Court Opinion

ID: 8115984
Source: CourtListenerOpinion
Date Created: 2022-09-09 14:45:54.348515+00
Date Added: 2024-06-11T16:38:49.749235
License: Public Domain

DISSENTING OPINION
Richaedson, Judge:
The plaintiff, The Trading Company of Afghanistan, Inc., imported from Afghanistan a shipment of 720 bales of raw carpet wool for carpet manufacturing, which arrived at the port of New York on February 7, 1957. All of the bales were shipped to Mid-Hudson Warehouse of Jersey City, Inc., a bonded warehouse in Jersey City, N.J. Sometime later and prior to January 28,1960, six bales of the merchandise disappeared. The plaintiff *13filed a claim against the warehouse for what it considered the value of the missing merchandise, $1,263.80, and settled the claim with the insurance company representing the warehouse for $750. Though plaintiff gave a general release, there is no showing that the settlement embraced the assessed duties, and Lewis W. Moats, in charge of imports for the plaintiff, testified that it did not. Sheet 4 of the official papers which are in evidence indicates that the collector’s office made a notation that the merchandise was not found in the warehouse January 17,1962. The collector denied relief to plaintiff because it did not file an application for abatement of duties with the collector within 30 days from the date of plaintiff’s discovery of the lost or missing merchandise, in accordance with provisions of section 15.1(a), Customs Regulations, 1954. Plaintiff’s protest is against the assessment of duty in the amount of $272.96 “by reason of the fact that sis bales of wool imported for carpet making were not found . . . that the carpet wool had disappeared from the warehouse, and was believed to have been stolen. . . .” The protest further states: “The fact remains that this merchandise was never located or returned to the importer.”
Section 15.1(a), Customs Regulations, 1954, upon which the collector relied in refusing relief to plaintiff, was promulgated by the Commissioner of Customs pursuant to delegation of authority by the Secretary of the Treasury under 19 U.S.C.A., section 1563, and reads as follows:
(a) No abatement or refund will be made under section 563(a), Tariff Act of 1930, as amended unless the importer or his agent shall file within 30 days from the date of his discovery of the loss, theft, injury, or destruction an application in duplicate on customs Form 4315, and within 90 days from the said date the evidence of such loss, theft, injury, or destruction hereinafter required is submitted.
The statutory section 1563, insofar as the abatement of duties on “merchandise in bonded warehouse” is concerned, is limited to “the actual injury or destruction” of such merchandise “by accidental fire or other casualty.” The only allowance or abatement for “loss or theft” of merchandise referred to in section 1563 relates to merchandise in “the appraiser’s stores.” The merchandise in this case was in a “bonded warehouse,” and there is no evidence that the merchandise was injured or destroyed by accidental fire or other casualty, thus, section 15.1(a) of Customs Regulations, 1954, is not applicable to the facts in this case.
The plaintiff contends that it is entitled to relief under section 15.8 of Customs Regulations, 1954 (R. 20), issued pursuant to 19 U.S.C.A., section 1624, which does cover the factual situation involved here of an allowance in the assessment of duties for “lost or missing merchandise” in a bonded warehouse. United States v. Browne Vintners Co., *14Inc., 34 CCPA 112, C.A.D. 351. Section 15.8 (a) of Customs Regulations, 1954, reads as follows:
15.8 Shortages; lost -packages; deficiencies in contents of packages.— (a) Allowance shall be made in the assessment of duties for lost or missing merchandise included in the entry whenever it is established to the satisfaction of the collector of customs before the liquidation of the entry becomes final that the merchandise claimed to be lost or missing was not imported.
