69 Cust. Ct. 257 | Cust. Ct. | 1972
This case is before us on an application for review of the decision and judgment in C. H. Powell Co., Inc. v. United States, 67 Cust. Ct. 493, R.D. 11752 (1971), wherein the trial court affirmed the appraised values of certain key chains designated as article Nos. 70 and 80.
Pertinent are sections 402(b) and 402(f) of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956. Section 402 (b) reads as follows:
(b) Expoet Value. — For the purposes of this section, the export value of imported merchandise shall be the price, at the time of exportation to the United States of the merchandise undergoing appraisement, at which such or similar merchandise is freely sold or, in the absence of sales, offered for sale in the principal markets of the country of exportation, 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 expenses incidental to placing the merchandise in condition, packed ready for shipment to the United States.
Section402(f) reads as follows:
(f) DEFINITIONS. — For the purposes of this section—
(1) The term “freely sold or, in the absence of sales, offered for sale” means sold or, in the absence of sales, offered—
(A) to all purchasers at wholesale, or
(B) in the ordinary course of trade to one or more selected purchasers at wholesale at a price which fairly reflects the market value of the merchandise,
without restrictions as to the disposition or use of the merchandise by the purchaser, except restrictions as to such disposition or use which (i) are imposed or required by law, (ii) limit the price at which or the territory in which the merchandise may be resold, or (iii) do not substantially affect the value of the merchandise to usual purchasers at wholesale.
(2) The term “ordinary course of trade” means the conditions and practices which, for a reasonable time prior to the exportation of the merchandise undergoing appraisement, have been normal in the trade under consideration with respect to merchandise of the same class or kind as the merchandise undergoing appraisement.
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Primarily appellant urges consideration of export value on the basis of being a selected purchaser as defined in section 402(f) (1) (B) at the entered value. Alternatively it is contended by appellant that if found not to be a selected purchaser, the evidence establishes the merchandise to be freely sold or offered for sale to all purchasers under said section 402 (b), swpra.
By statute, 28 U.S.C. § 2633, the appraised value is presumed to be correct. It is the burden of the party challenging its correctness to establish the appraised value to be incorrect and affirmatively establish the correct value. The basis of appraisement agreed upon by the parties, export value under section 402(b), supra, is the price at which such or similar merchandise at the time of exportation was freely sold or, in the absence of sales, offered for sale for exportation to the United States.
Section 402(f)(1)(A) defines “freely sold or, in the absence of sales, offered for sale” as meaning to all purchasers at wholesale while subsection (B) refers to such transactions in the ordinary course of trade to one or more selected purchasers at wholesale at a price which fairly reflects the market value. Accordingly, appellant had the burden of establishing either that the involved merchandise was freely sold or, in the absence of sales, offered for sale to all purchasers at wholesale or to one or more selected purchasers at wholesale at a price which fairly reflects the market value.
In order to logically approach this issue, consideration will be given first to the alternate claim of appellant, i.e., that such merchandise was freely sold or offered for sale to all purchasers.
Since we have found, as did the trial court, that Adams is a selected purchaser, the primary question for consideration by us is whether the record establishes that the prices of article Nos. 70 and 80 fairly reflect the market value as required by section 402(f) (1) (B). The statutory provision permitting sales to a selected purchaser as constituting a free offering was a step forward in recognizing the facts of life in the business world. However, certain precautions were necessary in order to prevent rigging of prices between such parties. Robert E. Landweer & Co., Inc., a/c Robert Newton & Sons, Inc., et al. v. United States, 63 Cust. Ct. 682, A.R.D. 261 (1969); Service Afloat, Inc., Howard Hartry. Inc. v. United States, 66 Cust. Ct. 519, R.D. 11734, 322 F. Supp. 396 (1971).
While we are not limiting the manner of proof in establishing whether a price fairly reflects the market value, the methods below have been accepted in establishing said value. In United States v. Acme Steel Company, 51 CCPA 81, C.A.D. 841 (1964), the court utilized the price at which the merchandise was sold in the home market or
In view of the foregoing, we are of the opinion that appellant has failed to make a prima facie case. The decision of the trail court sustaining the appraised value is therefore affirmed.
Since we have concluded the appraised value has not been overcome without consideration of defendant’s exhibit B, any error, if there be error, is harmless. The admission of such reports under 28 U.S.C. § 2633 is discretionary with the trial judge and is an exception to the hearsay rule. A reversal of the trial judge’s ruling admitting said exhibit must be based upon an abuse of discretion or a violation of the law. We find neither.
We find as matters of fact:
1. The imported merchandise herein consists of merchandise described as article Nos. 70 and 80 key chains which were exported from Hong Kong by Sun Wah Ornaments Manufactory, on or about June 13,1964.
2. The said merchandise was appraised on the basis of export value as defined in section 402(b) of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956.
3. The said merchandise does not appear on the Final List, T.D. 54521.
4. There has been no abuse of discretion or violation of law in the admission of defendant’s exhibit B.
5. Appellant has failed to prove values other than the appraised values.
1. Export value as defined in section 402(b) of tbe Tariff Act of 1930, as amended by tbe Customs Simplification Act of 1956, is the proper basis of appraisement.
2. Appellant has failed to overcome tbe presumption of correctness.
3. The proper dutiable values are tbe appraised values.
4. Tbe decision and judgment of tbe trial court is affirmed.
Judgment will be entered accordingly.
Article No. 8108, appraised as entered, is not involved herein.
Aceto Chemical Co., Inc. v. United States, 51 CCPA 121, C.A.D. 846 (1964).