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and Trade, T.D. 54108, as baskets of straw. It is claimed that the merchandise is properly dutiable at 121/2 per centum ad valorem under paragraph 1537(a) of said tariff act, as modified by the Protocol of Terms of Accession by Japan to the General Agreement on Tariffs and Trade, T.D. 53865 and T.D.53877.

Counsel for the respective parties have submitted this case on a stipulation reading as follows:

IT IS HEREBY STIPULATED AND AGREED by and between counsel for the plaintiff and the Assistant Attorney General for the United States that the items marked “A” and initialed PKL (Examiner's Initials) by Examiner Parke K. Linsley (Examiner's Name) on the invoices covered by the above-entitled protest and assessed with duty at the rate of 21% under Par. 411, Tariff Act of 1930, as modified, consist of rush bags similar in all material respects to the merchandise the subject of Carson M. Simon & Co. v. United States, C.D. 2558, wherein the Court held that such merchandise was dutiable at 1212% ad valorem under the provisions of Par. 1537(a) of the Tariff Act of 1930, as modified by T.D. 53865.

IT IS FURTHER STIPULATED AND AGREED that the record in C.D. 2558 be incorporated in these cases, and that said protest be submitted on this stipulation, the protest being limited to the items marked "A" as aforesaid.

In view of this stipulation and on the authority of the decision cited therein, we hold that the merchandise represented by the items marked with the letter "A" and with the initials of the examiner on the invoices covered by the protest herein is properly dutiable at 121/2 per centum ad valorem under paragraph 1537(a) of the Tariff Act of 1930, as modified, as manufactures of weeds, not specially provided for.

The protest is sustained and judgment will rendered for the plaintiff.

(C.D. 2706)

JEAN R. GRAEF, INC. v. UNITED STATES Watch movementsUnadjustedTrade agreement with Switzerland

United States Customs Court, Second Division

Protests 64/7059, etc., against the decision of the collector

of customs at the port of New York

Judgment for plaintiff.]

(Decided June 9, 1966)

Lane, Young & Fow for the plaintiff.
John W. Douglas, Assistant Attorney General, for the defendant.

Before Rao and FORD, Judges

Ford, Judge: Upon importation certain watch movements covered by the above-enumerated protests were classified by the collector of customs in paragraph 367 (a) of the Tariff Act of 1930, as modified by the Trade Agreement with Switzerland, 69 Treas. Dec. 74, T.D. 48093, and assessed with duty at the basic rates provided for said watch movements, plus 50 cents for each adjustment.

The plaintiff herein does not controvert the basic rates of duty imposed upon the importations but does claim said articles are not subject to the additional assessment inasmuch as the movements were unadjusted. The parties hereto have submitted these cases for decision upon

the following stipulation of fact:

IT IS STIPULATED AND AGREED BETWEEN COUNSEL, in the matter of the above protests, that the watch movements listed on the invoices accompanying the entries covered by the said protests, which were assessed with an additional duty of $1.00 each under Paragraph 367 (a) (4), Tariff Act of 1930, as modified, as being adjusted to 2 positions, consist of watch movements that were manufactured and repaired or corrected in substantially the same manner as, and are similar in all material respects concerning adjustment to, the watch movements which were the subject of BENRUS WATCH COMPANY, INC., ET AL., v. UNITED STATES, C.D. 2469, and therein held to be unadjusted and, accordingly, not subject to any additional duty for adjustments under said Paragraph 367 (a) (4).

That the record in said C.D. 2469 may be incorporated into the records of the above protests and that said protests may be deemed to be submitted for decision upon this stipulation.

The above protests are limited to the said watch movements which were assessed with additional duty of $1.00 each as being adjusted to 2 positions.

Upon the agreed facts of record and following the cited authority, we find and hold that the items of merchandise involved herein should properly have been classified as watch movements within the provisions of paragraph 367(a) of the Tariff Act of 1930, as modified by the Trade Agreement with Switzerland, supra, and duty imposed thereon at the applicable basic rates without the imposition of additional duty inasmuch as the imported articles were unadjusted. The claim in the protests to that effect is, therefore, sustained. As to all other merchandise and all other claims, the protests are overruled.

Judgment will issue accordingly.




(Reap. Dec. 11119)


Cotton articlesExport value



Notwithstanding sales are made for exportation to the United States on a c.i.f. basis, and charges for marine insurance and ocean freight are not part of the export value of imported merchandise, as that value is defined in section 402(b), Tariff Act of 1930, as amended by the Customs Simplification Act of 1956, where appraisement is made at a unit value which does not specifically reveal that such charges, as invoiced, are included, a party challenging such appraisement must establish an alternative value in accordance with the statutory definition and may not rely simply upon proof that the charges invoiced were actually paid.

Reappraisement R62/13551
Entered at New York, N.Y.
Entry No. 835807.

(Decided December 29, 1965)

Barnes, Richardson & Colburn (Norman C. Schwartz of counsel) for the plaintiff.

John W. Douglas, Assistant Attorney General (Herbert L. Warren, Sheila N. Ziff, and Alfred A. Taylor, Jr., trial attorneys), for the defendant.

