Zenith Radio Corporation v. United States

Warren E. Burger:

The judgment and opinion of the Court in 77-539, Zenith Radio Corporation against the United States will be announced by Mr. Justice Marshall.

Thurgood Marshall:

This case is here on certiorari to the Court of Customs and Patents Appeals.

It involves a question of statutory construction that has important implications for this country’s foreign trade.

The statute in question is Section 303 of the Tariff Act of 1930 as amended, the so called Countervailing Duty statute was first enacted as part of the Tariff Act of 1897.

The statute provides that when a foreign country pays a “bounty or grant” on exports, the Secretary of the Treasury is required to levy a countervailing duty equal to the “bounty or grant” upon importation if those products into the United States.

The specific issue here is whether Japan confers a “bounty or grant” by imposing a commodity tax on certain products when they are sold in Japan, but not when they are exported.

Following the long standing position of the Treasury department, dating back to 1898, the Secretary of the Treasury concluded that the exemption of export from such a tax is not a “bounty or grant” within the meaning of the statute.

Petitioner, an American manufacturer of consumer electronic products sought judicial review, claiming that the secretary’s position was inconsistent with this Court’s 1903 decision in Downs versus United States.

The Customs Court ruled in favor of petitioner, ordered the secretary to assess countervailing duties on the Japanese products.

On appeal by the government, the Court of Customs and Patent Appeals reversed.

It distinguished our decision in Downs and concluded that exemption of exports from an indirect tax is not a “bounty of grant.”

By an opinion filed with the clerk, we unanimously affirm the judgment of the Court of Customs and Patent Appeals.

The department’s out — long standing interpretation of the statute adopted less than a year after enactment of that statute is entitled to considerable weight.

On the other hand our examination of the language, the legislative history and the overall purpose of an 1897 law persuades us that the department’s initial construction of the statute was far from unreasonable.

Nothing in the subsequent events makes that interpretation any less permissible today.

The decision in Downs is not controlling on the issue of whether forgiveness of taxes standing alone, constitutes an export bounty.

Congress has not acted to overturn the department’s interpretation and it has now been incorporated into the General Agreement on Tariffs and Trade which is followed by every major importing nation in the world.

In this situation it is not the task of the judiciary to substitute its views for those of the secretary.

We therefore affirm the judgment of the Court of Appeals.

Warren E. Burger:

Thank you, Mr. Justice Marshall.