United States v. JOHN V. CARR AND SON, INC.

• Decision Date: 16 May 1974
• Docket Number: Customs Appeal No. 5525.
• Citation: 496 F.2d 1225
• Parties: The UNITED STATES, Appellant, v. JOHN V. CARR AND SON, INC., Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

496 F.2d 1225 (1974)

The UNITED STATES, Appellant, v. JOHN V. CARR AND SON, INC., Appellee.

Customs Appeal No. 5525.

United States Court of Customs and Patent Appeals.

May 16, 1974.

Irving Jaffe, Acting Asst. Atty. Gen., Walter H. Fleischer, Anthony J. Steinmeyer, Washington, D. C., for the U. S.

Barnes, Richardson & Colburn, New York City, attorneys for appellee. E. Thomas Honey and Peter J. Fitch, New York City, of counsel.

Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE, and MILLER, Judges.

BALDWIN, Judge.

This appeal is from the decision and judgment of the Customs Court, Third Division, sustaining appellee's protest concerning the classification of certain fish hooks and their tin containers. The opinion of the Customs Court appears at 69 Cust.Ct. 78, C.D. 4377, (1972). The court held that the fish hooks qualified for duty-free entry under item 800.00, TSUS, as returned American products which had not "been advanced in value or improved in condition by any process of manufacture or other means while abroad."

After a thorough consideration of appellant's arguments, we have concluded that we are in full agreement with the opinion of the Customs Court, and we adopt it as our own. The judgment is affirmed.

MILLER, Judge (dissenting).

I am persuaded that the involved merchandise, having been assembled abroad from bulk into individually-packaged assortments of forty hooks of eight different kinds each to meet the requirements of retail purchasers in this country, was substantially advanced in value and did not, therefore, qualify for classification under Schedule 8, Part 1, Subpart A, item 800.00, which provides as follows:

                  800.00 Products of the United
                    States when returned after
                    having been exported, without
                    having been advanced in
                    value or improved in condition
                    by any process of manufacture
                    or other means while
                    abroad. ........................ Free
                

I agree with appellant that the holding of the Customs Court effectively reads out of the statute the broad phrase "or other means," as does the majority here. I further agree that the test under item 800.00 is economic (advanced in value) and not merely physical (improved in condition), and that appellee did not sustain its burden of proving that the involved merchandise was not advanced in value or improved in condition by manufacture or other means. As discussed below, the words "other means" were used by the Congress for the purpose of limiting the duty-free entry of merchandise to compete with domestic industry and labor. Liberalizing the tariff laws by expanding the duty-free provisions is a Congressional prerogative.

The phrase "or other means" has been in item 800.00 and its predecessor provisions since the Tariff Act of 1890, enacted by the 51st Congress. It originated during the 50th Congress as an amendment by the Senate Finance Committee to a House-passed bill (H.R. 9051).¹ Under the free list, the House bill had provided:

Articles the growth, produce, and manufacturer of the United States, when returned after having been exported, without having been advanced in value by any process of manufacturer or by labor thereon; . . . .

As amended by the Senate Finance Committee, the provision read:

Articles the growth, produce, and manufacturer of the United States, when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means; . . . .

Thus, the Committee added the physical test, "or improved in condition," and replaced the words "by labor thereon" with "other means," obviously a broader phrase which would include labor.

The Senate passed the amended H.R. 9051 on January 22, 1889. The House failed to act, and the bill died at the end of the 50th Congress, April 2, 1889.

The 51st Congress commenced December 2, 1889, and the follow-on legislation to the above-referred to H.R. 9051 was introduced by the House Ways and Means Committee as H.R. 9416 on April 16, 1890. The new bill contained the above-quoted provision as amended by the Senate, and there was no attempt to change it as the bill progressed through the two houses and was finally enacted October 1, 1890, as the Tariff Act of 1890.²

It should be noted that during the 50th Congress, the Senate was in control of those favoring more protection, and the House was in control of those favoring less protection to domestic industry. The protective tariff was a principal issue in the elections of 1888, with those favoring more protection winning control of both the Senate and the House.³ Thus, the legislative history of the words "other means" makes it clear that protection of domestic industry and labor was intended; also that the test for free entry was not merely the physical "improved in condition," but, alternatively, the economic "advanced in value" as well. Not only is the intent of Congress clear, but the words expressing that intent are clear.

Appellee cites Border Brokerage Co. Inc. v. United States, 65 Cust.Ct. 50, C. D. 4052, 314 F.Supp. 788 (1970), relied upon by the Customs Court in its opinion. The case involved 40-pound cartons of tomatoes grown in Florida which were shipped by rail to Canada. There the tomatoes were unloaded, sorted, graded, repacked in 18-pound cartons, and then imported into the United States where they were sold. It seems clear that the repacking was for purposes of wholesale. The Customs Court held that the treatment given the tomatoes in Canada did not advance their value or improve their condition. Whether individual wrapping of the tomatoes would have made a difference in the court's decision cannot be determined, but it may be significant that the court noted that no cleaning, wiping, or individual wrapping was involved. In any event, the court said:

Hence, it would appear from the principles evolved in the Hallauer and Oakville cases, that the test to be applied in item 800.00 cases is whether the merchandise of American origin has itself (apart from its container) been the object of advancement in value or improvement in condition while

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