for different treatment of rebates of direct, as contrasted with indirect taxes.
Most economists now appear to be more cautious in accepting this working assumption. There seems little doubt that indirect taxes frequently are not passed fully through to the consumer, while direct taxes often are partially or fully passed on. The incidence of taxation often depends on whether there exists a buyers’ or sellers’ market, expressed by the relative elasticity of demand or supply of the product under consideration, rather than whether the tax is direct or indirect. No definitive quantitative study has been found describing the extent to which direct and indirect taxes are, or are not, passed through. [Footnotes omitted.]
See also: The Miehelin Decision: A Possible New Direction for U.S. Countervailing Duty Law, 6 Law & Pol. Int’l Bus. 237, 246-47 (1974); Rosendahl, Border Tax Adjustments: Problems and Proposals, 2 Law & Pol. Int’l Bus. 85, 88-98 (1970); Feller, Mutiny Against the Bounty: An Examination of Subsidies, Border Tax Adjustments and the Resurgence of the Countervailing Duty Law, 1 Law & Pol. Int’l Bus. 17, 50-54 (1969); The United States Submission on Border Tax Adjustments, February 16, 1966, to Working Party No. 4 of the Council on Border Tax Adjustments, Organization for Economic Co-operation and Development (copy annexed to plaintiff’s reply brief as an exhibit); King, Countervailing Duties — An Old Remedy with New Appeal, supra, at 1188-90.
Indeed, the Treasury Department itself has publicly conceded that no distinction should be made between remissions of direct and indirect taxes in enforcement of the countervailing duty law. At a press briefing in connection with the rejection of countervailing duty petitions filed by United States Steel Corporation, former Assistant Secretary of the Treasury Macdonald stated that in determining whether there is a “subsidy” on export due to the remission of the value-added tax “[t]here is a distinction, in this area, that has been adopted and maintained by the Treasury Department, and that is reflected in the GATT — in our General Agreement on Tariff and Trade— between 'direct’ taxes and 'indirect’ taxes”. Continuing, Mr. Macdonald stated:
The Treasury Department has consistently followed this distinction and has, in the past, countervailed against the remission of direct taxes.
Okay. Having made that distinction, I just want to make this additional point: The fact that we have not found the remission of value-added taxes to be a bounty or grant within the meaning of our law, does not mean that the United States Government is wild about other taxes of this sort. In fact, if there was one thing that was quite persuasive in the petition filed by U.S. Steel, it was their economic argument that, in fact, there should be no distinction between direct and indirect taxes.
We believe that, while we are making this decision in consonance with our prior precedents — we believe that this is a subject which requires very serious negotiations because the distinction between so-called “direct” taxes and so-called “indi*258red” taxes, economically speaking, may well be chimerical. [Emphasis added in part.]
Okay. Any questions?
* * * * * *
MEMBER OF THE PRESS: Is the Treasury now tinkering with changing the direct and indirect [tax distinction], and considering it as one?
SECRETARY MACDONALD: I think it is fair to say that the United States Government is in favor of changing it.19
In sum, I have determined that the direct-indirect tax dichotomy (and the discredited underlying tax shifting assumptions) upon which the Treasury’s administration of the countervailing duty law has been premised has no economic or legal justification.
NONEXISTENCE OF GENUINE ISSUE OF FACT CONCERNING ECONOMIC BENEFITS OF TAX REBATING TO JAPANESE EXPORTERS
Finally, defendant contends there is a genuine issue of fact precluding summary judgment concerning certain economic benefits of the tax remission to the Japanese exporters.
Zenith’s complaint alleges that the tax exemption and rebate of the commodity tax confer economic benefits on the Japanese exporters of the subject electronic products. Delineating this allegation more specifically .in its brief, plaintiff asserts that due to the tax exemption and rebate of the commodity tax, Japanese exporters “have been able to sell in the United States market at a price lower than that at which they can sell in Japan or at a price that would assure a greater profit than could be earned in Japan”, and the exporters “have been able to direct their products to new markets”.
In its answer, defendant denies that the tax exemption and rebate results in an economic benefit to the Japanese manufacturers, and in its brief argues that “to the extent plaintiff’s above-noted contentions have any relevance, plaintiff has failed to produce the necessary proof, not to mention demonstrating the absence of a genuine issue of fact between the parties”. Defendant’s brief also states that plaintiff’s contention “assumes that the taxes which are levied directly on the product are not shifted forward to the ultimate consumer, contrary to the long-standing assumptions”. According to defendant, “[pjlaintiff’s view assumes that the producer absorbes [sic] some of the tax when he sells at home. When the tax is remitted, according to the plaintiff, the producer need not absorb a portion of the tax and due to this fact may reduce his price (or increase his profit) by the amount of the tax absorbed in the home market”.
I have concluded that no triable issue of fact exists in this case. Plainly, when exports are relieved of a domestic consumption tax burden which would otherwise be imposed if the goods were sold in the home market, a bounty or grant, as those terms were construed in Downs and Nicholas, is bestowed on the exporter as a matter of law. Thus, in Downs, the Supreme Court stated (187 U.S. at 513, 23 S.Ct. at 228):
* * * But, if a preference be given to merchandise exported over that sold in the home market, by the remission of an excise tax, the effect would be the same as if all such merchandise were taxed, and a drawback repaid to the manufacturer upon so much as he exported. * *
And, in Nicholas, the Court commented (249 U.S. at 37, 39 S.Ct. at 219):
Looking only at the [countervailing duty] paragraph and judging from the first impressions of its words, the problem presented would seem to be without difficulty. There is paid to an exporter of spirits from the United Kingdom the sum of three or five pence a gallon, as the case may be, and the instant conclusion is that the sale of spirits to other countries is relieved from a burden that their sale in the United Kingdom must bear. There is a benefit, therefore, in exportation, an *259inducement to seek the foreign market. And thus it would seem, if we regarded the substance of things, that the condition of the application of Paragraph E obtains. [Emphasis added.]
Although the Supreme Court has not had occasion to construe the countervailing duty statute since Dows and Nicholas, the economic and legal rationale of those cases remain viable today. There can be no question but that the rebate or remission of a tax on products exported, where such taxes would have been imposed on a domestic sale in the country of exportation, constitutes a subsidy to the exporter, providing him “an inducement to seek the foreign market”. Nicholas, supra. And it was precisely such a subsidy that Congress intended should be construed as a bounty or grant subject to the imposition of countervailing duties under our statute.
Further, as noted supra, the assumption invoked by the Treasury Department that indirect taxes are fully shifted forward to the ultimate consumer has been shown to be arbitrary and unrealistic. Hence, in The United States Submission on Border Tax Adjustments, February 16, 1966, to Working Party No. 4 of the Council on Border Tax Adjustments, Organization for Economic Co-operation and Development (copy annexed to plaintiff's reply brief as an exhibit), it is noted that indirect taxes do not shift fully forward into the price of products (pages 2-3):
* * * the imposition of excise taxes and sales taxes are considered to be no different from increases in other kinds of costs. The domestic price of the product is increased to some extent by the tax (although only in exceptional eases such as cigarettes does it verge on an increase equal to the full amount of the tax) and in most cases reduces the quantity of the product demanded in the domestic market. The price net of tax therefore is lower, and a border tax adjustment involving a full refund of the tax to the exporter makes export sales relatively more profitable than before, thereby acting as an incentive to export the taxed commodity. [Emphasis added in part.]
CONCLUSION
For the reasons presented herein, I am clear that as a matter of law the remission of the Japanese commodity tax on the subject electronic products constitutes a bounty or grant under section 303, as amended. Accordingly, I join my distinguished colleagues in granting plaintiff’s motion for summary judgment.

