Section 7 of the Act of February 8, 1876, c. 36, 18 Stat. 307,
308, was repealed by the tariff acts of 1883 and of 1890.
When a later statute is a complete revision of the subject to
which the earlier statute related, and the new legislation was
manifestly intended as a substitute for the former legislation, the
prior act must be held to have been repealed.
When bags are imported, part of which are returned bags of
American manufacture and part foreign, if the appraiser, after
examination, decides that the goods are not as described, his
judgment must stand unless reversed.
Section 2901, Rev.Stat., was intended for the benefit of the
government, and is not mandatory.
Where merchandise liable in large part to duty is entered as
exempt therefrom, the collector has the right to assume that the
mingling was intentional, and with design to evade the revenue
laws, and it devolves upon the importer to show what part of the
whole he contends should not be taxed.
In the light of the rulings of the Treasury Department and the
special circumstances
Page 172 U. S. 134
of the case, the Court is not disposed to hold that, if the
proportion of dutiable bags sufficiently appeared or might
reasonably have been ascertained, the circuit court could not have
adjudged a recovery of. that proportion or directed a
reliquidation.
In view of the testimony and considering that the statute was
not strictly pursued in the examination (though the Court perceives
no reason to doubt the faithfulness of the officials in the
discharge of their duties), and the difficulties in the way of
determining the make of the bags disclosed by the evidence, and
bearing in mind that the taxation of so many of the bags as were of
American manufacture operated as a penalty in spite of the
concession that no fraud on the revenue was intended, the Court
thinks it unnecessary to remand the cause for another hearing, and
that the ends of justice will be best subserved by directing a
decree for the refunding of one-fourth of the duties paid.
Ranlett and Stone imported at the port of New Orleans, from
Liverpool, England, 2,925 bales of grain bags, known as "cental
bags," each bale containing 1,000 bags, or 2,925,000 in all, by
several vessels, the entries running from August 14, 1893, to
January 15, 1894.
The bags were entered free of duty, under paragraph 493 of the
Act of October 1, 1890, 26 Stat. 603, c. 1244, as bags of American
manufacture returned to the United States.
That paragraph is as follows:
"Articles the growth, produce, and manufacture of the United
States, when returned after having been exported, without having
been advanced in value or improved in condition by any process of
manufacture of other means; casks, barrels, carboys, bags, and
other vessels of American manufacture exported filled with American
products, or exported empty and returned filled with foreign
products, including shooks when returned as barrels or boxes; . . .
but proof of the identity of such articles shall be made, under
general regulations to be prescribed by the Secretary of the
Treasury, and if any such articles are subject to internal tax at
the time of exportation, such tax shall be proved to have been paid
before exportation and not refunded,
provided, that this
paragraph shall not apply to any article upon which an allowance of
drawback has been made, the reimportation of which is hereby
prohibited except upon payment of duties equal to the drawbacks
allowed. . . . "
Page 172 U. S. 135
The general regulations prescribed by the Secretary of the
Treasury under this paragraph contained the following
provisions:
"Art. 331. Articles of the growth, produce, and manufacture of
the United States, exported to a foreign country and returned
without having been advanced in value or improved in condition by
any process of manufacture or other means, and upon which no
drawback or bounty has been allowed, are entitled to entry free of
duty, but this privilege does not extend to articles exported in
bond from a manufacturing warehouse and afterward returned to this
country. The exportation must be
bona fide and not for the
purpose of evading any revenue law."
"
* * * *"
"If returned to the port of original exportation, the fact of
regular clearance for a foreign destination must be shown by the
records of the customs, . . . and by the declaration of the person
making the entry. But when the reimportation is made into a port
other than that of original exportation, there shall be required,
in addition to the declaration, a certificate from the collector
and the naval officer if any, of the port, where the exportation
was made showing the fact of exportation from that port."
"
* * * *"
"Art. 332. To guard against fraud and to insure identity, the
collector shall require, in addition to proof of clearance, the
production of a statement, certified by the proper officer of the
customs at the foreign port from which the reimportation was made
and authenticated by the consul of the United States, that such
merchandise was imported from the United States in the condition in
which it is returned and that it has not been advanced in value or
improved in condition by any process of manufacture or other
means."
