# Petition for Writ of Certiorari — General Motors Corp. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386419_0493%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1958 - **Citation:** 358 U.S. 866 ## Text 7 . 2s 766-315 i re $ f 4 fa t . ® * ha a om ” . cal a. at o e . . catalina rtasen meagan ne Ch ¢. ¥ 7 ~~ eae ** : a hs ’ , e ‘ r’ eo 5 . 0 + 74 ° et ee ee : 7 - . 24 | > » * ¥”. ° Siuprente Cit ots the Aluiten FS iLales > - ° Zt ‘ w24 3 pee w . , ; a) 4 { i ‘ f ae rE ~ | > Vind ! ee = } 1 | \ a oe % ; ' fo; 4 4 i > rem Cc o ‘ . ky e r : ) ; INDEX Page Opinions Below . ene San 1 Jurisdiction 0.0... : 5 ~ Questions Presented 4 ‘Statutes dnvolved |. . 2 Statement ....... soe wesg he 4 feasons for Granting the Writ =? nipie 7 | err eee Tr . er 16 ee rr, Sere Pore ree eerie Ss Opinions. of the Court of Claims |. ...... . “Khak ee ee Judgment of the =< of Claims i see wtih daea eee Findings of Fact ....42...0..... adveedéecdiaiuvtaca ce CITATIONS Cases: ’ i _ Dalehite v. United States, 346 VS.15 2.000000 .000005. aos Dickenson v. Petroleum Conversion Corp., 388 U.S. 507 @ ees _ Ford Motor Company v. United States, 156 F. Supp. Sot fk rr err rr as re eer reer | General Motors Corperetivn. Frigidaire Dirisian vy. United States, 121 F. Supp. 932 (C. Cls.), cert. denied $48 U.S. y OE Pre ee CLI Sr ny Pre Te ere rrr reer 5, 1¥ General Motors Corporation, Prigidetie Division v. United States, 146 F. Supp. 220 (C. Cis.) ...........-. Serer “§ General Motors Corporation, Frigidaire Divisién v. United Ben, Dae © CO. Wee 0G. GARD, nc cc cndcdscusecazs 6 John Hancock Mutual Life Insurance Company v. Bartels, ee Wt, EE ha b% CES ACRE SOAR MRES ARLE ERA WRAR ES COR WKS . 15 Maggio v. Zeitz, 333 US. 56 26... eee cee eee Prerere 15 Statutes: ees Internal Revenue Code of 1939: I SD -cacchshedckkeavenscussaanr hc oh aT wre < e IE, SEE 56 Gb 450s cS crdnemacabsbaseendececasauas 3 NE EP boc 4 6s ohn te shi bebie ns kA STARR EOE OR Rae ban 3,8 Section 3443 ......... Sul hasdsavegneeuneagecesaeuuee 3,8 Williston, Sales (1948 ME ee ee Eee, PEP TT 122. Miscellaneous: Unilurm Sales Act: Seetion 15(2) 22... ..60. 0060.00 ae cs TQ IN THE - Bupreme Court of the Mnited State OctonER TERM, — | ¢ No. GENERAL Motors Corporatio’, FRIGIDAIRE Division, Petitioner, : o. e . x Vv. THe Uniren- States, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF : CLAIMS - * Petitioner prays. that a. W rit of Certiorari issue to revie w. the Judgment of the Court of Claims’ in the. ‘ abov entitle d case. ; . - S OPINIONS BELOW The opinions in the Court of Claims (Appendix, ’ pp. la-8a) are reported at 147 F. Supp. 7 39. ; JURISDICTION * | The judgment of: the Court of. Claims was entered on July -16, 1958 (Appendix, p. 4a). The juris- diction of this Court is invoked under 28 UIN.C, 91255 (1). ; ed oe ~ QUESTIONS PRESENTED Does the Manufacturers Excise Tax imposed upon >the sald of refrigerators and related products apple wto charges made by a maniatacturer for agreement - Which obligate it te repaimor replace the cooling units | in its produets should sueh units es during thie. second tnrouge the fifi vear of use ?"* 0 STATUTES INVOLVED Inte ral ze ‘venme. Code of 192 a s eetion 3405. Tax oN MPGHANICAL RePRIGeR vrags, Quick-Freeze UNrrs, AND SELF “CONTAINED, Mi ° CONDITIONING UNtts, ! os There shall be inp msec Ol the following aunt leles Cineluding im each ease paits or accessories: there. for se on orin connection with the siile tHereal sold by the manufacturer, producer, or importer “a TaN pierre seve to 10 per centum of the price fer ns which sO sold: (a) Refrigerators and quick- freeze units, Household type refrigerators (for single or mult ple cabinet: installations) having, or bere tnarily designed for use with, a nechamics| frigerating unit operated by electricity, gas, kere sene, or gasoline: household. type units for ti quick freezing or ge " storage of foods, oper: ‘ted by electricity, ga » kerosene, or sasoline: cot 'There is also’ presented the cnnlack whether he expense of making good on a manufacturer's warranty constitutes a dise®unt, rebate, or allowance for excise tax purposes. This same question "is presented in the petition in No. 144, Ford Metor Co. vy. United States. “In addition, if the main question is answered in the affirm tive, a further, question. would ‘be presented: Do expenditures