Court Opinion

ID: 9456739
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:01:15.665951+00
Date Added: 2024-06-11T17:35:05.340381
License: Public Domain

ALMOND, Judge, dissenting, with whom BALDWIN, Judge, joins.
With deference, I am unable to agree with the conclusion of the majority that the Customs Court lacked jurisdiction in the present matter. I would not only affirm the decision of the court below on the jurisdiction issue but also on the merits of the controversy.
Section 516(b), unambiguous in its terms, confers permission on an American manufacturer, producer, or wholesaler to protest a decision of the Secretary of the Treasury as to the classification or rate of duty imposed upon imported merchandise of a class or kind manufactured, produced or sold at wholesale by him. Therefore, if the present protest involves either the classification of the imported merchandise or the rate of duty with respect thereto, the Customs Court was invested with jurisdiction to entertain the instant action.
I think it clear that the protest in issue was directed towards the classification and/or rate of duty as those terms are employed in section 516(b). These statutory terms were defined in Bradford Co. v. American Lithographic Co., 12 Ct.Cust.Appls. 318, T.D. 40318 (1924), where an American manufacturer, pursuant to section 516(b) of the Tariff Act of 1922, protested the failure of the Secretary of the Treasury to impose an additional duty equal to ten percent of the appraised value of the article because the merchandise was not marked, branded or labeled so as to indicate the country of origin as required by section 304 (a), Tariff Act of 1922, predecessor of section 304(a), Tariff Act of 1930.1 The appeals court affirmed the holding of the Board of General Appraisers that:
* * * the determination by the collector that the merchandise was, or was not, lawfully marked, as required by section 304(a), supra, involved classification of the merchandise, and that the additional duty of 10 per cent of the appraised value of merchandise classified as not legally marked, provided for in section 304(a), is a rate of duty within the meaning of the provisions of section 516(b) of the act of 1922, granting to an American manufacturer, producer, or wholesaler, of the class or kind of the imported merchandise, the right to protest the classification of merchandise and the rate of duty assessed by the collector * *. [12 Ct.Cust.Appls. at 320-321.]
The appellant in Bradford contended that the provisions of section 304(a) do not involve classification of merchandise and an assessment of a rate of duty, and therefore the right extended to an American manufacturer by section 516 (b) did not apply, and, accordingly, the Board of General Appraisers was without jurisdiction. The appellate court, however, stated:
Classification of imported merchandise is the process or act of grouping, or arranging merchandise into classes; it is a process which may be based upon the use to which the article has been dedicated, its commercial designation, its similarity to other merchandise, the condition in which it is imported, and other equally important considerations, the purpose of which is to determine what provisions of the tariff laws are applicable thereto.
As stated, classification is the process of determining “what provisions of the tariff law are applicable” to the importation. Assimilating Bradford to the instant situation, I think it clear that in both the American manufacturer was *1034protesting the failure of the Secretary of the Treasury to apply the provisions of the statute and, thus, in each instance the “classification” of the imported merchandise was involved. In Bradford, the complaint involved improper marking under section 304(a) resulting in failure to impose the additional duty demanded for improperly marked goods. Here, appellee’s complaint is directed at the failure of the Secretary of the Treasury to find that the litharge was the recipient of a bounty or grant under section 303, Tariff Act of 1930. Both in Bradford and here the seeking of judicial review was predicated on the finding of the Secretary that the relevant imported merchandise was not within a particular provision of the tariff laws which called for imposition of additional duties.
It is also my opinion that the additional duty prescribed by section 303, equal “to the net amount of such bounty or grant,” is a rate of duty envisioned within the meaning of section 516(b). In Bradford, which, as has been seen, relates to additional duty of 10 percent of the appraised value of goods improperly marked under section 304(a), the appeals court stated:
It is a rate of duty to be levied upon such merchandise as is classified by the collector as not marked in conformity with the mandate of the law. * * * * «• *
We think that a proper interpretation of the phrase, “rate of duty,” as it is used in section 516(b), supra, means the amount of duty assessed against imported merchandise, resulting in the first instance, from the classification thereof. No other fair conclusion can be reached, we think, without a strained interpretation of the provisions of the section, expressive of the legislative intent as it plainly appears therein, that is, to extend to the American manufacturer, producer, or wholesaler the right to protest a classification of imported merchandise of a class and kind manufactured, produced, or sold at wholesale by him, and the rate of duty assessed thereon, if in his opinion such classification is wrong and the rate of duty assessed improper, because of his interest and concern in preventing unlawful competition in the markets of the United States by foreign producers of foreign products, resulting in injury to his business.
