The issue here is the same as the one in Browne Vintners Co., Inc. It is not whether there was a compliance with the involved regulation, section 15.8 (a), which, while highly desirable, is not a condition precedent to recovery; but whether or not there was in fact a nonimportation-a nonimportation in the sense that the merchandise did not reach the custody and control of the importer. It is true that, in the Browne Vintners Co., Inc., case, the missing merchandise was never landed, but the word nonimportation is broad enough to cover the factual situation where merchandise is landed, placed in a bonded warehouse, and is discovered to be lost or missing before it passes beyond the custody and control of the customs officials and enters the commerce of the United States through the importer. "So long as merchandise remains under bond for warehousing in the tariff sense and for assessment of duties, its importation has not been completed." United States v. Cronkite Co., 9 Ct. Cust. Appls. 129, 134, T.D. 37980. See also Hartranft v. Oliver, 125 U.S. 525, 31 L. ed. 813; Five Percent cases, 6 Ct. Cust. Appls. 291, 320-321, T.D. 35508.

Two observations are made with respect to the case of United States v. Shallus, 2 Ct. Cust. Appls. 332, T.D. 32074, cited in the majority opinion. One observation is that the case was decided in 1911 by the Court of Customs Appeals, and the case of United States v. Cronkite Co.. 9 Ct. Cust. Appls. 129, 134, T.D. 37980, which is relied upon in this dissenting opinion, was decided 8 years later by the same court in 1919. Should there be any view that the two decisions are in conflict, it is submitted that the latest expression of the court would control. My second observation with respect to the decision in United States v. Shallus is that it would permit recovery in this case. The court stated, at page 333, that the destruction or loss of any part of a cargo of imported merchandise before it is "surrendered from the customs custody is not thereby, except as perforce of express statute or regulation and as therein provided, exempted from the payment of customs duties." [Emphasis added.] Section 15.8 (a) of the Customs Regulations, previously quoted, expressly provides for an exemption from the payment of customs duties when the collector is satisfied that the merchandise is missing from customs custody before liquidation. The plaintiff has sustained its burden of proof and is entitled to relief from the duties assessed on the six bales of merchandise which it did not receive from customs custody and which cannot be found. United States v. Browne Vintners Co., Inc., 34 CCPA 112, C.A.D. 351; United States v. Washington State Liquor Board, 34 CCPA 118, C.A.D. 352.

I would sustain the protest of the plaintiff that the duties upon the missing merchandise were not lawfully assessed.

(C.D. 2606)

BORDER BROKERAGE COMPANY, INC. v. UNITED STATES

Chemical mixtures or alcoholic compounds (paragraph 24)— Pigments, colors, stains, and paints (paragraph 66)— Compounds and mixtures containing titanium (paragraph 89)— Tariff Act of 1930

Certain merchandise, designated items N423, N430, N431, and S-914, manufactured for use in coating cedar shakes, containing alcohol in an amount less than 20 per centum but containing substantial quantities of titanium dioxide, which was described as a Canadian titanium pigment, held properly dutiable under paragraph 89, Tariff Act of 1930, as modified, at the rate of 15 per centum ad valorem under the provision in said paragraph for "all compounds and mixtures containing titanium" rather than at the rate of 1012 per centum ad valorem under paragraph 66 of the act, as modified, which provides for "Pigments, colors, stains, and paints *** not specially provided for *** Other," or under paragraph 24 of the act, as modified, at the rate of 20 cents per pound and 25 per centum ad valorem as chemical mixtures or alcoholic compounds. Held, these items are more specifically provided for under paragraph 89 of the act, as modified, supra.

The remaining item covered herein, namely, "N429 Navaho Paint," used as a stain or paint for a protective covering after the addition of a thinner, held properly dutiable under paragraph 66, Tariff Act of 1930, as modified, at the rate of 1012 per centum ad valorem under the provision therein for "Pigments, colors, stains, and paints *** not specially provided for *** Other."

United States Customs Court, First Division

Protest 63/16002 against the decision of the
collector of customs at the port of Seattle

[Judgment for plaintiff.]

