The A. W. Fenton Co., Inc. v. United States
| Decision Date | 06 July 1965 |
| Docket Number | C.D. 2554. |
| Citation | 55 Cust. Ct. 74 |
| Parties | THE A. W. FENTON CO., INC. <I>v.</I> UNITED STATES. |
| Court | U.S. Court of Customs and Patent Appeals (CCPA) |
John W. Douglas, Assistant Attorney General (Andrew P. Vance and Harvey A. Isaacs, trial attorneys), for the defendant.
Before OLIVER, WILSON, and NICHOLS, Judges
The merchandise involved in this case consists of rubber footwear, assessed with duty under paragraph 1537 of the Tariff Act of 1930, as modified by the Protocol of Terms of Accession by Japan to the General Agreement on Tariffs and Trade, T.D. 53865 and T.D. 53877, at 12½ per centum ad valorem on the American selling price, T.D. 46158. It is claimed that the footwear is not of a kind specified in Presidential proclamation, T.D. 46158; that the proclamation is unconstitutional, illegal, null, and void; that the liquidation was premature and is illegal, null, and void; and that the plaintiff has been deprived of its rights without due process of law.
When this case was called at Cleveland, Ohio, on May 12, 1964, counsel for the Government moved to dismiss the protest on the ground that duties due and owing upon the entries had not been paid. It was conceded by counsel for the plaintiff that such duties had not been paid; that some of the entries were consumption entries; and that the merchandise covered by warehouse entries had been withdrawn for consumption prior to liquidation.
Plaintiff opposes the motion on two grounds: (1) that the liquidation of June 17, 1963, was illegal because a reappraisement proceeding was pending, and (2) that there is no requirement that duties on warehouse entries be paid in order to perfect a protest as to them.
The first position urged by plaintiff is untenable. The merchandise in this case was entered by The A. W. Fenton Co., Inc., as importer of record for the account of Sharwell Brothers Co., Sharwell Brothers Shoe Co., or Sharyama, Inc. It was appraised on various dates in 1962 and notices of appraisement were sent to The A. W. Fenton Co., Inc. That firm filed timely appeals. The cases were called at a term of court in Cleveland on November 15, 1962, at which time there was no appearance on the part of the plaintiff, and counsel for the Government moved to dismiss on the ground of lack of prosecution. The cases were dismissed by order of this court, dated February 18, 1963. On August 15, 1963 (178 days later), a notice of appearance was filed by Allerton deC. Tompkins, Esquire, and he moved for a rehearing alleging that it had been understood that an arrangement for a continuance had been made and that the matter had escaped the attention of the brokerage firm until after the expiration of the 30-day period. This motion was denied on December 16, 1964. The A. W. Fenton Co., Inc. v. United States, 53 Cust. Ct. 519, Reap. Dec. 10871. There followed an application for review, and plaintiff attempted to support its case by citing S. Stern & Company v. United States, 51 CCPA 15, C.A.D. 830, claiming that it was deprived of due process of law by the dismissal of the case, since it was an agent of the party in interest and was not permitted to appear personally to answer the calendar call. The second division dismissed the application for review on the ground of lack of jurisdiction on March 19, 1965. The A. W. Fenton Co., Inc. v. United States, 54 Cust. Ct. 781, A.R.D. 184, appeal 5208 pending.
An examination of the affidavit in support of the motion for a rehearing discloses that so far as it makes any difference, both plaintiff and its principals had knowledge of the proceedings at all times, knew that counsel were necessary, and could have employed counsel to protect their respective interests. In any event, the law is clear that a motion for a rehearing must be filed within 30 days after judgment and that the court lacks jurisdiction to restore a case to the calendar on a motion made after the expiration of that period. United States v. Williams, Clarke Company, 52 Cust. Ct. 639, A.R.D. 173.
The appraisement of this merchandise thus became final and conclusive 30 days after the date of the dismissal of the appeals on February 18, 1963. The liquidation on June 17, 1963, was not premature or illegal. Subsequent proceedings in the reappraisement cases were mere nullities.
The second point involved here is the application of that part of section 515 of the Tariff Act of 1930, which provides:
* * * If the collector shall, upon such review [of the protest], affirm his original decision, or if a protest shall be filed against his modification of any decision, and, in the case of merchandise entered for consumption, if all duties and charges shall be paid, then the collector shall forthwith transmit the entry and the accompanying papers, and all the exhibits connected therewith, to the United States Customs Court for due assignment and determination, as provided by law. * * * [Emphasis supplied.]