incurred by manufacturers in’ carrying out repair and service. agreements constitute a discount, rebate, or allowance for excise tax purposes? , : - nations of such housek t 1\ ie (ee frigeraters aa units. sig . t | * a7 (7% - , ¥ ** (4°) Air comddt loners, Self eontaied AKoeat - Y ditioninggunits 53 Stat. #12. + ee Section D406. ExcisccTaxes DMpost by cub eR Eve: nee Act or 194]. , i me t(n) Lup fitty There shall be Trnposed it the following Articles, sw le the qamafdeturer, f produce reo Porter Rat? quivalent te the rate, ou the pricey ASY colek, set forth an the f follow- eg pariteraphe’(inchidivs HW eaeh: cgse parts or ae COSSOTIOS of sueéh arfie lf seld oor in ean hae tien there with, or with theesale thereof): * Sen? * fe C3 Electrié, fas, Fd vil ap, wes on. elec: ihe: = or oil pics hreaterss/).. 10 er centUunn Section 3441. SaLe Prick. a > (a) In determining for he PN POnes of this ‘chapter, the price) for whieh diy article is sold, there shall be inelud@d any charse for eoverines and containers of Whatever nature, ane ans chars incident to placing the article in cond tion packed ready for shipment, but there shall be. exGluded: > the ameéunt of tax imposed hy this. chapter, whether or not stated as a separate char@e. A transportations delivery, dnstrance, installation, or other charge (net reqnired by the for gs sentence to be eluded) shall besexeluded from the price only if the amount thereof is est hlished, to the satisfaction, of the Conyiissioner, dn ac cordance with the regulations.” 7 OSB State. 416. Sec tion 3443, ( REDITS anp REFUNDS. Cn) A eredit against tax under this chi iptery ora refund, may be allowed or nuide-- « & * * ° (2) to any: person, whe bie pud tox ander ‘this-chapter with 1m sspeet te an article, When, the \ so 4. -_ price on which the tax: was based is readjusted ly. ‘reason of return or re possession of the article or i covering or containers br by a bona fide discount. rebate, or allowance; in the amount of that part of the tax proportionate to the part of the price — is refunded or credited.” | STATEMENT Petitioner manufactures and sells household | re- frigerators and related products that are subject to the Manufacturer’s Excise: Tax. Since “the 1920's petitioner’s sales: price has included a charge for a one-year warranty that constitutes a recognition’ by petitioner of its obligation as a manufacturer to, pro- ‘ vide a product free from defects attributable to work manship and material and other manufacturing er- rors. This one-year warranty thus discharges “Tt legal liability of petitioner. as a manufac turer, ‘In addition, petitioner sells a repair contract, Ue 99 a ** Protection Plan,” which obligates it to repair replace the séaled cooling - unit in its refrigerators should the unit wear out after the one- year warranty has expired and. before thd end-of the fifth vear follow- ing delivery to the initia purchaser” Petitioner com- menced to se]] such contr ets 1 in 19. 333 and offered them to the purchasers of its pPodt moan optional basis *“*Wive-Year- Frotection Plan—We Warrant. every new 1936 ° Frigidaire Household Sealed-In Mechanical Unit to be free from defeets in material and workmanship under normal use and serv- ice, and we ‘will: within five years from date of delivery to the original purchas r, replace without any cost to the customer, any Sealed-In Mechanical Unit: which our examination shall disclose to our satisfaction to be thus defective, provided, however, that by so doing we shall not be obligated to replace the complete refrig- erator. The: foregoing applies enly to the Seated-In Mechanical. Unit under conditions specified herein, and does not apply’ to. any other parts of the Frigidaire equipment pees: hereinafter. ° .