Court Opinion

ID: 8088876
Source: CourtListenerOpinion
Date Created: 2022-09-09 14:10:18.59439+00
Date Added: 2024-06-11T16:38:29.673363
License: Public Domain

DISSENTING OPINION
Cole, Judge:
Section 402 (c) of the Tariff Act of 1930, as amended by the Customs Administrative Act of 1938 (19 U. S. C. 1940 ed. § 1402 (c)), provides the yardstick by which foreign value is determined. Its birth and subsequent development combine to reflect a painstaking and essentially sqund pronouncement by Congress to meet one of the most important provisions of our tariff structure. It has been productive of much of the very interesting and learned contributions to customs jurisprudence. I cannot bring myself to accept the court’s conclusion herein as properly interpretive thereof.
*377It should be emphasized that, for the purposes of the present issue, we are concerned only with the class of transactions involving chargeable items under chargeable purchases, the category in which the item under consideration belongs. Transactions between registered dealers where the tax does not apply and contingencies which may relieve payment of the tax are not germane to this case.
As I view the reasoning of Presiding Judge Oliver’s opinion in excluding the tax as part of dutiable foreign value, it is based on the premise that the tax is not susceptible of application in all cases and therefore cannot be applied in one. For instance, if it would be conceded that the appraiser should add to the entered value the item in question, such could be readily done in the case of sales where the merchandise had been actually delivered, but in the many cases where delivery had not been made it" would be impossible to add to the list price this additional element of value — delivery costs — that the law requires, thereby making the amount upon which the tax should be computed incapable of actual determination. I do not believe we should be seriously concerned with such a possibility; certainly, not sufficiently so to make it determinative of the important issue before us.
It is one thing to say that the tax in question is part of foreign value as statutorily defined. Such is this opinion. It is another thing to say that it is difficult in some instances, as appearing from the present record, and in other instances perhaps impossible to determine definitely the exact amount upon which such tax should be computed. That enters into the mechanics of the operation and is not the concern of the court in this instance. Without meaning to discard such an obvious difficulty, attention is directed to the apparent anticipation of the British authorities to just such a situation as this, for the basic law, itself, as discussed and set forth in full in Judge Keefe’s opinion, provides:
COMMISSIONER’S NOTICE No. 79.
* ' * * * * * *
3. Delivery Expenses. — If goods are not sold at a price free delivered to the buyer’s premises, the cost of delivery must be added to the price when calculating the tax value. * * *.
Where * * * owing to lack of information, or, for example, where goods are in practice collected by the buyer and an equitable basis cannot be framed, an overall addition of not less than 2yí per cent, may be made to the price. Alternative proposals for arriving at a fair average delivery charge' should be submitted in the first place to the local Officer of Customs and Excise.
The application of the foregoing catch-all provision is capable of but one interpretation; that is, its use in complete destruction of the concern expressed by the court in cases where information as to delivery costs is lacking.
*378The tax in question is inherently a sales tax that attached to the dutiable foreign value, section 402 (c), as amended, supra, of the merchandise in question at the time of its exportation. That the tax is not included in the manufacturer’s list prices offering the merchandise is not the criterion for proper disposition of the present issue. Nor is the date When the tax becomes due conclusive. The controlling consideration is that the tax, when .chargeable items are bought under chargeable purchases, is, as stated in General Dyestuff Corp. v. United States, 19 C. C. P. A. 309, T. D. 45480, “inseparable from the transactions.” While the cited case did not involve the identical question presented in the instant case, the court recognized application of a legal principle analogous to one invoked in Hugo Reisinger (Inc.) et al. v. United States, 20 C. C. P. A. 67, T. D. 45683, which has controlling influence on the conclusion reached herein. In that case, as in the present, the tax was imposed on merchandise destined for home consumption, and the foreign Government collected it from the seller, who showed it on the 'invoice as a separate item. In the Reisinger case, the court found that the tax is evidently “a sales tax passed on to and finally paid by the ultimate consumer of the article upon which levied,” which is equally true of the item under consideration. The opinion of Presiding Judge Oliver, seeking to distinguish that case, states that “unlike the facts in the Reisinger case, supra, the manufacturer herein is not 'liable for the tax,’ ” but in making this distinction and emphasizing that the manufacturer is merely accountable for the tax, the mandate of the British law (section 31 (2)), which requires that the tax “shall be recoverable as a debt due to His Majesty from the person accountable therefor,” is not accepted. The British law very specifically places a dual responsibility upon the seller who must not only render an accounting of the tax due but also assumes liability for its payment under chargeable transactions. Clearly, the foreign law under consideration, like the one involved in the Reisinger case, supra, makes the seller the tax debtor.
The conclusion reached herein is consistent with the basic law expounded in United States v. Passavant, 169 U. S. 16, holding as part of dutiable foreign value a tax imposed by the German Government on cotton velvets sold by manufacturers to purchasers for home consumption whose price included the tax that was not collected until the finished product went into consumption in Germany.
Appellant’s contention does not produce the chaotic condition implied in the court’s statement that “if the interpretation of the Government (appellant) is accepted, there will be not one market value, but as -many values as there would be purchasers throughout Great Britain.” The statement seems to be based upon an apparent uncertainty arising from the standard — “wholesale value” as defined *379in tbe British Finance Act of 1940 (Part Y, Purchase Tax) — adopted by the British Government for computing the amount of the tax. “It is not the standard which is of importance, but the matter of payment,” Veolay v. United States (23 C. C. P. A. 101, T. D. 47766). For tariff purposes, the applicable rate of the tax under consideration is that prevailing at the time of exportation of the merchandise, and, as hereinabove set forth, the foreign law provides for “an overall addition of not less than 2% per cent” if information is lacking concerning actual delivery charges (Commissioner’s Notice 79, supra).
United States v. Allenby, 20 C. C. P. A. 80, T. D. 45703, is distinguishable from the present case. There, the court held a so-called Japanese consumption tax not to be part of dutiable foreign value, basing its conclusion on facts which included a showing that the tax “accrued, and was collected, only in the event the merchandise was sold at retail to a Japanese resident.” In other words, it was a tax imposed only on retail transactions and therefore very definitely not an element included within dutiable foreign value. The item in question is not confined to such a narrow application. The British tax under consideration is an integral part of transactions in wholesale quantities of earthenware and chinaware sold to chargeable purchasers in the ordinary course of trade, in the principal market of the country of exportation. As such it is an element of the dutiable market value at which the merchandise is offered to all purchasers, and therefore should be included in statutory foreign value, section 402 (c), as amended, supra.
The judgment of the lower court should be reversed. I therefore respectfully dissent from the conclusion to the contrary of the majority.