CUSTOMS DUTY.

Press, Volume LXVIII, Issue 20490, 8 March 1932, Page 13

CUSTOMS DUTY.

<• METHOD OF ASSESSMENT. APPEAL BY IMPORTERS OF FOOTWEAR. • (FIIES3 ASSOCIATION ' TELEGBAM.) WELLINGTON, March 7. 'J he Appeal Court to-day heard the case of the Saracen Shoe Co., Ltd. v. tho Minister for Customs, an appeal from the judgment of Mr Justice Reed. This case came before the Court ' ot Appeal in October last, but on the Chief Justice becoming indisposed during the hearing, it was adjourned till this session. The Mishawaka Rubber Co., ot Indiana, U.S.A., is. the sole manufacturer of a certain brand of footwear ? f which the appellant company is the importer and lias the exclusive right of sale in New Zealand. In the United States the Mishawaka Company as to 90 per cent, of its output, sells to retailers, and as to 10 per cent, sells to a wholesaler, to whom it allows a 14 per cent, trade discount ofi the price fixed by it from time to time as the price to be charged retailers. Quantity discounts are also allowed to retailers calculated on yearly sales. The Mishawaka Company allows the appellant company the same trade discount as the said wholesaler, 14 per cent. The .'Minister for Customs contended that notwithstanding the price i so charged the ad valorem Customs J duty on the goods imported should be calculated as if the price paid was at the rate charged retailers in the United States of America. The appellant company asked whether on the true construction of Section 114 of the Customs Act, 1913, the discount of 14 per cent, was to l>e deducted from tne price charged by the manufacturer to the retailer in order to ascertain the fair market value before assessing the Customs c|uty on the importation of these goods. _ Mr Justice Reed upheld the contention of the Minister and disallowed the deduction of 14 per cent. Counsel for tho appellant contended that the true meaning of Section 114 was that if goods were brought by a wholesaler from a manufacturer their value for Customs purposes was the fail - market value of goods of an identical kind and brand when sold for cash in the ordinary course of business for home consumption by the manufacturer to the wholesaler in the principal trading centres in the country of export. Counsel contended that there were various centres of trade in America. In one or more of these centres the Misha\yaka. Company sold in the wholesale market for cash tor home consumption. That selling was in the ordinary course of the company's business, and the price of the goods as charged and paid in that market was the price which the Collector ol Customs should accept in assessing the duty. That price would be found to be the retail price less the wholesale deduction of 14 per cent. He . submitted that if the interpretation placed upon tfye section by the Trial Judge was correct, the wnole of the invoice system of assessing Customs duty would have to be abolished and the Customs Department would require to be supplied with daily reports of prico levels and variations from the wholesale and retail markets from which the goods were imported into New Zealand;