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M. SELLER & CO.

MARCH 10, 1941.-Committed to the Committee of the Whole House and ordered to be printed

Mr. SCOTT, from the Committee on Claims, submitted the following

REPORT

[To accompany S. 790]

The Committee on Claims, to whom was referred the bill (S. 790) for the relief of M. Seller & Co., having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

The purpose of the proposed legislation is to pay out of any money in the Treasury, not otherwise appropriated, the sum of $5,210.36 as refund of certain penalties paid to the collectors of customs at Portland, Oreg., and Seattle, Wash., on April 28, 1927.

The facts are fully set forth in Senate Report No. 36, Seventyseventh Congress, first session, which is appended hereto and made a part of this report.

Your committee concur in the recommendation of the Senate.

[S. Rept. No. 36, 77th Cong., 1st sess.]

The Committee on Claims, to whom was referred the bill (S. 790) for the relief of M. Seller & Co., having considered the same, report favorably thereon with the recommendation that the bill do pass without amendment.

An identical bill passed the Senate in the Seventy-sixth Congress.

The facts are fully set forth in Senate Report No. 1777, Seventy-sixth Congress, third session, which is appended hereto and made a part of this report.

[S. Rept. No. 1777, 76th Cong., 3st sess.]

The Committee on Claims, to whom was referred the bill (S. 2171) for the relief of M. Seller & Co., having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendment: Strike out all after the enacting clause and insert in lieu thereof the following: "That the Secretary of the Treasury be, and he is hereby, authorized and directed to refund to M. Seller and Company, Portland, Oregon, certain penalties in the amount of $5,210.36, paid to the collectors of customs at Portland, Oregon, and Seattle, Washington, on April 28, 1927. Said penalties were incurred under

M. SELLER & CO.

MARCH 10, 1941.-Committed to the Committee of the Whole House and ordered to be printed

Mr. SCOTT, from the Committee on Claims, submitted the following

REPORT

[To accompany S. 790]

The Committee on Claims, to whom was referred the bill (S. 790) for the relief of M. Seller & Co., having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

The purpose of the proposed legislation is to pay out of any money in the Treasury, not otherwise appropriated, the sum of $5,210.36 as refund of certain penalties paid to the collectors of customs at Portland, Oreg., and Seattle, Wash., on April 28, 1927.

The facts are fully set forth in Senate Report No. 36, Seventyseventh Congress, first session, which is appended hereto and made a part of this report.

Your committee concur in the recommendation of the Senate.

[S. Rept. No. 36, 77th Cong., 1st sess.]

The Committee on Claims, to whom was referred the bill (S. 790) for the relief of M. Seller & Co., having considered the same, report favorably thereon with the recommendation that the bill do pass without amendment.

An identical bill passed the Senate in the Seventy-sixth Congress.

The facts are fully set forth in Senate Report No. 1777, Seventy-sixth Congress, third session, which is appended hereto and made a part of this report.

[S. Rept. No. 1777, 76th Cong., 3st sess.]

The Committee on Claims, to whom was referred the bill (S. 2171) for the relief of M. Seller & Co., having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendment: Strike out all after the enacting clause and insert in lieu thereof the following: "That the Secretary of the Treasury be, and he is hereby, authorized and directed to refund to M. Seller and Company, Portland, Oregon, certain penalties in the amount of $5,210.36, paid to the collectors of customs at Portland, Oregon, and Seattle, Washington, on April 28, 1927. Said penalties were incurred under

the customs laws in the entry of certain merchandise from Germany at a less value than that returned upon final appraisement, such entry having been made without any intention to defraud the revenues of the United States or to conceal or misrepresent the facts of the case or to deceive the appraiser as to the value of the merchandise: Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000."

The bill, as amended, authorizes and directs the Secretary of the Treasury to refund to M. Seller & Co., Portland, Oreg., certain penalties in the amount of $5,210.36, paid to the collectors of customs at Portland, Oreg., and Seattle, Wash., on April 28, 1927.

In the first session of the Seventieth Congress a similar bill for relief of claimant, S. 2304, was favorably reported to the Senate from the Committee on Claims (S. Rept. No. 975, May 1, 1928, 70th Cong., 1st sess.).

In June, 1920 claimant company purchased in Germany certain lots of decorated chinaware for importation and sale within the United States. Claimant previously had made several entries of goods of this character under paragraph 1, section 3, of the Tariff Act of October 3, 1913 (38 Stat. 184), which provided: "That the owner, consignee, or agent of any imported merchandise may, at the time when he shall make entry of such merchandise, but not after either the invoice or the merchandise has come under the observation of the appraiser, make such addition in the entry to or such deduction from the cost or value given in the invoice or pro forma invoice or statement in form of an invoice, which he shall produce with his entry, as in his opinion may raise or lower the same to the actual market value or wholesale price of such merchandise at the time of exportation to the United States, in the principal markets of the country from which the same has been imported; and the collector within whose district any merchandise may be imported or entered, whether the same has been actually purchased or procured otherwise than by purchase, shall cause the actual market value or wholesale price of such merchandise to be appraised; and if the appraised value of any article of imported merchandise subject to an ad valorem duty or to a duty based upon or regulated in any manner by the value thereof shall exceed the value declared in the entry, there shall be levied, collected, and paid, an additional duty of 1 percent of the total appraised value thereof for each 1 percent that such appraised value exceeds the value declared in the entry. * * Such additional duties

shall not be construed to be penal, and shall not be remitted nor payment thereof in any way avoided except in cases arising from a manifest clerical error, nor shall they be refunded in case of exportation of the merchandise, or on any other account, nor shall they be subject to the benefit of drawback."