I am not persuaded of error in the decision of the Customs Court on the jurisdictional issue and would conclude with it that:
Bradford * * * is determinative of the jurisdictional issue here. Section 303, like section 304, requires the imposition of an added duty, added upon the existing statutory duty, should a specific condition exist. In section 304, this condition is the failure to properly mark the imported goods with the country of origin; in section 303 this condition includes the bestowal of a bounty or grant by a foreign government. One teaching of Bradford is that the determination by the Secretary of the existence of such a condition is “classification” within the meaning of section 516(b).
* * * In short, just as the additional duty of 10 percent of the appraised value of merchandise classified as not legally marked, as required by section 304(a), is a “rate of duty” within the meaning of section 516(b), so an additional duty equal to the net amount of a bounty or grant, as required by section 303, is a “rate of duty” within the meaning of section 516(b). Thus, the “rate of duty” within the meaning of section 516(b) is not delimited to the statutory duty being assessed on the imported merchandise ; rather, the imposition of an additional duty under section 303 is as much a statutory duty as the 1.25 cents per pound contained in item 473.52 of the tariff schedules. This is to say that if the existence of a bounty or grant is shown, then the mandate to levy the appropriate countervailing duty possesses the same statutory sanctity as the requirement of impos*1035ing 1.25 cents per pound under item 473.52.
The majority attempts to distinguish Bradford “on the hypothesis that the ten percent marking duty there involved was not regarded as penal.” I see no such distinction between the provisions of section 304 (the one involved in Bradford) and section 303 (the one involved here). They are either both “penal” or not, and I do not see how one could be found “penal” and the other one found “not penal.” Nor do I think that a distinction can be drawn from the fact that the “duty under section 304 for not marking relates to a physical characteristic of the merchandise, observable on its examination by Customs officers.” Whether the particular statutory provision involved relates to the physical examination of the merchandise or not has nothing to do with whether said statutory provision is concerned with the determination of the “classification” or “rate of duty.”
It seems clear to me that the majority has in effect concluded that the decision in Bradford was wrong. I cannot agree with the reasoning expressed by the majority in reaching such a conclusion and in limiting the applicability of section 516(b). The limitations imposed by the majority are, in my opinion, contrary to the decision in Bradford and to the explicit meaning of 516(b). The majority opinion suggests that American manufacturers should not bypass the U. S. Treasury by invoking 516(b) procedure, as distinguished from the procedure of section 514. I do not see how it can be said that the Executive branch is being bypassed in either case. If an importer may protest the decision of the Secretary of the Treasury finding a bounty or grant, why shouldn’t an American manufacturer be permitted to protest the decision of the Secretary of the Treasury finding no bounty or grant? In neither case are the protesting parties bypassing the U. S. Treasury. They are merely protesting a decision of the Secretary of the Treasury as they are clearly permitted to do under either section 514 or 516, depending on whether it is a protest by an importer or by an American manufacturer. Nor do I think that the slight language differences between sections 514 and 516 support the majority reasoning in this regard. We have previously held that “an American manufacturer, upon compliance with the provisions of * * * section 516(b), might protest the rate of duty assessed against importations to the same extent, so far as judicial review is concerned, as an importer might do under the provisions- of section 514, providing for protests by importers against decisions of the collector.” Feltex Corp. v. Dutchess Hat Works, 21 CCPA 463, 472, T.D. 46957 (1934). To me section 516(b) is clear in conferring jurisdiction upon the Customs Court in the instant matter.
Having concluded that the Customs Court had jurisdiction, I would also affirm that court’s decision on the merits of the controversy. I think the Customs Court was correct in finding a bounty or grant from the facts adduced in the present case. In fact, I am persuaded that such a conclusion is impelled by the definitions of bounty and grant expounded by the Supreme Court in Nicholas & Co. v. United States, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461 (1919), aff’g 7 Ct.Cust.Appls. 97, T.D. 36426 (1916), and Downs v. United States, 187 U.S. 496, 23 S.Ct. 222, 47 L.Ed. 275 (1903), aff’g 113 F. 144 (4th Cir. 1902) and by the facts involved in those cases. Since the majority found it unnecessary to discuss the issue on the merits because of its disposition of the jurisdiction issue, I likewise feel no need to consider it further except to add that the Customs Court’s findings in that regard are supported by substantial evidence and are not clearly contrary to the weight of the evidence. Suffice it to say that I think there is persuasive legal precedent requiring an affirmance of the decision of the Customs Court as to both jurisdiction and the merits. I would, therefore, affirm.

. As far as the issue here is concerned, section 516(b) of the Tariff Act of 1922 was essentially the same as section 516(b) of the Tariff Act of 1930.