R. J. Saunders & Co. v. United States

70 Cust. Ct. 295, 359 F. Supp. 1394, 1973 Cust. Ct. LEXIS 3435
CourtUnited States Customs Court
DecidedJune 19, 1973
DocketA.R.D. 314; Entry Nos. 840067, etc.
StatusPublished
Cited by1 cases

This text of 70 Cust. Ct. 295 (R. J. Saunders & Co. v. United States) is published on Counsel Stack Legal Research, covering United States Customs Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R. J. Saunders & Co. v. United States, 70 Cust. Ct. 295, 359 F. Supp. 1394, 1973 Cust. Ct. LEXIS 3435 (cusc 1973).

Opinion

Rao, Judge:

This is an application for review of a decision and judgment of the trial court, sustaining the appraised values of a chemi[296]*296cal known as thiourea, exported from Japan during the period from October 1958 through July 1964. R. J. Saunders & Co., Inc. v. United States, 69 Cust. Ct. 221, R.D. 11771 (1972) (motion for rehearing denied October 20, 1972).

Thiourea appears on the Final List published by the Secretary of the Treasury pursuant to section 6(a) of the Customs Simplification Act of 1956, under the heading “Industrial Chemicals.” 93 Treas. Dec. 14, 29, T.D. 54521 (1958). The imported merchandise was appraised on the basis of foreign value, as that value is defined in section 402a (c), Tariff Act of 1930, as amended by the Customs Simplification Act of 1956. It is claimed that the merchandise should have been appraised on the basis of United States value, as that value is defined in section 402a (e) of said act.

The trial court pointed out that in order to reach United States value, plaintiff must first disprove the existence of a foreign and an export value for such and similar merchandise. It stated that plaintiff had adduced persuasive evidence that thiourea was not freely offered for sale either for home consumption or for exportation to the United States, but that the record was devoid of evidence that similar merchandise was not freely sold in Japan in the home market or for export, or that no similar merchandise existed. It therefore held that plaintiff had not met its burden of proof.

In a recent case, Nichols & Company, Inc. v. United States, 59 CCPA 67, C.A.D. 1041, 454 F.2d 1183 (1972), our appellate court held that even if appellant proved that “such” merchandise was not freely offered for home consumption during the relevant period, in order to negate the existence of foreign value, it still had to establish that “similar” merchandise was not so offered. It determined that appellant had not sustained its burden of proof on the ground that the record lacked evidence concerning what, if any, merchandise was “similar” in a statutory sense to the imported goods and whether a foreign value existed therefor.

It is appellant’s position in the instant case that thiourea, being a chemical compound, is unique in that it has a fixed formula and a spatial arrangement which differs from every other chemical compound ; that it has its own chemical and physical properties; that every other compound differs from it in one or more of the following characteristics : The elements of which it is composed; the number of atoms of each element of which it is composed; the internal arrangement of its elements; and the physical and chemical properties of the compound itself. It therefore claims that there is no merchandise similar to the imported thiourea except thiourea produced by other manufacturers.

However, no evidence has been presented to sustain this claim. A [297]*297finding that merchandise is or is not similar to other goods must be based upon substantial evidence, not on inference, argument, or interpretation. United States v. Wecker & Co., 16 Ct. Cust. Appls. 220, T.D. 42837 (1928); United States v. Kraft Phenix Cheese Corp. et al., 26 CCPA 224, C.A.D. 21 (1938); H. J. Heinz Company v. United States, 43 CCPA 128, C.A.D. 619 (1956); A. Zerkowitz & Co., Inc. v. United States, 58 CCPA 60, C.A.D. 1005, 435 F.2d 576 (1970), cert. den., 404 U.S. 831 (1971); W. R. Zanes & Co. et al. v. United States, 43 Cust. Ct. 568, Reap. Dec. 9557 (1959).

In support of its uniqueness claim, appellant quotes in its brief a definition of thiourea from Snell & Snell’s Chemicals of Commerce, 2d edition (p. 296), as follows:

Thiourea, CS(NH2)2, is the product of reaction of carbon bisulfide and ammonia through the intermediate formation of ammonium thiocarbamate, or reaction of cyanamide with hydrogen sulfide. Both CP and technical grades serve for synthesis of organic sulphur compounds.

See also Webster’s Third New International Dictionary (1967 edition):

thiourea: a bitter crystalline compound CS(NH2)2 that is analogous to urea with the oxygen replaced by sulfur and resembles urea in chemical properties, that is obtained by heating ammonium thiocyanate or by adding hydrogen sulfide to cyana-mide, and that is used chiefly in the separation of hydrocarbons (as various liquid normal paraffin hydrocarbons from branched-chain hydrocarbons), in organic synthesis, and esp. formerly in synthetic resins.

However, similarity or dissimilarity is not determined for tariff purposes solely by the chemical formula or molecular structure of a product.

In Scharf Bros. Co. (Inc.) v. United States, 16 Ct. Cust. Appls. 347, T.D. 43089 (1928), the trial court found rock candy sold for export was similar to that sold for home consumption on the ground that it was similar in chemical composition. The court of appeals rejected that groimd, stating that “a thing may be similar chemically and yet not similar within the meaning of the word as used” in the tariff act. It then found similarity on the ground that both types of candy were made in the same kind of vats, by the same process, and out of the same material; they were approximately the same value, identical in composition, taste, color, and use, differing only in the size of crystals. They were held commercially interchangeable.

In United States v. Philipp Bros. Chemicals, Inc., 56 Cust. Ct. 816, A.R.D. 208 (1966), it was held that special grades of sodium peroxide were not similar to normal grades on the basis of evidence showing [298]*298that they had different characteristics, specifications, and uses, and that one would not be used in place of the other.

See also BASF Colors & Chemicals, Inc. v. United States, 56 CCPA 47, C.A.D. 952 (1969), where the question was whether a chemical known as HMD was subject to appraisement on the basis of American selling price because it was similar to certain coal-tar products provided for in paragraphs 27 and 1651, Tariff Act of 1930. The court stated (p. 52) :

In holding that the evidence failed to overcome the presumption attaching to the appraisement that HMD was similar to one or more of the products mentioned in paragraphs 27 or 1651, the [trial] court found:

In sum, plaintiff has introduced much detailed evidence on dissimilarity in molecular structure, but the testimony as to differences in other properties, uses, purposes, and applications is more general. It does show some differences in properties between aromatic and aliphatic compounds as classes, but Dr. Mark admitted that there were some overlapping cases. There is no evidence establishing whether or not HMD is in the overlapping category. While the difference in molecular structure may be of great importance to chemists, Congress was legislating in terms of commerce.

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Bluebook (online)
70 Cust. Ct. 295, 359 F. Supp. 1394, 1973 Cust. Ct. LEXIS 3435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/r-j-saunders-co-v-united-states-cusc-1973.