United States v. Muehlstein

42 Cust. Ct. 760
CourtUnited States Customs Court
DecidedMay 6, 1959
DocketA.R.D. 106; Entry No. 772747-1/3
StatusPublished
Cited by10 cases

This text of 42 Cust. Ct. 760 (United States v. Muehlstein) 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
United States v. Muehlstein, 42 Cust. Ct. 760 (cusc 1959).

Opinion

Rao, Judge:

This is an application for review of a decision and judgment in a reappraisement proceeding wherein it was held that the proper basis of value of certain imported ebonite or hard rubber dust was foreign value, as that value is defined in section 402(c) of the Tariff Act of 1930, as amended by the Customs Administrative Act o'f 1938, and that, as to each of the grades of dust involved in the importation, such value was represented by the entered value.

Said section 402 (c), as amended, provides as follows:

(e) Foreign Value. — The foreign value of imported merchandise shall be the market value or the price at the time of exportation of such merchandise to the United States, at which such or similar merchandise is freely offered for sale for home consumption to all purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade, including the cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to [762]*762placing the merchandise in condition, packed ready for shipment to the United States.

Of the two grades of hard rubber dust covered by this action, exported from England on November 20, 1951, the one described as grade 70/30S was entered at a unit price of 8 shillings 10 pence per pound, plus packing, as invoiced, and appraised at 4 shillings per pound, plus packing, as invoiced; the other, described as grade No. 3, was entered at a unit price of 2 shillings 3 pence per pound, plus packing, as invoiced, and appraised at 2 shillings 3% pence per pound, plus packing, as invoiced.

The record as made before the trial judge consists of an affidavit of one W. C. Martin, a director of James Ferguson & Sons, Ltd., the manufacturer and exporter of the instant merchandise, introduced into evidence as plaintiff’s exhibit 1, and a report of an investigation of said manufacturer conducted by Assistant Appraiser John J. Schreiner, introduced into evidence as defendant’s exhibit A. By stipulation of counsel, it was agreed that the proper basis of value for each of the involved grades of rubber dust was foreign value, as defined in said section 402(c), as amended, predicated in the case of grade 70/30S upon sales in England, the country of exportation, of such material, and in the case of grade No. 3, upon sales of a similar quality known as Prime B. It was further agreed that there was no statutory export value of such or similar merchandise.

In addition, counsel also stipulated as follows:

Me. Spectoe: Well, before you conclude, I just want to make clear to the Court part of our agreement had with Mr. Carter. We picked one case as a test case, and the period. This report [defendant’s exhibit A] may not in itself involve that particular period of time, but we have lists, I think, price lists of all periods of time involved, and it is understood and agreed that the sales covering the period of time which this importation is involved contains all the necessary elements that would be present if the special report werp made on each shipment.
Judge Mollison : In other words, the plaintiff has no basis for raising any objection to anything contained in this report based upon the date of exportation.
Me. Spectoe : That is right, about the conditions, and so forth.
Judge Mollison : That is agreed?
Me. Paeey : Yes, agreeable.

Basically, the question here, as it was before the trial court, is the sufficiency of the evidence to establish the usual wholesale quantities in which such or similar merchandise was offered for sale in the foreign market. It is tacitly, if not explicitly, conceded that all other elements entering into the definition of foreign value have been satisfied.

We approach the resolution of that question, guided by the well-settled principle that the usual wholesale quantity is that wholesale quantity in which the major portion of sales or offers for sale were made. United States v. M. Minkus, 21 C.C.P.A. (Customs) 382, T.D. [763]*76346912; Jenkins Brothers v. United States, 25 C.C.P.A. (Customs) 90, T.D. 49093; Brooks Paper Company v. United States, 40 C.C.P.A. (Customs) 38 C.A.D. 495. While, as observed by the trial judge, no case involving the major portion of sales rule specifically sets forth the period of time to be considered, in ascertaining the number of sales, it would appear that ordinarily a selling pattern obtaining subsequent to the date of exportation of imported merchandise would neither reflect, nor determine, a value which by statutory definition is related to the time of exportation. Such is the tenor, if not the mandate of prior adjudications, especially where price fluctuations have been shown. Mexican Products Co. v. United States, United States v. Mexican Products Co., 72 Treas. Dec. 1204, Reap. Dec. 4182, ultimately reversed on other grounds, United States v. Mexican Products Co., 28 C.C.P.A. (Customs) 80 C.A.D. 129; Hawley & Letzerich v. United States, 73 Treas. Dec. 1632, Reap. Dec. 4348; F. S. Whelan & Sons v. United States, 39 C.C.P.A. (Customs) 168, C.A.D. 482. Where, however, it is made to appear that sales subsequent to the date of exportation accurately typify the exporter’s sales practices as of the date of exportation, such sales may be considered in determining usual wholesale quantities. F. S. Whelan & Sons v. United States, supra.

In view of the statement made by counsel for the Government, and the ensuing colloquy, hereinabove quoted, it may be assumed, for the purposes of this case, that the exporter’s home consumption sales were characterized by a consistency that renders irrelevant the particular date of exportation of the merchandise at bar, notwithstanding that periodic changes in the price structure, applicable to subsequent deliveries, were effected.

Accordingly, we deem it pertinent to consider the schedules, attached to plaintiff’s exhibit 1, of all domestic sales and deliveries made by the Ferguson company, of its grades 70/30S and Prime B ebonite dust from January 1, 1951, to March 24, 1955. Said schedules show the dates of delivery, dates of contract, the quantity involved in each sale, and the effective price, each customer being designated by number rather than by name. Excepted from the list are lots of from 5 to 30 pounds of grade 70/30S, sold and delivered for testing purposes.

Concerning the omission of such sales, the trial court observed:

* * * Inasmuch as the articles at bar are by their nature obviously manufactured and designed to be sold to consumers who use them in manufacturing applications, it seems clear that sales for testing purposes were not in the ordinary course of trade and should not be considered in determining the usual wholesale quantity under the major portion of sales or offers for sale rule.

We are of opinion that this is a reasonable inference from the facts of record. The affiant Martin, having been associated with the manu[764]

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