A-97636, NOVEMBER 14, 1938, 18 COMP. GEN. 454

A-97636: Nov 14, 1938

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A CONFERENCE WAS HELD BETWEEN CUSTOMS OFFICIALS AND REPRESENTATIVES OF THE CUSTOMS BROKER AS TO THE WEIGHT BASIS ON WHICH THE ORE INVOLVED WAS SOLD. THE TENTATIVE LIQUIDATION OF SOME OF THE ENTRIES WAS THEREAFTER ADJUSTED TO THE WEIGHT BASIS ON WHICH THE ORE WAS SHOWN TO HAVE BEEN SOLD AND REFUND OF EXCESSIVE DUTIES COLLECTED WAS MADE. THE ADJUSTMENT BASIS FOR THE TENTATIVE LIQUIDATIONS MAY NOT BE EXTENDED TO INCLUDE ENTRIES FORMALLY LIQUIDATED PRIOR TO THE CONFERENCE AND NOT THERE UNDER CONSIDERATION BY THE CUSTOMS OFFICIALS EVEN THOUGH THE CUSTOMS BROKER'S REPRESENTATIVE WERE UNDER THE IMPRESSION ALL ENTRIES WERE BEING CONSIDERED. THE ORE WAS SHIPPED IN 19 RAILROAD CARS FROM WELLAND. 3900 AND 3897) WERE FILED IN CLAIMANT'S NAME.

A-97636, NOVEMBER 14, 1938, 18 COMP. GEN. 454

CUSTOMS DUTY REFUNDS - CLAIMANT'S PROTEST FAILURE - APPLICABILITY OF RELIEF ACT OF APRIL 10, 1928 WHERE, IN CONNECTION WITH THE LIQUIDATION OF CUSTOMS ENTRIES, A CONFERENCE WAS HELD BETWEEN CUSTOMS OFFICIALS AND REPRESENTATIVES OF THE CUSTOMS BROKER AS TO THE WEIGHT BASIS ON WHICH THE ORE INVOLVED WAS SOLD, AND THE TENTATIVE LIQUIDATION OF SOME OF THE ENTRIES WAS THEREAFTER ADJUSTED TO THE WEIGHT BASIS ON WHICH THE ORE WAS SHOWN TO HAVE BEEN SOLD AND REFUND OF EXCESSIVE DUTIES COLLECTED WAS MADE, THE ADJUSTMENT BASIS FOR THE TENTATIVE LIQUIDATIONS MAY NOT BE EXTENDED TO INCLUDE ENTRIES FORMALLY LIQUIDATED PRIOR TO THE CONFERENCE AND NOT THERE UNDER CONSIDERATION BY THE CUSTOMS OFFICIALS EVEN THOUGH THE CUSTOMS BROKER'S REPRESENTATIVE WERE UNDER THE IMPRESSION ALL ENTRIES WERE BEING CONSIDERED, THERE HAVING BEEN NO PROTEST FILED ON THE FORMALLY LIQUIDATED ENTRIES WITHIN THE TIME ALLOWED, OR AS PRESCRIBED, BY THE CUSTOMS LAWS AND REGULATIONS AND THE FACTS PRESENTED FAILING TO DISCLOSE "SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY" AS WOULD JUSTIFY THE GENERAL ACCOUNTING OFFICE IN SUBMITTING THE CLAIM FOR CONSIDERATION OF THE CONGRESS UNDER THE ACT OF APRIL 10, 1928, 45 STAT. 413. ALSO CONTAINS DISCUSSION AS TO THE PRINCIPLES UNDERLYING THE DISCRETION TO BE EXERCISED IN MATTER OF RELIEF UNDER THE ACT OF APRIL 10, 1928, SUPRA.

DECISION BY ACTING COMPTROLLER GENERAL ELLIOTT, NOVEMBER 14, 1938:

THE J. D. RICHARDSON CO., CUSTOMS BROKERS OF DETROIT, MICH., HAS REQUESTED CONSIDERATION UNDER THE ACT OF APRIL 10, 1928, 45 STAT. 413, OF ITS CLAIM FOR REFUND OF CERTAIN SUPPLEMENTAL CUSTOMS DUTIES PAID ON 13 ENTRIES OF MANGANESE ORE AT DETROIT, MICH., DURING MARCH, APRIL, AND MAY 1935, UNDER CONDITIONS HEREINAFTER SET FORTH.