(Decided December 29, 1965)

Glad & Tuttle (George R. Tuttle of counsel) for the plaintiff.

John W. Douglas, Assistant Attorney General (Bernard J. Babb and Alfred A. Taylor, Jr., trial attorneys), for the defendant.

Before OLIVER, WILSON, and NICHOLS, Judges

WILSON, Judge: The merchandise under protest was invoiced as "N423 Dipping Paint, with titanium," "N429 Navaho Paint," "N430 Doeskin," "N431 Beige," and "S-914 Silver Gray Dip Paste—with Titanium" (plaintiff's exhibit 2, R. 17). The importations were classified and assessed by the collector under paragraph 24 of the Tariff Act of 1930 as chemical mixtures or alcoholic compounds not specially provided for, containing under 20 per centum alcohol, at the rate

of 20 cents per pound plus 25 per centum ad valorem. The importer claims that the merchandise is properly dutiable under the provisions of paragraph 66 of the Tariff Act of 1930, as modified by the Sixth Protocol of Supplementary Concessions to the General Agreement on Tariffs and Trade, T.D. 54108, providing for "Pigments, colors, stains, and paints *** whether dry, mixed, or ground in or mixed with water, oil, or solutions other than oil, not specially provided for *** Other," at the rate of 102 per centum ad valorem, or, alternatively, under paragraph 89 of the Tariff Act of 1930, as modified by the General Agreement on Tariffs and Trade, T.D. 51802, at the rate of 15 per centum ad valorem as a compound or mixture containing titanium.

The statutes involved are as follows:

Paragraph 24, Tariff Act of 1930:

Chemical elements, and chemical and medicinal compounds, preparations, mixtures, and salts, distilled or essential oils, expressed or extracted oils, animal oils and greases, ethers and esters, flavoring and other extracts, and natural or synthetic fruit flavors, fruit esters, oils and essences, all the foregoing and their combinations when containing alcohol, and all articles consisting of vegetable or mineral objects immersed or placed in, or saturated with, alcohol, except perfumery and spirit varnishes, and all alcoholic compounds not specially provided for, if containing 20 per centum of alcohol or less, 20 cents per pound and 25 per centum ad valorem; ***.

Paragraph 66, Tariff Act of 1930, as modified by the Sixth Protocol of Supplementary Concessions to the General Agreement on Tariffs and Trade, T.D. 54108:

Pigments, colors, stains, and paints, including enamel paints, whether dry, mixed, or ground in or mixed with water, oil, or solutions other than oil, not specially provided for:

Paragraph 89, Tariff Act of 1930, as modified by the General Agreement on Tariffs and Trade, T.D. 51802:

Titanium potassium oxalate, and all compounds and mixtures containing titanium__.

15% ad val.

The evidence of the plaintiff consists of two exhibits (plaintiff's exhibits 1 and 2 (R. 10, R. 17)) and the oral testimony of W. D. Ekins, chief chemist and plant manager of Spectrum Chemicals, New Westminster, B.C., manufacturer of the merchandise here involved. The defendant introduced no testimony. The uncontradicted testimony of Mr. Ekins establishes the fact that plaintiff's exhibit 1 sets

forth the formulas used in the manufacture of the imported items designated as "N423 Dipping Paint, with titanium," "N429 Navaho Paint," "N430 Doeskin," and "N431 Beige." Mr. Ekins' testimony also shows that plaintiff's exhibit 2 is "a paint formula for a dip paste, which would be further reduced before being used" (R. 14), and is the formula for the item designated on the invoice, covered by entry 5943, as "S-914" (R. 17). The record discloses that both formulas were prepared by plaintiff's witness who stated that the business of Spectrum Chemicals was the preparation of formulas for and the manufacture of paints and stains. Plaintiff's witness further stated that the imported commodities were manufactured for use in coating cedar shakes, testifying, in this connection, as follows:

Q. And did you observe how they were used in the United States? A. Yes. I directed their use.

Q. Were those manufactured to any particular specifications?—A. They were manufactured to specific formulas which I made up, developed myself, for an end use. [R. 6.]

