Tupman Thurlow Co. v. United States , 40 Cust. Ct. 437 ( 1958 )

Wilson, Judge:

The parties to this action have stipulated that the merchandise here involved consists of “3-40 Gal. Steel drums cholesterol” and that it was “derived entirely from animal spinal cord marrow.” The product was classified by the collector as a chemical compound under paragraph 5 of the Tariff Act of 1930, as modified, and assessed with duty at the rate of 12% per centum ad valorem. An internal revenue tax was also imposed upon the merchandise under sections 4561 and 4581 of the Internal Revenue Code as a chemical compound, derived from wool grease.

The correctness of the collector’s classification of the importation under paragraph 5 as a chemical compound and of the duty assessment of 12)4 per centum ad valorem is conceded. The plaintiff’s sole contention is that the merchandise is not subject to a revenue tax under the provisions of sections 4561 and 4581 of the Internal Revenue Code of 1954. The only question for determination in this case is, therefore, whether the imported product is or is not composed of articles covered by the internal revenue act.

The plaintiff’s brief consists of a short memorandum setting forth the provisions of the revenue act which must be construed, and citing certain dictionary definitions of the words “marrow,” “spinal marrow,” and “spinal cord.” The Government served notice that it did not intend to file a brief because of the stipulation entered into between counsel and because of “the common meaning of terms set forth in plaintiff’s brief herein.”

The pertinent provisions of the Internal Revenue Code of 1954 before the court for construction read as follows:

§ 4581. Impostion of tax

In addition to any other tax or duty imposed by law, there is hereby imposed upon the following articles imported into the United States, unless treaty provisions of the United States otherwise provide, a tax at the rates set forth, to be paid by the importer—

Any article, merchandise, or combination (except oils specified in section 4511), 10 percent or more of the quantity by weight of which consists of, or is derived directly or indirectly from, one or more of the products specified in sections 4561 and 4571, or of the oils, fatty acids, or salts specified in section 4511, a tax at the rate or rates per pound equal to that proportion of the rate or rates prescribed in sections 4561 and 4571 or section 4511 in respect of such product or products which the quantity by weight of the imported article, merchandise, or combination, consisting of or derived from such product or products, bears to the total weight of the imported article, merchandise, or combination. * * *

Section 2491 (a), upon which the present section 4561, supra, is based, was modified by T. D. 51802.

§4561. Imposition of tax

In addition to any other tax or duty imposed by law, there is hereby imposed upon the following articles imported into the United States, unless treaty provisions of the United States otherwise provide, a tax of 3 cents per pound, to be paid by the importer:

Whale oil (except sperm oil).

Fish oil (except cod oil, cod-liver oil, and halibut liver oil).

Marine animal oil.

Tallow.

Inedible animal oils.

Inedible animal fats.

Inedible animal greases.

Fatty acids derived from any of the foregoing, and salts of any of the foregoing; all the foregoing, whether or not refined, sulphonated, sulphated, hydrogenated, or otherwise processed. * * *

Webster’s New International Dictionary, second edition, unabridged, 1954, defines “marrow” as follows:

. marrow, n. * * * 1. Anat. A highly vascular, soft tissue which fills the cavities' of most bones; the medulla. It is of two varieties, yellow and red. Yellow marrow, found in the cavities of long bones, contains about 95 per cent of fat. Red marrow, found in the cancellous tissue of various bones, contains little fat and is supposed to be a place where red blood corpuscles are formed. The so-called spinal marrow is the spinal cord. [Italics of last sentence supplied.]

The same source defines “spinal cord” as follows:

spinal cord. Anat. In vertebrates, the thick longitudinal cord of nervous tissue which extends along the back * * *. It is composed largely of white matter, consisting of more or less distinct groups (columns and tracts) of longitudinal fibers; but there is a large central core of gray matter (containing nerve cells), somewhat H-shaped in cross section, the branches of the lateral masses of gray matter being called the gray columns, horns, or cornua. The center of the gray matter is pierced by a small longitudinal canal continuous with the ventricles of the brain.

From the foregoing definitions it is clear that a substance which is “derived entirely from animal spinal cord marrow” is not a material, derived from wool grease or any other inedible animal oil, fat, or grease, directly or indirectly. The imported material is, therefore, not subject to the internal revenue tax provided for under the provisions of sections 4561 and 4581 of the Internal Revenue Code of 1954. The protest is, therefore, sustained, insofar as it challenges the validity of the imposition of the internal revenue tax, and overruled as to all other claims. Judgment will be entered accordingly.