THE ORE WAS SHIPPED IN 19 RAILROAD CARS FROM WELLAND, ONTARIO, BY THE ELECTRO METALLURGICAL CO. OF CANADA, LTD. UPON ARRIVAL IN DETROIT 18 CONSUMPTION ENTRIES (NOS. 3747, 3830, 3865, 3909, 3920, 3950, 3951, 4123, 4393, 4485, 4238, 4884, 4928, 6, 7, 4463, 3900 AND 3897) WERE FILED IN CLAIMANT'S NAME, AS THE NOMINAL CONSIGNEE, AND DUTY THEREON--- COMPUTED ON THE DRY WEIGHT OF THE ORE--- WAS PAID BY A REPRESENTATIVE OF THE MICHIGAN CENTRAL RAILROAD. HOWEVER, THE INVOICES ATTACHED TO THE ENTRIES INDICATED THAT THE ORE WAS SOLD ON THE BASIS OF THE WET WEIGHT AND, SINCE THE INSPECTOR WHO WEIGHED THE ORE MADE HIS WEIGHER'S RETURN UPON THAT BASIS, THE ENTRIES WERE LIQUIDATED ACCORDINGLY AND THE SUPPLEMENTAL INCREASES WERE DULY COLLECTED.

THE FIRST 13 ENTRIES WERE FORMALLY LIQUIDATED ON JULY 15, 1935. SHORTLY THEREAFTER THE REMAINING FIVE ENTIRES WERE RETURNED TO THE COLLECTOR OF CUSTOMS, DETROIT, BY THE COMPTROLLER OF CUSTOMS, FOR RECONSIDERATION OF THE TENTATIVE LIQUIDATIONS WHICH HAD BEEN MADE THEREIN. IN THE MEANTIME IT APPEARS THAT ORAL ARRANGEMENTS HAD BEEN MADE FOR A CONFERENCE BETWEEN REPRESENTATIVES OF THE COLLECTOR OF CUSTOMS AND CLAIMANT'S REPRESENTATIVES. AT THE CONFERENCE WHICH WAS HELD ON AUGUST 1, 1935, IT WAS POINTED OUT BY THE CUSTOMS OFFICIALS THAT THE INVOICES SHOWED THAT THE ORE WAS SOLD ON THE WET INSTEAD OF THE DRY WEIGHT, AS HAD BEEN INSISTED ON BY CLAIMANT. HOWEVER, CLAIMANT SUCCEEDED IN ESTABLISHING, SUBJECT TO THE SUBMISSION OF FURTHER PROOF, THAT THE ORE WAS BOUGHT AND SOLD UPON THE MANGANESE CONTENT, ARRIVED AT ON THE BASIS OF THE DRY WEIGHT. FOLLOWING THE CONFERENCE, THE FIVE ENTRIES WERE HELD IN THE DETROIT OFFICE FOR MORE THAN A MONTH AWAITING THE SUBMISSION BY CLAIMANT OF "PROOF OF THIS FACT.' UPON RECEIPT OF SAID PROOF, THE ENTRIES, TENTATIVELY LIQUIDATED ON THE DRY WEIGHT BASIS, WERE RESUBMITTED TO THE COMPTROLLER OF CUSTOMS, WHERE THEY WERE VERIFIED AND RETURNED TO THE DETROIT OFFICE FOR FORMAL LIQUIDATION AND REFUND OF THE EXCESS DUTIES.

