
    No. 110
    DAYTON BRONZE BEARING CO. v. GILLIGAN
    U. S. Circuit Court of Appeals, Sixth Circuit
    No. 3643.
    For full opinion see 281 Fed. Rep. 709.
    INTERNAL REVENUE — (1) Appeal and Error— (2) Failure of corporation to make timely return for munitions tax — (3) Penalties imposed only for substantial delinquencies — (4) Statutes — construction of, by administrative department.
    Attorneys — A. W. Schulman, Dayton, for the Bearing Co.; R. T. Dickerson, Pros., for Gilligan.
   DONAHUE, C. J.

Epitomized Opinion

This is an action by the Bronze Bearing Co. to recover certain munitions taxes and penalties erroneously assessed by and paid to Gilligan, Internal Revenue Collector. The Bronze Bearing Co. contracted with a munitions company to mold materials, furnished by the latter, into castings which were to he used in the manufacture of munitions. The Bearing Co. believed that it was not engaged in the manufacture of munitions and was not liable to the payment of tax under the Munitions Tax Act of September 8, 1916. Being advised by reputable legal counsel to this effect, the Bearing Co. neglected to file a return. July 13, 1917, by advice of Gilligan, the Bearing Co. did file a return, although later than the time specified by statute, under protest, without prejudice to its rights, and was assessed $4,860, plus 50 per cent- penalty, which it paid.

Held:

1. Where no question of sufficiency of evidence is raised and no exception taken by defendant to judgment, the only question for review is whether satisfactory proof of allegations of the petition entitles plaintiff to judgment.

2. A corporation believing in good faith, on reasonable grounds and after taking advice of ’'eputable counsel that it was not liable for munitions tax assessed and collected after making a voluntary return, without prejudice, may recover such tax and penalty.

3. Courts will not impose more than a nominal penalty where the violation is merely technical.

4. The construction placed upon a statute by the department, charged with the enforcement thereof, should be given due consideration, regardless of the length of time such construction has been adopted and enforced.  