United States v. Hammond Lead Products, Inc.

• Decision Date: 22 April 1971
• Docket Number: 5393.,Customs Appeal No. 5392
• Citation: 440 F.2d 1024
• Court: U.S. Court of Customs and Patent Appeals (CCPA)
• Parties: The UNITED STATES (Ralph Valls, Party-in-Interest), Appellants, v. HAMMOND LEAD PRODUCTS, INC., Appellee.

440 F.2d 1024 (1971)

The UNITED STATES (Ralph Valls, Party-in-Interest), Appellants, v. HAMMOND LEAD PRODUCTS, INC., Appellee.

Customs Appeal Nos. 5392, 5393.

United States Court of Customs and Patent Appeals.

April 22, 1971.

William D. Ruckelshaus, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, New York City, Anthony J. Steinmeyer, Civil Division, Department of Justice, Washington, D. C., for the United States.

Paul A. Lenzini, Washington, D. C., for party-in-interest, appellant.

Albert H. Greene, Alvord & Alvord, Washington, D. C., for appellee.

Before RICH, ALMOND, BALDWIN and LANE, Judges, and NICHOLS, Judge, United States Court of Claims, sitting by designation.

NICHOLS, Judge.

This is an appeal from a decision and judgment of the United States Customs Court, First Division, 63 Cust.Ct. 316, C.D. 3915 (1969), sustaining the protest of an American manufacturer, Hammond Lead Products, Inc., appellee, and ordering reliquidation of entry.

On May 2, 1967, appellee filed a complaint asserting that litharge, item 473.52 of the Tariff Schedules of the United States (TSUS), imported from Mexico, was the recipient of a bounty or grant from the Mexican government, and consequently, a countervailing duty was required to be imposed under the mandate of the Tariff Act of 1930, section 303, 19 U.S.C. § 1303. The Commissioner of Customs, acting for the Secretary of the Treasury, notified appellee that in his view the classification and rate of duty on litharge were correct and that countervailing duties were not applicable. Thereupon appellee protested pursuant to the Tariff Act of 1930, section 516(b), 19 U.S.C. § 1516(b), the classification and rate of duty assessed upon such litharge, which protest was duly docketed in the Customs Court. Appellants moved to dismiss the protest on the ground that the court below lacked jurisdiction on the subject matter to entertain an American manufacturer's protest under section 516(b) which complained that the Secretary of the Treasury failed to invoke a countervailing duty under the mandate of section 303. Following the filing of written briefs and oral argument, the Customs Court denied the motions of both appellants, 61 Cust. Ct. 137, C.D. 3552 (1968). Trial on the merits followed, and the Division unanimously sustained appellee's protest in the other decision cited.

Appellant United States is before this court seeking review and reversal of the Customs Court on the merits, while appellant Party-in-Interest seeks review of the decision below on both the jurisdictional aspect and on the merits.

The statutes involved are:

Item 473.52, TSUS:

Pigments (except pigments, in dry form, described in the foregoing provisions of this subpart):

* * * * * *

Containing lead:

* * * * * *

Item 473.52 Litharge .... 1.25¢ per lb.

Tariff Act of 1930, Section 303, 19 U.S.C. § 1303:

Countervailing duties.

Whenever any country, dependency, colony, province, or other political subdivision of government, person, partnership, association, cartel, or corporation shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article or merchandise manufactured or produced in such country, dependency, colony, province, or other political subdivision of government, and such article or merchandise is dutiable under the provisions of this chapter, then upon the importation of any such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by remanufacture or otherwise, there shall be levied and paid, in all such cases, in addition to the duties otherwise imposed by this chapter, an additional duty equal to the net amount of such bounty or grant, however the same be paid or bestowed. The Secretary of the Treasury shall from time to time ascertain and determine, or estimate, the net amount of each such bounty or grant, and shall declare the net amount so determined or estimated. The Secretary of the Treasury shall make all regulations he may deem necessary for the identification of such articles and merchandise and for the assessment and collection of such additional duties.

Tariff Act of 1930, Section 516(b), 19 U.S.C. § 1516(b):

(b) Classification.