--* 5 : ; / See Pee — util 1986 0 Since, then petitioner has required that repair contracts be purchased for refrigerators and other products purchased. for individual -houschold use. Seana 7 Petitioner made, a charge: of *5 for each repair. contract and this case involves claims gone of Manufacturer’s Excise Taxes paid .on: sich charges. "The ‘question whethe y the Manufacturr’s Excise Tax . ix applicable to this charge has been litigated in three different cases before the Court of Claims. All three: cases have involved the same law and the same con- tract, vet three different and inconsistent answers have -heen given. In the first case, which covered chatges made from May 10, 1937, through Decenber 31, 1941, General Motors v. United States, 121 F. Supp. 932, cer- - tiorari denied 348 U.S. 942, the Court of Claims. held that although the charges made for ‘the repair ‘agreements weré subject to the Manufacturer's Excise Tax, the expenses Incurred in carrying out such agrec- ments were “allowances”? within the meaning of See- ‘tion 3443(a)(2) of the 1939 Code and predecessor sections of the Revenue Acts, and: thus petitioner was entitled, te ali appropriate’ refund. - In the ‘second ease, General Motors v. United States, 146 F. Supp... 290, covering the period from January J, 1942, through . December 31, 1944, a similar result was reached when — the court below first ¢onsidered the case. .* vans In the third case, the review of which this petition seeks, a similar: refund Was sought ‘with respect’ to the period January 1, 1945, through August 31, 1951.° Petitioner requested) summary judgment which. was denied on the growind. that the court has ‘heen *t wrong in holding that [petitioner] was entitled to [a refund] _ 5 o og Pai i tax practic ally disappears. WW ’ , . Fa a ‘ J e * : o ° . ry . t : e \ Cs P . v. ; | RS ce’ §: -@ as an ‘allowance... General Motors vy. United States, 147 F. Supp. 739. Instead, the court concluded that “a refund was due for. the principal reason advanced Ay petitiofier, and rejected by the court, in the first two cases—namely that the charge muidé «for the “repair agreement Was uatsubject to the Manufacturer's Excise Tax ‘because it, was not part of the sales price, duit Was an extra charge for an agreement to keep certain parts of the refrigeraitay in repair beyond the © Period of the usual manufacthrer’s warranty.’ The court there upon withdrew the opinion it had rendered in petitioner's second case and entered judgment for petitioner on the ground that the eharge for.the repair’ agreement -Was eee ans ES to the Manufacturer's “Exeise Tax. Inn its decision ii) petitioner” 's third. case, “the COUF below held that the charge ‘for the repair agreenient should be ex¢luded from the tax bas: to the ex- tent that it was reasonable in amount, and further > held that the-charge should **bear a ‘close relationship to the actual cost of rendern & the service. When se evasion of the CXCISE. limited’... the opportuni “he dase was referred to a commissioner of the court to take evidence as te the reasonableness of the $5 charge made by petitioner. a ae the court also directed the commissioner to take evidenee on the question of whether such repaint agreements were custom ry in the t ‘ade during tie vears involved.» ~ 4 On; theaevidence ‘submitted, the « commissioner found that petitioner's large for the répair agreements Was re bse related to the costs of making bepairs andl vas reasonable in amount, and that such re pair acres nie nts were customary in the trade. because other mangfacturers in the trade sold similar. ~ ( °o The Court of Claims, on July 16, 1958, adoptedthe: commissioner's findings and. filed the opinion and judgment here sought. to be reviewed. In that opin- ‘ion, the court reyersed its field once again and held that the. repair agreements in question were ‘a taxable part of the purchase price of the article sold’ repair agreements. Judge W hitaker, ‘dissenting, ad- _hered to the position he had taken in the first decision and consistently maintained throughout this litigation —that a charge for a repair agreement is not subject to the Manufacturer's Excise Tax. REASONS FOR GRANTING me WRIT The Court of Claims-has erroneously decided an im- portant question of federal excise tax daw and has left the question in such a state of confusion that review by this Court is necessary, Absent an exercise of this ‘Court’s > certiors wit “Jurisdiction to. make ‘clear the applic ‘ation of the questioned statutory provisions, the . inconsistent and confused positions taken by the court helow will render it impossible to predict the excise tax’ consequences of the repair and - replacement services conducted. by mue ‘h of the manufacturing - industry. Under Seetion 3405 a the Internal Revenue Code _ of 1939 an excise tax is imposed wpon the sale by manufacturers of ‘refrigerators’? and “parts or ae- cessories therefor,” which excise, so