International Navigation Co. v. United States

• Decision Date: 03 January 1957
• Docket Number: C.D. 1836,Protest No. 206465-K.
• Citation: 38 Cust. Ct. 5,148 F. Supp. 448
• Parties: INTERNATIONAL NAVIGATION CO., Inc., v. UNITED STATES.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

148 F. Supp. 448

38 Cust. Ct. 5

INTERNATIONAL NAVIGATION CO., Inc., v. UNITED STATES.

C.D. 1836; Protest No. 206465-K.

United States Customs Court, Third Division.

January 3, 1957.

COPYRIGHT MATERIAL OMITTED

Joseph Cardillo, Jr., New York City (Curran C. Tiffany, New York City, of counsel), for plaintiff.

George Cochran Doub, Asst. Atty. Gen. (William J. Vitale, trial atty., New York City), for defendant.

Before JOHNSON and MOLLISON, Judges.

JOHNSON, Judge.

This is a protest against the collector's assessment of an ad valorem duty of 50 per centum under section 466 of the Tariff Act of 1930, 19 U.S.C.A. §§ 257, 258, on the cost of certain repairs made in foreign countries to a vessel documented under the laws of the United States to engage in the foreign or coasting trade and against the decision of the collector or his assistant and that of the Chief of the Division of Classification, Entry, and Value denying an application for relief from such duties. It is claimed in the first five items of the protest that said repairs were compelled by a casualty arising in the regular course of the vessel's voyage and were necessary to secure the safety of the vessel; that where the action of customs officials depends upon the validity of the action of the Secretary of the Treasury, the validity of such action is reviewable; that the action of customs officials in denying an application for remission of duties herein was void, on the ground that the Secretary's authority to delegate his duties was limited to the exportation of merchandise; that there was an abuse of discretion in denying remission herein; and that the decision denying remission was appealable on the ground that the Secretary's authority to remit was in part ministerial. The last three items of the protest cover claims that certain items were not properly dutiable as repairs under said section 466.

The pertinent provisions of the tariff act are as follows:

"Sec. 466. Equipment and Repairs of Vessels.

"Sections 3114 and 3115 of the Revised Statutes, as amended by the Tariff Act of 1922, are amended to read as follows:

"Sec. 3114. The equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States to engage in the foreign or coasting trade, or a vessel intended to be employed in such trade, shall, on the first arrival of such vessel in any port of the United States, be liable to entry and the payment of an ad valorem duty of 50 per centum on the cost thereof in such foreign country; and if the owner or master of such vessel shall willfully and knowingly neglect or fail to report, make entry, and pay duties as herein required, such vessel, with her tackle, apparel, and furniture, shall be seized and forfeited. For the purposes of this section, compensation paid to members of the regular crew of such vessel in connection with the installation of any such equipments or any part thereof, or the making of repairs, in a foreign country, shall not be included in the cost of such equipment or part thereof, or of such repairs.

"Sec. 3115. If the owner or master of such vessel furnishes good and sufficient evidence —

"(1) That such vessel, while in the regular course of her voyage, was compelled, by stress of weather or other casualty, to put into such foreign port and purchase such equipments, or make such repairs, to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination; * * * then the Secretary of the Treasury is authorized to remit or refund such duties, and such vessel shall not be liable to forfeiture, * * *."

At the opening of the trial, counsel for the Government moved to dismiss the first five items of the protest on the ground that the court lacked jurisdiction over the subject matter, citing Waterman Steamship Corp. v. United States, 30 C.C.P.A., Customs, 119, C. A.D. 223. Decision on the motion was reserved.