"
* * * *"
"Art. 335. Casks, barrels, carboys, bags, and vessels of
American manufacture, exported filled with American products, or
exported empty and returned filled with foreign products, including
shooks when returned as barrels or boxes,
Page 172 U. S. 136
are free of duties, but in case drawback has been allowed upon
the exportation of any such articles, they shall on importation be
subject to a duty equal to the drawback. Proof of the identity of
such articles must be made, and if any of them were subject to
internal tax at the time of exportation, such tax shall be proved
to have been paid before exportation and not refunded or duty will
accrue."
"
* * * *"
"Art. 336. Before entry, the following proof shall be required
by the collector:"
"
First. A certificate as follows from the shipper in
triplicate, attested by a consul or other proper officer a
authorized to take affidavits, as follows:"
"I hereby certify, under oath, that, to the best of my knowledge
and belief, the [
Footnote 1]
_____ hereinafter specified, are truly of the manufacture of the
United States, [
Footnote 2]
_____ or were exported from the United States, filled with
[
Footnote 1] _____, and that it
is intended to reship the same to the port of _____, in the United
States, [
Footnote 3] _____ on
board the _____ now lying in the port of _____. I further certify
that, to the best of my knowledge and belief, the actual market
value of the articles herein named at this time and in the form in
which the same are to be exported to the United States, is as
follows [
Footnote 4]
_____."
"_____ _____."
"Sworn to before me, this ___ day of _____, 18__."
"_____ _____."
"
* * * *"
"
Second. A declaration in the entry by the importer of
the name of the exporting vessel, the date of the ship's manifest,
and the marks and numbers on the articles for which free
Page 172 U. S. 137
entry is sought. If the exportation was made by railroad, the
way bill may be substituted as evidence for the manifest. The marks
and numbers should be such as to prove beyond any reasonable doubt
the identity of the articles with those entered on the outward
manifest. . . ."
"
Third. An affidavit by the importer, attached to the
entry, that the articles mentioned therein are to the best of his
knowledge and belief truly and
bona fide manufactures of
the United States, or were bags exported therefrom filled with
grain."
"
* * * *"
"
Fifth. Verification, after examination, by the
appraiser, with an endorsement stating whether the articles are of
domestic or of foreign manufacture."
"Such bags and other coverings exported to be returned should,
when practicable, be marked or numbered, in order that they may be
identified on their return, and the marks or numbers should appear
on the shipper's manifest upon which they are exported."
When the respective shipments arrived in this country, free
entry was made by the importer, and evidence furnished regarding
the right to free entry, and the character of the goods. Samples of
the respective invoices were then sent to the appraiser's office,
and examined, as follows:
From one entry of 600 bales, 70 were ordered to the appraiser's
store, and 18 of that number were opened by him.
Of another entry of 650 bales, 43 were ordered to the store, and
19 were opened.
Of a third entry of 325 bales, 38 were ordered to the store, and
13 were opened.
Of a fourth entry of 850 bales, 85 were ordered to the store,
and 16 were opened.
Of a fifth entry of 300 bales, 21 were ordered to the store, and
14 were opened.
Of a sixth entry of 100 bales, 100 were ordered to the store,
and 10 were opened.
And of a seventh entry of 100 bales, 100 were ordered to the
store, and 10 were opened.
Page 172 U. S. 138
The examination of the bales was made by the appraiser, assisted
by an examiner. The appraiser reported as to each importation that
the bales contained bags of foreign manufacture, subject to duty,
and thereupon the collector, by direction of the Treasury
Department at the request of the importers, in order to obtain
possession of the goods, made impost entries, assessing duties at
the rate of two cents per pound on the entire consignment, under
paragraph 365 of the act of 1890, 26 Stat. 593, as "bags for grain,
made of burlaps." The importers protested against the "decision,
liquidation, and rate and amount of duties assessed" on the grounds
that the bags were entitled to free entry, under paragraph 493 of
the free list, as bags of American manufacture, exported filled
with American products; that, if not free under that paragraph,
they were entitled to free entry under the provisions of section 7
of the Act of February 8, 1875, and the regulations for the free
entry of bags other than of American manufacture, prescribed by the
Secretary of the Treasury thereunder, and that the goods were not
fairly and faithfully examined by the appraisers; that the
assessment of two cents per pound because the bales contained a
mixture of foreign and American bags was incorrect, and that the
goods, being all of one value, whether of foreign or American make,
did not come under the provisions of section 2910 of the Revised
Statutes.