far as here rele- vant, is a fixed percentage of “the price for which [sue ‘h appliances are] so sold.” A charge by a manu- a oat *The questioned ex¢ise” tax provisions of the 1939 Code were reenacted without signiBeant change as Sections 4111 and 6416 of the Tnternal -Revenue Code of 1954. & —_~ re . : ny facturer for a service contrackat not subject to excise tax. if it is not comprehended by the above language of ‘Seetion 3405, or if ita@s an “other charge’? whieh is specifically excluded by ‘Section 3441(a). In the event the re pair charge is faxed as part of “the price” of the refrigerator, the cost of repairs or replacements uder’ the service contract should constitute an, allowance” under Section 3443(a) (27 whieh pemnits a credit or refund of the excise paid if the ‘price’? of a taxable article is ‘readjusted’ “by a bona. fide oiliscount, rebate or allowance.”"' ) > - Tn short, a charge fora servic e agreement should be exeluded’ from tax heeause it is not part of the price of he article ov beeause it is an “other charge’ that ix Specific ally excluded; if it is ineluded as ypart of - the price, the actual cost of making” repairs. under the agreement should be allowed as an adjustment to the sale price. ° Though the legal questions thus presented are precise and narrow, their resolution by the vourt below has - heen inconsistent, halting and confused. Tn three different cases the Court of Clainis has considered the separate charge for and the éxpense incurred mder *The Court “of Claiins has held that expenditures incurred, in fulfilling a manufacturer's warranty and expenditures incurred im carrying out repair agreements do prot come ‘within Seetion 3443(a) (2): The: first of these conclusions was reached by the sage in this case and in Ford Notor ¢ ‘om pany v. United tates, 156 BL Suppood. As noted above, there is pending befyre this Court a petition for certiorari in the Ford case, Nor 144. Octoher Term, 1958. The Ford case does not involve repair ; agree ments for which an extra charge is.made. However, since -it does present an important aspect. of dhe allowance question the Court) may wish to consider the petition in the Ford case tirether with the petition in gis case, 24 ’ ‘ ; oc % | by ; . De) . ‘r pree deely the same repair agreement. “The first time . it found that a tux Was properly imposed’ on the charge, but recognized that the expense of providing repair services under the agreement constituted an allowance, The second time it found ‘that noe tax shotild he imposed tipon the charge for the repair ‘agreement to the extent it was reasonable in amount; and the third tines it imposed a tax on the charge ——tnd refused to recognize that the expense of fulfilling _ the repair ‘agreement constituted an allowance. Peti-, eae has thus recovered in one case of one theory ; in the second gase, on a different theory; ‘and in the third Lise. hax heen denied any: recovery in a decision whieh rejects both of the theeries previously em- braced by the court. The third holding to which this petition ix directed, rests largely, if not entirely, upon 1 significance which the court, attac ‘hed to the fact tit gether manufacturers in’ the trade entered into service and repair arrangements substantially similar ~ to those of. petitioner. o Refrigerator manufactiirers do contract to provide _ services of the kind covered by the service agreements « Which petitioner sold. But nothing*is said or roa in-the governing statute which would Impose a tax the price of “service”? sold in connection with re- frigerators. Nor ig there anything igpsthe legis- lative history that: supports such a Ry: The plain meaning ‘of the statute permits th impoi- tion of the tax only upon the price ef the “article” sold. Thus, the nl rational basis for the imposition of the excise tied would he a tinding that the sale of a refrigerator obligates a manufacturer to service it for a period of five vears so that.a charge for an agreement to provide such service is nierely part of the pricé of the ‘‘article.”” / om 4 ae 6 ‘gation upon a manufacturer to 10 The record and conclusions of the court below _ establish, however, that repair is not part of the obli- “gation imposed upon’a manufacturer through the sale - of a-refrigerator. Only the terms of a specific agree- ment such as petitioner made, would