THE EVIDENCE OF RECORD ESTABLISHES THAT AT THE TIME OF THE CONFERENCE IT WAS THE UNDERSTANDING OF THE CUSTOMS OFFICIALS THAT ONLY THE 5 ENTRIES THEN UNDER CONSIDERATION WERE INVOLVED; THAT THEY DID NOT CONSIDER THE 13 ENTRIES THAT PREVIOUSLY HAD BEEN FORMALLY LIQUIDATED. ON THE OTHER HAND, IT IS ALLEGED BY CLAIMANT THAT ITS REPRESENTATIVES PARTICIPATED IN THE CONFERENCE UNDER THE IMPRESSION THAT THERE WAS BEING CONSIDERED THE MATTER OF REFUNDING EXCESS DUTY ON ALL OF THE AFORE LISTED 18 ENTRIES, AND, AS RESULT OF THIS MISUNDERSTANDING AND THE BELIEF THAT A REFUND SHORTLY WOULD BE MADE ON THE ENTIRE LOT OF 18 ENTRIES, NO WRITTEN PROTEST WAS FILED WITH THE COLLECTOR OF CUSTOMS WITHIN THE 60-DAY PERIOD REQUIRED BY SECTION 514 OF THE TARIFF ACT OF 1930, 46 STAT. 734; THAT SUCH MISUNDERSTANDING WAS NOT DISCOVERED UNTIL THE AUTHORIZED REFUND WAS RECEIVED ON THE 5 ENTRIES WHICH HAD BEEN CONSIDERED BY THE CUSTOMS OFFICIALS AT SAID CONFERENCE.

SECTION 514, TARIFF ACT OF 1930, 46 STAT. 590, 734, PROVIDES:

PROTEST AGAINST COLLECTOR'S DECISIONS.

EXCEPT AS PROVIDED IN SUBDIVISION (B) OF SECTION 516 OF THIS ACT (RELATING TO PROTESTS BY AMERICAN MANUFACTURERS, PRODUCERS, AND WHOLESALERS), ALL DECISIONS OF THE COLLECTOR, INCLUDING THE LEGALITY OF ALL ORDERS AND FINDINGS ENTERING INTO THE SAME, AS TO THE RATE AND AMOUNT OF DUTIES CHARGEABLE, AND AS TO ALL EXACTIONS OF WHATEVER CHARACTER (WITHIN THE JURISDICTION OF THE SECRETARY OF THE TREASURY), AND HIS DECISIONS EXCLUDING ANY MERCHANDISE FROM ENTRY OR DELIVERY, UNDER ANY PROVISION OF THE CUSTOMS LAWS, AND HIS LIQUIDATION OR RELIQUIDATION OF ANY ENTRY, OR REFUSAL TO PAY ANY CLAIM FOR DRAWBACK, OR HIS REFUSAL TO RELIQUIDATE ANY ENTRY FOR A CLERICAL ERROR DISCOVERED WITHIN ONE YEAR AFTER THE DATE OF ENTRY, OR WITHIN SIXTY DAYS AFTER LIQUIDATION OR RELIQUIDATION WHEN SUCH LIQUIDATION OR RELIQUIDATION IS MADE MORE THAN TEN MONTHS AFTER THE DATE OF ENTRY, SHALL, UPON THE EXPIRATION OF SIXTY DAYS AFTER THE DATE OF SUCH LIQUIDATION, RELIQUIDATION, DECISION, OR REFUSAL, BE FINAL AND CONCLUSIVE UPON ALL PERSONS (INCLUDING THE UNITED STATES AND ANY OFFICER THEREOF), UNLESS THE IMPORTER, CONSIGNEE, OR AGENT OF THE PERSON PAYING SUCH CHARGE OR EXACTION, OR FILING SUCH CLAIM FOR DRAWBACK, OR SEEKING SUCH ENTRY OR DELIVERY, SHALL, WITHIN SIXTY DAYS AFTER, BUT NOT BEFORE SUCH LIQUIDATION, RELIQUIDATION, DECISION, OR REFUSAL, AS THE CASE MAY BE, AS WELL IN CASES OF MERCHANDISE ENTERED IN BOND AS FOR CONSUMPTION, FILE A PROTEST IN WRITING WITH THE COLLECTOR SETTING FORTH DISTINCTLY AND SPECIFICALLY, AND IN RESPECT TO EACH ENTRY, PAYMENT, CLAIM, DECISION, OR REFUSAL, THE REASONS FOR THE OBJECTION THERETO. THE RELIQUIDATION OF AN ENTRY SHALL NOT OPEN SUCH ENTRY SO THAT A PROTEST MAY BE FILED AGAINST THE DECISION OF THE COLLECTOR UPON ANY QUESTION NOT INVOLVED IN SUCH RELIQUIDATION.