The Board of General Appraisers sustained the action of the
collector. General Appraisers' Decisions, No. 2,623.
The importers applied for a review of this decision to the
Circuit Court of the United States for the Fifth Circuit, which,
without taking any additional testimony, reversed the decision of
the board, and entered a decree that the duties paid by Ranlett and
Stone, namely, two cents per pound on the several consignments of
bags, enumerating them, be refunded;
"that the examination heretofore made of said bales of bags is
void, and not in conformity to law or the regulations of the
Treasury Department, and any liquidation of duties based on said
examination is illegal and void, and the liquidation of duties
heretofore made be set aside, and the money
Page 172 U. S. 139
received from Ranlett and Stone as duties be refunded as
aforesaid, and the court doth further order and decree that the
collector direct a reexamination of said bales of bags to be made
according to law, and on such reexamination to reliquidate the
duties which may be lawfully due thereon."
The United States appealed from the decree to the circuit court
of appeals which certified certain questions to this Court,
whereupon a writ of certiorari was issued, and the entire record
brought up.
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
In respect of these importations, it must be assumed that the
bags were not in fact all of American manufacture, or substantially
so.
The opinion of the general appraisers stated that
"it was admitted that there were bags of foreign manufacture and
of American manufacture, all indiscriminately mingled together, no
attempt being made, on entry or afterwards, to separate from these
enormous totals of goods of the same class those claimed to be
relieved from duty, accompanied by the proof establishing such
indulgence."
The examiner testified that he "in some cases examined, every
bale of the whole entire invoice," that he used his judgment "to
try to open sufficient to get at the classification of the goods,"
and that, where he opened the bales, and examined them, he found of
foreign make in general "from seventy-five to eighty percent."
Indeed we do not understand the importers to deny that these
importations contained foreign-made bags.
Under title 33 of the Revised Statutes, a duty was imposed on
grain bags except those manufactured in the United
Page 172 U. S. 140
States and exported containing American products, declaration
having been made of intent to return the same empty. Rev.Stat. ยงยง
2504, 2505.
By section 7 of the Act of February 8, 1875, 18 Stat. 307, 308,
c. 36, it was provided:
"That bags, other than of American manufacture, in which grain
shall have been actually exported from the United States may be
returned empty to the United States free of duty, under regulations
to be prescribed by the Secretary of the Treasury."
Section 6 of the tariff Act of March 3, 1883, 22 Stat. 488, 189,
c. 121, provided that, on and after July 1, 1883, "the following
sections shall constitute and be a substitute for title 33 of the
Revised Statutes." The provision in regard to empty returned bags
of American manufacture was reenacted in substance in the free
list, but that of section 7 of the act of 1875 was omitted, and
bags, excepting bagging for cotton, were made dutiable.
Paragraph 493 of the Tariff Act of 1890 retained the same
exemption from duty upon returned empty bags of American
manufacture, and was silent in regard to returned empty
foreign-made bags which were filled when exported.
In view of this legislation, Acting Attorney General Maxwell
advised the Secretary of the Treasury, July 20, 1893, that the
provision of section 7 of the act of 1875 exempting foreign made
grain bags was repealed. 20 Op.Atty.Gen. 630. This ruling was
followed and approved by the Treasury Department, August 22, 1893,
Syn. T.D. 14,281, and the same ruling was made by the Board of
General Appraisers February 3, 1894, in
Kent v. United
States, G.A. 2448, as it had been in prior decisions; by Judge
Lacombe, in effect, April 21, 1891, in
In re Straus, 46 F.
522, and specifically by Judge Townsend in
Kent v. United
States, 68 F. 536, June 2, 1895. The latter case was carried
to the Circuit Court of Appeals for the Second Circuit, and the
decree affirmed, April 7, 1896. 73 F. 680. The rule applied was
that,
"when a later statute is a complete revision of the subject to
which the earlier statute related, and the new legislation was
manifestly intended as a substitute
Page 172 U. S. 141
for the former legislation, the prior act must be held to have
been repealed,"
and the opinion of Judge Shipman leaves nothing to be added in
support of the conclusion reached.
