JUNE 9 (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. 4329] The Committee on the Judiciary, to which was referred the bill (H. R. 4329) for the relief of Huntington, McLaren & Co., having considered the same, reports favorably thereon, with an amendment, and recommends that the bill, as amended, do pass. AMENDMENT Page 1, lines 11 and 12, strike the words "in excess of 10 per centum thereof". PURPOSE The purpose of the proposed legislation, as amended, is to pay the sum of $3,712 to Huntington, McLaren & Co., of San Marino, Calif., in full settlement of all claims against the United States as reimbursement of excessive paymert of custom tax on jute webbing shipped from Calcutta, India, during the period April 3, 1951, to July 23, 1952. STATEMENT The claimant in this case was erroneously overassessed on three importations of jute webbing from Calcutta, India, at various periods in 1951. According to the Treasury Department, "Once an appraisement has been completed, the appraiser cannot change his decision in any way (19 U. S. C. 1501). To do so has been held to be void." The Treasury Department admits that the appraisal was made on the basis of misleading information and that the values were excessive, and has no objection to the enactment of the proposed legislation. Attached hereto and made a part of this report is a letter from the Treasury Department dated May 6, 1953, as well as other explanatory material submitted by the claimant. Hon. CHAUNCEY W. REED, Chairman, Committee on the Judiciary, TREASURY DEPARTMENT, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your letter of April 2, 1953, requesting a statement of this Department's views on H. R 4329, for the relief of Huntington, McLaren & Co. The proposed legislation would authorize payment to the company of $3,720 as reimbursement for an overassessment of duties on warehouses entries Nos. 1409, 1670, and 1802, dated May 25, July 26, and August 23, 1951, respectively, made at Los Angeles, Calif. The files show that the values used in the entries were based on information secured from the appraiser at Los Angeles. The information given was based on quotations received through the Department of State, a review of the quotations was pending, but before notice got to the appraiser he had reported the value to the collector, completing his appraisements at the entered values. The quotations proved to be erroneous, and the values were excessive. Once an appraisement has been completed, the appraiser cannot change his decision in any way (19 U. S. C. 1501). To do so has been held to be void. The appraisement is final upon all parties, including the United States Government, unless an appeal to the United States Customs Court is taken under section 501 of the Tariff Act (Gothic Watch Company v. United States, Reappraisement Decision No. 7438; 19 United States Customs Court Reports 309, and many other cases). The successful prosecution of an appeal would have done the importers no good since under 19 U. S C. 1503 (a) the higher entered values would have had to have been used for duty purposes. The correct amount of the overassessment is $3,712 rather than the amount of $3,720 stated in the bill. The Department has no objection to the enactment of the proposed legislation. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to you committee. Very truly yours, H. CHAPMAN ROSE, Acting Secretary of the Treasury. DATA PERTAINING TO THE IMPORTATION OF JUTE WEBBING FROM CALCUTTA, INDIA, IN THE SPRING OF 1951 BY HUNTINGTON, MCLAREN & Co., of Los ANGELES, CALIF. 1. High evaluation placed on jute webbing shipped from Calcutta, India, April 3, 1951, to April 23, 1951 (subsequently extended to shipments through July 23, 1951), by Customs Information Exchange.-As is usual at the port of Los Angeles, our customhouse brokers, James London & Co., Inc., requested of the United States appraiser at San Pedro, Calif., current values for the date of export as quoted to him by the Customs Information Exchange, New York. We were given a quotation at that time of values of jute webbing for the March shipping period and this was used in establishing the entered value on a shipment subsequently covered by warehouse entry No. 1409, although the actual date of export was April 3. In cases of this type, the importer is allowed to amend to the correct value when the examiner receives quotations for the period covering the actual shipment. In the case of this first shipment, the United States appraiser did not receive quotations from the Customs Information Exchange in New York until June 8, 1951, at which time he notified us of the figures received and gave us a notice to amend to values approximately 90 percent higher than the figures he had given us based on the March quotations. (See exhibits A and B.) Subsequent shipments covered by a warehouse entry No. 1670 and warehouse entry No. 1802 were valued at the same high value based on information received from the Customs Information Exchange. Warehouse entries are attached. HUNTINGTON, MCLAREN & CO. 3 2. High evaluation protested by Huntington, McLaren & Co., June 8, 1951, July 6, 1951, and subsequent.-As a firm, we questioned these values immediately, as we were in receipt of quotations and offerings from Indian shippers and knew that the values set by the Customs Information Exchange were much too high. Through our bank, the Citizens National Bank, a letter was sent to their Calcutta associate bank, the chartered Bank of India, Australia, and China, which in turn, produced a letter in reply from the India Jute Mills Association, sent direct to the United States Customs Information Exchange with data on the true market value of jute webbing during the period in question. (See exhibits C and D.) A letter was written July 6, 1951, by the firm to the Customs Information Exchange, All exhibits on file with also protesting the evaluation. (See exhibit E.) committee. 