Shell Eastern Petroleum Products, Inc. v. United States

DISSENTING OPINION

Brown, Judge:

This suit against the United States was brought at New York to recover customs duties claimed to have been illegally exacted on the importation of a substance known as naphthenic acid.

The collector took duty at 25 per centum ad valorem under paragraph 1, Tariff Act of 1930, as all other acids, or under paragraph 5 as a chemical compound not specially provided for at the same rate.

Pab. 1. * * * and all other acids and acid anhydrides not specially provided for, 25 per centum ^d valorem.
Par. 5. All chemical elements, all chemical salts and compounds, all medicinal preparations, and all combinations and mixtures of any of the foregoing, all the foregoing obtained naturally or artificially and not specially provided for, 25 per centum ad valorem.

The plaintiffs claim refund of all duty taken on the ground that it is properly free of duty under paragraph 1733 of said act reading as follows:

Pab. 1733. Oils, mineral: Petroleum, crude, fuel, or refined, and all distillates obtained from petroleum, including kerosene, benzine, naphtha, gasoline, paraffin, and paraffin oil, not specially provided for.

This identical issue upon the same article was very elaborately and fully tried upon a complete record. Able and exhaustive briefs were filed by amicus curiae as well as by the parties plaintiff and defendant.

This division of the Customs Court in a carefully written opinion weighing in detail the evidence presented and all the contentions made or, which it seems to us, could possibly have been made, held the importer was entitled to recover in Shell Eastern Petroleum Products, Inc. v. United States, T. D. 49026, 71 Treas. Dec. 949. This decision was affirmed by the Court of Customs and Patent Appeals in United States v. Shell Eastern Petroleum Products, Inc., 26 C. C. P. A. 132, C. A. D. 6.

The record in that case was admitted in evidence in the case at bar. The Government upon following protests has here attempted to make *7a new case. New testimony was then introduced but it cannot be considered new evidence for it is merely cumulative of wbat went before into the old record.

The Government has filed an elaborate brief claiming vigorously, but we think unsuccessfully, that there is a real factual difference between the two records, and also claiming equally vigorously in effect that we and the court of appeals wrongly construed and applied the law to the facts proved in our first holding. We remain unconvinced that that was so.

There really was and is no dispute about the facts. The naphthenic acid involved is produced by the distillation of crude petroleum. The distillation results in certain fractions from which the naphthenic acid is separated by chemical means. The kerosene fraction generally contains the naphthenic acids,sought. It is treated with an aqueous solution of caustic soda. The caustic soda combines with the naph-thenic acid and forms sodium napthenate. This solution is heavier than the balance of the kerosene fraction so that it can be physically separated from the fraction.

After the separation is effected the sodium naphthenate solution is treated with sulphuric acid. The sulphuric acid combines with the sodium naphthenate forming sodium sulphate and naphthenic acid. The naphthenic acid thus formed is chemically indistinguishable from the naphthenic acids in the crude petroleum and in the kerosene fraction and has the same physical nature and properties.

Consequently, after the most careful review of this new record and reexamination of the points of law involved, we adhere to our original decision and findings.

Judgment should therefore issue sustaining the claim for free entry under paragraph 1733 and directing the collector to refund all duty taken.

The above upon a subject regularly assigned to the writer was prepared as for a proposed division opinion. Being disapproved by the majority it is now respectfully filed as a dissenting opinion.

In the view of the writer the matter discussed in the majority opinion was all set forth in the original decision of the issue in T. D. 49026, 71 Treas. Dec. 949, decided June 7, 1937. There is no change in the factual situation between that record and this record. The identical contentions of the Government on these identical facts were all overruled both above and below in the original case.

The present majority view in interpreting the effect of the same facts as before is based upon too narrow a chemical distinction, whereas the tariff is made for business men. Our court of appeals in the first case correctly treated it as merely a process of separating out the distillate, naphthenic acid.