G.R. No. L-7989; August 27, 1913
LEON J. LAMBERT & CO., plaintiff-appellee, vs. THE INSULAR COLLECTOR OF CUSTOMS, defendant-appellant.

FACTS

Leon J. Lambert & Co. imported fountain pens. The customs appraisers classified them under paragraph 27(d) of the Tariff Revision Law of 1905 as “gold, manufactured into article other than jewelry or plate,” assessing duty based on gold being the component material of chief value. The importer protested, claiming the pens should be classified under paragraph 352(b) as “hard rubber articles not especially provided for,” contending that hard rubber was the component material of chief value. The Collector of Customs affirmed the appraisers’ classification, finding after investigation that fountain pens with gold points and rubber barrels were manufactured in chief value of gold. The importer appealed to the Court of First Instance, which reversed the Collector’s decision, giving weight to the importer’s invoice and oral testimony on the value of labor in the rubber cases. The Collector of Customs appealed.

ISSUE

Whether the Court of First Instance erred in reversing the decision of the Collector of Customs regarding the classification and valuation of the imported fountain pens for duty assessment.

RULING

Yes, the Court of First Instance erred. The judgment of the lower court is reversed, and the decision of the Insular Collector of Customs is affirmed. The valuation of imported merchandise by customs appraisers is conclusive in the absence of fraud or illegality. The appraisers are not bound by the invoice values presented by the importer; they may use their own knowledge, conduct investigations, and determine values based on the actual market value or wholesale price at the time of exportation. The burden is on the importer to prove the illegality of the appraisers’ action. Here, the appraisers properly investigated and determined that gold was the component material of chief value. The component materials should be valued at the time they are assembled into the completed article, not in their raw state. No fraud or illegality was shown in the appraisers’ proceedings.