United States v. Josef Mfg., Ltd.

• Decision Date: 23 June 1970
• Docket Number: A.R.D. 274
• Citation: 64 Cust. Ct. 865
• Parties: UNITED STATES <I>v.</I> JOSEF MFG., LTD.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

64 Cust. Ct. 865

UNITED STATESv.

JOSEF MFG., LTD.

A.R.D. 274

United States Customs Court, Third Division, Appellate Term.

Decided June 23, 1970.

William D. Ruckelshaus, Assistant Attorney General (Harold L. Grossman, trial attorney), for the appellant.

Barnes, Richardson & Colburn (Joseph Schwartz of counsel) for the appellee.

Before RICHARDSON, LANDIS, and ROSENSTEIN, Judges

LANDIS, Judge:

This is an application to review the decision of the trial judge in Josef Mfg., Ltd. v. United States, 62 Cust. Ct. 763, R.D. 11616, 294 F. Supp. 956 (1969), as to the export value of rayon dresses manufactured by Josef Mfg., Ltd., Montreal, Canada.

The dresses came down the highway from Canada in two shipments on or about January 18 and 25, 1967. At Champlain, New York, A. N. Deringer, customhouse broker, and Josef Mfg., Ltd., entered the dresses for the account of purchasers in Chicago (R67/5062) and Palm Beach (R67/5063). Both those firms noted and declared, in the form provided therefor on the customs entry (Customs Form 7501), that they were only nominal consignees entering the dresses for the account of purchasers from Josef Mfg., Ltd.

The commercial invoice of Josef Mfg., Ltd., filed in connection with each entry, indicates that the purchasers in Chicago and Palm Beach paid the same price for identically numbered styled dresses, prices stated to include "all charges to * * * [Chicago and Palm Beach], including custom's duty, brokerage and transportation." The record attests that Josef Mfg., Ltd., in fact freely sold identical dresses, at the same delivered price, to all purchasers anywhere in the United States. We need not here go into the commercial signification to the seller and all purchasers, anywhere in the United States, of one delivered price. One may gain or one may lose depending on cost-price factors not here disclosed, and whether the place of delivery is Los Angeles or New York.

At issue in this review is the legal signification of the appraiser's action valuing the dresses on the basis of their export value, at the delivered invoice prices anywhere in the United States, less an arbitrary sum, in the amount of $7.88 to cover the cost of freight from Montreal to a point in New York, less additional amounts for entry fees and duty. Export value, concededly the correct basis for valuing the imported dresses, is defined in section 402(b) of the Tariff Act of 1930, as amended (70 Stat. 943, T.D. 54165), as follows:

(b) EXPORT VALUE. — For the purposes of this section, the export value of imported merchandise shall be the price, at the time of exportation to the United States of the merchandise undergoing appraisement, at which such or similar merchandise is freely sold or, in the absence of sales, offered for sale in the principal markets of the country of exportation, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States, plus when not included in such price, the cost of all containers and coverings of whatever nature and all other expenses incidental to placing the merchandise in condition, packed ready for shipment to the United States.

The purpose of the above definition, as applied to these imported dresses, is to value them at the price at which they were freely sold to all purchasers or, in the absence of sales, offered for sale to all purchasers. Such valuation must be consistent with the facts and reflect export value as judicially construed. It cannot be arbitrary. Aceto Chemical Co., Inc. v. United States, 51 CCPA 121, C.A.D. 846 (1964). The fact around which this dispute swirls is that these imported dresses were freely sold to all purchasers at the same delivered price, including, for one, transportation costs from Montreal to any place in the United States. Diametrically opposed to that fact is the law, alluded to in the opinion below, citing cases, that "ocean freight [here it is highway freight from Montreal to place of delivery] is not a part of export value." The appraiser sought to bring the facts and law together, and thus serve the statutory purpose of a single selling price to all purchasers, by allowing an arbitrary sum, in the same fixed amount, for freight from...