Diamond Match Company v. United States

• Decision Date: 23 February 1960
• Docket Number: C.D. 2154,Protest No. 58/21335.
• Parties: DIAMOND MATCH COMPANY v. UNITED STATES (Winter, Wolff & Co., Inc., Party in Interest).
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

181 F. Supp. 952

DIAMOND MATCH COMPANY v. UNITED STATES (Winter, Wolff & Co., Inc., Party in Interest).

C.D. 2154; Protest No. 58/21335.

United States Customs Court, Third Division.

February 23, 1960.

Lamb & Lerch, New York City (David A. Golden, New York City, of counsel), for plaintiff.

George Cochran Doub, Asst. Atty. Gen. (Richard H. Welsh, New York City, trial atty.), for defendant.

Sharretts, Paley & Carter, New York City (Howard Clare Carter, New York City, of counsel), for party in interest.

Before OLIVER, JOHNSON, and RICHARDSON, Judges.

JOHNSON, Judge.

The merchandise involved in this case consists of wooden spatulas or ice cream sticks, approximately 4½ inches long and three-eighths of an inch wide, imported from Japan, in bundles of 50, held together by a paper band or strip 1½ inches wide. The band is marked "Made in Japan," but the individual sticks are not marked. Such sticks are used primarily by the ice cream industry for insertion in ice cream bars or confections and are sold to domestic ice cream manufacturers for such use.

The protest herein has been brought by an American manufacturer of ice cream sticks pursuant to section 516(b) of the Tariff Act of 1930, as amended by the Customs Administrative Act of 1938 (19 U.S.C.A. § 1516(b)), against the collector's liquidation without the assessment of an additional duty of 10 per centum ad valorem under section 304 of said tariff act, as amended (19 U.S.C.A. § 1304). It is claimed that the individual sticks are the imported articles, and, since they were not marked with the name of the country of origin, the additional duty should have been assessed.

The pertinent provisions of the tariff act, as amended, are as follows:

"§ 516. Appeal or protest by American producers.

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"(b) Classification.—The Secretary of the Treasury shall, upon written request by an American manufacturer, producer, or wholesaler, furnish the classification of, and the rate of duty, if any, imposed upon, designated imported merchandise of a class or kind manufactured, produced, or sold at wholesale by him. If such manufacturer, producer, or wholesaler believes that the proper rate of duty is not being assessed, he may file a complaint with the Secretary, setting forth a description of the merchandise, the classification, and the rate or rates of duty he believes proper, and the reasons for his belief. If the Secretary decides that the classification of, or rate of duty assessed upon, the merchandise is not correct, he shall notify the collectors as to the proper classification and rate of duty and shall so inform the complainant, and such rate of duty shall be assessed upon all such merchandise entered for consumption or withdrawn from warehouse for consumption after thirty days after the date such notice to the collectors is published in the weekly Treasury Decisions. If the Secretary decides that the classification and rate of duty are correct, he shall so inform the complainant. If dissatisfied with the decision of the Secretary, the complainant may file with the Secretary, not later than thirty days after the date of such decision, notice that he desires to protest the classification of, or rate of duty assessed upon, the merchandise. Upon receipt of such notice from the complainant, the Secretary shall cause publication to be made of his decision as to the proper classification and rate of duty and of the complainant's desire to protest, and shall thereafter furnish the complainant with such information as to the entries and consignees of such merchandise, entered after the publication of the decision of the Secretary at the port of entry designated by the complainant in his notice of desire to protest, as will enable the complainant to protest the classification of, or rate of duty imposed upon, such merchandise in the liquidation of such an entry at such port. The Secretary shall direct the collector at such port to notify such complainant immediately when the first of such entries is liquidated. Within thirty days after the date of mailing to the complainant of notice of such liquidation, the complainant may file with the collector at such port a protest in writing setting forth a description of the merchandise and the classification and rate of duty he believes proper. * * *

"(c) Hearing and Determination. —A copy of every appeal and every protest filed by an American manufacturer, producer, or wholesaler under the provisions of this section shall be mailed by the collector to the consignee or his agent within five days after the filing thereof, and such consignee or his agent shall have the right to appear and to be heard as a party in interest before the United States Customs Court. The collector shall transmit the entry and all papers and exhibits accompanying or connected therewith to the United States Customs Court for due assignment and determination of the proper value or of the proper classification and rate of duty. * * *"

"§ 304. Marking of imported articles and containers.

