Under the provisions of paragraph 387 of the Act of July 24,
1897, and section 7 of the Act of June 10, 1890, as amended by
section 32 of the Act of July 24, 1897, the merchandise in suit,
being certain woven fabrics in the piece composed of silk and
cotton, was subject to an
ad valorem duty or to a duty
based upon or regulated by the value thereof. An additional duty of
one percentum of the total appraised value of such merchandise for
each one percentum that such appraised value exceeded
Page 172 U. S. 623
the value declared in the entry, as applied to the particular
article in such invoice so undervalued, accrued according to the
provisions of section 7 of the Act of June 10, 1890, as amended by
the Act of July 24, 1897.
On September 15, 1897, Frederich Hoeninghaus and Henry W.
Curtiss imported at the of New York certain woven fabrics in the
piece, composed of silk and cotton. Such fabrics were provided for
in paragraph 387, schedule
d of the Tariff Act of July 24,
1897, which contains an elaborate scheme of specific duties for
goods of this character, the rates varying from 50 cents of $4.50
per pound, depending upon the weight of the fabric, the percentage
of silk contained in it, its color, its mode of manufacture, etc.,
and concludes with a provision which reads as follows: "But in no
case shall any of the foregoing fabrics in this paragraph pay a
less rate of duty than 50 percentum
ad valorem."
The appraiser returned the merchandise as manufactures of silk
and cotton in the gumsilk under 20 percent, and the collector
assessed upon the merchandise a duty of 50 cents a pound, under the
paragraph above mentioned. On the last item of the invoice, the
appraiser increased the valuation made in the invoice to make
market value, thus making the appraised value exceed the value
thereof declared in the entry. Thereupon the collector levied an
additional duty of 1 percentum of the total appraised value for
each 1 percentum that said appraised value exceeded the value
declared on said item in the entry, under the provisions of section
32 of the Act of July 24, 1897, which is in the following
terms:
"That the owner, consignee, or agent of any imported merchandise
which has been actually purchased, may at the time when he shall
make and verify his written entry of such merchandise, but not
afterwards, make such addition to the entry to the cost or value
given in the invoice or
pro forma invoice or statement in
form of an invoice, which he shall produce with his entry, as in
his opinion may raise the same to the actual market value or
wholesale price of such merchandise at the time of exportation to
the United States in the principal markets of the country from
which the same has been imported; but no such addition shall be
made upon entry to the
Page 172 U. S. 624
invoice value of any imported merchandise obtained otherwise
than by actual purchase, and the collector within whose district
any merchandise may be imported or entered, whether the same has
been actually purchased or procured otherwise than by purchase,
shall cause the actual market value or wholesale price of such
merchandise to be appraised,
and if the appraised value of any
article of imported merchandise subject to an ad valorem
duty or to a duty based upon or regulated in any manner by the
value thereof shall exceed the value declared in the entry, there
shall be levied, collected and paid, in addition to the duties
imposed by law on such merchandise, an additional duty of one
percentum of the total appraised value thereof for each one
percentum that such appraised value exceeds the value declared in
the entry, but the additional duties only apply to the
particular article or articles in each invoice that are so
undervalued, and shall be limited to fifty percentum of the
appraised value of such article or articles.
Such additional
duties shall not be construed to be penal and shall not be
remitted, nor payment thereof in any way avoided, except in
cases arising from a manifest clerical error, nor shall they be
refunded in case of exportation of the merchandise, or on any other
account, nor shall they be subject to the benefit of drawback,
provided that if the appraised value of any merchandise shall
exceed the value declared in the entry by more than fifty
percentum, except when arising from a manifest clerical error, such
entry shall be held to be presumptively fraudulent, and the
collector of customs shall seize such merchandise and proceed as in
case of forfeiture for violation of the customs laws, and in any
legal proceeding that may result from such seizure, the
undervaluation as shown by the appraisal shall be presumptive
evidence of fraud, and the burden of proof shall be on the claimant
to rebut the same, and forfeiture shall be adjudged unless he shall
rebut such presumption of fraudulent intent by sufficient evidence.
The forfeiture provided for in this section shall apply to the
whole of the merchandise or the value thereof in the case or
package containing the particular article or articles in each
invoice which are undervalued; provided further that all additional
duties,
Page 172 U. S. 625
penalties or forfeitures applicable to merchandise entered by a
duly certified invoice shall be alike applicable to merchandise
entered by a
pro forma invoice or statement in the form of
an invoice, and no forfeiture or disability of any kind incurred
under the provisions of this section shall be remitted or mitigated
by the Secretary of the Treasury. The duty shall not, however, be
assessed in any case upon an amount less than the invoice or
entered value."
