National Lead Co v. United States
| Citation | 40 S.Ct. 237,252 U.S. 140,64 L.Ed. 496 |
| Decision Date | 01 March 1920 |
| Docket Number | No. 123,123 |
| Parties | NATIONAL LEAD CO. v. UNITED STATES |
| Court | United States Supreme Court |
Messrs. Alexander Britton and Evans Browne, both of Washington, D. C., for appellant.
[Argument of Counsel from pages 140-142 intentionally omitted] Mr. Assistant Attorney General Davis, for the United States.
This is a suit to recover the difference between the amount of drawback allowed by the government to the appellant, a corporation, as an exporter of linseed oil cake, and the amount to which it claims to be entitled under section 22 of the Act of Congress effective August 27, 1894 (28 Stat. 509, 551), which reads as follows:
'That where imported materials on which duties have been paid are used in the manufacture of articles manufactured or produced in the United States, there shall be allowed on the exportation of such articles a drawback equal in amount to the duties paid on the materials used, less one per centum of such duties. * * *'
It is further provided in the section that the drawback due thereon shall be paid to the manufacturer, producer or exporter 'under such regulations as the Secretary of the Treasury shall prescribe.'
The appellant imported large quantities of linseed upon which it paid a specific duty of 20 cents per bushel of 56 pounds. This seed, when treated by a simple process, yielded about 20 pounds of linseed oil and about 36 pounds of linseed oil cake, to the bushel. The oil was much more valuable than the oil cake; the latter being composed of the solid substance of the seed and a small amount of oil not recovered, which made it valuable as a feed for stock. It is a by-product, and, except for the small amount of oil in it, would be mere waste.
Appellant exported large quantities of oil cake, derived from seed which it had imported, and made demand in proper form for the drawback provided for by the act of Congress.
The law providing for such drawbacks has differed in form of expression from time to time but, since the Act of August 5, 1861 (12 Stat. c. 45, p. 253), it has not differed in substance from the Act of 1894, as we have quoted it. The number of articles to which the law is applicable is very great, among them, notably, 'refined sugar and syrup which come from imported raw sugar and refined sugar and syrup which come from imported molasses.'
The Court of Claims found that:
The claim of the appellant is that the correct construction of the section, relied upon, requires that the drawback should be computed on the basis of the weights of the oil and oil cake derived by the process of manufacture from the seed, instead of on the basis of the values of the two products, as it was computed by the government, and the question for decision is, whether the department regulation is a valid interpretation of the statute.
The act quoted provides that where imported materials are used in this country in the manufacture of articles which are exported, a drawback shall be allowed 'equal in amount to the duties paid on the material used,' less 1 per centum. What was the amount of duty paid on the small amount of oil and on the large amount of solid substance, the hull and the fiber, which made up the exported oil cake? Was it substantially two-thirds of the total, determined by weight—on 36 of 56 pounds—or was it about one-fourth of the total as determined by the relative values of the oil and of the oil cake derived from the seed?
The terms of the provision show that the contingency of having one kind of dutiable material, from which two or more kinds of manufactured products might be derived, is not specifically provided for. Obviously only a part, the least valuable part, of the materials or ingredients of the linseed were used in the making of oil cake, and therefor the problem of determining the 'drawback equal in amount to the duty paid' on the part so used the solid parts of the seed and the small amount...
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