The Secretary of the Treasury shall, upon written request by an American manufacturer, producer, or wholesaler, furnish the classification of, and the rate of duty, if any, imposed upon designated imported merchandise of a class or kind manufactured, produced, or sold at wholesale by him. If such manufacturer, producer, or wholesaler believes that the proper rate of duty is not being assessed, he may file a complaint with the Secretary, setting forth a description of the merchandise, the classification, and the rate or rates of duty he believes proper, and the reasons for his belief. If the Secretary decides that the classification of, or rate of duty assessed upon, the merchandise is not correct, he shall notify the collectors as to the proper classification and rate of duty and shall so inform the complainant, and such rate of duty shall be assessed upon all such merchandise entered for consumption or withdrawn from warehouse for consumption after thirty days after the date such notice to the collectors is published in the weekly Treasury Decisions. If the Secretary decides that the classification and rate of duty are correct, he shall so inform the complainant. If dissatisfied with the decision of the Secretary, the complainant may file with the Secretary, not later than thirty days after the date of such decision, notice that he desires to protest the classification of, or rate of duty assessed upon, the merchandise. Upon receipt of such notice from the complainant, the Secretary shall cause publication to be made of his decision as to the proper classification and rate of duty and of the complainant\'s desire to protest, and shall thereafter furnish the complainant with such information as to the entries and consignees of such merchandise, entered after the publication of the decision of the Secretary at the port of entry designated by the complainant in his notice of desire to protest, as will enable the complainant to protest the classification of, or rate of duty imposed upon, such merchandise in the liquidation of such entry at such port. The Secretary shall direct the collector at such port to notify such complainant immediately when the first of such entries is liquidated. Within thirty days after the date of mailing to the complainant of notice of such liquidation, the complainant may file with the collector at such port a protest in writing setting forth a description of the merchandise and the classification and rate of duty he believes proper. Notwithstanding such protest is filed, merchandise of the character covered by the published decision of the Secretary, when entered for consumption or withdrawn from warehouse for consumption on or before the date of publication of a decision of the United States Customs Court or of the United States Court of Customs and Patent Appeals, rendered under the provisions of subsection (c) of this section, not in harmony with the published decision of the Secretary, shall be classified and the entries liquidated in accordance with such decision of the Secretary, and, except as otherwise provided in this chapter, the liquidations of such entries shall be final and conclusive upon all parties. If the protest of the complainant is sustained in whole or in part by a decision of the United States Customs Court or of the United States Court of Customs and Patent Appeals, merchandise of the character covered by the published decision of the Secretary, which is entered for consumption after the date of publication of such court decision, shall be subject to classification and assessment of duty in accordance with the final judicial decision on the complainant\'s protest, and the liquidation of entries covering such merchandise so entered or withdrawn shall be suspended until final disposition is made of such protest, whereupon such entries shall be liquidated, or if necessary, reliquidated in accordance with such final decision.

We conclude that the Customs Court lacked jurisdiction and reverse on that ground. Those interested in the facts and record in detail can find them stated in the decisions below. In view of our conclusion, a summary will suffice here. Briefly, then, Mexico has had in recent years an exportable surplus of refined lead, and has therefore figured in the world lead market. Lead is traded on the London Metal Exchange and has a world price established there daily. Litharge is a lead oxide, made from refined lead by a simple process, and containing 93% primary lead metal. Its main use is in storage batteries, and in the chemical and paint industries. In 1954, as we take judicial notice, Mexico devalued the peso from 8.65 to 12.50 per dollar. In connection therewith she increased existing export taxes on lead for the purpose of maintaining domestic supplies and keeping down domestic prices. Thereafter refined lead remained available or was made available to domestic users approximately at the world price adjusted less the export tax, which was of course not applicable. Sales of lead for export subject to tax were at the world price. The export tax was, however, not applied thenceforward to exports of litharge and consequently, Mexican litharge producers could offer litharge in other countries with a price predicated on the domestic lead price unenhanced by the export tax. This exemption enabled Mexican litharge to enjoy in world markets a more favorable price in relation to lead, Mexican and other, than would have been normal. Exports of litharge to the United States rapidly increased,...