impose any obli- air a refrigerator two.to five years after it had }en put to use. That manufacturers generally havyé entered into repair agreements comparable to, those sold by petitioner can- not in any way affect the service character of such - agreements or indicate that Congress intended to tax them simply because they were entered into by manu- facturers at the time the refrigerators were sold. The fact that manufacturers generally contract to provide repair services under agreements similar to those sold by plaintiff establishes only that the | question in this case involves substantial amounts of money. It means that other manufacturers may have . similar claims for refund and that excise tax collections may be less if the governing statute is not extended to cover the sale of repair ‘services by manufacturers. Such considerations, however, are quite: irrelevant to the question of statutory construction presented in this ease. Cf. Dalehitc.y. United States, 346 U.S. 15, 60.4 > If stich services are to he subject to the excise tax, it is for Congress to so declare. .And in the absence of such a declaration it is not open to the courts to amend the statute to avoid a possible revenue loss. The court below may have confused a repair agree- ment with a warranty that a product is free from defects, which is an integral feature of any manu factured product. Tn an earlier deci ‘ision in this cask the court referred to a warranty that -an artic ba * when Sold is in) good working condftion and free ‘from defects, and ‘stated that ‘the sales price in- eludes such a warranty. More recently in the Ford * Motor case, supra, the court again expressed the view thatca warranty that an article is free from defects. is an integral part of the produe t.° It would seem that the portion of the price of a product attributable to such a war attty would be subject to the excise tax because the purchaser would be thus - receiving only what he had a-right to receive—a refrigerator free from defects in’ workmanship and material. In its — final opinion, however, the court) ignored its pre- ious acknowle “dgement that the one-year warranty satisfied the manifacturer’ s obligation” to sella sound refrigerator, and- taxed the charge for a’ re- « pair agreement as if it) were. ne more than a warranty against defects of workmanship and mate ‘rial. Repair agreements are something quite different — as the owner of an appliance such as a television set will at once knows Assuming ‘perfect workmanship and material, ordinary wear and tear will demand repair and replacement of parts and components, As - a matter of customer contentment and product prestige nearly every appliance manufacturer will - either undertake to provide repair service for at least the more complicated components of his produet or *. recommend to the customer that all specialized work on the appliance be done by “anthorized dealers.’%.° To) *The court below found that. the repair services performed by pet.iiéner under the agreements in question were ‘attributable to ‘certain types of wear and tear!’ caused by the use of the refrigera- tors or .to other factors beyond petitioner's control and not to defects in) workmanship aid material or other manufacturing 4 12 the extent the former procedure has bees adopted shy petitioner with respect to its refrigerators, it sells service contracts obligating it to make any necessary-—— repairs-on_the.sealed-cooling unit (Se four vears afte: the one-year, warranty has eXpired. The question would not be, different were the period tem vears and the product a televison picture tube. * Since the legal obligation of a manufacturer extends only to defects of workmanship and material in the product at the time of sale” a manufacturer need not ‘undertake, for any price, to repair his product after it has been in-use for a period of years. Thus, as found by the court below, petitioner did not sell repair agree- ments for a substantial number of refrigerators sold to multiple unit purchasers for other than household use, (Findings 26 and 88, Appendix pp. 15a, 164,38: +. Where such repair contracts were sold, however, the sale was of a separate service quite apart from the refrigerator and the legal obligations which its price ineluded. Asa matter of statutory construction there is ne basis for holding