3. Protest acknowledged by Commissioner of Customs, Washington, D. C., August 7, 1951.-A letter was received from the deputy collector in charge of the Appraisement Division of the Bureau of Customs, Washington, dated August 7, 1951, confirming their receipt of a letter from the India Jute Mills Association, Calcutta, dated June 26, 1951, and our letter of July 6, 1951, and stating that "this Bureau has requested further inquiry to determine whether the value information furnished for the period in question was correct; however, definite advice has not been received to date. The Bureau requested this additional information predicated upon the letter dated June 26, 1951, received from the India Jute Mill Association, Calcutta, India. "You will receive a further communication from this Bureau after the additional (See exhibit F.) information has been received." Correspondence carried on about every 60 days relative to status as to reevaluation, October 3, 1951, to December 8, 1952. (See exhibit G-15 letters.) 4. Appraisals made locally July 16, 1951 (warehouse entry No. 1409), August 14, 1951 (warehouse entry No. 1670), and October 3, 1951 (warehouse entry No. 1802), although investigation being made, merchandise in warehouse bond, and warehouse entries not liquidated.-Though an investigation into the values of jute webbing was taking place, the local appraiser apparently was not notified and appraised warehouse entry No. 1409 on July 16, 1951, whereas entry No. 1670 on August 14, 1951, and warehouse entry No. 1802 on October 3, 1951. Since above entries were warehouse entries, we were not given the usual notice of appraisement as required by section 501 of the Tariff Act of 1930, and also because we had entered or amended (as in the case of warehouse entry No. 1409) to the contended values set by the appraiser, there was no difference between our We first realized that appraisement had entered value and the appraised value. been made after receiving a letter from the Commissioner of Customs dated December 10, 1952, stating in part that "all the Customs appraising officers are now in agreement as to the basis of appraisement." (See exhibit H.) Re duty valuation, jute webbing, during the period April 3 to April 23, 1951. UNITED STATES CUSTOMS INFORMATION EXCHANGE, 201 Varick Street, New York, N. Y. DEAR SIRS: We are writing to protest the duty valuation placed by Customs on Indian jute webbing during the period April 3 through April 23 and subsequent. The underlying facts of the matter were that during the period in question the United States Customs advanced the dutiable value of jute webbing from 150 percent of its former valuation to almost 200 percent of its former valuation. This increase was in no way justified by actual market conditions, either in this country or at the port of origin. In substantiation of this, you are in receipt of a letter from the Indian Jute Mills Association, Calcutta, under the date of June 26, 1951 (4705–D), in which this official association of all the leading jute mills in Calcutta has advised you of the price situation obtaining at that time. As the dutiable rate for jute webbing is 35 percent ad valorem, it works an extreme hardship on importers, and if maintained will result in a heavy loss to importers such as ourselves with considerable shipments during the period involved. We present the following facts in substantiation: 1. During the period involved, the market here was saturated with the commodity and prices were falling. You can easily verify this fact. The best price obtainable here during the period in question and subsequent thereto has been 50 to 52 cents per pound, duty paid, and delivered to the customer's door. If you assume that a person purchased webbing at 52 cents (which you state is the reasonable value) during the period named, and add the 18.2 cents per pound effective duty, it will give a cost of 70.2 cents per pound. Adding to this the freight, insurance, and incidental costs of around 2 cents per pound will give a total cost of 72.2 cents per pound. If an importer were to make a reasonable profit on this merchandise of 10 percent, it would mean that he would have to sell at almost 80 cents per pound-this in the face of a domestic market of 50 to 52 cents per pound. 2. Naturally, no one did pay this price. No one could afford to in view of market conditions. The actual invoice price of materials shipped to us during this period was 35 cents per pound, including freight, which is just about in line with the duties you had previously set up. 3. You will see that the Indian Jute Mills Association state that, although they were asking 41 cents at the time, no one was willing to pay this price, even with the preexisting duty, which importers understood would be more or less applicable. 4. It seems to us extremely arbitrary and unfair for the United States Customs to use a figure at which no transactions of any consequence took place. A market price is defined as the price at which there are both willing buyers and willing sellers, and this definitely did not apply in this case. Druing the period in question, the Indian sellers were holding back their materials in the expectation of profiteering due to the war situation. But the mere fact that they were doing this does not alter the situation. The fact is that they found no buyers at their quotations. Even a casual investigation of the market existing at that time domestically will convince you that from any importer's standpoint it would have been suicidal to enter the market in excess of 35 cents. In fact, we would have gladly canceled that order if we had not had a contract. Inasmuch as the Customs dutiable value is supposed to reflect the actual and fair market price, we respectfully submit the above, to the end of having the matter reconsidered as to the dutiable value during this period and subsequent. Very truly yours, O HUNTINGTON, MCLAREN & Co. By HOWARD E. HUNTINGTON. |