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The Treasury Department in 1904 (T. D. 25453, supra) somewhat exhaustively considered this question and reviewed pertinent authorities, among others, T. D. 22805 (G. A. 4865), decided by the Board of General Appraisers in 1901. In that case the board in substance concluded that where goods in bonded warehouse became subject to a different rate of duty than when placed therein the collector's refusal to reliquidate at the time of withdrawal must be taken as a decision by him that a former liquidation was correct, although there was no particular moment of time prior to withdrawal at which the collector was required to make the reliquidation. And the department, agreeing with the board, held that in such case the collector's duty was to reliquidate such entries either before or at the time of withdrawal; that if he failed or refused so to do the importer's right of protest accrued at the time of withdrawal.

Again in 1913 (T. D. 33949) the department expressed its adherence to the same view and there is nothing to indicate that it has ever departed therefrom. This conclusion seems to rest in part at least upon the fact that the applicable statutes have provided that at the time of withdrawal from bonded warehouse it was incumbent upon importer to settle and pay all the duties then found assessable against the merchandise as a condition precedent to its delivery to him, and the further fact that he was entitled then to know definitely what course to take to protect his rights.

Consistently therewith, this court held in Taylor & Co. v. United States, supra, that under similar circumstances the importer's right of protest first accrued at the time of such withdrawal and settlement of duties. It was in that case pointed out, in view of the facts there present, that this was the first time when the applicable rate of duty upon the merchandise so withdrawn could be fixed and the collector was called upon expressly or impliedly to determine both the rate and amount of duties then accruing. We think this is sound law as applicable to the facts in the instant case and this decision is limited thereto.

In this connection see American Cigar Co. and Falk & Bro. v. United States (146 Fed. 484); Westray v. United States (85 U. S. (18 Wall.) 322); Merritt v. Cameron (137 U. S. 542); Customs Regulations 1915, Chapter XII.

To the Government's contention that the liquidation of January 14, 1918, was not a liquidation because the duties were not then paid, it is only necessary to say that inasmuch as the goods were in bonded warehouse it was not incumbent upon the importer then to pay the same. That the collector deemed it a liquidation there can be no doubt. Article 615 of the Customs Regulations of 1915 provides that when a liquidation is completed the word "liquidated" must be stamped upon the entry and that such stamp is legal evidence of liquidation.

The collector, by stamping upon the entry "March 21, 1922, reliquidated," recognized that there had been a prior liquidation. This would, if valid, be an abandonment of all prior liquidations.-—Robertson v. Downing (127 U. S. 607); United States v. Godchaux Sugars (Inc.) (11 Ct. Cust. Appls. 529; T. D. 39678).

If the doctrine contended for by the Government be upheld, the purpose of section 21 of the act of 1874 in cases of this kind would manifestly be defeated. It was intended thereby to fix a time, after the settlement and payment of duties and the delivery of merchandise to importer, at which a liquidation would be final and conclusive upon all parties in the absence of fraud and protest. It was not contemplated that a collector, by failing to perform his duty to liquidate at the time of withdrawal and place the liquidation stamp upon the entry in cases such as this, could reserve to himself an unlimited time in which the act of liquidation could be performed by him. The statute itself gives him only one year, in the absence of fraud and of protest, in which to make any further reliquidation, and that statute is the measure of his right and power.

See Customs Regulations, 1915, article 640; United States v. Phelps (27 Fed. Cas. 521; 17 Blatch. 312).

It is not intended to hold that in no case may the collector defer final liquidation of an entry for consumption of goods in warehouse until after delivery thereof to importer.

The customs regulations contain provisions that this may be done for importer's convenience.

See also Kennedy & Moon v. United States (9 Ct. Cust. Appls. 49; T. D. 37905).

The judgment of the Board of General Appraisers is reversed.

BUSH & Co. (INC.) v. UNITED STATES (No. 2271).1

1. CLEANED RICE, DAMAGED.

Cleaned rice which has been damaged is still cleaned rice under paragraph 193, tariff act of 1913, and has not become a crude vegetable substance under paragraph 552. See Tower & Sons v. United States (11 Ct. Cust. Appls. 489; T. D. 39629). 2. NONIMPORTATION EVIDENCE, BURDEN OF Proof.

