Balero Rum Distributing Co. v. United States

CliNE, Judge:

In this suit against the United States the plaintiff 'claims that the collector of customs at the port of Los Angeles erroneously assessed duty on rum imported from Cuba on May 31, 1936. It appears from the record that duty was assessed at $2 per gallon under the Liquor Taxing Act of 1934 plus $2 per gallon under paragraph 802 of the Tariff Act of 1930 as amended by the provisions of the trade agreement with Haiti, dated March 28, 1935 (T. D. 47667) and the trade agreement with Cuba, dated August 24, 1934 (T. D. 47232) and that the wine gallon was used as the basis of measurement and assessment.

A number of claims are contained in the printed form of protest but the only one relied upon by the plaintiff at the trial in this case is contained in typewriting at the bottom of the printed matter and reads as follows:

It is further claimed that duty and internal revenue tax should be assessed on the proof gallon and not on the wine gallon or other means of measurement.

When the case was called for trial the United States examiner, called as a witness by the plaintiff, testified that the shipment contained 2.4 wine gallons of rum per case; that the proof of the rum was .86 and the number of proof gallons could be found by multiplying the number of wine gallons by .86; and that the computation shows that there were 2.064 proof gallons per case.

*260The pertinent parts of the Tariff Act of 1930 and the Trade Agreements with Haiti and Cuba read as follows:

Par. 802 [Tariff Act of 1930]. Brandy and other spirits manufactured or distilled from grain or other materials, cordials, liqueurs, arrack, absinthe, kirseh-wasser, ratafia, and bitters of all kinds containing spirits, and compounds and preparations of which distilled spirits are the component material of chief value, and not specially provided for, $5 per proof gallon.
Par. 811 [Tariff Act of 1930]. Each and every gauge or wine gallon of measurement shall be counted as at least one proof gallon; and the standard for determining the proof of brandy and other spirits or liquors of any kind when imported shall be the same as that which is defined in the laws relating to internal revenue. The Secretary of the Treasury, in his discretion, may authorize the ascertainment of the proof of wines, cordials, or other liquors and fruit juices by distillation or otherwise, in cases where it is impracticable to ascertain such proof by the means prescribed by existing law or regulations.
SCHEDULE II — Trade Agreement with Haiti (T. D. 47667)
Note. — The provisions of this schedule shall be construed and given the same effect, and the application of collateral provisions of the tariff laws of the United States to the provisions of this schedule shall be determined insofar as may be practicable, as if each provision of this schedule appeared respectively in the paragraph of the Tariff Act of 1930 noted in the column at the left of the respective descriptions of articles.

SCHEDULE II — Trade Agreement with Cuba (T. D. 47232)

It is obvious that the collector, in levying the customs duty,, deducted 20 per centum, the preferential reduction to Cuba, from $2.50 per gallon, the rate granted Haiti in the trade agreement, and arrived at the rate assessed, namely $2 per gallon.

Counsel for the plaintiff argues in his brief that the trade agreement with Cuba and the trade agreement with Haiti provide for the assessment of duty on rum on the proof gallon and not on the wine gallon and that, as the instant merchandise is not subject to duty under the Tariff Act of 1930, the provisions of paragraph 811 have no application.

Counsel for the defendant calls attention to the note at the head of the trade agreements providing that “the application of collateral *261provisions of tbe tariff laws of tbe United States to tbe provisions of this schedule shall be determined insofar as may be practicable, as if each provision of this schedule appeared respectively in tbe paragraph of tbe Tariff Act of 1930 noted in tbe column at tbe left of tbe respective descriptions of tbe articles” and contends that the trade agreements merely amend particular provisions of tbe Tariff Act of 1930, in this case an amendment of paragraph 802 by striking out $5 and inserting in lieu thereof $2.50 less 20 per centum, and that all other provisions of tbe Tariff Act of 1930, including paragraph 811, are in full force and effect. Tbe point is discussed by counsel for defendant in the following language:

It is apparent that this claim has no merit whatever, for if the collector was bound under the provisions of paragraph 811 of the Tariff Act of 1930 to consider one wine gallon as one proof gallon, before the signing of the Cuban Agreement, as conceded by the plaintiff, it was also obligatory upon him to use the same measurement after the Cuban Agreement became effective. . This is so because paragraph 811 is not modified by, or even mentioned in, the Cuban Trade Agreement of 1934, and it therefore remained in full force and effect, insofar as Cuban products are concerned, after the signing of the Cuban Agreement.

We are of opinion that there is no merit in tbe plaintiff’s claim that tbe duty assessed on rum by virtue of tbe Haitian and Cuban Trade Agreements should be computed by applying tbe rate of $2 per gallon to tbe number of proof gallons rather than to the number of wine gallons in tbe shipment. We bold that tbe provisions of paragraph 811 of tbe Tariff Act of 1930 are applicable to rum from Cuba and that “Each and every gauge or wine gallon of measurement shall be counted as at least one proof gallon.”

Tbe claim in tbe protest that tbe so-called internal-revenue tax should be assessed on tbe proof gallon rather than on tbe wine gallon is settled by tbe terms of tbe Liquor Taxing Act of 1934 (48 Stat. 313) which provides that tbe tax shall be assessed on tbe wine gallon measurement when the liquor is below proof. Tbe provision reads as follows:

(4) On and after the effective date of Title I of the Liquor Taxing Act of 1934, $2.00 on each proof gallon or wine gallon when below proof and a proportionate tax at a like rate on all fractional parts of such proof or wine gallon.

Tbe plaintiff contends further that tbe duty was assessed on an excessive quantity of liquor. An examination of tbe entry shows that 102 cases of rum were entered and that duty was assessed on 244.8 gallons. Tbe United States examiner testified that each case contained 2.4 wine gallons. A computation indicates that there were 244.8 wine gallons in tbe total shipment.

Tbe protest is overruled. Judgment will be entered in favor of tbe defendant.