. These products include: television receivers, radio receivers, radio-phonograph combinations, radio-television-phonograph combinations, radio-tape recorder combinations, record players and phonographs complete with amplitiers and speakers, tape recorders, tape players, and color television picture tubes.

. Press briefing on October 20, 1975 by David R. Macdonald, former Assistant Secretary, Enforcement Operations and Tariff Affairs, on rejections of petitions in steel countervailing duty *250cases; transcript of proceedings, page 9, annexed to plaintiffs reply brief as an exhibit.

. Predecessor countervailing duty provisions in the Tariff Acts of 1890 and 1894 were limited in their application to certain sugar imports.

. See United States v. Hammond Lead Products, Inc., C.A.D. 1017, 440 F.2d 1024, 58 CCPA 129 (1971), cert. denied 404 U.S. 1005, 92 S.Ct. 565, 30 L.Ed.2d 558 (1971), reversing a decision of the Customs Court, First Division, Hammond Lead Products, Inc. v. United States, 63 Cust.Ct. 316, C.D. 3915, 306 F.Supp. 460 (1969). The appellate court’s decision in Hammond Lead was nullified by Congress in the 1974 Trade Act amendment to section 516, Tariff Act of 1930. The report of the Ways and Means Committee explains the purpose of the amendment (H.R.Rep. No. 93-571, 93d Cong., 1st Sess. 76 (1973)):
Section 331(b) of the bill would amend subsections (a), (b), and (c) of section 516 of the Tariff Act of 1930, as amended (19 U.S.C. 1516), to provide for judicial review of negative countervailing duty determinations by the Secretary of the Treasury. The amendment is necessitated by a 1971 decision of the Court of Customs and Patent Appeals (United States v. Hammond Lead Products, Inc., C.A.D. 1017, 440 F.2d 1024, 58 CCPA 129), which held that judicial review of negative countervailing duty determinations was not available to domestic producers. Your committee is concerned that this decision might adversely affect the ability of American producers to obtain meaningful relief under the countervailing duty law, and believes that the amendment is also warranted, equitably, because American producers have a right to judicial review in the customs courts of other customs determinations involving duty assessments, and importers are entitled to judicial review of the actual assessment of countervailing duties.

