Zinberg v. United States

Hatfield, Judge,

delivered tbe opinion of the court:

This is an appeal from a judgment of the United States Customs Court.

*269Certain rosaries were imported at the port of New York. The invoice price was $1.45 per dozen. They were entered at $1.60 per dozen and appraised at $1.80 per dozen. An appeal was taken by importer to reappraisement. They were reappraised by Sullivan, Justice, at the entered value — $1.60 per dozen (reappraisement No. 38283-A). While this appeal was pending importer imported similar merchandise at the port of New York. The invoice price of one shipment was $1.45 per dozen. The invoice price of a later shipment was $1.60 per dozen. Before making entries of the merchandise covered by these shipments importer submitted the invoices therefor to the local appraiser and requested information as to the dutiable value of the merchandise covered thereby. He was informed by the appraiser that the dutiable value of the rosaries in each shipment was $1.95 per dozen. Thereupon the importer made entries at $1.95 per dozen; and, in each entry, certified that the entered value was higher than the dutiable value.and that the merchandise was so entered in order to meet advances by the appraiser in a similar case then pending on appeal for reappraisement. The pending appeal referred to was reappraisement No. 38283-A.

Appeals were taken by importer to reappraisement. In each appeal the merchandise was reappraised at $1.60 per dozen. No appeals were taken in any of the cases from the judgments entered by the associate justice sitting in reappraisement.

The merchandise covered by the alleged “duress” entries was assessed for duty by the collector at $1.95 per dozen, the values stated in the entries, rather than at $1.60 per dozen, the final appraised values.

The importer claimed in his protest that duties should have been assessed “on the basis of the final appraised value.” The court below overruled the protest and importer appealed.

The contention of counsel for importer seems to be summed up by this statement contained in his brief:

The plain intent of the statute is that when an importer has imported a certain type of merchandise, as to which he makes a claim as to its value, which is lower than the appraised value, and thereafter imports the same merchandise which he claims to be of the same value, basing his entry on his appeal in the initial case, if his contention as to the value in the “pending case” be finally sustained by the courts, duty shall be assessed on the “value returned by the appraiser, general appraiser, or Board of General Appraisers, as the case may be.” Sec. 503. (Italics ours.)

When tbis statement of the construction of section 489 (hereinafter quoted) is applied to the case at issue, it is at once evident that, by the language “basing his entry on his appeal in the initial case,” counsel does not intend to so construe the section as to confine the issues in “duress” entries to the issues in the pending case. In *270his statement of the case in the court below counsel for importer said:

Mr. Richardson. These two cases are protests against the refusal of the collector to liquidate duress entries upon the final appraised value, the situation being that of an unusual case. The importer entered the merchandise at $1.60; the appraiser raised it to $1.80. There was a new entry made in which the importer entered at $1.95 to meet that advance made by the appraiser, and also made other advances.
Judge Waite. I thought the appraiser advanced it to $1.80?
Mr. Richardson. That is correct. In the meantime the market value of the merchandise had gone up and on, advice given to the importer by the appraiser he entered at $1.95 instead of $1.80. The collector’s letter does not correctly represent the facts in this case. For that reason I would like the broker to take the stand and prove what he actually did in making the entry in these two cases, and then submit the records in the reappraisement cases and then ask Mr. Trupper a few questions, so he can go. I will take him a little bit out of the order.
Judge Young. Your position is he is in the same situation as though he had entered at $1.80?
Mr. Richardson. Yes; so far as this case is concerned.
Judge Young. He entered at $1.95 to meet the advance of the appraiser as to what it was going to be the next time?
Mr. Richardson. Yes; that is the exact situation. The collector in all our cases has refused in any event to allow a liquidation or a refund in duress entries where the value at which merchandise is entered varies in even the slightest degree from that under which the duress entry is entered. He is contending it has got to be not only the same merchandise, appraised at the same price but entered at the same price; that if merchandise arriving a month apart on which under natural conditions the market has gone up, according to the interpretation, the absurd interpretation that the collector has placed upon that law, there can not be a dures^entry under those circumstances. That is the situation here.
Mr. Richardson. * * * The original case I think the invoice was $1.45, but through further information we raised our entered value to $1.60. This first case was advanced to $1.80. The other eases were entered to meet the advance of $1.95, and our claimed market value in both those cases was $1.60.
4? * sH * * * *