Foreign-made bags, then, being dutiable at two cents per pound
under paragraph 365 of the Act of October 1, 1890, and these bales
being permeated with bags of foreign manufacture, the appraiser
reported all the bags as dutiable, and the collector so assessed
them.
But the importers insist that this assessment was illegal
because of the insufficiency or invalidity of the examination, or
of the absence of a statute specifically applicable, or because it
was not confined to foreign-made bags.
Paragraph 493 required proof of the identity of articles entered
as exempt thereunder, and this was not only repeated in the
regulations, but article 336 required "verification, after
examination, by the appraiser, with an endorsement stating whether
the articles are of domestic or foreign manufacture." By section 2
of the Customs Administrative Act of June 10, 1890, c. 407, all
invoices must contain a correct description of the merchandise,
signed by the manufacturer, or by the person owning or shipping the
same, or by his duly authorized agent, which, under section 5,
might be adopted by the domestic consignee or owner, who, by
section 9, was made liable for the employment or use of any
fraudulent or false invoice or statement by means whereof the
United States may be deprived of lawful duties. Under section 10,
it was the duty of the appraiser to ascertain, estimate, and
appraise the actual market value and wholesale price of merchandise
imported, and the number of yards, parcels, and quantities. And
evidently this ascertainment involves character and quality as well
as value, since the statement, invoice, or entry must be true in
respect of the character of the goods as well as of their value. 26
Stat. 131, 136.
On the question of identity, then (which, under the law,
includes the question of country of manufacture), the production of
the papers required by the regulations are not conclusive proof,
and if the appraiser, after actual examination had,
Page 172 U. S. 142
decides that the goods are not as described, but are such in
fact as to fall within a different classification, and so reports
to the collector, his judgment must stand, unless reversed on
reappraisement, or by the Board of General Appraisers, on protest
filed.
As to these bags, the examiner reported to the appraiser his
finding of a very large percentage of foreign-made bags in the
shipments, and the appraiser reported that he found the shipments
to contain bags of foreign manufacture, and that the importations
were dutiable at two cents per pound under paragraph 365.
If the importers were not satisfied with the examination made,
and objected to the competency of the examiner and appraiser, they
should have applied for a reexamination, but they did not do this,
nor did they offer evidence before the Board of General Appraisers
tending to establish an objection on that ground.
But it is said that the appraisement was invalid because the
examination was not in accordance with section 2901 of the Revised
Statutes. That section, however, was intended for the benefit of
the government, and we have held that it is not mandatory, and that
official acts are not invalidated for want of strict compliance
therewith.
Erhardt v. Schroeder, 155
U. S. 125;
Origet v. Hedden, 155 U.
S. 228.
The section reads thus:
"The collector shall designate on the invoice at least one
package of every invoice, and one package at least of every ten
packages of merchandise, and a greater number should he or either
of the appraisers deem it necessary, imported into such port, to be
opened, examined, and appraised, and shall order the package so
designated to the public stores for examination, and if any package
be found by the appraisers to contain any article not specified in
the invoice, and they or a majority of them shall be of opinion
that such article was omitted in the invoice with fraudulent intent
on the part of the shipper, owner, or agent, the contents of the
entire package in which the article may be, shall be liable to
seizure and forfeiture on conviction thereof before any
Page 172 U. S. 143
court of competent jurisdiction; but if the appraisers shall be
of opinion that no such fraudulent intent existed, then the value
of such article shall be added to the entry, and the duties thereon
paid accordingly, and the same shall be delivered to the importer,
agent, or consignee. Such forfeiture may, however, be remitted by
the Secretary of the Treasury on the production of evidence
satisfactory to him that no fraud was intended."
Assuming that fraudulent intent was lacking, these bags were not
held for forfeiture, but the collector in effect added them all to
the entries, leaving it to the importers to prefer such claim to
exemption as they might consider they were entitled to.
Section 2901 was brought forward from section 32 of the Act of
March 2, 1861, 12 Stat. 197, c. 68, and on December 28, 1868, Mr.
