United States v. Kittleson

O’Connell, Acting Chief Judge, delivered the opinion of the court: This is an appeal from a decision of the United States Customs Court, Second Division, one judge dissenting, granting a petition by the appellees, Kittleson and Rollow, for remission of additional duties assessed on an importation of hard sugar candy from Cuba. The candy in question was purchased on August 27,1946, exported October 23, 1946 from Havana, Cuba and entered at Tampa, Florida on October 30, 1946, at the invoice price of 11.25 cents per pound'. It was eventually appraised at 17.5 cents per pound, no request having been made meanwhile by the importer to amend the entry, and the additional duties here involved were assessed. [33] These proceedings are governed by section 489 of the Tariff Act. of 1930 which in pertinent part provides: Additional Duties. * * * Such additional duties shall not be construed to be-penal and shall not be remitted nor payment thereof in any way avoided, except * * *, or in any case upon the finding of the United States Customs Court, upon a petition filed at any time after final appraisement and before the expiration of sixty days after liquidation and supported by satisfactory evidence under such rules as the court 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. * * * The only testimony offered by the petitioners was that of Kenneth Kittleson, the customs broker who handled the importation under consideration. He testified that the candy was entered at the invoice price, after he had consulted the consignee, Rollow, as to the purchase price. He further stated that he made oral inquiry of the appraiser’s, office for information as to price and was told that no information was available. He did not remember whether he had talked with the-appraiser Kirkland or the Examiner Tryon, but is sure it was someone •‘who was qualified to give me that information.” Both Kirkland, and Tryon definitely deny that they discussed the present shipment with Kittleson, and Kirkland states that he and Tryon were the-only ones authorized to give information of the kind in question. Kittleson further testified that there had been three prior shipments of candy identical with that involved in this case, which were-entered on February 21, April 24, and October 1,1946, respectively, at the same price as the consignment here under consideration,-that-each of those shipments was appraised at the entered value; and that he received no information from any source indicating that the entered value was not correct until the merchandise was appraised, about two years after entry. Kittleson was not advised of the proposed change in valuation or given an opportunity to amend the entry. Tryon states that such opportunity was not given because another entry of the same candy' had been filed by Kittleson on November 14, 1946, at the same value-as the present entry and Kittleson had later amended that entry to 20 cents per pound on the basis of information contained in the-consular invoice. In view of the fact that that entry was changed while the present one was not, Tryon felt Kittleson had not acted in good faith, and was not entitled to an opportunity to amend his, entry. Section 489 requires that a petition for remission of additional duties be supported by satisfactory evidence. This calls for something more than a mere self-serving statement by the petitioner,. [34] and we have held that “If such evidence is not offered, even though it may be inconvenient or impossible to do so, the petitioner must suffer the consequences.” Linen Thread Co. v. United States, 13 Ct. Cust. Appeals 301, T. D. 41220. In the present case there is no corroboration of Kittleson’s testimony as to his alleged inquiries of the appraiser’s office or the consignee, Hollow. So far as the former inquiry is concerned, Kittleson’s testimony is rebutted, so far as rebuttal is possible, by the categorical denial of Kirkland and Tryon who stated that no inquiry was made •of them and that they were the only ones who could have properly answered such an inquiry. The consignee, Hollow, was not called as a witness, nor was the failure to call him satisfactorily explained. So far as appears from the record, he was available. The majority of the lower court stated that his failure to appear or have his testimony taken by deposition “does not militate against petitioner’s case, since Hollow’s deposition would have been repetitious of the information contained in the petition itself, which was signed jointly by Kittleson and Hollow.” The logic of that reasoning does not fulfill the legal requirement laid down by the decisions for satisfactory evidence either by Hollow, one of the petitioners, or by Kittleson, the other petitioner, that the entry in issue at less value than was finally appraised was without intent to defraud the revenues of the United States; and a finding that either party was merely careless in making the erroneous entry will not justify the Customs Court in deciding there should be a remission. United States v. Fish, 268 U. S. 607, 612, affirming 12 Ct. Cust. Appls. 307; Glendenning, McLeish & Co. v. United States, 13 Ct. Cust. Appls., 387, 390, T. D. 41320. In United States v. W. J. Westerfield, 40 C. C. P. A. (Customs) 115, C. A. D. 507, we recently held, after citing an extensive and uniform list of reliable authorities, that “satisfactory evidence” consists of proof of the surrounding circumstances and conditions, together with a full and candid explanation of an importer’s conduct at the time of •entry, as well as before and subsequent thereto, showing that his action in making the entry at the lower rate and his failure to amend the same was in good faith; and that satisfactory evidence relative to such good faith means the amount of proof which would ordinarily satisfy an unprejudiced and reasonable mind. The Westerfield case was decided by a divided court January 23, 1953, and late in the summer of that year, namely August 8, 1953, Congress through the Simplification Act, sec. 18 (b), provided that section 489 of the Tariff Act of 1930 (U. S. C. 1946 Edition, Title 19) be amended by deleting the first two paragraphs thereof. One of the paragraphs of said section 489 so deleted is the paragraph herein35 before set forth, the provisions of which are' relied upon by Government counsel to support their contentions here. A saving clause however in the said Customs Simplification Act, section 23, Public Law 243, 67 Stat. 507, was also enacted on the same day, which provided as follows: Sec. 23. Except as may be otherwise provided for in this Act, the repeal of existing law or modifications thereof embraced in this Act shall not affect any act done, or any right accruing or accrued, or any suit or proceeding had or commenced in any civil or similar case prior to such repeal or modification, but all liabilities under such laws shall continue, except as otherwise specifically provided in this Act, and may be enforced in the same manner as if such repeal or modification had not been made. In a subsequent remission case, which had accrued prior to the said enactments, this court resorted to and applied the rigid rules of construction which had been previously enunciated and adhered to by us in cases such as the one at bar. A. N. Deringer, Inc. v. United States, 42 C. C. P. A. (Customs) 28, C. A. D. 565. The fact that Edttleson was able to amend another entry for the candy here involved, and purchased on the same day, to show the increased value thereof of twenty cents per pound, shortly more than two weeks after the present entry was made at 11.25 cents per pound, definitely suggests that a diligent investigation by appellees at the time when the present entry was made would have readily disclosed that the lower value given herein was incorrect. In such a situation, as correctly pointed out in the dissenting opinion of the trial court, the proof submitted by appelles is not sufficient to sustain their petition for remission. United States v. Pennsylvania Salt Mfg. Co., 26 C. C. P. A. (Customs) 232, 241, C. A. D. 22, United States v. H. S. Dorf & Co., 36 C. C. P. A. (Customs) 29, C. A. D. 392. In the Dorj case we unanimously held that where the situation presented by the record is based upon facts tending to put a party on inquiry as to the proper value of the imported goods, lack of knowledge of the true value thereof cannot of itself be accepted by the court as an excuse or reason for the remission of additional duties; that it is no part of the official duty of the examiner or other customs agents to supply information as to the value of said merchandise; nor can such information, if supplied, be relied upon by the entrant to obviate the duty imposed upon him to ascertain and enter the true value of the imported goods. Since appellees had the burden of proof to establish good faith in ascertaining the proper value, it is clear to us, upon careful consideration of the entire case, that the petitioners did not present evidence satisfying the requirement of the statute. The decision of the United States Customs Court is accordingly reversed.