Eleven of the entries under protest are warehouse entries and eight are consumption entries. Plaintiff apparently concedes that the consumption entries are subject to dismissal for nonpayment of the increased duties, but it is claimed that the statute does not require payment of such duties where the merchandise, the subject of protest, was entered for warehouse. Defendant's position is that the words "merchandise entered for consumption" include merchandise which at the time of the collector's action has been withdrawn from warehouse for consumption and has entered the commerce of the country. In the instant case, the merchandise was withdrawn for consumption before liquidation; therefore, it is claimed that since the increased duties have not been paid, the protest is subject to dismissal.
Plaintiff relies on Importers Sales Agents (J. L. Westland & Son) and Importers Sales Agent (John L. Westland & Son, Inc.) v. United States, 30 Cust. Ct. 378, Abstract 57153. That case involved a warehouse entry covering 100 cases of merchandise. Forty-seven cases had been withdrawn from warehouse for consumption and 53 remained in warehouse. Increased duties had not been paid. The court denied a motion for dismissal of the protest because of nonpayment of duties, stating (p. 379):
Counsel for the importers contends that the payment of duties is not a condition precedent to the filing of a valid protest under the circumstances of the instant case in which a warehouse entry and not an entry for consumption was made. It is contended that the statute is limited to cases involving entries for consumption. It is pointed out in the brief filed on behalf of the importers, plaintiffs herein, that Congress has made a clear distinction between entries for consumption and withdrawal for consumption. When it intends to provide for both, it so indicates by the use of a phrase such as "entered or withdrawn for consumption." (Section 313(c), Tariff Act of 1930 (19 U.S.C. § 1313(c).) Likewise, in sections 311 and 313(i), when it intends to designate the operation of removing goods from warehouse and mingling them with the commerce of the country, it uses some such term as "withdrawn for domestic consumption," or "withdrawn for consumption." We consider this point well taken and find that the provision in section 515, supra, being limited to cases of merchandise entered for consumption, there is no provision in the statute requiring that duties and charges must be paid in cases of warehouse entries.
Defendant claims that this holding was improvident and not in conformity with congressional intent. We do not consider it sacrosanct under stare decisis because it was only an interlocutory ruling and the Government finally obtained dismissal for want of prosecution. Importers Sales Agents et al. v. United States, 35 Cust. Ct. 345, Abstract 59558. The papers reflect that the issue was briefed and some of the pertinent authorities cited, but on the Government side the brief rather fails to come to grips with the issue and perhaps, by its omissions, accounts for the decision. The rule laid down has apparently been accepted by the Bureau of Customs, since section 17.3(k) of the Customs Manual now provides:
Whenever the collector affirms his original decision after his review of the protest, where increased duties or charges on goods covered by a consumption entry have not been paid, the third copy of the protest forwarded to the Assistant to the Chief Counsel pursuant to paragraph (j) of this section shall be accompanied by a notice so advising that official and recommending that he request the Assistant Attorney General to file a motion for dismissal of the protest. If such duties or charges are subsequently paid while the protest is still pending in the Customs Court, notice shall be given to the Assistant to the Chief Counsel and a receipted copy of customs Form 5107, notice of Duty and Internal Revenue Tax Due, shall be forwarded to the clerk of the court, as prescribed in section 10.60(i) of the Customs Accounting Manual. [Emphasis supplied.]
The first sentence was added by a revision of November 1960 and the second by the revision of October 1962.
Abstract 57153, supra, was followed, apparently without any fresh review of its reasoning, in Fred Whitaker Company v. United States, 35 Cust. Ct. 309, Abstract 59463.
In Sucrest Corporation v. United States, 31 CCPA 220, C.A.D. 275, sugar had been entered for warehouse, and the broker presented papers for its withdrawal for consumption just before the time when a higher rate of duty went into effect. He was informed that he would have to pay duty at the higher rate, and he abandoned his efforts to withdraw at that time and did not tender payment. A protest was filed against the collector's refusal to permit the withdrawal and accept appellant's entry for consumption. The court stated (p. 232):
It is clear from a consideration of the hereinbefore referred to provisions of the Tariff Act of 193...
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