Rao, Chief Judge: The merchandise involved in this appeal for reappraisement consists of men's and boys' cotton sateen and corduroy pants, manufactured and shipped by the Asia Industrial Development Co., Ltd., of Hong Kong. It was appraised at the invoice unit values, net, packed, which, it is alleged by plaintiff, improperly included charges for ocean freight and insurance, as invoiced.

The parties are agreed that the appraisement was based upon the alleged price of such merchandise to all purchasers within the intendment of section 402 (b) of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956, as defined by subdivisions (f) (4) (A) and (f) (1) (A) of said section 402, as amended. The cited subdivisions of section 402 provide the following:

(b) EXPORT VALUE.-For the purposes of this section, the export value of imported merchandise shall be the price, at the time of exportation the United States of the merchandise undergoing appraisement, at which such or similar merchandise is freely sold or, in the absence of sales, offered for sale in the principal markets of the country of exportation, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States, plus, when not included in such price, the cost of all containers and coverings of whatever nature and all other expenses incidental to placing the merchandise in condition, packed ready for shipment to the United States.

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(f) DEFINITIONS.—For the purposes of this section,

(1) The term “freely sold or, in the absence of sales, offered for sale" means sold or, in the absence of sales, offered

(A) to all purchasers at wholesale, or

(4) The term "such or similar merchandise" means merchandise in the first of the following categories in respect of which export value, United States value, or constructed value, as the case may be, can be satisfactorily determined:

(A) The merchandise undergoing appraisement and other merchandise which is identical in physical characteristics with, and was produced in the same country by the same person as, the merchandise undergoing appraisement.

The case has been submitted for decision upon an affidavit of one Charles Pan, who describes himself as "Manager of Garment Department” of Asia Industrial Development Co., Ltd., which, together with certain attachments, was received in evidence as plaintiff's exhibit 1, and a report of James O. Holmes, acting senior customs representative in Hong Kong, dated July 12, 1962, coupled with a group of invoices, which was received in evidence as defendant's exhibit A.

In his affidavit, Mr. Pan, after setting forth the basis of his familiarity with his company's export transactions relating to wearing apparel, recited that, on October 11, 1961, his company shipped a quantity of cotton pants to Luckytex, Ltd., of New York City. Included in said shipment were 300' dozen of a style described as 3402-S, 330 dozen, style 1401, and 204 dozen, style 3402–C. The prices agreed upon for said merchandise were c.i.f. prices, and the items of marine insurance and ocean freight were as set forth on the invoice.

Mr. Pan further stated that, during 1961, his company freely offered this merchandise to all purchasers for exportation to the United States, without any restrictions, but that, during the 6 months preceding the instant shipment, the only sales to the United States of the same or similar pants were to Luckytex, Ltd., or to the Westbound Corp. of 1140 Broadway, New York City. However, in order principally to dispose of "left-over merchandise, unsaleable to our regular United States customers," his company also sold odd-lots of assorted pants in broken styles and colors at f.o.b., Hong Kong prices, which were lower than the regular prices to Luckytex and Westbound when adjusted to an f.o.b. basis. Because of the nature of those sales, the affiant was not able to determine whether they included any of the styles sold to Luckytex or Westbound during that period. In any event, the volume involved in those sales was insignificant as compared to the volume of regular sales and, therefore, the company did not regard those sales as in the usual course of business. All other sales to the United States during 1961 were on a c.i.f. basis.

This list of sales attached to plaintiff's exhibit 1 specifies nine sales to Luckytex, Ltd., from June 20, 1961, to October 9, 1961, of several styles, in various quantities, at stated c.i.f. prices per dozen, and three sales to Westbound Corp. during April and May 1961 of a style designated as 7020, in quantities, respectively, of 1,428 dozen, 384 dozen, and 90 dozen, all at the c.i.f. price of $9 per dozen.

. Except for the shipment in issue, charges for marine insurance premiums and ocean freight are not specified in connection with any of the other transactions listed in the attachment to plaintiff's exhibit 1.

Defendant's exhibit A is a report of several interviews which James 0. Holmes, acting senior customs representative in Hong Kong had with Mr. Pan during the period here involved. It appears therefrom that, despite the existence of family relationships between officers of the exporter and of Luckytex and Westbound, the firms are independent and sales prices were not affected by those relationships. The merchandise is sold outright, without any restrictions or control over its ultimate disposition. Prices are negotiated with each buyer and depend on quality, workmanship, and quantities ordered; but no line is exclusive to any buyer. All sales are f.o.b. Hong Kong or c.i.f. port of destination, all charges being paid by the exporter; the inland charges are estimated, and marine insurance and ocean freight, when shown, were as actually paid.

It further appears in said report that, in connection with sales to Macy's the manufacturer charged approximately 10 per centum more for its merchandise because it regarded Macy's as a retailer, and because the styles are different, the quality and workmanship are superior, and the amount purchased is much less than the quantity of a comparable style sold to Westbound. Similar considerations account for a difference in price of styles ordered by Luckytex and by Macy's.

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