Thereupon the importers filed a protest, claiming that said
merchandise, having regard either to its invoice, entered, or
appraised value, was not subject to an
ad valorem duty or
to a duty based upon or in any manner regulated by the value
thereof, but, on the contrary, was subject only to a specific
duty.
The board of general appraisers, under the provisions of section
14 of the Act of June 10, 1890, affirmed the decision of the
collector and held that such goods were properly subject to the
additional duty imposed under section 7 of the Act of June 10,
1890, as amended by section 32 of the Tariff Act of July 24,
1897.
From this decision of the board of general appraisers the
importers appealed to the Circuit Court of the United States for
the Southern District of New York, and after, in pursuance of an
order of said court, the board of general appraisers had made a
return of the record and proceedings before them, that court
affirmed the decision of the board of general appraisers. From the
judgment of the circuit court an appeal was taken to the Circuit
Court of Appeals for the Second Circuit, and that court thereupon
certified to this Court the following questions of law:
"First. Under the provisions of paragraph 387 of the Act of July
24, 1897, and section 7 of the Act of June 10, 1890, as amended by
section 32 of the Act of July 24, 1897, was the merchandise in suit
subject to an
ad valorem duty, or to a duty based upon or
regulated in any manner by the value thereof?"
"Second. Did the additional duty of one percentum of the total
appraised value of said merchandise for each one percentum that
such appraised value exceeded the value declared in
Page 172 U. S. 626
the entry, as applied to the particular article in said invoice
undervalued as aforesaid, accrue according to the provisions of
section 7 of the Act of June 10, 1890, as amended by section 32 of
the Act of July 24, 1897?"
MR. JUSTICE SHIRAS, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The tariff legislation in question recognizes three classes of
merchandise subject to duty. One is where the duties are purely
specific, another where the duties are wholly based on valuation,
and the third where the duties are "regulated in any manner by the
value thereof."
All importations of merchandise must be accompanied with an
invoice, stating the cost or market value. The third section of the
Act of June 10, 1890, c. 407, 26 Stat. 131, provides that all such
invoices shall have endorsed thereon a declaration signed by the
purchaser, manufacturer, owner, or agent setting forth that the
invoice is in all respects correct and true, and was made at the
place from which the merchandise is to be exported to the United
States; that it contains, if the merchandise was obtained by
purchase, a true and full statement of the time when, the place
where, the person from whom the same was purchased, and the actual
cost thereof, and, when obtained in any other manner than by
purchase, the actual market value or wholesale price thereof at the
time of exportation to the United States in the principal markets
of the country from whence exported; that such market value is the
price at which the merchandise described in the invoice is freely
offered for sale to all purchasers in said markets, and that it is
the price which the manufacturer or owner making the declaration
would have received, and was willing to receive, for such
merchandise, sold in the ordinary course of trade, in
Page 172 U. S. 627
the usual wholesale quantities, the actual quantity thereof, and
that no different invoice of the merchandise mentioned has been or
will be furnished to anyone; that, if the merchandise was actually
purchased, the declaration shall also contain a statement that the
currency in which such invoice is made out is that which was
actually paid for the merchandise by the purchaser.
The seventh section, as amended by section 32 of the Act of July
24, 1897, provides that the importer, at the time he makes his
entry, may make such addition to the cost or value given in the
invoice as in his opinion may raise the same to the actual market
value or wholesale price of such merchandise in the principal
markets of the country from which imported; but no such addition
shall be made to the invoiced value of any imported merchandise
obtained otherwise than by actual purchase.
These and other provisions contained in the acts of June, 1890,
and July, 1897, compel us to perceive the importance attached by
Congress to the obligation put upon the importer to furnish the
appraisers and the collector with a true valuation of the imported
merchandise, and also the care taken to relieve the importer from a
hasty or ill considered valuation contained in the invoice by
giving him an opportunity to raise such valuation by voluntarily
making such addition thereto as to bring the same to the actual
market value, and by providing for an appeal by the importer, if
dissatisfied with the appraisement, to the board of general
appraisers, and from the decision of the board to the courts.
The contention on behalf of the importers is, in effect, that
there are only two classes of merchandise to be considered -- one
where the duties are purely specific, and where it is claimed no
appraisement is required and none is made, and the other where the
merchandise is subject to an
ad valorem rate of duty, and
that the merchandise in question in this case belongs to the former
class.