An importer claiming nonimportation of a portion of a shipment by reason of damage amounting to destruction must show the amount destroyed and that the destruction occurred before importation.

United States Court of Customs Appeals, November 17, 1923. APPEAL from Board of United States General Appraisers, G. A. 8624 (T. D. 39530).

[Affirmed.]

Barnes, Chilvers & Halstead (Frank M. Halstead of counsel) for appellant.

William W. Hoppin, Assistant Attorney General (Charles D. Lawrence and Ralph Folks, special attorneys, of counsel), for the United States.

1 T. D. 39894.

[Oral argument October 3, 1923, by Mr. Halstead and Mr. Lawrence.]

Before MARTIN, Presiding Judge, and SMITH, BARBER, and BLAND, Associate Judges. BARBER, Judge, delivered the opinion of the court:

Ten thousand bags of rice of the net weight of substantially 97 pounds per bag were shipped by one Da Rocha from Hongkong, China, on or about April 8, 1919, by the steamer Manila Maru, consigned to Suzuki & Co., of San Francisco, who are referred to in the record as the importers.

The rice was stowed in what is referred to as " " 'tween decks." While the steamer was at sea on May 4 following, smoke was discovered coming out of No. 5 hold, where some matting was stored and below where some of the rice was placed. Water was immediately pumped into the hold and steam turned into it for several hours, when the fire appeared to have been extinguished. Steam, however, was kept turned on "tween decks" until May 11, but no further signs of fire appeared during that time. May 12 the vessel arrived at the port of Seattle, at which port 5,000 bags were unladen. Concerning these bags, no question is made and nothing appears as to their condition. May 13 the vessel arrived at Tacoma. The batches were removed and the discbarge of the cargo begun. About 5 o'clock of that day fire again broke out in hold No. 5. Water was again turned on and the unlading continued until all the rice was removed from the steamer. Some 2,900 bags were placed upon two scows alongside the ship and the balance, 2,100 bags, on the dock. Of these, 900 bags were put under cover and 1,200 left exposed.

The result of the efforts to put out or keep the fire under subjection was, that some of the rice was badly water-soaked; the major part of it was water-soaked or heated and moistened by the steam. A minor part was in fairly good condition. Witnesses substantially agreed that the 2,900 bags were in the worst condition, that the 1,200 bags were not quite so bad, and the 900 were still better. In a good many of the latter the rice was but little damaged. The rice was insured. At the instance of the insurance company, the importer and perhaps the owner of the vessel, an examination or survey of the rice was made by an adjuster of marine losses and a marine surveyor, for the purpose of ascertaining the damage to the rice, which apparently was unladen under their supervision. The result was that the insurance company paid the total loss under the policies. The marine surveyor sold the rice to one Colsky, whose business was the buying of salvaged merchandise, and turned over to the insurance company the amount Colsky paid him for it.

While the unlading was in progress, or soon after, the pure food officials of the Department of Agriculture at Seattle requested the collector at Tacoma to refuse delivery of the rice as damaged and

not fit to be used for human consumption in its imported condition, but after learning that some of it was fit for such use, allowed delivery to be made to Colsky on condition that they be permitted to see the rice after it had been reconditioned, and that the damaged portion be either destroyed or sold for animal food.

Colsky bought the entire 5,000 bags for 30 cents per bag, making a total of $1,500, thinking at the time that he could abandon a part of it and pay duty upon the rest, but the customs officials declined to allow him to do this, so he took the entire quantity and paid the assessed duty of 1 cent per pound thereon, amounting to $4,592.50. May 20 the merchandise was apparently entered for consumption by George S. Bush & Co. (Inc.), appellant here. Just how it came to be entered by them or their interest therein does not appear.

