83D CONGRESS 2d Session } SENATE { REPORT No. 1419 MONTGOMERY OF SAN FRANCISCO, CALIF., INC. MAY 24 (legislative day, MAY 13), 1954.-Ordered to be printed Mr. LANGER, from the Committee on the Judiciary, submitted the following REPORT [To accompany H. R. 1905] The Committee on the Judiciary, to which was referred the bill (H. R. 1905) for the relief of Montgomery of San Francisco, Calif., Inc., having considered the same, reports favorably thereon, without amendment, and recommends that the bill do pass. PURPOSE The purpose of the proposed legislation is to authorize and direct the Secretary of the Treasury to pay the sum of $1,197.97 to Montgomery of San Francisco, Calif., Inc., in full settlement of all claims against the United States as a refund of the customs duty and excise tax paid on copper tubing purchased in Japan. STATEMENT The files of the Treasury Department disclose that the tubing in question is covered by San Francisco consumption entry No. 9399 filed on January 9, 1951, and that the entry was filed by Joseph A. Paredes & Co., customhouse brokers, for the account of the Pacific Far East Co., 617 Montgomery Street, San Francisco, and covers 50 cases of seamless copper tubes imported from Japan. The files further disclose that estimated duties and import taxes in the total amount of $1,212.53 were deposited at the time of entry; that the merchandise was released from customs custody on January 26, 1951; that the entry was liquidated on January 31, 1952; that, in liquidation, customs duties were assessed on 22,046 pounds of tubes at the rate of 32 cents per pound and the import taxes assessed on 21,318 pounds at the rate of 2 cents per pound; that the total duties and import taxes assessed amounted to $1,197.97; that the excess deposited on entry was therefore refunded on February 5, 1952; tha there is no record of any application for refund of the duties and taxes on the tubing having been made to the collector on account of the exportation of the tubing, and that if the tubing was reshipped to Brazil as claimed, such exportation was not made under customs supervision. The collector states that in support of the claim of exportation and at his request, Mr. Montgomery submitted the copy of the bill of lading transmitted with the collector's letter. According to this letter, the bill of lading was issued at San Francisco on January 3, 1952, by the Pacific Argentine Brazil Line, Inc., and covers a shipment of 51 cases of copper tubing (gross weight 26,000 pounds) by Montgomery of San Francisco, Inc., to Rio de Janeiro per steamship P. & T. Seafarer. The collector states that this difference between the number of cases exported (51) and the number imported (50)| "was said to result from repacking after release from customs custody." He further states that Mr. Montgomery advises that the actual date of exportation was January 12, 1952, rather than January 3, 1952, as indicated in the bill of lading. Section 558 of the Tariff Act of 1930, as amended by section 24, Customs Administration Act of 1938, provides in substance (with certain exceptions not applicable in the case of the tubing in question) that no abatement, remission, refund, or drawback of estimated or liquidated duties shall be allowed because of the exportation of any imported merchandise if the merchandise was released from the custody of the Government prior to its exportation. As the tubing in question, if exported as claimed, was released from customs custody i. e. Government custody) prior to its exportation, the Treasury Department is precluded by section 558 supra, as amended, from allowing a refund of the duties on the tubing on account of its exportation. Such refund could be allowed only by the enactment of special legislation such as that proposed in the instant bill. The Treasury Department in reporting on a similar bill of the last session states in part as follows: The Department is opposed to the enactment of special legislation for relief in cases like the present one for the reason that such enactment discriminates against those persons who willingly accept the application of existing law without question, and in favor of those persons who seek to avoid such application by means of special legislation. In a supplemental letter sent to the chairman of this committee under date of June 26, 1953, the Treasury Department points out that there was only one payment of duty by the importer to the United States. Upon the entry of the goods, the importer deposited $1,212.53, the amount of estimated duties and import taxes. Upon liquidation of the entry, the duties and import taxes were determined to be $1,197.97. The amount was paid from the amount deposited by the importer, and a balance of $14.56 was returned to the importer. Accordingly, the importer actually paid only $1,197.97 to the United States, and if this proposed legislation were enacted that sum would be returned to him. The supplemental letter from the Treasury Department also points out that the copper tubing in question was in the commerce of the United States almost an entire year. The copper tubing was entered at San Francisco on January 9, 1951, and was released from customs custody on January 26, 1951. The bill of lading supplied by Mr. Montgomery shows January 3, 1952, as the date of exportation. However, Mr. Montgomery advised the collector at San Francisco. that the tubing was actually exported on January 12, 1952, almost an entire year after the tubing was released by customs on January 26, 1951. No duties were assessed and collected on the exportation of the copper tubing. The amount of $1,197.97 was the actual amount of import duties assessed. This amount was retained from the amount of duties deposited and the balance repaid to the importer. The committee recognizes the basic objection of the Treasury Department to the passage of the instant legislation. The committee is aware of the statute which states that no abatement, remission, or refund shall be allowed because of the exportation of any imported. merchandise, if the merchandise was released from the custody of the Government prior to its exportation. The committee recognizes the Department's position as legally sound. However, the committee notes that there are equitable considerations involved herein, which the Treasury Department has not considered. The committee does not believe that the claimant herein should be penalized because of actions taken in good faith. The copper tubing was purchased for home construction in the United States. However, before the copper tubing reached the United States, home construction was discouraged by Government regulations