Court Opinion

ID: 6822264
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:09:15.59497+00
Date Added: 2024-06-11T16:04:10.909329
License: Public Domain

Johnson, Judge,
dissenting..
Section 402 (d) of the Tariff Act of 1930 is set forth in the majority opinion. The portion which I deem determinative of the issues here is emphasized by the italicized part thereof which follows:
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Export Value — The export value of imported merchandise shall be the market value or the price, at the time of exportation of such merchandise to the United *184States, at which such or similar merchandise is freely offered for sale to all purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States * * *
It is my opinion tbat when the facts of this case are viewed in the light of the above italicized portions of the statute, the conclusion is inescapable that the 15% commission which is claimed by the importer as being non-dutiable,. is in reality a part of the “price, at the'time of exportation oj such merchandise to the United States,” and in reality is a part of the freely offered price of the imported merchandise, for exportation to the United States, and should therefore be dutiable; The uncontradicted facts show that the price to the importer cannot, under any circumstances, be less than the manufacturer’s price plus 15%, whether a “commissionaire” is or is not employed.
I feel that the decision in this case should be controlled by the reasoning set forth in United States v. Hermann, 91 F. 116 (C. C. A. 2nd 1898) since it is very similar to the present case. The facts of the Hermann case, which are pertinent to the present case, are succinctly set forth in the following quoted portion thereof:
The importations were manufactured in England by Eirth & Sons, and sold by them to Henry & Co., of Bradford, commission merchants, at a price which may be called the invoice price, less a discount of 5 per cent. The importers purchased the goods of Henry & Co., paying them the invoice price, including the discount. The invoices upon which the importations were entered in this country were made up by a statement of the manufacturer’s price to the English seller, and a deduction of 5 per cent, discount. The discount represented a commission or profit allowed by the manufacturers to the seller for handling and marketing the goods, and paying for them in advance. The importers claim, and it is now contended for them, that this discount is a commission which should have been deducted from the manufacturer’s price, or the invoice price, upon appraisement, in ascertaining the dutiable value of the importations.
Tbe court’s reasoning in the Hermann case is quoted below:
* * * it was quite competent for the board to conclude that what was called “commissions”, was merely an arbitrary item, which, really represented a part of the market price of the goods to the ordinary purchaser in the foreign market, that a special discount was allowed to commission merchants, that the real market price of the goods was the price which ordinary purchasers buying of commission merchants were obliged to pay, and that the invoice price was composed of manufacturer’s price and discount in order to permit the importer to insist that the item of discount called “commissions” was not a part of the price of the goods, and should be deducted therefrom. * * * [Italics added]
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* * * The evidence before the board of general appraisers impresses us with the conviction that the item of “commissions,” so called, is not entitled to cut any figure in the case, except as a trade device to mislead the customs officers, and be made the basis of a claim for a deduction from the real wholesale price.
*185The majority is of the opinion that “there is substantial evidence to support the decision of the Customs Court” while I am of the opinion that there is no evidence, substantial or otherwise, to support the decision of the Customs Court, but rather that the evidence fully supports this dissent as is hereafter set forth. .
There is no conflict in the evidence. It shows conclusively that if an importer purchases directly from the manufacturer he is charged an additional “15% advance for export services rendered,” which the evidence shows is to cover the manufacturer’s “overhead expenses accruing by the export business, namely in such a way that he puts on the price of 100 a 15% advance for export service rendered. By this selling advance the export overheads of the manufacturer are being covered which, as a matter of fact, are omitted for an inland business.”
The evidence also conclusively shows that if an importer purchases through a “commissionaire” 15% is added for his commission. There is no dispute as to the facts. The sole question involved is one of law, i. e. whether the 15% added regardless of whether the purchase is made direct from the manufacturer or through a “commissionaire” should be included for duty purposes.
After a careful review of the facts in the light of the statute and the above cited decision, I feel that the 15% of the purchase price, here in dispute, is a dutiable item since the ultimate price to the importer is the same whether the purchase is made directly from the manufacturer or indirectly through a “commissionaire.” In other words, the importer can not under any circumstances purchase the merchandise for exportation to the United States unless he pays the manufacturer’s price plus 15%. The payment of this 15% is not optional with the importer; it is mandatory. Thus, stating the facts in terms of the statute, the freely offered price in the ordinary course of trade for exportation to the United States is the manufacturer’s price plus 15%. I therefore feel that the 15% commission should be considered part of the dutiable value of the merchandise.
In view of the foregoing, it is my opinion that the decision of the Customs Court should be reversed.
O’Connell, J., concurs in the dissent.