The merchandise involved in H. Z. Bernstein Co., Inc. v. United States, 41 Cust. Ct. 282, C.D. 2053, involved only merchandise “stolen” from a cargo room on the premises of an air carrier, which was not owned, leased, or operated by the Government and to which its employees did not have a key — and thus the area or space at the airport could not be equated to an “appraiser’s stores” under section 1563. Section 1563 limits abatement or refund for loss by theft to merchandise stolen while in the appraiser’s stores. The merchandise in this case was not in an “appraiser’s stores,” but in a “bonded warehouse,” and there is no proof that the merchandise in this case was stolen, though there was an expression of belief that it had been stolen. The court should not presume a “theft” of missing merchandise without proof, nor conjecture or speculate as to how the merchandise became lost or missing. United States v. R. C. Williams & Co., Inc., 40 CCPA 130, 134, C.A.D. 508.
Section 1624 of title 19, U.S.C.A., under which the Secretary of the Treasury acted in promulgating section 15.8(a) of Customs Regulations, 1954, gives wider authority to the Secretary of the Treasury than he is given under section 1563; and section 15.8(a) of Customs Regulations specifically makes an allowance in the assessment of duties for lost or missing merchandise when it is claimed, as here, that such merchandise was not imported. Section 15.8 of Customs Regulations, 1954, should be liberally interpreted, so that its beneficial and equitable purposes of not collecting duties on merchandise which has not been imported in the sense that it has not entered the commerce of the country through the control or negligence of the importer, may be realized.
In Geo. S. Bush Co., Inc. v. United States, 34 Cust. Ct. 323, Abstract 58897, the protest was against the collector’s assessment of duty on a bale of wool (bale No. 16), which importer claimed was never received by it. The evidence showed that bale No. 16 was received at the port of entry and was sent to a firm connected with the importing company, and was not placed in a bonded warehouse with other merchandise in the same shipment. On such a record, the plaintiff could not establish a nonimportation on bale No. 16.
*15The issue here is the same as the one in Browne Vintners Co., Inc. It is not whether there was a compliance with the involved regulation, section 15.8 (a), which, while highly desirable, is not a condition precedent to recovery; but whether or not there was in fact a nonimportation — a nonimportation in the sense that the merchandise did not reach the custody and control of the importer. It is true that, in the Browne Vintners Co., Inc., case, the missing merchandise was never landed, but the word nonimportation is broad enough to cover the factual situation where merchandise is landed, placed in a bonded warehouse, and is discovered to be lost or missing before it passes beyond the custody and control of the customs officials and enters the commerce of the United States through the importer. “So long as merchandise remains under bond for warehousing in the tariff sense and for assessment of duties, its importation has not been completed.” United States v. Cronkite Co., 9 Ct. Cust. Appls. 129, 134, T.D. 37980. See also Hartranft v. Oliver, 125 U.S. 525, 31 L. ed. 813; Five Percent cases, 6 Ct. Cust. Appls. 291, 320-321, T.D. 35508.
Two observations are made with respect to the case of United States v. Shallus, 2 Ct. Cust. Appls. 332, T.D. 32074, cited in the majority opinion. One observation is that the case was decided in 1911 by the Court of Customs Appeals, and the case of United States v. Cronkite Co., 9 Ct. Cust. Appls. 129, 134, T.D. 37980, which is relied upon in this dissenting opinion, was decided 8 years later by the same court in 1919. Should there be any view that the two decisions are in conflict, it is submitted that the latest expression of the court would control. My second observation with respect to the decision in United States v. Shallus is that it would permit recovery in this case. The court stated, at page 333, that the destruction or loss of any part of a cargo of imported merchandise before it is “surrendered from the customs custody is not thereby, except as perf orce of express statute or regulation and as therein provided, exempted from the payment of customs duties.” [Emphasis added.] Section 15.8(a) of the Customs Regulations, previously quoted, expressly provides for an exemption from the payment of customs duties when the collector is satisfied that the merchandise is missing from customs custody before liquidation.
The plaintiff has sustained its burden of proof and is entitled to relief from the duties assessed on the six bales of merchandise which it did not receive from customs custody and which cannot be found. United States v. Browne Vintners Co., Inc., 34 CCPA 112, C.A.D. 351; United States v. Washington State Liquor Board, 34 CCPA 118, C.A.D. 352.
I would sustain the protest of the plaintiff that the duties upon the missing merchandise were not lawfully assessed.