Hugo Stinnes Steel & Metals Co. v. United States

• Decision Date: 20 June 1978
• Docket Number: C.D. No. 4753. Court No. 73-2-00485.
• Citation: 453 F. Supp. 94
• Parties: HUGO STINNES STEEL AND METALS CO. v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

453 F. Supp. 94

HUGO STINNES STEEL AND METALS CO. v. UNITED STATES.

C.D. No. 4753. Court No. 73-2-00485.

United States Customs Court.

June 20, 1978.

COPYRIGHT MATERIAL OMITTED

Rode & Qualey, New York City (Ellsworth F. Qualey, New York City, of counsel), for plaintiff.

Barbara Allen Babcock, Asst. Atty. Gen., Washington, D.C. (Saul Davis, trial atty., New York City), for defendant.

BOE, Judge:

The plaintiff has filed a motion for summary judgment contesting the imposition of a supplemental duty in the amount of 10% ad valorem under item 948.00, Tariff Schedules of the United States, pursuant to Presidential Proclamation 4074, 36 F.R. 15724 (1971). The merchandise upon which the supplemental duty was assessed consisted of 415 coils of cold rolled steel sheets, shipped from Japan on July 17, 1971 to Antwerp, Belgium, shipped therefrom to the United States on September 25, 1971 and entered at the port of Toledo, Ohio on or about November 4, 1971. A protest to the assessment was filed by the plaintiff which was denied by the customs service.

The defendant has filed a cross-motion for summary judgment contending that the Commissioner of Customs properly determined that the date of exportation of the merchandise in question to the United States was the date on which the steel coils were shipped from Belgium on September 25, 1971 and, accordingly, were subject to the 10% supplemental duty provided by Presidential Proclamation 4074 and the orders, rules and regulations subsequently issued by the Secretary of the Treasury by way of implementation.

By the terms of Presidential Proclamation 4074, the supplemental duty in the amount of 10% was imposed on all dutiable articles, except those articles exempted by the Secretary of the Treasury, imported for consumption into the customs territory of the United States after 12:01 a. m., August 16, 1971. To implement the provision providing for the imposition of the supplemental duty, the Proclamation directed that subpart C be inserted immediately after subpart B of part 2 of the Appendix to the Tariff Schedules of the United States. By the terms of headnote 4(a), subpart C, authority was delegated to the Secretary of the Treasury to "* * * take action to reduce, eliminate or reimpose the rate of additional duty herein or to establish exemption therefrom * * *."

In the course of the administration of the provisions relating to the supplemental duty, it appeared that in certain circumstances equity justified a one-time, non-recurring exemption from the effective time and date of the supplemental duty as fixed by the Presidential Proclamation. Accordingly, on August 31, 1971, the Secretary of the Treasury issued Additional Duty Order No. 3, 36 F.R. 17667 (1971), providing the following exemption from the imposition of the supplemental duty:

Headnote 5, subpart C, part 2, Appendix to the Tariff Schedules of the United States:

5. Articles exempt from the additional duties. — In accordance with determinations made by the Secretary in accordance with Headnote 4(a), the following described articles are exempt from the provisions of this subpart:

* * * * * *

(h) Articles exported to the United States before 12:01 a. m., August 16, 1971, * * *.

The issue presented to the court in this action, accordingly, is whether the merchandise in question, entered into the United States at Toledo, Ohio on November 4, 1971 was "exported to the United States before 12:01 a. m., August 16, 1971" within the intendment of Additional Duty Order No. 3 promulgated by the Secretary of the Treasury.

In the determination of the foregoing issue, the defendant contends that this court is restricted only to a review of the administrative record to determine whether the decision of the Commissioner of Customs was reasonable. This position of the government is predicated upon Additional Duty Order No. 3 which, the defendant maintains, conferred upon the Commissioner of Customs the discretionary authority to determine what goods, in fact, were "exported to the United States before 12:01 a. m., August 16, 1971." Additional Duty Order No. 3 provided in pertinent part:

By virtue of the authority vested in the Secretary of the Treasury, * * * the Commissioner of Customs, with the approval of the Assistant Secretary of the Treasury (Enforcement, Tariff and Trade Affairs, and Operations) is authorized to prescribe such regulations and issue such instructions as may be necessary to carry out the purposes of this order.

