dissenting.
In United States v. Acme Steel Co., 51 CCPA 81, C.A.D. 841, we affirmed the Customs Court in finding an export value without regard to the relationship of parent and subsidiary which existed between the importer and the exporter. Here, it seems to me, the issue becomes unnecessarily confused because the record as a whole indicates that examiner Voigt and the two judges constituting the majority of the Customs Court, considering the transactions in issue to be between “related parties,” ignored the invoice price as being the “export value” of the imported merchandise.
I agree with the trial judge and the dissenting judge of the Second Division, appellate term, that the invoice price on the present record establishes the “export value” of the imported merchandise. Appellant has established, I think, that an export value existed. The pertinent evidence on this point was correctly summarized by the trial judge as follows:
The exporter was the only manufacturer in Canada of parts for antivibration mounts such as or similar to the parts here involved. It primarily produced such parts for its own use in the manufacture of antivibration mounts, but it also sold such merchandise for home consumption in Canada and for exportation to the United States. Its only United States customer at the time of exportation of the merchandise in issue was the importer of the merchandise at bar.
The principal business of the importer was the production and sale in the United States of antivibration mounts made with the use of parts such as or similar to those in issue. At the time of exportation here involved, such parts were purchased by the importer from United States suppliers as well as from the exporter.
The transaction represented by the present importation was one of a series entered into between the exporter and the importer beginning some 3 months previously, and all under the same conditions and practices as existed in connection with the importation at bar. The prices at which the merchandise was sold were the result of negotiations, and there is testimony that they represented the highest prices the importer would pay for the parts and the lowest prices that the exporter would accept for them. The record indicates a normal buying and selling relationship between the exporter and the importer and shows that *74neither the parent corporation nor the importer dictated the prices. Further, it shows that the prices did not vary with the quantity sold, and there were no-restrictions as to the disposition or use of the merchandise by the purchaser.
Whetlier the invoice price properly reflects the “export value” of the imported, merchandise turns on whether this price fairly reflects the market value of the merchandise. On this issue, I think appellant should prevail. The evidence, as summarized by the trial judge, shows:
* * * (1) that the transaction was an outright purchase and sale between the exporter and the importer; (2) that the selling prices were arrived at by negotiation; .(3) that neither the buyer nor the common parent corporation in any way dictated the prices; (4) that the purchase prices were competitive with prices for similar parts charged by United States manufacturers; (5) that the exporter would have been willing to sell identical merchandise at wholesale to other purchasers in the United States at the same prices; (6) that the selling prices were high enough to include the cost of production of such merchandise for export sale, plus a profit'; and (7) that, subsequent to the transaction here involved, the exporter obtained orders from at least one other customer in the United States at exactly the same prices paid by the importer herein.
It is significant, I think, that the Government did not call any witnesses or produce any evidence but instead submitted its case on the argument that since the evidence produced by appellant discloses that the merchandise was sold for exportation to the United States at less than it cost to produce it in Canada, the selling prices did not reflect the fair market value of the merchandise.
It seems to me that the market itself is the best and only place in which to determine market value. The uncontradicted evidence here is that the fair market price, established (albeit by negotiation between “related” parties) and reflected in the invoice price, was determined as the testimony shows as the highest price the importer would pay and the lowest price the exporter would accept. It is significant also that the prices so arrived at were competitive with prices for similar parts charged by United States manufacturers. While not directly pertinent to the issue, there is cumulative significance, I think, in the fact that subsequent to the dates of the importations in issue, the exporter has obtained orders from at least one other customer in the United States for the same merchandise at the same prices here paid by the importer.
If, in fact, the “related parties” aspect of the present case had depressed the invoice prices so that they did not in fact reflect the fair market value, it seems to me that the burden was on the Government to establish this fact. The Government produced no evidence and is necessarily bound by the record as it here appears. On that record there is no basis upon which to find that the invoice price did not reflect the market value of the importer merchandise.
*75The vagaries of cost accounting procedures and theories afford at. best but a tenuous basis for arguing that the invoice price as here arrived at did not fairly reflect the market value of the imported merchandise. Even here, the dispute centers around the item of so-called “fixed costs” which were charged to the Canadian market but not charged to the export market.
The Canadian market price does not necessarily reflect the fair export price for the imported merchandise. Many factors can influence the home market price and while it must not be ignored, neither is it conclusive of what is a fair, export price. Here, for example, the export price as determined by the competition existing in the United States market requires an export price which is realistic. On the present record this price is substantially less than the price of the same merchandise on the Canadian market. In the absence of evidence indicating manipulation of the prices, it seems fundamental to me that the only way in which the exporter could sell competing goods in the United States is to do so on a realistic pricing basis. It strains my sense of credulity to believe that any Canadian company would deliberately underprice its merchandise in an export market. Living as I did for so many years as a near neighbor to Canada and bearing as I do the “scars” resulting from numerous professional negotiations for clients with Canadian business men (as operating heads both of wholly U.S. owned subsidiaries and independent Canadian companies), I would be remiss if I did not take judicial notice of their keen business acumen and take this opportunity to pay tribute to it. With this background it would certainly take more than the Government’s speculative conjecture here to convince me that the merchandise in issue was exported at a price less than the highest price the Canadian exporter could get for it.
The “fixed costs” item, like the selling expenses in the Acme case, may or may not be a proper factor for inclusion in the export price. The evidence here is compelling that such “fixed costs” had been charged to the Canadian market and hence were not a necessary factor in determining the export price. Here again, if this were not the fact, the Government has failed to so establish. Except as we are willing to leave the record and substitute suspicion for fact, there is no basis on which to support the Government’s position that such “fixed costs” should have been a necessary part of the export price.
As stated by the trial judge:
It must 'be remembered that the exporter was itself primarily a manufacturer of antivibration mounts made with the use of parts such as those here involved. Whether or not it made any sales for export, it would incur, in producing such parts for itself, fixed and unvarying items of expense, such as taxes, insurance, depreciation, etc., properly attributable to that primary phase of its business. These fixed costs would not increase because of the production of additional *76parts for export sale, and I see no impropriety in the adoption of export selling prices based upon cost calculations from which they have been eliminated which would bar a finding of export value on the ground that such prices did not fairly reflect the market value of the merchandise.
That such practice was realistic from a commercial standpoint is demonstrated •by the fact that the evidence shows that the export selling prices were competitive with the prices charged by American firms for the same components, the difference being within less than a dollar per thousand units.
The opinion of the trial judge recites eleven fact findings, supported by substantial evidence of record, which in my opinion require as a matter of law that the export value of the imported merchandise as defined in section 402(b) of the Tariff Act of 1930, as amended by the •Customs Simplification Act of 1956, is the proper basis for the determination of the value of the imported merchandise. Appellant has ■established that the export value is the invoiced and entered value for ■each item and the Government has introduced no evidence to the ■contrary.
I would, therefore, reverse the appealed decision.