Ti Hang Lung & Co. v. United States

CONCUKKING OPINION

Cline, J.

I concur with the majority in this case holding that the merchandise is dutiable at the rates assessed by the collector and that the protest should be overruled, but I do not agree with statements in a quotation from defendant's brief in the decision with respect to *143the meaning and application of section 528 of section 20 of the Customs Administrative Act of 1938. The defendant states that internal revenue taxes which are not in themselves designated as customs duties “ are no longer to be considered as duties ‘for the purpose of any statute relating to the customs revenue/ but are exactions (within the jurisdiction of the Secretary of the Treasury) which are protestable under section 514 of the Tariff Act of 1930.” I believe that further consideration should be given to that contention.

In Dunbar Molasses Co. et al. v. United States, 58 Treas. Dec. 634, T. D. 44389, and in Adele Forwarding Co. v. United States, 62 Treas. Dec. 923, Abstract 21680, the court held that protests against exac-tions of the collector, other than duties, should be filed within 60 days after decision and payment thereof, under section 514 of the Tariff Act of 1922, rather than within 60 days after liquidation of the entry. In those cases the protests which were filed within 60 days after liquidation were dismissed as untimely. Although section 514 of the Tariff Act of 1922 was amended somewhat when section 514 of the Tariff Act of 1930 was enacted, the limitations as to the time of filing protests were not substantially changed. Therefore, if the assessment of the internal revenue taxes should be considered as exactions, as stated by the defendant, a protest against such taxes filed within 60 days after liquidation but not within 60 days after decision and payment of the tax would be untimely. It becomes important, therefore, to determine whether internal revenue taxes are exactions.

The word “exaction” is defined in Bouvier’s Law Dictionary as follows:

exaction. A wilful wrong done by an officer, or by one who,' under color of his office, takes more fee or pay for his services than the law allows.
Between extortion and exaction there is this difference: that in the former case the officer extorts more than his due, when something is due to him; in the latter, he exacts what is not his due, when there is nothing due to him. * * *.

The word is defined in Corpus Juris, Secundum, Vol. 32, page 1146, as follows:

exaction. The act of demanding and receiving; and, more specifically, the wrongful act of an officer or other person in compelling payment of a fee or reward for his services, under color of authority, where no payment is due.

In customs cases, the courts have treated as exactions, other than duties, payments made to the collector for different purposes, such as fees on packed packages (United States v. American Express Co., 154 Fed. 996, T. D. 28285), inspection charges (Dunbar Molasses Co. v. United States, supra) and cartage charges (Adele Forwarding Co. v. United States, supra).

We have been unable to find any authority holding that internal revenue taxes on imports are exactions. In fact, the courts have held that they are duties and thus come under the jurisdiction of the customs courts. In F. H. Shallus & Co. v. United States, 35 Treas. *144Dec. 394, Abstract 42718, tbe Board of United States General Appraisers (now tbe United States Customs Court) dismissed a protest against tbe assessment of an internal revenue tax on liquor classified under section 300 of tbe War Revenue Act of 1917, saying—

It is very clear to us that this board has no jurisdiction to hear appeals from the action of the collector of customs or any other official who exacts a payment as an internal-revenue tax. Therefore, declining to pass upon the merits of the case, we feel constrained to dismiss the appeal, and it is so ordered.

Although tbe case was apparently decided adversely to tbe importer’s contention, tbe Government filed an appeal with tbe United States Court of Customs Appeals. In reversing tbe decision below, in United States v. Shallus & Co., 9 Ct. Cust. Appls. 168, T. D. 37999, the court said:

The protest was overruled by the collector and on appeal the Board of General Appraisers, of its own motion, the issue not having been tendered by the parties, held the assessment an exaction of an internal revenue tax and that the board was without jurisdiction to hear such appeals, notwithstanding the decision as to the inurement of the claimed revenue was made by a collector of customs. Appeal therefrom was taken by the Government. The importers do not appear in this court.
That this is a tax on imports can not be questioned. Brown v. Maryland (12 Wheat., 419); May v. New Orleans (178 U. S., 496, 507).
Stress seems to have been laid by the board upon the fact that the word “tax” was employed in place of the word “duties,” in section 300, but the word “tax” is often used interchangeably with the word “duties,” and when provision for a tax on an import is made it unquestionably provides for a duty. The definition of a duty is “a tax on imposts; excise or customs dues.” So it may be well said, therefore, that when the tax is imposed upon an importation, while it is still in customs custody, the purpose is to be inferred that it is intended as duties on imports.

See also Shaw & Co. et al. v. United States, 11 Ct. Cust. Appls. 226, T.D. 38990.

Tbe customs courts bave considered many cases involving tbe assessment on imports of internal revenue taxes by tbe collector of customs. No cases bave come to my attention where tbe courts considered tbat jurisdiction depended on tbe question of wbetber or not tbe assessments were exactions. Sucb a tax would not come witbin tbe definitions of exaction, above-quoted, and I do not believe tbat tbe assessment was an exaction.

Section 528 of section 20 of tbe Customs Administrative Act of 1938 reads as follows:

SEC. 628. TAXES NOT TO BE CONSTRUED AS DUTIES.
No tax or other charge imposed by or pursuant to any law of the United States shall be construed to be a customs duty for the purpose of any statute relating to the customs revenue, unless the law imposing such tax or charge designates it as a customs duty or contains a provision to the effect that it shall be treated as a duty imposed under thp customs laws. Nothing in this section shall be con*145strued to limit or restrict the jurisdiction of the United States Customs Court or the United States Court of Customs and Patent Appeals. •

Although the jurisdiction of the customs courts'arises from the fact that internal revenue taxes imposed by the collector of customs on imports are duties, it is evident that section 528, above-quoted, was not intended to deprive the courts of jurisdiction in such cases. The last sentence in the provision amply supports that view.

The defendant’s brief contains excerpts from the hearings and documents before the Committees of Congress explaining the intended meaning of the provision, which was evidently proposed by the Treasury Department. It appears that representatives of the Treasury Department stated to the committee that the section will preclude any court or administrative officer from holding that provisions of law, particularly exemptions and preferences applying to duties, are applicable also to internal revenue taxes accruing on imports. The witnesses explained that the exemptions and preferences referred to were intended to apply to such preferences as are found in the Cuban Trade Agreement and would limit the 20 per centum preferential provided for in that agreement to duties as distinguished from internal revenue taxes. If such is the only .intent of the provision, it would seem that the section is merely an approval of judicial decisions, because it was held hr Faber, Coe & Gregg (Inc.) v. United States, 19 C. C. P. A. (Customs) 8, T. D. 44851, and in Faber, Coe & Gregg, Inc. v. United States, 26 C. C. P. A. (Customs) 95, T. D. 49638, that the preferential rates in the Cuban treaty of December 11, 1902, and in the Cuban Trade Agreement of August 24, 1934, were not applicable to internal revenue taxes on cigars.

I am of the opinion that section 528 of section 20 of the Customs Administrative Act of 1938 makes.no change in the court’s jurisdiction or practice in passing on the legality of the assessments of internal revenue taxes on imported merchandise.