Under this provision claimant had made entry of similar goods at values varying either above or below the invoice values.

In the summer of 1920, following purchase of the goods here involved, claimant inquired at the Customs Division of the Treasury Department in Washington to determine whether by law or regulations that method of making entry had been altered. Claimant was advised the entry value might be based upon the market value in the country of origin.

The Emergency Tariff Act of May 27, 1921 (42 Stat. 16), provided in section 301:

"That whenever merchandise which is imported into the United States is subject to an ad valorem rate of duty, or a duty based upon or regulated in any way upon the value thereof, duty shall in no case be assessed on a value less than the export value of such merchandise."

Section 303a provided:

"That wherever in Title I of this Act, or in the Tariff Act of 1913, as amended, or in any law of the United States in existence at the time of the enactment of this Act relative to the appraisement of imported merchandise (except sections 2874, 2976, and 3016 of the Revised Statutes, and section 801 of the Revenue Act of 1916), reference is made to the value of imported merchandise (irrespective of the particular phraseology used and irrespective of whether or not such phraseology is limited or qualified by words referring to country or port of exportation or principal markets), such reference shall, in respect to all merchandise imported on or after the day this Act takes effect, be construed to refer, except as provided in subdivision (b) to actual market value as defined by the law in existence at the

time of the enactment of this Act, or to export value as defined by section 302 of this Act, whichever is higher."

Thus, under the 1921 act entry value of imports had to be based upon their export prices and could not be based upon the market value of the goods in the export countries at the time of exportation. However, the penalties applicable when the appraised value of imports exceeded the value declared in the entry, and the provision such penalties could not be remitted or avoided except in cases arising from manifest clerical error, were not affected by the 1921 act.

Merchandise here involved arrived in this country and was entered by claimant between July 8 and August 17, 1921. Entry papers filed with the collector show the invoices bore a shipper's memorandum which when translated reads as follows: "The purchasing power of the mark is still considerably higher in Germany than any other country; consequently, the selling prices of these commodities in Germany are approximately percent lower than those charged in the invoice. The rates of percentages vary with different invoices, but range from 521⁄2 to 62%1⁄2 percent.'

When entry was made, invoices with shipper's notation as to difference between market value and export value were submitted to the collector of customs at the port of Portland. Claimant's method of calculating the market value of the merchandise was fully stated and explained to the collector. It appears the collector gave claimant no indication his method of calculating the entry value was incorrect. Subsequently appraisers appraised the merchandise at the export value shown on the invoices. Since the appraised value exceeded the entry value, penalties under the 1913 act automatically attached.

Claimant appealed from imposition of the penalties and on appeal the assessment was affirmed. Thereupon claimant filed petition for relief from penalties and on hearing from the Customs Division and the Treasury Department, relief was denied on the ground that under the Tariff Act of 1913 no relief could be granted unless additional duties and penalties were assessed through manifest clerical error, and no such error was involved in this case.

In letter of August 9, 1922, to the collector of customs at Portland, Oreg., the Assistant Secretary of the Treasury says:

"The Department is satisfied from all the facts in the case that the importers acted in entire good faith and that the undervaluation resulted rather from a lack of knowledge of the provisions of the Emergency Tariff Act with respect to the basis of appraisement than from any intention to defraud."

On the ground that enactment of S. 2171 would accord certain importers special privileges not enjoyed by all under the law, the Acting Secretary of the Treasury in report of May 5, 1939, on the bill states the Department does not recommend its enactment.

In the Tariff Act of September 21, 1922 (42 Stat. 962), Congress has made provision for remittance of penalty duties in cases similar to this. With respect to these duties, section 49 of that act provides:

"Such additional duties shall not be construed to be penal and shall not be remitted nor payment thereof in any way avoided, except in the case of a manifest clerical error, upon the order of the Secretary of the Treasury, or in any case upon the finding of the Board of General Appraisers, upon a petition filed and supported by satisfactory evidence under such rules as the board may prescribe, that the entry of the merchandise at a less value than that returned upon final appraisement was without any intention to defraud the revenue of the United States or to conceal or misrepresent the facts of the case or to deceive the appraiser as to the value of the merchandise."

In this case the importer cannot proceed under the 1922 act because his penalties were incurred under the act of 1913, which prohibits remittance of penalties except when incurred through manifest clerical error.

The total duty paid by claimant on the shipments was $1,743.05. The duty which should have been paid totaled $3,831.85. Penalties totaled $5,210.36. The Acting Secretary of the Treasury reports the Department does not believe refund in excess of $5,210.36 should be authorized as this is the maximum amount of additional duties the Department's records show was assessed in connection with these importations.

As amended, your committee recommend the passage of the bill.

The following letter from the Acting Secretary of the Treasury is appended hereto and made a part of this report.

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