In the Waterman case, it appeared that a certain vessel developed engine trouble on a voyage to Japan and repairs were made in that country. On its return here, application was made to the Commissioner of Customs for remission of duty on the cost of such repairs. The application was denied on the ground that there was no showing that the repairs were occasioned by stress of weather or other casualty. After liquidation, in which duty was assessed on the cost of the repairs, protest was filed for remission of such duty. The protest was dismissed on the ground that, under section 466 of the Tariff Act of 1930, the court was without jurisdiction to review the action of the Secretary in refusing to remit or refund duties on repairs to a vessel made in a foreign country. In the course of its opinion, the court pointed out that it was not the intention of Congress to confer upon collectors, or upon the courts, the power to review issues, the final determination of which was conferred exclusively upon the Secretary of the Treasury, but that where official action of customs officials depended upon the validity of the action of the Secretary, the validity of such action might be judicially reviewed. The court then stated, 30 C.C.P.A., Customs, at pages 125-126:

"It is clear from the provisions of sections 3114 and 3115, supra, that it was the mandatory duty of the collector to assess the duty herein complained of, and that he had no authority to either remit or refund such duty, such authority being conferred upon the Secretary of the Treasury by the provisions of section 3115. There being no provision either in section 3115, or in any other provision of the Tariff Act of 1930, for a review of the Secretary's decision, we think it is clear that it was the purpose of the Congress, by the enactment of section 3115, to confer upon the Secretary of the Treasury exclusive and final authority to determine, from the evidence submitted, whether or not the duties provided for in section 3114 should be remitted or refunded."

Because the issues had not been raised below, the court did not pass upon contentions that the Secretary of the Treasury had no authority to delegate his powers to the Commissioner of Customs and that the delegation permitted by 5 U.S.C.A. § 281b(a), 44 Stat. 1382, referred only to actions in respect to the importation or entry of merchandise, and not as to the remission of duties upon expenses of repairs.

In the instant case, it appears that certain repairs were made to the vessel SS. Elly (an American vessel engaged in foreign trade) in Trinidad in December 1951 and in Buenos Aires, Argentina, in January 1952. According to the testimony and the exhibits, some of the tubes in the starboard boiler burned out before arrival at Trinidad, and, during the ensuing voyage to Buenos Aires, the inboard feed pump and the main circulator did not operate properly. Damage to the port boiler was first noticed when the vessel lay afloat at Buenos Aires. Consequently, repairs were made, which were duly entered upon return of the vessel to this country. Application was then made by the master to the Bureau of Customs at Baltimore, Md., for remission of the duties on said repairs (plaintiff's exhibit 5). The application was denied, for the reason, as stated by the assistant collector, that the evidence did not show the damage was proximately caused by stress of weather or other casualty (plaintiff's exhibit 19).

Thereafter, a petition for review of the collector's decision was filed and transmitted by the collector to the Bureau of Customs. On December 24, 1952, the Chief, Division of Classification, Entry, and Value, denied the relief prayed for under section 466, on the ground that he was not satisfied that the repairs were necessitated by stress of weather or other casualty; but he held that certain items, such as cleaning the port boiler, were not subject to duty as repairs (plaintiff's collective exhibit 20).

In a recent decision in the case of International Navigation Co., Inc., v. United States, 35 Cust.Ct. 52, C.D. 1721, which involved the same vessel (under another name) but a different voyage, we held that the action of the assistant collector at Norfolk denying a similar application for remission and the liquidation based thereon were invalid and void on the ground that the authority to remit or refund duties assessed under section 466 was vested in the Secretary of the Treasury, and that while such authority had been delegated in the first instance to the Commissioner of Customs and then to the Chief of the Division of Classification, Entry, and Value, it had not been delegated to collectors or assistant collectors.

In that case, we pointed out that, under section 3(a) of chapter 348 of the laws of 1927, 44 Stat. 1382, 5 U. S.C.A. § 281b, infra, the Secretary of the Treasury was given authority to confer upon the Commissioner of Customs or any of the officers of the Bureau of Customs any of the rights, privileges, powers, or duties in respect to the importation or entry of merchandise into, or exportation from, the United States, vested in the Secretary of the Treasury by the Tariff Act of 1922 or any other law. Pursuant to this section, the Secretary's powers were conferred upon the Commissioner of Customs by various orders of the Secretary, including T.D. 52121, which also provided that such powers might be exercised by other officers, as designated by the Commissioner with the approval of the Secretary. The Commissioner, with the approval of the acting Secretary of the Treasury, thereafter designated the Chief of the Division of Classification, Entry, and Value as the officer who should make decisions relating to the assessment of duties on equipment or repairs of vessels under section 466 and decisions remitting or refunding such duties. T.D. 52331, as amended by T.D. 52394. We found that at the time of entry there was no clear and...