The evidence in the case fully supports the statements of counsel. Accordingly, in the consideration of this case, we are confronted at the outset with the proposition, plainly and unequivocally stated by counsel and the witness for the importer, that the alleged “duress” entries were not made for the purpose of meeting, equaling, or opposing the advance in value made by the appraiser in the initial case then pending on appeal for reappraisement, but were in fact made to meet such advance, and, in addition thereto, to meet the opinion of the appraiser, expressed in advance of entry and appraisement at the request of importer, as to the dutiable value of the merchandise covered by the “duress” entries. In other words, it has been frankly admitted that it was not for the purpose of meeting the advance in value made by the appraiser in the pending case, but to meet anticipated appraisements at values higher than those returned in the pending case. The purpose of the importer having been plainly and *271frankly stated, it remains to be seen whether such proceedings are authorized by law. This brings us to a consideration of the provisions of section 489 of the Tariff Act of 1922. They read as follows:

Sec. 489. * * * Duties shall not, however, be assessed upon an amount less than the entered value, except in a case where the importer certifies at the time of entry that the entered value is higher than the value as defined in this act, and that the goods are so entered in order to meet advances by the appraiser in similar cases then pending on appeal for reappraisement or re-reappraisement, and the importer’s contention in said pending cases shall subsequently be sustained, wholly or in part, by a final decision on reappraisement or re-reappraisement, and it shall appear that the action of the importer on entry was so taken in good faith, after due diligence and inquiry on his part, and the collector shall liquidate the entry in accordance with the final appraisement.

The manifest purpose of the Congress in enacting the additional duties provisions in section 489, and in providing that “duties shall not, however, be assessed upon an amount less than the entered value,” was to require importers to ascertain the dutiable value of imported merchandise, and to enter it at such value. Were it not for these provisions the entire burden of ascertaining the dutiable value of imported merchandise would fall upon the officials of the Government.

The only exception to the provision-that duties shall not be assessed upon an amount less than the entered value is in a case where the “importer certifies at the time of entry that the entered value is higher than” the dutiable value, “and that the goods are so entered in order to meet advances by the appraiser in similar cases then pending on appeal jor reappraisement or re-reappraisement.” (Italics ours.) But this is not all that is required of the importer. Before he is entitled to any relief under these provisions the contention of the importer in the pending case or cases must be sustained, wholly or in part, by a final decision of the court on appeal or review. More than that, it must appear that the “action of the importer on entry was so taken in good faith, after due diligence and inquiry on his part.” (Italics ours.)

What was the contention of the importer on his appeal to reap-praisement “in the pending case”? Was it not that the appraisement of the rosaries at $1.80 per dozen was wrong and that their dutiable value was less? If his contentions in the pending case be sustained the “collector shall liquidate the [duress] entries in- accordance with the final appraisement” of the merchandise covered by them. Is it not perfectly clear that the action of an importer in a “duress” entry must be based upon the contentions of the importer in the pending case? If so, how can it be argued with reason that an importer may use the pending case as- an excuse rather than as the basis of his action in “ duress” entries? - Surely it was not within the contemplation of the Congress that ah importer might file a *272“duress” entry for merchandise believed by him to be of a value higher than the appraised value of the merchandise in the pending case. If an importer may lawfully do this, the statutory provisions that “duties shall not, however, be assessed upon an amount less than the entered value,” could always be avoided, regardless of the value of the merchandise covered by “duress” entries, when similar merchandise is involved in a case pending on appeal for reappraisement. This argument seems to be impossible of refutation, when it is considered that the action of an importer on “duress” entries must be taken in “good faith, after due diligence and inquiry on his part.” Concerning what must he inquire? Is it not plain that the “inquiry ” and “due diligence” on his part relate to the dutiable value of the merchandise covered by the “duress” entries? But why should the Congress be concerned about “due diligence,” “inquiry,” and “good faith” on the part of the importer? Surely, it must have had in mind that “duress” entries should cover only such merchandise as was comparable in value to that involved in the “cases then pending-on appeal ”;. and that the issues raised by the certificate in the ‘' duress ’ ’ entries would be the same as those in the pending cases. If this is true, then, of course, it was not within the contemplation of the Congress that merchandise of a higher value — due to an advancing market — and, therefore, of a different status than that involved in “pending cases,” could be brought within the “duress” entry provisions of the statute. Nor is the principle involved in any way altered by the fact that upon final appraisement the merchandise covered by the “duress” entries may be held to be of the same value as that involved in the pending-case.

The issue presented by the appeal to reappraisement in the “pending case” was whether the merchandise was dutiable at $1.80 per dozen or less. If similar merchandise is entered at $1.95 per dozen, is it not a fair deduction that the importer thought that it might be of that value, even though he certified that it was worth only $1.60 per dozen? Can it be. argued that the entries at $1.95 per dozen, admittedly entered at that value to meet the suggestions of the appraiser, were made to meet the advance in value from $1.60 to $1.80 per dozen in the case pending on appeal?

