Uddo & Taormina Co. v. United States

Jackson, Judge,

delivered the opinion of the court:

This is an appeal in a reappraisement proceeding from a judgment of the United States Customs Court, First Division, in conformity.with its decision by a divided court (Reap. Dec. 8061) affirming the judgment of the single judge.

The imported merchandise involved herein is “Romano Pecarino Genuine Cheese (Standard Quality)”, exported from Rome, Italy, on or about February 27, 1948.

It appears that such type of cheese, during the time it is being cured and aged, has applied to it a coating made of fuller’s earth, lamp black, and olive oil foots. Such coating or rind, which is inedible, is placed on the cheese for the purpose of protecting it during storage and transportation.

The goods were invoiced at $2 per kilogram, minus two per centum cash discount, f. o. b. Genoa, and appended to the invoice is a statement that 2.50 per centum of the net weight of the cheese, which was 1,611.6 kilograms, was the proportion of weight represented by the rind or coating.

The merchandise was entered at $2 per kilogram less the two per centum cash discount, nondutiable charges for inland freight to Genoa and loading charges. The entry was made on a weight of 1571.3 kilograms, which is the remainder after having subtracted from the net weight of the cheese and coating 40.3 kilograms, the weight of the coating. That deduction at the rate of $2 per kilogram amounts to $80.60. Therefore, it may be seen, the entry did not include the proportionate “cost of all containers and coverings of whatever nature” in either the unit or total values.

■ If the merchandise had been entered at the full weight of the cheese, which is 1611.6 kilograms at $2 per kilogram, the total value would have amounted to $3,223, as shown on the invoice. Such sum would have included the cost of coverings and containers of whatever nature. In the entry on the weight set out therein the value appears as $3,142.60. From that amount appellant deducted $41.00 for inland freight and loading charges, arriving at the amount of $3,039.00 for duty purposes. Thus it may be observed that $80.60 for the coating or covering is not included in the entered value of $3,142.60.

The appraiser appraised the importation at $2 per kilogram of cheese after having deducted 2%% allowance for tare, 40.29 kilograms, and, in accordance with sec. 16.6 (c), C. R. 1943, as amended, T. D. 51818, added the proportionate part of the cost of the inedible coating which each' kilogram of cheese bore to the total weight of the coating. He returned the cost of the rind or coating as $2 per kilogram, as well as tbe same amount per kilogram for tbe value of tbe cbeese, less two per centum casb discount, together with tbe nondutiable charges.

Tbe entry and appraisement were made on tbe export value of the merchandise defined in section 402 (d) of tbe Tariff Act of 1930, read” ing as follows:

■ Sec. 402. VALUE.

* * * # * * fc ' ,

(d) Export Value. — The export 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 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, for exportation to the United States, plus, when not included in such price, the cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the merchandise in condition, packed ready for shipment to the United States. [Italics ours.]

Tbat basis of value is not in dispute and a stipulation was entered into by counsel for tbe parties at tbe trial tbat tbe foreign value as defined in section 402 (c) of tbe act, as amended, for cbeese of this type, •was not bigber than tbe importer’s entered unit value.

Tbe entire shipment weighed 1872.9 kilograms including tbe tare of 261.3.

■■ It may be noted tbat tbe value of tbe merchandise as entered, was advanced by tbe appraiser in tbat it was placed at $2 per kilogram on tbe cbeese itself and the cost of tbe inedible covering at tbe same amount.

There can be no question but tbat tbe merchandise was bought and sold at $2 per kilogram based upon tbe total weight of tbe cbeese and its inedible covering.

' It is.not disputed tbat tbe coating on tbe cbeese is a covering or container and, pursuant to section 402 (d), supra, it must be added to the cost of tbe goods per se, even though it is excluded as tare by tbe examiner.

There is no question but tbat tbe weight of tbe cbeese, excluding tbe weight of tbe inedible covering, is 1571.3 kilograms. It was entered at tbat weight by tbe importer at tbe price paid for tbe weight of tbe cbeese and its covering. It is clear to us, as was pointed out ■in tbe decision of tbe Customs Court, tbat in applying section 402 (d), supra, to the involved merchandise, tbat tbe price of a kilogram of tbe involved cbeese, plus tbe cost of containers, etc., placed tbe cbeese in condition ready for shipment to tbe United States.

While tbe cost of tbe inedible coating is not set out in tbe invoice, .there can be no question but tbat it was paid for by tbe importer at tbe same rate per kilogram as was paid for tbe cbeese per se, less .deductions and nondutiable charges, and, in our view, it is immaterial; so far as tbe dutiable charges' to tbe importer are concerned, whether or not-.the value of the merchandise is.$2 per kilogram on the net weight of the cheese alone, plus $2 per kilogram of inedible covering, or whether the entire weight of the cheese, plus the inedible covering is valued at $2 per kilogram.

In the dissenting opinion it is pointed out that the type of cheese in issue is always bought and sold with the protective inedible cover-? ing and in that condition freely offered for sale to all purchasers at the time of exportation of the involved shipment at $2 per kilogram, less two per centum cash discount, f. o. b., port of exportation. The dissenting opinion suggests that on the record here the proper basis of appraisement is $2 per kilogram of cheese including the inedible covering, less two per centum cash discount, less nondutiable charges. It appears to us that the final result of the calculation set out in the dissenting opinion and that arrived at in the prevailing decision amount to the same dutiable value.

It may be remembered that the appraiser made a tare allowance of 40.29 from the weight of the cheese and covering, which was 1611.60 kilograms. The same figures appear in the entry with the difference of one cent so that the weight of the importation minus the allowance for tare is 1571.31 found by the United States Customs Court, and 1571.30 on the entry.

With that exception, there is no difference between the entered weight and that found by the court. But while the importer deducted the same tare, it claims no duty should be assessed upon the covering.

We are unable to perceive any mistake in law in the decision of the appellate division affirming that of the single judge and, therefore, the decision of the United States Customs Court is affirmed.

Jackson, J., retired, recalled to participate herein. ■ William P. Cole, Jr., J., having participated below, disqualified himself to sit in this case, and James W. Morris, United States District Judge for the District of Columbia, was designated and did serve herein, pursuant to the provisions of Title 28, United States. Code, section 293. •. .