curtailing credit for new building construction. This reduced the United States market for copper in housing construction. Also, price controls became effective, which would necessitate the disposal of this copper tubing at a heavy loss if sold in the United States. Due to the loss of the market in the United States and the inability of disposing of the copper tubing without a financial sacrifice, the company was forced to export the copper in order to salvage some of the purchase costs. Therefore, because this company was the innocent victim of Government regulations unforeseeable by the company at the time it purchased the copper tubing, the committee does not think it equitable to force this company to suffer a further loss by asserting a technical legal position as the basis for retention of import duties collected on goods which in fact were not used or disposed of in the United States but were reexported. The committee believes that it is within the power of Congress to recognize hardship cases, and the committee therefore deems it proper to recommend favorably this bill H. R. 1905. Attached hereto and made a part of this report are the reports of the Treasury Department and other evidentiary data submitted in connection with this claim. Hon. EMANUEL Celler, Chairman, Committee on the Judiciary, TREASURY DEPARTMENT, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: Further reference is made to your request for the views of this Department on H. R. 6654, for the relief of William L. Montgomery, together with copies of any papers on file material to the facts in the case. H. R. 6654 would authorize and direct the Secretary of the Treasury to pay the sum of $1,200 to William L. Montgomery, of San Francisco, Calif., in full settlement of all claims against the United States as a refund of the customs duty and 58003°-55 S. Repts., 83-2, vol. 3-38 excise tax paid on copper tubing purchased in Japan. It is stated in the bill t such tubing arrived in the United States and that it was reshipped to Brazil af the duty and tax were paid. There are enclosed for your information copies of the following corresponder in the files of the Bureau of Customs of this Department relative to the tubing question: (1) a letter addressed to the Commissioner of Customs, Washingt D. C., by Montgomery of San Francisco, Inc., 617 Montgomery Street Buildi San Francisco, Calif., under date of September 29, 1951; (2) the reply ther of the Bureau of Customs dated October 3, 1951; (3) a letter addressed to collector of customs at San Francisco by the Bureau on February 26, 19 requesting a report relative to the tubing covered by the bill; and (4) the coll tor's report dated February 29, 1952. There is also enclosed for your informat the copy of the export bill of lading transmitted by the collector with his repo From the collector's report, it appears that the tubing in question is cove by San Francisco consumption entry No. 9399, filed on January 9, 1951; and t the entry was filed by Joseph A. Paredes & Co., customhouse brokers, for account of the Pacific Far East Co., 617 Montgomery Street, San Francisco, covers 50 cases of seamless copper tubes imported from Japan. It further appears that estimated duties and import taxes in the total amo of $1,212.53 were deposited at the time of entry; that the merchandise was leased from customs custody on January 24, 1951; that the entry was liquida on January 31, 1952; that, in liquidation, customs duties were assessed on 22, pounds of tubes at the rate of 32 cents per pound and import taxes assessed 21,318 pounds at the rate of 2 cents per pound; that the total duties and imp taxes assessed amounted to $1,197.97; that the excess deposited on entry w therefore, refunded on February 5, 1952; that there is no record of any applicat for a refund of the duties and taxes on the tubing having been made to the collec on account of the exportation of the tubing; and that, if the tubing was reship to Brazil as claimed, such exportation was not made under customs supervisi The collector states that, in support of the claim of exportation, and at request, Mr. Montgomery submitted the copy of the bill of lading transmit with the collector's letter and which is enclosed herewith. According to t copy, the bill of lading was issued at San Francisco on January 3, 1952, by Pacific Argentine Brazil Line, Inc., and covers a shipment of 51 cases of cop tubing (gross weight, 26,000 pounds) by Montgomery of San Francisco, I to Rio de Janeiro per steamship P. & T. Seafarer. The collector states that difference between the number of cases exported (51) and the number impor (50) "was said to result from repacking after release from customs custod He further states that Mr. Montgomery advises that the actual date of expor tion was January 12, 1952, rather than January 3, 1952, as indicated in the bill lading. Section 558, Tariff Act of 1930, as amended by section 24, Customs Admin trative Act of 1938, provides in substance (with certain exceptions not applica in the case of the tubing in question) that no abatement, remission, refund, drawback of estimated or liquidated duties shall be allowed because of the portation of any imported merchandise if the merchandise was released from custody of the Government prior to its exportation. As the tubing in questi if exported as claimed, was released from customs custody (i. e., Governm custody) prior to its exportation, this Department is precluded by section 5 supra, as amended, from allowing a refund of the duties on the tubing on acco of its exportation. Such refund could be allowed only by the enactment of spec legislation such as that proposed by the bill. The Department is opposed to the enactment of special legislation for re in cases like the present one for the resson that such enactment discrimina against those persons who willingly accept the application of existing law with question and in favor of those persons who seek to avoid such application by me of special legislation. If, however, the Congress should deem the enactment of H. R. 6654 advisal it is suggested that the amount of the refund should be reduced to $1,197.97 ( amount actually paid). It is assumed that the tubing has been exported, altho there is no information available to the Department which conclusively est lishes the fact of exportation. The copy of the bill of lading enclosed herew is not deemed to be sufficient evidence of the fact of exportation. The Department has been advised by the Bureau of the Budget that there no objection to the submission of this report to the committee. Very truly yours, JOHN S. GRAHAM, Acting Secretary of the Treasury |