. In this connection see: Butler, Countervailing Duties and Export Subsidization: A Re-emerging Issue in International Trade, 9 Va.J. of Int’l L. 82, 147-148 (1969).

. Schedule E (sugar schedule), paragraph 237, Tariff Act of 1890, 26 Stat. 567, 584; schedule E (sugar schedule), paragraph I82V2, Tariff Act of 1894, 28 Stat. 509, 521.

. 30 Stat. 151, 205.

. Section 6, Tariff Act of 1909, 36 Stat. 11, 85; paragraph E, Tariff Act of 1913, 38 Stat. 114, 193; section 303, Tariff Act of 1922, 42 Stat. 858, 935; section 303, Tariff Act of 1930, 46 Stat. 590, 687.

. Section 331 of the Trade Act of 1974 made the countervailing duty law applicable, under certain circumstances, to duty-free imports for the first time in the law’s history.

. The Downs and Nicholas decisions have been cited and followed by the Customs Court in two countervailing duty cases involving tax remission schemes: Hammond Lead Products, Inc. v. United States, supra, 63 Cust.Ct. 316, rev’d on jurisdictional grounds, United States v. Hammond Lead Products, Inc., supra, 58 CCPA 129, cert. denied 404 U.S. 1005, 92 S.Ct. 565, 30 L.Ed.2d 558 (1971); and American Express Company v. United States, 67 Cust.Ct. 141, C.D. 4266 (1971), aff’d on other grounds, C.A.D. 1087, 472 F.2d 1050, 60 CCPA 86 (1973).

. T.D. 19321, 1 Synopsis of Dec. 696 (1898); T.D. 19729, 2 Synopsis of Dec. 157 (1898); T.D. 20407, 2 Synopsis of Dec. 996 (1898); T.D. 34466, 26 Treas.Dec. 825 (1914); T.D. 42895, 54 Treas.Dec. 101 (1928); T.D. 43634, 56 Treas. Dec. 342 (1929); T.D. 49355, 73 Treas.Dec. 107 (1938).
Respecting “long-established administrative practice” as it bears on the construction of tariff laws, see Judge Lane’s opinion in Commonwealth Oil Refining Company v. United States, United States v. Commonwealth Oil Refining Company, 60 CCPA 162, C.A.D. 1105, 480 F.2d 1352 (1973).

. In Executive Branch GATT Studies, Senate Committee on Finance, 93d Cong., 2d Sess. (1974), Congress was informed (pages 11-12):
Under administrative precedents dating back to 1897, the Treasury Department has generally not construed the rebate, remission or exemption on exports of ordinary indirect taxes (consumption taxes on goods) to be a “bounty or grant” within the meaning of our countervailing duty statute (Section 303, Tariff Act of 1930; 19 U.S.C.A. 1303). These precedents have been applied as a general rule with regard to all consumption taxes on goods. The precedents are based on the principle that, since exports are not consumed in the country of production, they should not be subject to consumption taxes in that country. The theory has been that the application of countervailing duties to the rebate of consumption taxes would have the effect of double taxation of the product, since the United States would not only impose its own indirect taxes, such as Federal and state excise taxes and state and local sales taxes, but would also collect, through the use of the countervailing duty, the indirect tax imposed by the exporting country on domestically consumed goods.
The Treasury Department has not applied these precedents to tax “rebates” in excess of taxes collected on the exported product. If, for example, the foreign exporter has paid $1 in excise taxes on a product he exports to the United States but receives a rebate of $1.20 on exportation, under long-established administrative precedents of the Treasury Department the imported merchandise would be subject to a countervailing duty of $0.20.

. H.R. 1535 was replaced by H.R. 5505, 82d Cong., 1st Sess. (1951).

. Treasury’s proposal to amend the countervailing duty statute to require a finding of injury, so as to conform our statute with the GATT rule on countervailing duties, was similarly rejected.

. “It should be kept in mind that the Countervailing Duty Law and the Antidumping Statute are opposite sides of the coin. The former deals with subsidized imports entering this country; the latter deals with imports being sold at less than fair value in this country (meaning imports that are sold here at less than they are sold for in the country of export”. King, Countervailing Duties — An Old Remedy with New Appeal, 24 Bus.Law. 1179, 1181 (1969).

. Also, Ad Article XVI of Annex I, added to the GATT in 1955, further clarifies the rule as follows: “The exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess of those which have accrued, shall not be deemed to be a subsidy”.

. This provision is commonly referred to as the “grandfather clause”.

. A copy of this paper was submitted as an exhibit annexed to plaintiffs reply brief.

. Transcript of press briefing, op. cit., at 3-4, 7.