United States v. Passavant, 169 U.S. 16 (1898)

United States v. Passavant

No. 129

Argued December 1, 1898
Decided January 8, 1898
169 U.S. 16

CERTIFICATE FROM THE CIRCUIT COURT

OF APPEALS FOR THE SECOND CIRCUIT

Syllabus

In proceedings brought before the Board of General Appraisers by protests under § 14 of the Customs Administrative Act of June 10, 1890, c. 407, 26 Stat. 131, to review decisions of a collector of customs upon entries, the board has jurisdiction to inquire into and impeach the dutiable valuation reported to the collector by the appraiser upon which the collector assessed the rate of duty to which the merchandise was subject.

The "German duty," which is a tax imposed by the German government on merchandise when sold by manufacturers for consumption or sale in the markets of Germany, but is remitted by that government when the goods are purchased in bond or consigned while in bond for exportation to a foreign country, was lawfully included by the appraiser in his estimate of the dutiable value of the importation in question in this case.

This case came to this Court on the following certificate from the United States Circuit Court of Appeals for the Second Circuit:

A judgment or decree of the Circuit Court of the United States for the Southern District of New York having been made and entered on the 30th day of January, 1895, by which it was ordered, adjudged, and decreed that there is no error in certain proceedings before the Board of United States General Appraisers in this cause, and that their decision therein be, and the same hereby is, in all things affirmed, and an appeal having been taken from said judgment or decree to this court by the above-named appellants, and the cause having come on for hearing and argument in this court, certain questions of law arose, concerning which this court desires the instructions of the Supreme Court of the United States for the proper decision of said cause.

The facts from which said questions arise are herewith submitted and certified as follows:

1. Certain merchandise, consisting of cotton velvets, was imported from the empire of Germany into the port of New York by the appellees in various steamers between May 22, 1891, and March 13, 1892, and was entered at the custom house, and appraised by the appraiser.

2. The merchandise was originally imported into Germany in the gray, and was subjected to processes of dyeing and finishing, and was put in bond in that country.

3. The collector classified the merchandise for duty under paragraph 350 of the Tariff Act of October 1, 1890 at 20 percentum ad valorem and 14 cents per square yard, and assessed the said rates of duty upon the dutiable value of the merchandise decided by the appraiser, and reported by him to the collector.

4. The merchandise was of a description provided for eo nomine in said paragraph 350, and was properly classified for duty under that section.

5. The invoices stated certain prices as the net invoice value of this merchandise. The invoices stated also certain additional sums, under the heading "German Duty."

6. This German duty is a tax which is imposed by the German government on the merchandise when it is sold by the manufacturers thereof for consumption or sale in the markets of Germany, but when the merchandise is purchased in bond or consigned while in bond for exportation to a foreign country, this duty is remitted by the German government, and is called "bonification of tax," as distinguished from being refunded as a rebate.

7. This German duty or tax is the amount of the duty levied by the German tariff upon the goods when consumed in Germany. It is collected when the finished product goes into consumption in Germany, but is remitted when the finished product is sold in bond for exportation.

8. The merchandise can be purchased in bond for exportation in the principal markets of Germany at the net invoice prices, and without paying the so-called "German Duty." The merchandise involved in this action was so purchased for exportation.

9. In estimating and appraising the actual market value and wholesale price of such merchandise at the time of exportation to the United States in the principal markets of the country from whence imported, the appraiser decided that the dutiable value of such merchandise equaled the sum of the net invoice value and the German duty added together, and reported to the collector this decision as to the dutiable value of the merchandise appraised.

10. In estimating this dutiable value. the local appraiser added as an element of dutiable value to the net invoice value these amounts specified in the invoices and entries under the name of "German Duty." Such amounts had been included by the importers in their entries under duress, to avoid threatened penalties under the law.

11. The importers did not call for any reappraisement of the merchandise, but, within ten days after the liquidation by the collector of each entry, and the assessment by him of the rates of duty aforesaid upon the dutiable valuation so reported to him by the appraiser, filed protests, under section 14 of the Act of June 10, 1890, against the decisions of the collector, of which the following protest is one, to which the others are similar:

[Here followed the protest.]

12. The Board of United States General Appraisers, acting upon said protests, reversed the decisions of the collector, on the ground that the so-called "German Duty" was not a lawful element of dutiable value.

13. Thereupon the collector applied to the Circuit Court of the United States for the Southern District of New York by petition, praying for review of said decision by the board, pursuant to section 15 of the Act of June 10, 1890, and the said circuit court, upon said petition, ordered the Board of United States General Appraisers to return to the circuit court the record and the evidence taken by them, together with a certified statement of the facts involved in the case and their decision thereon, and the said Board of General Appraisers thereafter made such return, and the circuit court affirmed the decision of the board, as aforesaid.

14. It is admitted that Frederick S. Passavant, Karl Kotzenberg, William Sandhagen, Heinrich Meyer, Arthur W. Watson, and Oscar Passavant, the importers, are the persons composing the firm of Passavant & Company.

Upon the foregoing facts, this court, for the proper decision of said cause, desires instruction upon the questions of law following:

(1) In proceedings brought before the Board of General Appraisers by protests, under section fourteen (14) of the Act of June 10, 1890, to review the collector’s decisions upon the entries in this case, had the board jurisdiction to inquire into an impeach the dutiable valuation so reported to the collector by the appraiser, as above stated, and upon which the collector assessed the rate of duty to which the merchandise was lawfully subject?

(2) If the first question is answered in the affirmative, was the "German Duty" lawfully included by the appraiser in his estimate of dutiable value?