Without deciding whether, even in the case of an importation of
merchandise subject only to a specific duty, it is lawful to
dispense with an appraisement, our opinion is that, in finding
Page 172 U. S. 628
the duty properly assessable upon this merchandise, it was
obligatory on the government officials to inquire into its value,
and that therefore the duty was one regulated in some manner by the
value thereof. The fact that it turned out in the present case that
the goods did not pay a less rate of duty than fifty percentum
ad valorem did not relieve the appraiser from inquiring
into and determining the value of the goods. And if it was the duty
of the appraiser, in order to enable him to fix the duty, to
inquire into the value of the imported merchandise, he was entitled
to the aid afforded him in such an inquiry by the production of a
true and correct invoice.
We cannot accept the contention of the importers that where
articles of merchandise are entered and appraised, the inquiry
whether the appraised value exceeds the entered value is immaterial
unless, as a result of such inquiry, such articles have imposed
upon them
ad valorem duties.
The importers had no right to determine for themselves in
advance whether a specific duty or an
ad valorem duty
should be levied. The duty was to be regulated by the value of the
goods. A duty at least equivalent to an
ad valorem duty of
fifty percentum had to be levied, and to determine what duty was
leviable it was necessary for the collector and appraisers to be
truthfully advised of the value of the goods.
It is urged that, as specific duties were actually assessed in
the present case, it therefore appears that the importers were not
benefited by the undervaluation; that the revenue has not and could
not suffer anything by the undervaluation, and that a mere
difference of opinion between the importer and the appraisers as to
the value of the goods should not subject the former to an
additional duty.
But what might seem to be the hardship of such a case cannot
justify the appraisers or the courts in dispensing with the
requirements of the statutes. The meaning and policy of the tariff
laws cannot be made to yield to the supposed hardship of isolated
cases. Nor is it apparent that the enforcement of the statutory
requirements can be justly termed a hardship to importers who take
the risk of an undervaluation. The burden
Page 172 U. S. 629
of furnishing a true and correct invoice in such a case is no
greater than that imposed on other importers where goods are
confessedly within the category of goods subject to an
ad
valorem assessment.
The administration of such laws cannot be narrowed to a
consideration of every case as if it stood alone, and as if the
only question was whether there was an actual intention to defraud
the government. Wide and long experience has resulted in the
command that all importations of merchandise must be accompanied
with a true and correct invoice stating the cost or market value.
Like other importers, the present appellants must comply with this
command, and if they have failed to do so, they must be held to be
subject to the additional duty imposed by the statute. If the
statutory regulations are found to be too stringent, the remedy
cannot be found either in the courts whose duty is to construe them
or in the executive officers appointed to carry them into effect,
but in Congress.
We have been referred to no decision of this Court directly
applicable to the case in hand, but
Pings v. United
States, 72 F. 260, is cited. That was a case arising under the
Tariff Act of October 1, 1890, c. 1244, 26 Stat. 567, where gloves
were imported into the port of New York, and were dutiable at $1.75
per dozen unless their value exceeded $3.50 per dozen, in which
case they would be dutiable at fifty percentum
ad valorem.
The appraiser advanced their value in excess of ten percentum of
the value declared in the entry, and the propriety of this advance
was not questioned. The appraised value, however, was not in excess
of $3.50 per dozen. The collector held the merchandise liable to
the additional duty prescribed by section 7 of the Customs
Administration Act of June 10, 1890. The importer's contention that
the additional duty should not be exacted because gloves of the
kind imported pay a specific duty, and because the advance,
although in excess of the ten percentum, was not sufficient to
require him to pay the
ad valorem duty exacted by the last
proviso of paragraph 458 of the Tariff Act of October 1, 1890, was
sustained by the board of general appraisers. But the circuit
Page 172 U. S. 630
court held otherwise, and on appeal, the Circuit Court of
Appeals for the Second Circuit affirmed the decision of the circuit
court. The court of appeals, reviewing the provisions of the Act of
June 10, 1890, held that where the value of the goods determines
the question whether they are to pay specific or
ad
valorem duty, appraisement is essential, and that it is to be
expected that the statute should require the importer himself to
state the value of his goods faithfully and truthfully, and to
enforce that requirement by appropriate penalties. The court
said:
"We see no reason for restricting the broad language of the
statute, and concur with the judge who heard the case in the
circuit court that the statutes require that all imports be entered
at fair value, and that the provision for increasing duties for
undervaluations of more than ten percentum makes no distinction
between specific and
ad valorem duties or between
undervaluations that may affect the amount of regular duties and
those that will not."
This case was under another statute, in somewhat different
terms, but the reasoning upon which that decision went is that
which we have pursued in the present case, and meets with our
approval.
Our conclusion is that the questions certified to us by the
judges of the circuit court of appeals should be answered in the
affirmative, and it is so ordered.
MR. JUSTICE PECKHAM dissented.
