RETAIL OR WHOLESALE?

Auckland Star, Volume LXIII, Issue 57, 8 March 1932, Page 3

RETAIL OR WHOLESALE?

CUSTOMS APPEAL COURT CASE

FOOTWEAR FROM AMERICA

WRITTEN DECISION PROMISED. (By Telegraph.—Press Association.) WELLINGTON, this day. The hearing commenced in the Appeal Court yesterday of an appeal in the case of the Saracen Shoe Company, Ltd., versus the Minister of Customs, an appeal from the judgment of Mr. Justice Reed. This case came before the Court of Appeal in October last, but 011 the Chief Justice, Sir Michael Myers, becoming indisposed during the hearing, the case was adjourned until this session. The facts stated were that the Mishawaka Rubber Company, of Indiana, United States of America, is the sole manufacturer of a certain brand of footwear, of which the appellant Company is the importer, to have the exclusive right of sule 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 the wholesalers, to whom it allows 14 per cent trade discount off the price fixed J by it from time 40 time as the price to 1 be charged to retailers. Quantity discounts also allowed to retailers arc calculated on yearly sales. The Mishawaka Company allows the appellant company the same trade discount as the wholesaler, !|.4 per cent.

The Minister of Customs contended that notwithstanding the price so charged, the ad valorem Customs duty on the goods imported should be calculated as if the price paid was at the rate charged to retailers in the United States of America. The appellant company asked whether 011 the true construction of section 114 of the Customs Act, 1913, the discount of 14 per cent was to be deducted from the price charged by the manufacturer to the retailer in order to ascertain the fair market value before assessing the Customs duty 011 the importation of these goods. 1

Mr. Justice Reed upheld the contention of the Minister and disallowed the deduction of 14 per cent.

Counsel for the appellant contended that the true meaning of section 114 was that if goods we're bought by a wholesaler from the manufacturer their value for Customs purposes was the fair market value of goods of 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.

I Counsel contended there were various centres of trade in America. In one or more of these centres the Misliawaka Company sold in the wholesale market for cash for 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 pricc which the Collector of 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. Counsel submitted that if the interpretation placed upon the section by the trial judge was correct, the whole 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 price levels and variations from the wholesale and retail markets from which the goods were imported into New Zealand.

At the conclusion of the addresses of counsel for the appellant this morning, the Court indicated that it did not wish to call 011 the Solicitor-General to address the Court, and it would put its decision in writing at a later date.'