Secretary McCulloch made the following ruling:
At that time, the law imposed a duty of twelve cents per pound
on all woolen rags, and admitted free rags composed of cotton and
linen and intended for the manufacture of paper, and twenty-one
bales of rags brought into the country from Canada, and containing
at least forty percent of woolen rags, though imported as
containing rags for the manufacture of paper, had been seized. The
matter being referred to the Secretary, he ruled, in a letter
addressed to the collector of customs at Rochester, as follows:
"If you are satisfied that there was no intention on the part of
the importers to conceal the dutiable rags by mingling them with
others free of duty, you will not hold them for condemnation, but
will allow the parties to separate such as are dutiable from such
as are not so, and make entry accordingly, paying the proper duty
on the former class. These instructions are to be considered as
applicable only to such bales as contain so large a proportion of
woolen rags as to render it worthwhile to collect a duty. Forty
percent of woolen rags is, however, much too large a percentage to
be allowed entry as free goods."
Again, in July, 1890, it was held by the Treasury Department
that where cargoes of anthracite and bituminous coal were imported
so mixed as to render it impracticable to
Page 172 U. S. 144
separate the free from the dutiable coal for the purpose of the
accurate weighing of each kind, the whole cargo should be treated
as dutiable. T.D. 10,098, Syn. 1890.
The general policy of the law is indicated in the statutory
requirements that where goods of different qualities or different
values are mingled or are composed of material of different values,
the highest rate of duty shall be imposed, as in the familiar
instances of the classification of articles composed of two or more
materials at the rate of duty charged on the component material of
chief value; in section 2911 of the Revised Statutes, that whenever
articles composed wholly or in part of wool or cotton, of similar
kind, but different quality are found in the same package, charged
at an average price, the appraisers shall adopt the value of the
best article as the average value; in section 2912, that when bales
of wool of different qualities are embraced in the same invoice at
the same prices whereby the average price is reduced more than ten
percentum below the value of the bale of the best quality, the
value of the whole shall be appraised according to the value of the
bale of the best quality, and that no bale, bag, or package shall
be liable to a less rate of duty in consequence of being invoiced
with wool of lower value, and in section 2910, that:
"When merchandise of the same material or description but of
different values is invoiced at an average price, and not otherwise
provided for, the duty shall be assessed upon the whole invoice at
the rate to which the highest valued goods in such invoice are
subject."
Numerous provisions exist in the statutes and regulations
designed to protect the public treasury from the bringing in of
goods at a less rate of duty than they ought to pay under cover of
association with goods properly subject to the lower amount, and
the protection intended to be secured ought, on principle, equally
to be accorded in respect of dutiable goods invoiced
indiscriminately with free goods.
Of these seven importations, according to the importers, all the
bales in two of them, and ten percent of those in three of them,
were ordered to the appraiser's store, while as to two of them, the
number taken for examination fell a little
Page 172 U. S. 145
short of ten percent, and of all these bales one hundred were
opened. It appeared also that all the merchandise covered by all
the invoices was of the same character and description. Since the
bales that were opened were found to contain foreign-made bags in
large numbers in importations claimed to consist solely of
American-made bags, it is not easily seen how the examination of a
larger number of bales would have affected the result arrived at by
the appraiser. And, as before observed, if the importers believed
that they had sustained injury because more bales were not opened,
they should have applied for a reexamination, and they might have
produced evidence before the Board of General Appraisers to
maintain their claim that the bags were American-made,
notwithstanding the return of the examiner and the report of the
appraiser, or they might have protested on the ground that the duty
should have been levied only on part thereof, and tendered evidence
to support that contention.
If they had furnished evidence of the number of bags of domestic
manufacture and the number of bags of foreign manufacture, or had
sought a reexamination with the view to an adjustment by
proportion, and that had been had, then the collector might have
assessed the foreign bags so ascertained, and admitted the American
bags free from duty. But it was for the importers, and not for the
government, to make the separation on which such a claim for relief
would have rested, or at least, to have invoked the rule of
proportion based on a reexamination.
The importers contended that they had complied with the law and
the Treasury regulations by furnishing certain statements of the
shippers as to the origin of the goods, and certain certificates as
to their exportation filled with wheat, and that this
prima
facie evidence of the bags being of the manufacture of this
country had not been disproved. But if it were admitted that these
papers made a
prima facie showing, that showing was
overturned when it appeared that foreign-made bags in large numbers
made up the importations.
The remedies provided by the Act of June 10, 1890, furnish the
equivalent for the action against the collector, which was
Page 172 U. S. 146
originally the remedy for an illegal exaction of duties,
United States v. Passavant, 169 U. S.
