
    United States v. C. J. Holt & Co., Inc.
    (No. 3242)
    
    United States Court of Customs and Patent Appeals,
    January 15, 1930
    
      Charles D. Lawrence, Assistant Attorney General (James R. Ryan and Ralph Folks, special attorneys, of counsel), for the United States.
    
      James W. Bevans for appellee.
    
      [Oral argument December 10, 1929, by Mr. Folks and Mr. Be vans}
    Before Gbaham, Presiding Judge, and Bland, Hatfield, Gaebett, and Lenboot, Associate Judges
    
      
       T. D. 43822.
    
   Bland, Judge,

delivered tbe opinion of tbe court:

Tbis is an appeal from tbe judgment of tbe United States Customs Court sustaining tbe protest of appellee against tbe action of tbe collector in disallowing a claim for drawback on motion-picture films printed upon tbe raw-stock film.

The notice of intent to export with benefit of drawback was dated March 17, 1926, and tbe clearance of tbe exporting vessel was on March 18, 1926. Afterwards, on March 26, 1928, drawback entry for imported merchandise, manufactured and exported, was filed with tbe collector.

It seems to be conceded that all tbe regulations of tbe Secretary of tbe Treasury, made in pursuance of authority granted by section 313 of tbe Tariff Act of 1922 for drawback, were fully complied with, and such compliance was sufficient to entitle appellee to drawback, except that tbe drawback entry was filed more than two years after tbe date of tbe clearance of the exporting vessel, which was, by tbe collector, regarded as a-failure to comply with article 976 of tbe Customs Regulations of 1923. Tbe collector’s refusal to allow drawback was based entirely upon tbe fact that the drawback entry was not filed within tbe time limit prescribed in the regulation.

Appellee protested tbe decision of the collector refusing to allow drawback, whereupon the collector transferred all papers in accordance with tbe law to tbe United States Customs Court.

At tbe trial tbe affidavits and papers in tbe case were moved into tbe record by appellee’s counsel over tbe objection of tbe Government. No other evidence was introduced. Appellee there contended that the affidavits and papers bad been sufficient for tbe collector on tbe questions of manufacture, etc., and that bis objections did not go to their insufficiency but to tbe time limit for filing drawback entry, and that tbe question before tbe court then was solely a question of law as to whether or not tbe collector’s refusal on account of tbe time limit in tbe Treasury regulations was in accordance with law.

While tbe Government contended that tbe collector was justified in refusing drawback on account of tbe failure of appellee to comply with tbe Treasury regulations as to tbe 2-year hmitation, it also moved to dismiss tbe protest for tbe reason that there was not sufficient evidence to support a judgment reversing tbe collector’s action. Both parties make here tbe same contentions that were made in tbe court below.

A majority of tbe first division of tbe court below sustained tbe protest, bolding that tbe time-limit provision in tbe Treasury regulations amounted to a statute of fimitations which tbe law did not authorize, and that appellee bad a right to drawback regardless of the 2-year limitation, and furthermore held that the question before the collector was the only question before the court and that the affidavit and other record proof, being sufficient for the collector, was sufficient for the court.

As the case is presented here, it offers but two questions:

First, are affidavits and other papers showing manufacture, exportation, etc., which are authorized, prescribed, and required by the Secretary of the Treasury for the purpose of obtaining drawback by an exporter of goods manufactured in whole or in part from imported material, evidence of the facts therein contained sufficient to support a judgment upon trial of the issue upon protest in the United States Customs Court?

Second, is the time-limit provision prescribed by the Secretary of the Treasury a valid regulation?

Our answer to the first question will make it unnecessary to decide the second one.

We think the first question is decided and answered in the negative by this court in the following cases: Eidlitz & Son (Inc.), as Agent v. United States, 12 Ct. Cust. Appls. 56, T. D. 39998; Borgfeldt & Co. v. United States, 11 Ct. Cust. Appls. 421, T. D. 39433. See also United States v. National Aniline & Chemical Co., 3 Ct. Cust. Appls. 10, T. D. 32287, and United States v. Thomas, 3 Ct. Cust. Appls. 142, T. D. 32385. These decisions go to the effect that the Secretary of the Treasury is not authorized to prescribe the character of proof required in proving issues before the trial court, and in our view of the case the Secretary of the Treasury has not attempted to do so but has prescribed the character of proof required to make a prima facie showing as far as the collector is concerned.

Under the authorities above cited, from which quotation is unnecessary, we hold that there is not sufficient evidence in the record of a compliance with the provisions of section 313 for support of a judgment in behalf of appellee.

The Government moved at the proper time to dismiss the protest for this reason. Appellee refused to produce any further evidence. By this motion and the colloquy which occurred between the justices and counsel at the trial, appellee was fully warned that in his refusal to submit further evidence (if he could have produced it) he was taking considerable chance of jeopardizing his client’s interests.

The Government assigned as error the action of the court below in refusing to grant its motion to dismiss the protest on the insufficiency of the evidence and that there had been no proof of manufacture in compliance with the regulations. The refusal of the court below to sustain such motion, under the authorities cited, was error and its judgment is reversed.  