The taxes sought to be recovered related to the carrier's charges, not for the line haul transportation of the plaintiff's goods, but for so-called accessorial services furnished by the carrier, those services being the icing and salting of refrigerator cars, the heating of cars to protect the contents from freezing, and the unloading of cars. This court has decided in the cases of Swift Company v. United States, 144 F. Supp. 956, 136 Ct.Cl. 394, and in Armour Company v. United States, Ct.Cl., 159 F. Supp. 380, that the transportation tax was not applicable to charges for icing and salting. The instant cases present the same problem. The Government urges that our prior decisions were erroneous, and assumes at least a part of the responsibility for our error by confessing that its briefs in the prior cases were not as complete as they should have been.
it must be presumed that Congress used "retail" in its ordinary and common meaning. United States v. Merriam, 263 U.S. 179, 187-88 [ 44 S.Ct. 69, 71, 68 L.Ed. 240] . . . (1923), Old Colony Railroad Co. v. Commissioner, 284 U.S. 552, 560 [ 52 S.Ct. 211, 213, 76 L.Ed. 484] . . . (1932); Swift Co. v. United States, 136 Ct.Cl. 394, 398, 144 F. Supp. 956 (1956).Id. at 507-08.
It appears from the facts, and the government seems to agree, that the Internal Revenue Service agent used total freight charges, i.e., the unit charge based on weight and miles plus icing and unloading costs, as the tax base. Plaintiff recognizes that section 143.1(d) of Treasury Regulations 113 defines "transportation" (the tax is imposed on the amount paid for "transportation") as including icing and unloading as "accessorial services furnished in connection with a transportation movement." Plaintiff also recognizes that in Armour Company v. United States, 169 F. Supp. 521, 144 Ct.Cl. 697, cert. denied, 361 U.S. 821, 80 S.Ct. 67, 4 L.Ed.2d 66 (1959), this court overruled Swift Company v. United States, 144 F. Supp. 956, 136 Ct.Cl. 394 (1956), and Armour Company v. United States, 159 F. Supp. 380, 141 Ct.Cl. 566 (1958), and followed Beber v. United States, 167 F. Supp. 169 (N.D.Calif. 1958), which held that under the "re-enactment doctrine" the regulations defining "transportation" were valid so that charges for icing and salting performed by carriers should be included in the tax base. He argues the present case may be distinguished by the fact that his icing and unloading payments were simply reimbursements to the truckers for services rendered by persons not "engaged in the business of transporting property for hire.
Thus, the question presented is whether the charges made by the carrier for icing and salting refrigerator cars are subject to the tax on transportation of property imposed by Section 3475(a) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 3475(a), and by Section 4271(a) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 4271(a). In the motion for summary judgment and in the argument before the Court, plaintiff basically relied on two Court of Claims cases: Swift & Company v. United States, 144 F.Supp. 956, 136 Ct.Cl. 394, and Armour & Company v. United States, Ct.Cl., 159 F.Supp. 380, which clearly support its position. The defendant cited as authority to the contrary Avoset v. United States, D.C.N.D.Cal., Civil No. 36905, July 31, 1958, and Beber v. United States, D.C., 167 F.Supp. 169, wherein the collection of the tax was upheld
It is plaintiff's contention that the Regulation invalidly extends the scope of tax beyond the provisions of the Act. Plaintiff's contention had been upheld twice by the United States Court of Claims in the cases of Swift & Company v. United States, 144 F.Supp. 956, 136 Ct.Cl. 394, and Armour & Co. v. United States, 159 F.Supp. 380, but more recently these two decisions have been expressly overruled by the Court of Claims in the case of Armour & Co. v. United States, 169 F.Supp. 521. The Armour case held that the plaintiffs were properly taxed on these accessorial services, the motions of the Government for summary judgment were granted, and the plaintiffs' petitions dismissed.
Helvering v. Winmill, 1938, 305 U.S. 79, 59 S.Ct. 45, 83 L.Ed. 52; Brewster v. Gage, 1930, 280 U.S. 327, 50 S.Ct. 115, 74 L.Ed. 457; Getchell Mine, Inc., v. United States, 9 Cir., 1950, 181 F.2d 987. Plaintiffs contend that Swift Company v. United States, 1956, 144 F. Supp. 956, 136 Ct.Cl. 394, and Armour and Company v. United States, Ct.Cl. 1958, 159 F. Supp. 380, control the case at bar. In those cases, the Court of Claims held that "transportation" as used in § 3475 included only such additional services furnished by the carrier as are involved in physically moving cargo from one point to another, e.g., switching.
This court has held that a railroad's charge for demurrage is subject to a tax on transportation charges. Swift Co. v. United States, 144 F. Supp. 956, 136 Ct.Cl. 394, 399-400. The parties have cited numerous decisions involving situations which they urge, are analogous to the instant situation.
Plaintiffs in their petitions have abandoned the tax on demurrage as set forth in the claim for refund. The first question presented, i.e., whether icing and salting is a part of transportation and subject to tax, was considered in the case of Swift Company v. United States, 144 F. Supp. 956, 136 Ct.Cl. 394, where this court held that the definition of transportation as contained in the regulations of the Commissioner of Internal Revenue should not have included amounts paid for ventilation, refrigeration, icing, and salting. On the authority of that case, to which we adhere, plaintiffs' motion for summary judgment is granted and defendant's motion for summary judgment is denied, subject to the restrictions discussed below, regarding the second question presented, i.e., that claims for refund are to an extent barred by the statute of limitations.