16;
Schoenfeld v. Hendricks, 152 U.
S. 691, and as in that action, so in this proceeding,
the importer must establish the illegality in order to recover back
duties paid under protest, and this, in a case like the present,
involves, in substantiating that contention, the making proof of
the identity of the merchandise,
Earnshaw v. Cadwalader,
145 U. S. 247,
145 U. S. 262;
Erhardt v. Schroeder, 155 U. S. 124.
Moreover, where merchandise liable in large part to duty is
entered as exempt therefrom. the collector has the right to assume
that the mingling was intentional, and with design to evade the
revenue laws, and hence, even where the confusion of goods is
accidental, or not fraudulent in fact and forfeiture is not
incurred, it yet devolves on the importer to show what part of the
whole he contends should not be taxed.
But these importers planted themselves on the ground that all
these bags were exempt under the act of 1875, or, if not, that the
assessment was wholly void for insufficient examination, or illegal
except as to foreign-made bags, which it devolved upon the
government to segregate from the common mass.
In the case of
Kent, already referred to, it was
decided by the Board of General Appraisers, February 3, 1894 (G. A.
2448), that the Act of February 8, 1875, was not in force, and a
reliquidation was ordered for a classification according to the
proportion of foreign and American bags found in two bales which,
by agreement, had been examined as representative bales, bag by
bag. On the second of May, 1894 (G. A. 2610), the Board of General
Appraisers held, in the matter of Balfour, Guthrie & Company,
that inasmuch as bags made of burlaps were dutiable except such as
are described in paragraph 493, it was the duty of all persons
bringing in goods claimed to be free out of a class otherwise
dutiable to prove affirmatively the facts constituting the
exemption, and that they should separate and designate such
merchandise, accompanied by the evidence required by law. This
decision was reaffirmed May 5, 1894 (G. A. 2613), and again in the
case before us.
Page 172 U. S. 147
On the 27th of April, 1894, which was after this case had been
carried before the Board of General Appraisers and the evidence had
been taken, the Treasury Department (T.D. 14,912) held that in the
absence of any provision of law to prevent the importation of both
free and dutiable second-hand bags baled together, collectors might
pursue the course of examining the designated number of packages,
making such investigation of their contents as would reveal the
character of the bags contained therein, and then adopt the finding
of the appraisers as the basis of the assessment of duty on bales
not examined. And since then, it has been determined that importers
of bags must have bags of foreign and bags of domestic origin
packed separately. T.D. 18,425.
Notwithstanding the positions taken by the importers are, as we
have seen, untenable, we are not disposed to hold, in the light of
these rulings of the department and the special circumstances of
the case, that if the proportion of dutiable bags sufficiently
appeared or might reasonably have been ascertained, the circuit
court could not have adjudged a recovery in that proportion or
directed a reliquidation.
A reexamination
de novo is now impracticable, but it
appears to us that the evidence taken by the board affords an
adequate basis for a conclusion. The examiner testified that he
found "along about 80 to 86 percent foreign make," "in general from
seventy-five to eighty percent," and that in his judgment there was
no invoice "that would show over twenty-five percent of American
bags," yet he also said that he could not give specific details of
each invoice and that he "supposed, if seventy-five percent of the
bags in the bale were of foreign manufacture, it carried the whole
of them."
In view of this testimony, and considering that the statute was
not strictly pursued in the examination (though we perceive no
reason to doubt the faithfulness of the officials in the discharge
of their duties), and the difficulties in the way of determining
the make of the bags disclosed by the evidence, and bearing in mind
that the taxation of so many of the bags as were of American
manufacture operated as a penalty in
Page 172 U. S. 148
spite of the concession that no fraud on the revenue was
intended, we think it unnecessary to remand the cause for another
hearing, and that the ends of justice will be best subserved by
directing a decree for the refunding of one-fourth of the duties
paid.
Decree reversed, and cause remanded, with a direction to
enter such a decree.
[
Footnote 1]
Name the articles.
[
Footnote 2]
If the packages are empty, insert statement of the facts, as
"and were exported from the United States filled with the produce
of that country."
[
Footnote 3]
If the packages contain foreign merchandise, insert "filled
with" and a description of the merchandise they contain.
[
Footnote 4]
This blank is to be filled only when the merchandise contained
in the packages is subject to a duty
ad valorem.