The issue raised by the involved “duress” entries is this: Is the merchandise dutiable at $1.95 per dozen, as claimed by the appraiser prior to entry and appraisement, or is it dutiable at $1.60 per dozen as claimed by the importer? Assume, for illustration, that the final appraisement of the merchandise in the pending case is $1.79 per dozen — the importer’s contention being partly sustained — and that the merchandise in the “duress” entries is finally appraised at $1.92 per dozen, can it be argued that the collector is required to assess duty on such merchandise at $1.92 per dozen, rather than on the *273value at which it was entered — $1.95 per dozen? It must be remembered that the statute requires the collector to liquidate the “duress” entries at the appraised value oj the merchandise covered thereby, if the importer’s contentions in the cases pending on appeal have been sustained, wholly or in part. If this question is answered in the affirmative, then, of course, the contention of importer is correct. If, however, it must be answered in the negative, which we think is inevitable, the contention of importer is wrong.

We are confirmed in this conclusion by the definition of the verb “meet.” It is defined as follows:

Meet, v. 1. To come to (a person or thing moving toward the same point from an opposite or different direction); as, to meet a stranger on the road. 2. To come to and touch or unite with; become contiguous to or joined with; as, the Ohio and the Mississippi meet at Cairo, Ill. 3. To be, act, or take place in conformity with; be suitable to; come up to; as, you have met my wishes in all things. 4. To discharge by paying; satisfy, as an expectation or desire; as, the bank has met all demands. 5. To come to and oppose; encounter; collide with; as, when Greek meets Greek, then comes the tug of war * * *.

We are of opinion that the Congress by the language “and that the goods are so entered in order to meet advances by the appraiser in similar cases then pending on appeal for reappraisement or re-reappraisement,” intended to require an importer to meet the issue in the pending case, and that in order so to do he must enter merchandise in “duress” entries at the appraised value of the merchandise in the pending case.

This conclusion is supported, we think, by two other propositions of law, to which attention will now be directed. The Treasury Department has construed identical provisions contained in Paragraph I, section 3, of the Tariff Act of 1913. In T. D. 36221 the department held:

The statute invoked is found in Paragraph I of section 3 of the Tariff Act of 1913. As the said Act passed the House of Representatives this provision read, as it had in the Acts of 1897 and-1909:
The duty shall not, however, be assessed in any case upon an amount less than the entered value.
As the bill passed the Senate it was made to read as follows:
The duty shall not, however, be assessed in any amount less than the entered value unless by direction of the Secretary of the Treasury after consideratioh of the particular case. The Secretary of the Treasury shall accompany his direction with a statement of his conclusions and the reasons for it.
In conference this language was changed to read as follows:
The duty shall not, however, be assessed in any case upon an amount less than the entered value unless by direction of the Secretary of the Treasury in cases in which the importer certifies at the time of entry that the entered value is higher than the foreign-market value, and that the goods are-so entered-in- order-to meet-advances by the appraiser in similar cases then pending on appeal for reappraisement, and the importer’s contention shall subsequently be sustained by a final decision on reappraisement, and it shall appear that the action of the importer *274on entry was taken in good faith, after due diligence and inquiry on his part, and the Secretary of the Treasury shall accompany his direction with a statement of his conclusions and his reasons therefor.
Under our tariff laws importers are presumed to know the market value of merchandise imported by them and must enter their merchandise at such value under penalty of the payment of the additional duties imposed by law for failure so to do. It is not the purpose of this statute to relieve importers of that liability. It is its purpose to give to importers the benefit of their success in contested reappraisement cases in which there is a clearly defined issue between them and the appraiser, and the position of the importer is fully sustained upon the-final decision in those cases in which the advance is made on entry in good faith and after due diligence and inquiry on their part — that is to say, after such investigation as shall afford good reason to believe, and shall cause them to believe, that the value contended by them to be the value of the merchandise is, in fact, the actual market value thereof.
In order to grant relief in the case here presented, the statute must be construed as if it read as it appeared in the bill as it passed the Senate, which would render nugatory the amendment made while the bill was in conference. All it would be necessary for any importer to do to circumvent the law would be to insure that a reappraisement should be always pending covering his line of merchandise. He could then make entry at the highest value that anyone had ever suggested for such merchandise, and thus avoid any possibility of the payment of additional duty and at the same time not be bound by the entered value. This would be equivalent to allowing entry by appraisement order on all lines of merchandise-upon which a reappraisement was pending at the time entry was made, and the whole theory of the customs administrative laws relating to the entry of merchandise would fall.
In order to secure the benefit of the statute cited the importer must make a definite contention at the time of entry, which must be sustained upon final reappraisement. The advances must be made to meet advances made by the appraiser in cases then pending — that is, they must be equal to the value returned by the appraiser in such cases. In addition thereto he must show that such advances were made by him in “good faith after due diligence and inquiry on his part;”

We are in accord with the department’s construction of the language “and that the goods are so entered in order to meet advances by the appraiser in similar cases then pending on appeal for re-appraisement” contained in Paragraph I, section 3, of the Act of 1913. (Italics ours.) It has never, to our knowledge, been otherwise construed. This was known to the Congress at the time of the enactment of the Tariff Act of 1922. We must presume, therefore, that, .by the use of identical language in section 489, the Congress intended to ratify this construction. No authorities need be cited in support of this proposition.