It was admitted that the formula of the finished products contained ethyl alcohol in an amount less than 30 per centum. Mr. Ekins stated that it is normal to add solvents to a paint when it is purchased for a stain and explained that the alcohol was used for what is known in the trade as a "solvent" and that the "Solvent is that material which evaporates from the paint after application, but does not remain as part of the finished protective film" (R. 7). In this connection, the witness testified as follows:

Q. Why is the alcohol added?-A. There's an ingredient in the formula generically called bentone, which is a type of clay. The alcohol is added to adjust for what we call the polarity of the solvent system to promote the swelling of this clay. Clay acts as a bodying agent, which controls the body of the finished product for application purposes. [R. 11.]

Some of the items contained a coloring matter known as titanium (R. 13). It is a fair deduction from all of Mr. Ekins' testimony that the material as imported was suitable for no other commercial purpose except for use as a stain or paint for a protective covering after the addition of a thinner.

On cross-examination, plaintiff's witness testified in part as follows: Q. Does this merchandise require a thinner?-A. This was formulated to require a thinner, yes, because of the type of operation it was to be used in.

Q. So then, in the condition as imported, it wasn't usable as a paint or a stain?-A. It could be used as a paint as it was imported.

Q. But it was not intended to be used as a paint or stain as imported?-A. It was not adapted to the equipment. It had to be reduced by the customer.

JUDGE WILSON. Would you put it into commerce as it was imported, so that the end user could put in thinner, as you put in?

THE WITNESSS Well, this is a little difficult to answer, in this respect. Some customers may like a paint this heavy in body, with this type of thickness to it. Then it could be used, and we would sell

it this way.

JUDGE WILSON: Well, did you sell this this way, or did you thin it out yourself before putting it into commerce, or selling it?

THE WITNESS: No. We sold it to the customer this way.

JUDGE WILSON: So any thinner used, then, was used by the customer, according to your directions?

THE WITNESSS Yes. [R. 21-22.]

As heretofore noted, the plaintiff contends that the merchandise under protest is more specifically provided for under paragraph 66 of the tariff act, supra, than under paragraph 24, as classified, or that it is properly classifiable under paragraph 89 of the tariff act. Plaintiff's exhibits 1 and 2 show the items N423, N430, N431, and S-914 as containing substantial quantities of rutile titanium dioxide, which was described as a Canadian titanium pigment. In Jarrell-Ash Co. v. United States, 17 Cust. Ct. 176, Abstract 51285, the court, in holding certain merchandise designated as "R.U. Powder, F.558" properly Classifiable under paragraph 89 of the Tariff Act of 1930, providing for "Titanium potassium oxalate, and all compounds and mixtures containing titanium," at page 177, stated:

The language of paragraph 89, supra, is clear and unambiguous, Lanifesting an intent to include therein all mixtures containing titanium. United States v. Meadows & Co., 5 Ct. Cust. Appls. 532, T.D. 35177, gave expression to statutory use of the word "containing" by stating that "whatever was a part of the article as imported is in de tariff sense contained therein. It is a part of the article. The Ford 'contain' means to include or embrace." [Italics quoted.]

In Comstock & Theakston v. United States, 12 Ct. Cust. Appls. 502, T.D. 40698, it was held that "Kronos titanium," titanium oxide in physical combination with barium sulphate, used as a pigment in compounding paints, was more specifically provided for under paragraph of the Tariff Act of 1922, which covered all compounds and mixtares containing titanium, than under paragraph 68 of the act, which overed pigments, colors, stains, and paints, not specially provided for. The court, at page 506, stated:

Congress included many different commodities known as "pigments" and "colors" in the act of 1922 in paragraphs 28, 47, 67, 70, 72, 73, 74, 74, 76, 77, 78, 79, and 91. It seems to us unusually clear that the framers of this act intended paragraph 68 to be the catchall paragraph for pigments, colors, stains, and paints, and that since it used titanium Lixtures for the first time in paragraph 91, its intenton is too obvious to be overcome by the considerations urged by the importers. And

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