Colsky immediately sold 2,483 sacks of the merchandise in the condition it was unladen and without being reconditioned for $25 per ton. The purchaser placed it in a warehouse, where it dried out in time, and used it for hog feed covering a period of six or seven months. Colsky took the remainder to Seattle, where it was reconditioned by putting it through a sifting machine. As a result of the reconditioning process he got 753 bags of 100 pounds each which were sold for hog feed at $30 a ton, and 1,663 bags of 100 pounds each which were sold at 63 cents a pound for human consumption. The aggregate amount he received for the rice was $14,930.13. Including the purchase price, $1,500, and the duty paid by him, $4,592.50, the cost of reconditioning, transportation and storage, and other incidental charges, his total outlay on account of the rice was $11,247.55, and he testified that his profit on the transaction was about $2,800. The record shows that one reason why he succeeded so well was that at the time he sold the rice for human consumption there was a scarcity of that commodity. The quantity he sold in pounds was some less than the quantity theoretically contained in the 5,000 bags. Just how this happened is not explained, Colsky saying that perhaps some of it stuck to the sacks. The pure food officials suggested that the shrinkage was partly due to slack sacks.

The merchandise was classified under paragraph 193 of the tariff act of 1913 as rice, cleaned, and duty taken thereon at the rate of 1 cent per pound.

The appellant here filed its protest, which was duly heard and overruled by the Board of General Appraisers.

In this court appellant contends first, that all the rice should be classified as a crude vegetable substance and held free of duty under paragraph 552 of the act which allows free entry to crude vegetable substances not specially provided for. Second, if this claim be denied, that duty as assessed be upheld only as to 166,300 pounds of rice contained in the 1,663 bags which were sold for human con

sumption, and that as to the balance of the importation it be regarded as entitled to free entry under said paragraph 552, or as a nonimportation under the rule of Lawder v. Stone (187 U. S. 281); United States v. Habicht (1 Ct. Cust. Appls. 53; T. D. 31031); United States v. Shallus (2 Ct. Cust. Appls. 332; T. D. 32074); United States v. Pastene Co. (3 Ct. Cust. Appls. 164; T. D. 32458); and Poole Co. v. United States (9 Ct. Cust. Appls. 271; T. D. 38216). There was some question as to commercial designation at the hearing before the board, but it is not raised here.

Paragraph 193 provides for "rice, cleaned," and there is no controversy that at the time of its shipment it was that commodity. It is true that when it was unladen, it was more or less wet, heated, smelled of smoke, and had begun, as the odors emanating therefrom indicated, to decompose. These unfavorable qualities, however, as was evidenced by the behavior of the 2,483 bags sold in the condition in which they were unladen, began to improve as soon as the bags were stored in warehouse, and it turned out that the rice therein, without anything being done to it, was suitable and was used for animal food, and was apparently worth what was paid for it, $25 a ton. And it may be observed that the rice in these bags was in as bad condition as any of the importation. Paragraph 193 contains no provision for a diminution of the duty rate thereunder because of damage. Cleaned rice, regardless of its quality, is dutiable at the specific rate therein provided. See Tower & Sons v. United States (11 Ct. Cust. Appls. 489; T. D. 39629).

We do not think the facts in this case bring it within the rule of the cases above cited and relied upon by the appellant. An examination thereof discloses that in every case a definitely ascertained percentage or portion of each importation had become absolutely worthless before importation, and in some of the cases it was condemned by health officers and destroyed. It may be that if it had appeared in this case that some definite part of the rice at the time it crossed the customs line had become absolutely valueless, the appellant would be entitled to relief as to that part. The burden, however, was upon appellant to establish that fact, and counsel rely in this regard upon the evidence to the effect that 2,900 bags of the rice which were put upon scows were not worth the duty assessed thereon and the necessary transportation charges and expenses of sale; that it did, however, have a commercial value is demonstrated by the fact that 2,483 bags thereof were in their imported condition immediately sold for $25 per ton and used for animal food, while the balance of the 2,900 bags was reconditioned and thereafter sold. If any part of the importation was destroyed or absolutely worthless, the burden was upon the appellant to establish the quantity, percentage, or amount thereof, and in this failed.

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