United States v. Domestic Fuel Corporation

• Decision Date: 02 April 1934
• Docket Number: Customs Appeal No. 3727.
• Citation: 71 F.2d 424
• Parties: UNITED STATES v. DOMESTIC FUEL CORPORATION et al.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

71 F.2d 424 (1934)

UNITED STATES v. DOMESTIC FUEL CORPORATION et al.

Customs Appeal No. 3727.

Court of Customs and Patent Appeals.

April 2, 1934.

Charles D. Lawrence, Asst. Atty. Gen., and John T. Fowler, Sp. Asst. to Atty. Gen. (Ralph Folks, Sp. Atty., of New York City, of counsel), for the United States.

Curtis, Fosdick & Belknap, of New York City (James F. Curtis, of New York City, of counsel), for appellees.

Henry Warrum, of Indianapolis, Ind., Gleason, MacLanahan, Merritt & Ingraham, of New York City, and Geo. W. Dalzell, of Washington, D. C. (Walter Gordon Merritt, George C. Austin, and Cyrus C. Perry, all of New York City, of counsel), amici curiæ.

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

GARRETT, Associate Judge.

Appeals are here brought before us from two judgments of the United States Customs Court, sustaining protests made by Domestic Fuel Corporation and George E. Warren Corporation, respectively, against the assessment and collection by collectors of customs of taxes or duties on certain importations of anthracite coal, made in the year 1932, from Germany and from Wales, a part of the United Kingdom of Great Britain and Ireland, respectively.

By agreement of counsel, with the approval of the court, a consolidated record was prepared for the appeals and the cases were briefed and orally argued together. The trial court disposed of both cases in a single opinion, rendering separate judgments, and that course will be followed by us.

By section 201, paragraph 1650 of the Tariff Act of 1930 (19 USCA § 1201, par. 1650) coal is placed on the free list, with, however, a countervailing duty proviso not here involved.¹

The Revenue Act of 1932 provides in the main for internal taxes as distinguished from duties on imports, but title 4 thereof, which provides for certain "Manufacturers' excise taxes," carries also provision for the imposition and collection, by collectors of customs, of taxes, or duties on quite a number of specifically designated articles, upon their importation, the tax to be imposed, as set forth in the act, "unless treaty provisions of the United States otherwise provide."

Among the articles so designated is coal, such as that here involved, the tax to be levied thereon at the rate of 10 cents per 100 pounds, but the coal paragraph has a provision, not appearing in any of the other tariff paragraphs, the meaning of which is that the tax provided shall not be imposed upon coal and other fuel materials named in the paragraph, imported from countries with which, during the calendar year preceding the importation, the balance of trade in such coal and other fuel materials was favorable to the United States.²

It is agreed that during the calendar year 1931 the balance of trade in anthracite coal between the United States and Mexico and between the United States and Canada was favorable to the United States, and that, during the calendar year 1932, under instructions of the Treasury Department, anthracite coal imported into the United States from both Mexico and Canada was admitted without the levying of tax or duty thereon.

It is further agreed that, during the calendar year 1931, the balance of trade in coal, such as that involved, between the United States and Germany, and between the United States and the United Kingdom of Great Britain and Ireland, was against the United States.

The effective date of section 601 of the Revenue Act of 1932 was 15 days after June 6, 1932, the date of its approval by the President of the United States, and T. D. 45751, instructing collectors of customs to admit coal from Mexico and Canada (these countries being specifically named) tax free, was issued June 20, 1932.³

From T. D. 46102, hereinafter alluded to, we learn that on July 26, 1932, "the Bureau of Customs advised an inquirer that coke from Great Britain, Belgium, or Germany, imported into the United States during 1932 after the effective date of the revenue act would be subject to the import tax provided for in the said act." It does not appear from the record who the inquirer was, but it does seem to have become the administrative practice thereafter for collectors to assess and collect duties upon coal coming from those countries, which practice was followed in the instant cases.

