611.573/52

The Secretary of State to the Norwegian Minister ( Morgenstierne )

Sir: As I informed you on the occasion of our recent conversation, I have conveyed to the Treasury Department the substance of your letter dated October 25, 1934,26 which was in further reference to the question of the tax on whale oil imposed under Title IV, Section 602, of the Revenue Act of 1934.

Supplementing its letter dated August 31, 1934,27 the Treasury Department has recently addressed a further letter to the Department on this subject, from which I quote the pertinent portion:

“The Minister refers to excerpts from the letter of this Department, addressed to you on August 31, 1934, which you quoted to him, and sets forth new contentions in support of his representations that the tax in question should be construed to be an internal tax and accordingly not applicable to Norwegian whale oil in view of Article VIII of the Treaty of 1928 between the United States and Norway.

“The first contention of the Minister is that the provisions of section 602 of the Revenue Act of 1934 that ‘The tax on the articles described in this paragraph shall apply only with respect to the importation of such articles after the date of the enactment of the Revenue Act of 1934’, does not restrict the application of the tax to importations, but merely stipulates a time after which the tax shall apply on the imported articles. His second contention is that the titles of Title IV and of section 601 of the Revenue Act of 1932 establish the nature of the tax in question as an internal tax rather than a customs duty.

“The parts of section 601 of the Revenue Act of 1932, as amended, which are material to the first contention of the Norwegian Minister, are as follows:

“‘Sec. 601. Excise Tax on Certain Articles.

(a) In addition to any other tax or duty imposed by law, there shall be imposed a tax as provided in subsection (c) on every article imported into the United States unless treaty provisions of the United States otherwise provide.

(b) The tax imposed under subsection (a) shall be levied, assessed, collected, and paid in the same manner as a duty imposed by the Tariff Act of 1930, and shall be treated for the purposes of all provisions of law relating to the customs revenue as a duty imposed by such Act, except that—

. . . . . . . . . . . . . .

(3) such tax shall not be imposed upon any article [imported] prior to the date on which this title takes effect;

. . . . . . . . . . . . . .

(c) There is hereby imposed upon the following articles sold in the United States by the manufacturer or producer, or imported into the United States, a tax at the rates hereinafter set forth, to be paid by the manufacturer, producer, or importer:

. . . . . . . . . . . . . .

(8) Whale oil (except sperm oil), fish oil (except cod oil, cod-liver oil, and halibut-liver oil), marine animal oil, and any combination or mixture [Page 674] containing a substantial quantity of any one or more of such oils, 3 cents per pound. The tax on the articles described in this paragraph shall apply only with respect to the importation of such articles after the date of the enactment of the Revenue Act of 1934, and shall not be subject to the provisions of subsection (b) (4) of this section (prohibiting drawback) or section 629 (relating to expiration of taxes).’

“It is not necessary, for the purpose of disposing of the Minister’s contention, to discuss whether these quoted provisions of law impose an excise tax upon whale oil which has not been imported into the United States, as the Minister seems to believe. They unquestionably impose upon imported whale oil, unless treaty provisions of the United States otherwise provide, a tax which ‘shall be levied, assessed, collected, and paid in the same manner as a duty imposed by the Tariff Act of 1930, and shall be treated for the purposes of all provisions of law relating to the customs revenue as a duty imposed by such Act, except that the tax on whale oil shall not be imposed upon any article imported prior to the enactment of the Revenue Act of 1934.

“In accordance with section 601 (b) of the Revenue Act of 1932 and the provisions of the Tariff Act of 1930, the tax on imported whale oil is imposed while the oil is in customs custody. Therefore, following the plain language of the statute, this Department adheres to the opinion it expressed in its letter to you of August 31, that the tax on the whale oil in question is a customs duty for the purposes of all provisions of law, including treaties of the United States, relating to the customs revenue, except as provided in the statute, and that the said tax is not in any respect an internal tax.

“It is well established in our law that the titles of a statute can not control or vary the plain and unambiguous meaning of the body of the statute (Cornell v. Coyne, 192 U. S. 418, 430; United States v. Mouyas et al., 42 Fed. (2) 743, 744). Moreover, in the case of Faber, Coe & Gregg (Inc.) v. United States, 19 C. C. P. A. 8, T. D. 44851, cited in the Department’s letter of August 31, the United States Court of Customs and Patent Appeals held that taxes imposed on imports while in customs custody, regardless of how they might be designated by the Congress, were customs duties. These considerations, as well as those mentioned with reference to the first contention, appear to dispose of the Minister’s second contention.”

Accept [etc.]

For the Secretary of State:
Francis B. Sayre
  1. Not printed.
  2. See communication of October 11 to the Norwegian Minister, p. 653.