I

Recently, the government has been urging with increased frequency that decisions made by the Secretary of the Treasury and the Commissioner of Customs of the character presently under consideration may be reviewed only with respect to the reasonableness thereof. From whence such a construction has had its origin is not suggested or explained. No applicable authority for this position has been cited by the defendant.¹ Nor has this court independently been able to discover any authoritative support therefor. On the contrary, the defendant's construction as to the extent of this court's scope of review in a proceeding of this character is neither consistent with existing statute relating to trial procedure in this court, nor with the historical and accepted practice, particularly in proceedings seeking a determination as to the applicability of a rate of duty upon imported merchandise. The intent of Congress, indeed, is clear as to the extensive character of the judicial review it assures a litigant in any proceeding before the United States Customs Court. 28 U.S.C. § 2637(a) provides:

In any proceeding in the Customs Court, under rules prescribed by the court, the parties and their attorneys shall have an opportunity to introduce evidence, to hear and cross-examine the witnesses of the other party, and to inspect all samples and all papers admitted or offered as evidence, * * *. Emphasis added.

However, the defendant urges that the instant action should be considered outside the usual framework of cases presented to this court because the administrative decision denying plaintiff's protest was based upon an interpretation of an intra-executive department directive — Additional Duty Order No. 3. To so characterize the Order of the Secretary of the Treasury is a gross misconception. Presidential Proclamation 4074 and Additional Duty Order No. 3 became a part of the Tariff Schedules of the United States. Each with respect to the supplemental duty and its application was the legal equivalent of a Congressional enactment. The 10% supplemental duty was not restricted to specific or a limited number of tariff provisions, but applied generally on all dutiable articles imported into the United States except those which the Secretary of the Treasury was authorized to exempt. The powers exercised by the President and the Secretary of the Treasury were not inherent in and to the Executive Branch of government, but rather were exercised by and through the authority initially delegated by the Congress. See United States v. Yoshida International, Inc., 526 F.2d 560, 63 CCPA 15, C.A.D. 1160 (1975).

In the same manner as any importer seeks an adjudication of the proper rate of duty assessed by the customs service on specific merchandise imported into the United States by the filing of a protest and upon denial thereof by a trial on the record before the Customs Court, so the plaintiff in the instant proceeding, upon the denial of its protest, seeks an adjudication in a trial on the record with respect to its liability for the "additional duty" imposed by Presidential Proclamation 4074 on the specific merchandise imported.

II

In determining, therefore, whether the merchandise in question had been "exported to the United States" before the date and time specified in Presidential Proclamation 4074 and within the intendment of the exemption provided in Additional Duty Order No. 3, it is proper to not only consider the record examined by the Commissioner of Customs in making his determination in the within proceedings, but also the evidence submitted by way of depositions together with the various exhibits presented to this court in connection with this proceeding.²

In February 1971, Heine Bros., Ltd., an English trader in steel, offered to sell to La Metallurgie Liegeoise, a Belgian steel trader, a quantity of cold rolled steel sheets in coil. Heine Bros., in turn, had been offered the steel from Koyo Boeki Co., Ltd., a Japanese steel trader, which steel was to be manufactured in Japan by Nippon Steel Corp. La Metallurgie Liegeoise was given a period of time to accept the offer to purchase the steel from Heine Bros. In the course of attempting to secure buyers for the steel which it had the option to purchase, La Metallurgie Liegeoise on February 24, 1971 offered to sell to the plaintiff 2,000 metric tons (m/t) of cold rolled steel sheets in coils. On May 5, 1971, presumably after negotiations with respect to the total amount of the purchase had been completed, the plaintiff sent its order to La Metallurgie for 11,000 m/t of the steel coils.

The plaintiff's order specified "Nippon Steel Corp., Japan" as the origin of the steel. The total order was subdivided into six different order numbers — 10555, 10556, 10557, 10558, 10559 and 10562. Each order number related to the destination in the United States to which the respective designated quantities of steel were to be delivered. The merchandise in question in this proceeding relates, however, only to orders numbers 10555 and 10556. The price for the merchandise was specified in United States dollars per m/t and insurance at 115% of the sales price in United States dollars was stipulated. The terms of the sale were "CIF free out Antwerp."³ The order specified that the goods be exported from Japan prior to July 31, 1971. The order also required that the merchandise be marked for transshipment to designated ports in the United States in accordance with a...