ARTICLE 850, CUSTOMS REGULATIONS, 1931, PROVIDES:

FORM OF PROTEST.--- PROTESTS (EXCEPT PROTESTS BY AMERICAN MANUFACTURERS, PRODUCERS, AND WHOLESALERS) SHALL BE IN DUPLICATE AND IN WRITING, ADDRESSED TO THE COLLECTOR, AND SIGNED BY THE PARTY PROTESTING, OR HIS AGENT OR ATTORNEY, EACH PROTEST SHALL GIVE THE ADDRESS OF THE PROTESTANT OR HIS ATTORNEY, THE ENTRY NUMBER, IMPORTING VESSEL, DATE OF ARRIVAL, AND OF LIQUIDATION OF THE ENTRY, AND SHALL SET FORTH DISTINCTLY AND SPECIFICALLY IN RESPECT TO EACH ENTRY, PAYMENT, CLAIM, OR DECISION, THE REASONS FOR THE OBJECTION, CITING THE RATE OR RATES OF DUTY CLAIMED TO BE APPLICABLE AND THE PARAGRAPH OR SECTION OF THE LAW, IF ANY, UNDER WHICH RELIEF IS CLAIMED.

THE ACT OF APRIL 10, 1928, 45 STAT. 413, UNDER WHICH THE CLAIM HAS BEEN SUBMITTED FOR CONSIDERATION BY THIS OFFICE, PROVIDES:

THAT WHEN THERE IS FILED IN THE GENERAL ACCOUNTING OFFICE A CLAIM OR DEMAND AGAINST THE UNITED STATES THAT MAY NOT LAWFULLY BE ADJUSTED BY THE USE OF AN APPROPRIATION THERETOFORE MADE, BUT WHICH CLAIM OR DEMAND IN THE JUDGMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES CONTAINS SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY AS TO BE DESERVING OF THE CONSIDERATION OF THE CONGRESS, HE SHALL SUBMIT THE SAME TO THE CONGRESS BY A SPECIAL REPORT CONTAINING THE MATERIAL FACTS AND HIS RECOMMENDATION THEREON.

CLAIMANT CORPORATION IS A FIRM OF CUSTOMS BROKERS AND IT MUST BE PRESUMED THAT ITS AGENTS ARE FAMILIAR WITH THE CUSTOMS LAWS AND REGULATIONS WITH WHICH THEY DEAL REGULARLY. AT THE DATE OF THE CONFERENCE 13 OF THE ENTIRES INVOLVED HAD BEEN FORMALLY LIQUIDATED. KNOWLEDGE OF THIS FACT WAS IN CLAIMANT'S POSSESSION. UNDER SECTION 514 OF THE TARIFF ACT OF 1930, SUPRA, THE FORMAL ACTION TAKEN WITH RESPECT TO THESE ENTRIES WAS FINAL, UNLESS WITHIN 60 DAYS THEREAFTER A WRITTEN PROTEST WAS FILED WITH THE COLLECTOR OF CUSTOMS. BY ARTICLE 850 OF THE CUSTOMS REGULATIONS, SUPRA, PROTESTS FILED UNDER THE ABOVE SECTION WERE REQUIRED TO "BE IN DUPLICATE AND IN WRITING, ADDRESSED TO THE COLLECTOR.' SINCE NO PROTEST HAD BEEN FILED WITH RESPECT TO THESE ENTRIES IN THE MANNER REQUIRED BY LAW AND REGULATIONS, ANY QUESTION AS TO THEIR INCLUSION WITH THE TENTATIVELY LIQUIDATED ENTRIES CONSIDERED AT THE CONFERENCE IS EFFECTUALLY REMOVED. ALSO, THE EVIDENCE ESTABLISHES THAT NO PROTESTS WERE FILED WITH RESPECT TO THESE ENTRIES WITHIN THE PRESCRIBED STATUTORY PERIOD OF 60 DAYS.

