George S. Bush & Co. v. United States

• Decision Date: 15 June 1939
• Docket Number: Customs Appeal No. 4173.
• Parties: GEORGE S. BUSH & CO., Inc., v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

27 CCPA 64, 104 F.2d 368 (1939)

GEORGE S. BUSH & CO., Inc., v. UNITED STATES.

Customs Appeal No. 4173.

Court of Customs and Patent Appeals.

June 15, 1939.

Lawrence & Tuttle, of San Francisco, Cal. (George R. Tuttle, of San Francisco, Cal., of counsel), for appellant.

Webster J. Oliver, Asst. Atty. Gen. (Charles D. Lawrence, Sp. Asst. to Atty. Gen., and Joseph F. Donohue, Sp. Atty., of Nutley, N. J., of counsel), for the United States.

Before GARRETT, Presiding Judge, and BLAND, HATFIELD, LENROOT, and JACKSON, Associate Judges.

HATFIELD, Associate Judge.

This is an appeal from a judgment of the United States Customs Court, Second Division, in reappraisement No. 113,195-A.

Merchandise, consisting of canned clams, imported into the United States from Japan and entered at the port of Seattle, Washington, was appraised by the local appraiser at that port upon the basis of the American selling price as defined in section 402(g) of the Tariff Act of 1930, pursuant to a proclamation by the President of the United States, dated May 1, 1934, T. D. 47031, 65 Treas.Dec. 736, issued under the flexible tariff provisions — section 336 — of the Tariff Act of 1930.

Section 336, supra, so far as material to the issues here involved, reads:

"Sec. 336 § 1336. Equalization of costs of production.

"(a) Change of classification or duties. — In order to put into force and effect the policy of Congress by this Act chapter intended, the commission (1) upon request of the President, or (2) upon resolution of either or both Houses of Congress, or (3) upon its own motion, or (4) when in the judgment of the commission there is good and sufficient reason therefor, upon application of any interested party, shall investigate the differences in the costs of production of any domestic article and of any like or similar foreign article. In the course of the investigation the commission shall hold hearings and give reasonable public notice thereof, and shall afford reasonable opportunity for parties interested to be present, to produce evidence, and to be heard at such hearings. The commission is authorized to adopt such reasonable procedure and rules and regulations as it deems necessary to execute its functions under this section. The commission shall report to the President the results of the investigation and its findings with respect to such differences in costs of production. If the commission finds it shown by the investigation that the duties expressly fixed by statute do not equalize the differences in the costs of production of the domestic article and the like or similar foreign article when produced in the principal competing country, the commission shall specify in its report such increases or decreases in rates of duty expressly fixed by statute (including any necessary change in classification) as it finds shown by the investigation to be necessary to equalize such differences. In no case shall the total increase or decrease of such rates of duty exceed 50 per centum of the rates expressly fixed by statute.

"(b) Change to American selling price. — If the commission finds upon any such investigation that such differences can not be equalized by proceeding as hereinbefore provided, it shall so state in its report to the President and shall specify therein such ad valorem rates of duty based upon the American selling price (as defined in section 402 1402 (g)) of the domestic article, as it finds shown by the investigation to be necessary to equalize such differences. In no case shall the total decrease of such rates of duty exceed 50 per centum of the rates expressly fixed by statute, and no such rate shall be increased.

"(c) Proclamation by the President. — The President shall by proclamation approve the rates of duty and changes in classification and in basis of value specified in any report of the commission under this section, if in his judgment such rates of duty and changes are shown by such investigation of the commission to be necessary to equalize such differences in costs of production.

* * * * * * *

"(e) Ascertainment of differences in costs of production. — In ascertaining under this section the differences in costs of production, the commission shall take into consideration, in so far as it finds it practicable:

"(1) In the case of a domestic article. — (A) The cost of production as hereinafter in this section defined; (B) transportation costs and other costs incident to delivery to the principal market or markets of the United States for the article; and (C) other relevant factors that constitute an advantage or disadvantage in competition.

"(2) In the case of a foreign article. — (A) The cost of production as hereinafter in this section defined, or, if the commission finds that such cost is not readily ascertainable, the commission may accept as evidence thereof, or as supplemental thereto, the weighted average of the invoice prices or values for a representative period and/or the average wholesale selling price for a representative period (which price shall be that at which the article is freely offered for sale to all purchasers in the principal market or markets of the principal competing country or countries in the ordinary course of trade and in the usual wholesale quantities in such market or markets); (B) transportation costs and other costs incident to delivery to the principal market or markets of the United States for the articles; (C) other relevant factors that constitute an advantage or disadvantage in competition, including advantages granted to the foreign producers by a government, person, partnership, corporation, or association in a foreign country.

* * * * * * *

"(h) Definitions. — For the purpose of this section —

* * * * * * *

"(4) The term `cost of production', when applied with respect to either a domestic article or a foreign article, includes, for a period which is representative of conditions in production of the article: (A) The price or cost of materials, labor costs, and other direct charges incurred in the production of the article and in the processes or methods employed in its production; (B) the usual general expenses, including charges for depreciation or depletion which are representative of the equipment and property employed in the production of the article and charges for rent or interest which are representative of the cost of obtaining capital or instruments of production; and (C) the cost of containers and coverings of whatever nature, and other costs, charges, and expenses incident to placing the article in condition packed ready for delivery."

Section 402 of the Tariff Act of 1930, 19 U.S.C.A. § 1402, so far as pertinent, reads:

"Sec. 402 § 1402. Value.

* * * * * * *

"(d) 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 States, 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, plus, when not included in such price, the cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the merchandise in condition, packed ready for shipment to the United States.

* * * * * * *

"(g) American selling price. — The American selling price of any article manufactured or produced in the United States shall be the price, including the cost of all containers and coverings of whatever nature and all other costs, charges, and expenses incident to placing the merchandise in condition packed ready for delivery, at which such article is freely offered for sale to all purchasers in the principal market of the United States, in the ordinary course of trade and in the usual wholesale quantities in such market, or the price that the manufacturer, producer, or owner would have received or was willing to receive for such merchandise when sold in the ordinary course of trade and in the usual wholesale quantities, at the time of exportation of the imported article."

The importer appealed for reappraisement, claiming that the involved merchandise, which it is conceded is dutiable under paragraph 721(b) of the Tariff Act of 1930 at 35 per centum ad valorem should have been appraised at its foreign or export values, whichever are higher, rather than upon the basis of the American selling price, as defined in section 402 (g), supra.

On the trial before the trial court it was stipulated by counsel for the parties that the merchandise has no foreign values; that its export values are $2.75 per case for that imported in five ounce tins, and $3.68 per case for that imported in 8 ounce tins, less nondutiable charges as shown by the invoice; that should the export values be held to be the proper dutiable values of the merchandise the dutiable values are $2.5107 per case for the 5 ounce tins, and $3.598 per case for the 8 ounce tins; and that should the presidential proclamation be held valid, the appraised values are the proper dutiable values of the merchandise.

Counsel for the importer introduced in evidence the presidential proclamation and the report of the Tariff Commission.

The trial court affirmed the appraised values, and, on appeal, the appellate division of the Customs Court affirmed the judgment of the trial court.

Counsel for appellant contend that the proclamation by the President is invalid because it was based upon an investigation by the Tariff Commission which was not made in accordance with the provisions of section 336, supra; that the Tariff Commission being unable to find the cost of production of the involved merchandise, as defined in section 336(h) (4), accepted as evidence of such cost the weighted average of invoice prices of merchandise like that here involved in Japanese yen for the period...