The opinion of the court was delivered by: Marovitz, District Judge.
CROSS-MOTIONS FOR SUMMARY JUDGMENT
This is an action seeking refund from the United States, of
manufacturers' excise taxes assessed and collected pursuant to
the provisions of Section 3406(a)(1) of the Internal Revenue
Code of 1939, and Section 4161 of the Internal Revenue Code of
1954.*fn1 The original complaint of plaintiff Norton Manufacturing
Company, relied on 23 separate claims for refund filed with the
Internal Revenue Service. All of such claims were disallowed by
the Commissioner. The parties have since stipulated that claims
1-10 were not filed timely enough, so that only claims 11-23,
which total $50,422.51,*fn2 remain for decision. The parties have
filed cross-motions for summary judgment. Plaintiff's motion is
supported by several affidavits and a number of documentary
exhibits. The parties have agreed to a stipulation of facts,
which sets forth all of the essential facts, and presents the
narrow issue involved.
The dispute is essentially a semantic one. Section 4161
provides for the collection of a 10% manufacturers' excise tax
"upon the sale of fishing rods, creels, reels, and artificial
lures, baits and flies (including parts or accessories of such
articles sold on or in connection therewith, or with the sale
thereof) * * *".
For about twenty years, plaintiff has been in the business of
importing lengths of bamboo cane, which fall into two
classifications; those eight to ten feet long, and those eleven
feet or longer. The eight to ten foot lengths are cut into two
sections by plaintiff, and the longer lengths are cut into three
sections. The lengths of bamboo are cleaned, straightened, if
necessary, and ordinarily varnished. After cutting they are
fitted with either brass, aluminum or steel ferrules of a
screw-lock type or of a tapered self-locking type. A small wire
loop is fitted at the far end of the last piece of the bamboo,
which is used to tie or secure a fishing line. The fisherman
merely locks the lengths together before using. The bamboo is cut
into lengths solely for ease of transportation, but performs
exactly the same fishing function as would an uncut length of
Plaintiff contends that its product constitutes a "fishing
pole" rather than a "fishing rod," and is not subject to the tax
imposed by sections 3406(a)(1) and 4161.
An identical factual situation has previously been presented to
two United States' Courts of Appeal, which have reached opposing
conclusions on the issue. In Commerce-Pacific Inc. v. United
States, 278 F.2d 651 (9th Cir. 1960), the Ninth Circuit upheld
the district court's finding that jointed bamboo cane poles,
virtually identical to the ones in issue, constituted "fishing
rods" and were subject to the § 3406 excise tax. On the other
hand, in Simmons v. United States, 308 F.2d 938 (5th Cir. 1962),
the Fifth Circuit reversed the district court's entry of a
directed verdict to the effect that identical poles constituted
"fishing rods" under § 3406 as a matter of law. Although not
expressly ruling on the merits, and only holding that at least a
question of fact for the jury existed, the Court strongly
asserted its own view that jointed bamboo poles are not "fishing
rods" subject to taxation.
The question is pre-eminently one of statutory interpretation.
But the legislative history affords little clue to the intent of
the lawmakers, if indeed there was any consideration of the scope
of the term "fishing rods". In 1918, Congress first imposed
excise taxes on sporting goods. Included were "fishing rods and
reels" and the statute ended with a catch-all clause including
"and all similar articles commonly or commercially known as
sporting goods". The tax was repealed, but was re-enacted in
1932, again reciting "fishing rods and reels" with the same
catch-all phrase. The 1932 tax was repealed in 1938.
The Internal Revenue Act of 1941, which amended the 1939 Code,
again imposed an excise tax, but the phrase used in the Act was
enlarged to "fishing rods, creels, reels, and artificial lures,
baits and flies" (the same as the present statute), and this time
there was not a catch-all clause. This was Section 3406(a)(1) of
the 1939 Code. In proceedings before the House Ways and Means
Committee, Congressman Reed stated on June 30, 1941: "The tax
will be imposed on a specific list of items, as set forth in the
Bill rather than on sporting goods as a class. This is to avoid
confusion." 87 Cong.Rec. 6486, 77th Cong., 1st Sess.
The 1954 Internal Revenue Code carried over the same language
used in the 1941 amendment to the 1939 Code, and changed the
section number to 4161.
In 1965, the excise tax on all classes of sporting goods was
repealed except as to "fishing rods, creels, reels and artificial
lures, baits and flies". The Senate Finance Committee Report on
Pub.L. 89-44 explained that the 1941 excise tax had singled out
certain items of sporting equipment for taxation, and left other
items untaxed, which represented a discriminatory tax on limited
forms of recreation. The Bill before Congress eliminated this
source of discriminatory tax treatment on all of the sporting
goods items except "fishing rods, creels, reels and artificial
lures, baits and flies". The Report explains that the tax on
fishing rods, etc., was retained because the revenue therefrom
was distributed to aid the states in their conservation programs,
pursuant to 16 U.S.C. § 777b.
The history offers no explicit help in resolving the issue
before the Court. However, it makes clear that § 4161 and its
predecessor were designed to impose a tax on a "specific list of
items". The law is relatively clear that a taxing provision, as
opposed to an exemptive provision, should be construed strictly
against the Government and any doubt should be resolved in favor
of the taxpayer. Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 62
L.Ed. 211 (1917); Tandy Leather Co. v. United States,
347 F.2d 693 (5th Cir. 1965); The Cordon v. United States, 46 F.2d 719,
723 (Ct.Cl. 1931); 1 Mertens, Law of Federal Income Taxation, §
3.07; Cf. Endler v. United States, 110 F. Supp. 945 (D.N.J. 1953).
The words of a statute are usually construed according to their
common and ordinary meaning. Norris Dispensers, Inc. v. United
States, 211 F. Supp. 79, 81 (D.Minn. 1962); Grange Insurance Assn.
of California v. Commissioner,
317 F.2d 222, 224 (9th Cir. 1963); Hine v. United States,
113 F. Supp. 340, 125 Ct.Cl. 836 (1953). Plaintiff argues, however,
that where a tax statute is directed at a particular industry,
trade, business or profession, then the terms relating thereto
should be construed in the sense in which the terms are generally
used in said industry or trade. Carter v. Liquid Carbonic Pacific
Corp., 97 F.2d 1, 3 (9th Cir. 1938); O'Hara v. Luckenbach S.S.
Co., 269 U.S. 364, 46 S.Ct. 157, 70 L.Ed. 313 (1926).
In Commerce-Pacific, unlike this case, the plaintiff conceded
that construction of the words of the statute should be based on
their ordinary and everyday meaning. On that basis, the court
essentially applied a dictionary definition test to the issue.
The dictionary used*fn3 contained the following definitions: "Rod;
a support for a fishing line, a fish pole". "Fishing Pole; a
slender tapering pole to which a line is attached, used in
fishing". "Fishing Rod; a springy tapering rod of wood, split
bamboo, steel etc., made with several joints and used in
fishing". (emphasis added). In finding for the Government, the
Court placed emphasis upon the absence of the term "joints" from
the definition of "fishing pole", and stressed the similarity
between the definition of fishing rods, which included "joints",
and the construction of the jointed bamboo poles in issue. It
concluded that the district court's finding of fact on the issue
was not "clearly erroneous", and should be affirmed.
Of course, this Court, as a trial court, is not confronted by
the same issue as an appellate court reviewing a lower court's
finding of fact. We must only determine as a matter of law, an
ultimate issue of "fact", as to the construction of a statute.
Plaintiff contends, first, that we should ahere to the rationale
of Simmons over that of Commerce-Pacific, and second, that under
either a standard of ordinary and ...