IT APPEARS FROM THE FOREGOING THAT SEVERAL FACTORS CONTRIBUTED TO THE CONDITION FROM WHICH RELIEF IS SOUGHT. FIRST, THE DATA SHOWN ON THE INVOICES WERE NOT SUFFICIENT TO ENABLE THE CUSTOMS OFFICIALS TO DETERMINE, IN THE FIRST INSTANCE, THE PROPER BASIS ON WHICH THE ORE WAS SOLD. NEXT, A DELAY OF OVER 30 DAYS WAS INVOLVED IN THE FURNISHING BY CLAIMANT OF THE SUPPLEMENTAL INVOICE DATA. BUT FOR THIS DELAY, THE RECEIPT OF THE REFUND ON THE 5 ENTRIES CONSIDERED AND ALLOWED AT THE CONFERENCE MIGHT HAVE BROUGHT TO LIGHT THE STATUS OF THE OTHER 13 ENTRIES. HOWEVER, BE THAT AS IT MAY, THE FINAL OR THE PROXIMATE CAUSE OF THE CONDITION FROM WHICH RELIEF IS SOUGHT WAS, AS ADMITTED BY THE CLAIMANT'S REPRESENTATIVE, THE FAILURE "TO FILE A PROTEST, IN THE PRESCRIBED TIME AS PROVIDED BY THE CUSTOMS LAWS.'

THE PROPRIETY OF AFFORDING RELIEF UNDER THE ACT OF APRIL 10, 1928, SUPRA, IS A MATTER OF DISCRETION TO BE EXERCISED ACCORDING TO THE CIRCUMSTANCES OF EACH PARTICULAR CASE. HOWEVER, THIS DISCRETION IS NOT AN ARBITRARY ONE, BUT IS REQUIRED TO BE EXERCISED IN ACCORDANCE WITH FIXED PRINCIPLES AND PRECEDENTS. IT IS A PRINCIPLE OF LONG STANDING, GOVERNING THE EXERCISE OF EQUITABLE JURISDICTION, THAT WHEN THERE IS A COMPLETE AND ADEQUATE REMEDY AT LAW, AND THE PARTY AGGRIEVED FAILS TO TAKE ADVANTAGE OF SUCH REMEDY, SUCH PARTY WILL NOT BE PERMITTED TO ASSERT IT IN EQUITY UNLESS HE WAS PREVENTED BY FRAUD OR MISTAKE OR BY CIRCUMSTANCES BEYOND HIS CONTROL. MURRAY V. UNITED STATES, 46 CT.CLS. 94. WHERE AN ADEQUATE REMEDY AT LAW HAS BEEN LOST THROUGH EITHER POSITIVE NEGLIGENCE OR MERE FAILURE TO SEEK IT AT THE PROPER TIME, EQUITY WILL NOT INTERPOSE TO GRANT RELIEF. BAKER V. CUMMINGS, 169 U.S. 189; HENDRICKSON V. HINCKLEY, 17 HOW. 443. IN THE DISPOSITION OF CLAIMS PRESENTED FOR CONSIDERATION UNDER THE ACT OF APRIL 10, 1928, SUPRA, THESE PRINCIPLES HAVE BEEN OBSERVED UNIFORMLY. SAID ACT DOES NOT CONTEMPLATE THE REVIVAL OF CLAIMS BARRED BY STATUTORY OR REGULATORY LIMITATIONS UNDER CIRCUMSTANCES SUCH AS HERE INVOLVED. SEE 14 COMP. GEN. 324; A-74206, AUGUST 4, 1936.

ACCORDINGLY, AS THE FACTS PRESENTED FAIL TO DISCLOSE "SUCH ELEMENTS OF LEGAL LIABILITY OR EQUITY" AS WOULD JUSTIFY THIS OFFICE IN SUBMITTING THE CLAIM FOR CONSIDERATION OF THE CONGRESS UNDER AUTHORITY OF THE ACT OF APRIL 10, 1928, SUPRA, THE REQUEST THAT SUCH ACTION BE TAKEN MUST BE AND IS DENIED.