The record before us does disclose that, under date of July 26, 1932, the Assistant Secretary of State of the United States addressed a communication to the Secretary of the Treasury on the subject of the applicability of the tax on coal, provided in the Revenue Act of 1932, to importations from Germany and Great Britain in view of the provisions of the "most-favored-nation" clauses in the commercial treaties existing between the United States and those countries, taken in connection with the clause, "unless treaty provisions of the United States otherwise provide" contained in the act.

To this communication the Secretary of the Treasury responded by letter, dated November 14, 1932, and expressed the opinion that "so long as coal from Canada or any other country is exempt from the tax prescribed in section 601 (c) (5) of the revenue act, coal from Great Britain or Germany is entitled to similar treatment when imported into this country."

On November 19, 1932, T. D. 45991 was formally issued, paragraph 6 of which instructed collectors of customs, according to the views expressed in the said letter of the Secretary of the Treasury.⁴

Subsequently, on January 9, 1933, there was issued T. D. 46102, which revoked T. D. 45991 — 6, and directed the assessment of the tax upon coal, coke, and other fuels imported "from countries to which the exports from the United States did not exceed the imports therefrom of such fuels during the calendar year preceding the date of importation."⁵

The importations here at issue seem to have been entered and liquidated prior to the date of the letter of the Secretary of the Treasury above alluded to, and, as of course, prior to T. D. 45991 — 6, supra, based upon said letter.

Timely protests were filed by the importers in both of the cases before us. These protests, as finally amended, of necessity differ in certain particulars, but the essential contention of each protest is that the levying of the tax is in contravention or violation of the most-favored nation clauses of treaties existing respectively between the United States and Germany⁶ and the United States and Great Britain,⁷ which treaties are claimed not to have been repealed, abrogated, or modified, but to have been explicitly recognized by the heretofore quoted clause of section 601 (a), "unless treaty provisions of the United States otherwise provide."

As we view the issues before us there is no occasion here for an elaborate or detailed consideration and discussion of the place of treaties in the law of the land. Neither is there any requirement of elaborate or detailed discussion of the power of Congress to supersede treaties by legislation enacted subsequent to the ratification and promulgation of such treaties. Article 6 of the Constitution declares "* * * all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land," and the courts have had frequent occasion to construe and apply the provision thus made. The general principle is so well established as to require no citations, other than those hereinafter named relating to specific phases of the controversies before us. The same may be said of the general principle relative to the abrogation or repeal of treaties by subsequent legislation. "Where a treaty and an act of Congress are in conflict, the latest in date must prevail," is a well-established and often-declared rule. United States v. Lee Yen Tai, 185 U. S. 213, 22 S. Ct. 629, 46 L. Ed. 878, and cases therein cited.

Appellees, however, do not here question the power or authority of Congress to supersede treaties. Their contention proceeds, in effect, upon the theory that Congress has not abrogated the treaties here involved and that, by the provisions of the treaties — they being substantive law — coal from Germany and England, imported in 1932, was entitled to the same treatment relative to taxation as coal, imported that year, from Canada and Mexico.

In brief, appellees do not bring the law itself in question except as to its construction. Their protests are leveled at administrative acts of the respective collectors of customs as being in contravention of the law, when such law is properly construed and applied.

The issue being thus limited, we deem it entirely proper to refrain from any discussion of a number of incidental or collateral questions suggested by some of the briefs filed in the case, interesting as those questions may be.

It is contended on behalf of appellant that the taxes levied are not, in a legal sense, discriminatory, and that their levy does not contravene the most-favored nation clauses of the treaties.

The expression "in a legal sense," used immediately above, is our own, it being our interpretation of the meaning of this portion of appellant's argument.

We are wholly unable to conclude that there was not, so far as the involved importations were concerned, discrimination in fact.

Coal from Canada and Mexico was admitted duty free in 1932 because in the calendar year 1931, which was a passed period at the time of the enactment of the Revenue Act of 1932 (26 USCA § 3001 et seq.), the balance of trade in coal between the United States and those respective countries was favorable to the United States. In that same year of 1932 the coal here at issue was taxed because the balance of trade in coal with Germany and Great Britain was, in 1931, adverse to the United States.

The respective treatments accorded the importations from Mexico and Canada, upon the one hand, and Germany and Great Britain upon the other, resulted solely from the application of a...