It will be observed that the provisions in section 489 in question here do not impose duties, charges, or exactions upon importers, but must be construed as a governmental grant of a privilege. Where a privilege is granted by the Government, any doubt in the interpretation or construction of the statute shall be resolved in favor of the Government. Swan & Finch Co v. United States, 190 U. S. 143, 146; Hannibal etc., R. R. v. Packet Co., 125 U. S. 260, 271. *275In the Swan case the “drawback” provisions of the Tariff Act of 1897 were under consideration. The court said:

Fourth. Being a governmental grant of a privilege or benefit it is to be construed in favor of the Government and against the party claiming the grant. Where the burden is placed upon a citizen, if there be a doubt as to the extent of the burden it is resolved in favor of the citizen, but where a privilege is granted any doubt is resolved in favor of the Government. In Hariranft v. Wiegmann, 121 U. S. 609, 616 the one rule was thus stated:
We are of opinion that the decision of the Circuit Court was correct. But, if the question were one of doubt, the doubt would be resolved in far or of the importer, “as duties are never imposed on the citizen upon vague or doubtful interpretations.” Powers v. Barney, 5 Blatch. 202; United States v. Isham, 17 Wall. 496, 504; O-urr v. Seudds, 11 Exch. 190, 191; Adams v. Bancroft, 3 Sumner, 384. See also American Net & Twine Co. v. Worthington, 141 U. S. 468, 474.
On the other hand, in Hannibal &c. Railroad Co. v. Packet Co., 125 U. S. 260, 271, we said, citing several authorities:
But if there be any doubt as to the proper construction of this statute, * * * then that construction must be adopted which is most advantageous to the interests of the Government. The statute being a grant of a privilege, must be construed most strongly in favor of the grantor.
In the Hannibal case the court said:
But if there be any doubt as to the proper construction of this statute (and we think there is none), then that construction must be adopted which is most advantageous to the interests of the Government. The statute being a grant of a privilege, must be construed most strongly in favor of the grantor. Gildart v. Gladstone, 12 East, 668, 675; Charles River Bridge v. Warren Bridge, 11 Pet. 420, 544; Dubuque and Pacific Railroad v. Litchfield, 23 How. 66; The Binghampton Bridge, 3 Wall. 51, 75; Rice v. Railroad Co., 1 Black, 358, 380; Leavenworth, Lawrence and Galveston Railroad v. United States, 92 U. S. 733; Fertilizing Co. v. Hyde Park, 97 U. S. 659.

Accordingly, if there be any doubt about the construction to be placed upon the provisions in question, it must be resolved in favor of the Government and not in favor of the importer.

Even though this opinion may be open to the criticism of repetition, nevertheless we again call attention to the obvious purpose of the Congress to require importers, as hereinbefore stated, “to ascertain the dutiable value of imported merchandise, and to enter it at such value.” Furthermore, in construing the “good faith” provisions of section 489, pertaining to remission of additional duties, this court, in the case of Wolf & Co. v. United States, 13 Ct. Cust. Appls. 589, T. D. 41453, after referring to other decisions of the court upon the subject, said:

* * * Summarized, these adjudged cases announce certain fundamental facts which the petitioner must establish if he is to obtain relief: First, he must show that in undervaluing his goods he was acting in entire good faith; second, that there were no facts or circumstances known to the petitioner when he made his entry which would cause a prudent and reasonable person to question the correctness of the values given by him; third, that he had made to the collector in making his. entry, a full .and candid disclosure of all the material facts in his possession bearing upon the value of the merchandise imported.

We are at a loss to understand how an importer can be injured by a construction'of the provisions under consideration which, in effect, *276requires him to ascertain the value of his merchandise; and, if he desires to take advantage of the privilege extended to him therein to-so make his “duress” entries as to fairly and honestly meet the issues in the “pending case.” He must be familiar with those issues, or he would be unable to make the certificate required by law. Surely, he ought not to be held to the measure of proof required in remission cases, if the “good faith” provisions under consideration are to be ignored.

An importer may either accept or reject requested advice as to values given by an appraiser. However, he is demanding too much when he insists upon the right to do both.

For the reasons stated the judgment is affirmed.