(a) Marking of Articles.—Except as hereinafter provided, every article of foreign origin (or its container, as provided in subsection (b) hereof) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. The Secretary of the Treasury may by regulations—

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"(3) Authorize the exception of any article from the requirements of marking if—

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"(D) The marking of a container of such article will reasonably indicate the origin of such article;

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"(b) Marking of Containers.— Whenever an article is excepted under subdivision (3) of subsection (a) of this section from the requirements of marking, the immediate container, if any, of such article, or such other container or containers of such article as may be prescribed by the Secretary of the Treasury, shall be marked in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of such article, subject to all provisions of this section, including the same exceptions as are applicable to articles under subdivision (3) of subsection (a). * * *

"(c) Additional Duties for Failure to Mark.—If at the time of importation any article (or its container, as provided in subsection (b) hereof) is not marked in accordance with the requirements of this section, and if such article is not exported or destroyed or the article (or its container, as provided in subsection (b) hereof) marked after importation in accordance with the requirements of this section (such exportation, destruction, or marking to be accomplished under customs supervision prior to the liquidation of the entry covering the article, and to be allowed whether or not the article has remained in continuous customs custody), there shall be levied, collected, and paid upon such article a duty of 10 per centum ad valorem, which shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause. * * *"

When this case was called for hearing, counsel for the plaintiff offered in evidence various documents showing compliance with the provisions of section 516 (b), supra (plaintiff's exhibits 1 through 10), and a sample of the imported merchandise (plaintiff's exhibit 11).

Counsel for the party in interest then made three motions to dismiss the protest: (1) On the ground that the court is without jurisdiction to hear and determine this case because the protest seeks a judicial review of the Secretary's exercise of the authority granted to him by section 304(a)(3), supra, to make regulations authorizing the exception of certain articles from the marking requirements and his authorization of the exception involved herein; (2) on the ground that the failure of the collector to comply with section 516(c), supra, by mailing a copy of the protest to the party in interest within 5 days after the filing thereof is such a defect in procedure as to deprive the plaintiff of any right to have its protest heard and determined; and (3) on the ground that the protest is not signed with the correct name of the plaintiff. The last motion was subsequently withdrawn.

The party in interest claims in the first motion that the issue involves a matter within the discretion of the Secretary of the Treasury which is not reviewable by this court. The plaintiff contends that the protest is against an action of the collector and does not involve a review of any action by the Secretary.

The protest is directed against the collector's liquidation on the ground that the merchandise was not legally marked so that an additional duty of 10 per centum ad valorem should have been assessed under the provisions of section 304(c), supra.

In Bradford Co. et al. (United States Impleaded) v. American Lithographic Co., an American Manufacturer, 12 Ct. Cust.App. 318, T.D. 40318, it was held that the collector's action in determining that the merchandise was legally marked in accordance with the statute was a classification within the meaning of section 516(b) of the Tariff Act of 1922; that an American manufacturer had the right to protest a classification under the marking statute; and that such protest properly invoked the jurisdiction of the Board of General Appraisers (now the Customs Court). The decision of the board sustaining the protest and directing the collector to reliquidate, assessing the additional duty of 10 per centum ad valorem for failure to properly mark the merchandise, was affirmed.

Section 516(b) of the Tariff Act of 1930, as amended, supra, is similar to its predecessor in the Tariff Act of 1922. The protest herein, like that in the Bradford case,...