that the repair agreements were errors. «The court noted that an example of the canse of om wear and tear would be the ‘‘operation of the unit under low, -voltage.”" In this connection, the court alsa found that sineg) the early 1930°% repair agreements to provide service following the expiration of the manufacturer's one-year warranty have. been ‘ widely sold in metropolitan afeaseby independent service arid repair companies which neither manufacture nor sell the refrigera_. tors covered by their repair agreements. - (Findings 57, ©1, 6°. App. pp. 29a, 31a). If the court's reasoning be valid, the charge « made by such non-manufacturing repair companies should alse be subject to the excise tax: : « ;: . ey ® Section - 15(2), Uniform Sales Act, (1950 ed.); 1) Williston. Sales § 232 (1948 ed.). i 13 ” a part of the article and that the price of the service undertaking Was a part of the-price-of the article.’ Should the decision below he allewed te stand, a statute which imposes a tax on the price for which - selécted manufactured products are sold) will have- deen used to exact a faxupon amounts received for the performance of repair services, _ Respondent al ued below thiat should the separate service Charge be excluded from the tux base, an easy device for reducing the proper amour 1 of excise would he created, This argument involves a padding of the price of the service agrec.. nt with a corresponding _ decrease in the * price” of the refrigerater. The court 7 Other Federal agencies that h wy had oveasion to examine ‘into the eharacteristies of repair cogtfiimes have concluded that they dy not represent‘a manufacturerpbligation but are separate services agreements. , ; 4) The NRA Code, whieh was in effect during the period these contracts were developed, specified the standard one-year warranty us, the required olfigation of a manufacturer. Jt recognized the existence of repair and replacement contracts, but exeluded them ‘from the price of a refrigerator and provided that they should be the subject of ‘individual arrangements. (hy) The specifient ions for refrigerators which the National Hirean of Standards, in conjunction withvother agencies, devel- oped*tfor the guidance of Federal Purchasing azetits from 1941 through 196 preseribed a one-vear warranty but made ne mention cof repair contracts on sealed units: Clearly such a contract was regarded as an extra atid net as amt ittegral part ofa refrigerator. (e) Both the Office of Price Administration during World Wat Il and the Offiee of Price Stabilization during the Korean War ~ Were reqiired to consider the proper pricing of refrigerators. Both viewed the one-year warranty as an integral feature of a refriger- ator and allowed the eX perines uttrabutable to its fulfillment to be ‘considered in) pricing the produet, Neithes regarded the repair - agreemen’s as a part of the refrigerator and both regulated its pricing, not as part of the product, but as a separate service. a y helow—in its intermediate, opinion—reeognized the /force of this argument and provided that no charge should be exeluded from tax unless it Was established to be reasonable in amount. Insofar as petitioner is concerned, the court found the argument.to be without merit since the entire charge was reasonably related to _the services performed” But-aside from petitioner's ease, Clear statutory kinguage must be respected even though in some instances the language used by Con gress might create tadministrative problems, Tf the language needs correcting, Congress mist do it.’ ‘ ; S “The following facts were found by the Court below and are set, forth, in Findings 72 and 78° > App. po sad: When the repair agreement proctaim was first iostituted in 905 the charge was set at $5.00 cexcept as fe self-contained air eond! tioners). This original charge was based on petitioner's determi- “nation that the probalile cost for the repair of a single unit) would be approximately $25.00 and that not more than 20 percent. of the units sold would fecome inoperative during the four-vear period of the agreement. On that basis it) was determined| that iW charge of $5.00 paid by each purchaser would dnect the anticipated costs. From 1936 to the. present time. however, petitioner has antiually reviewed and reexamined its charge for ‘the agreements by considering past experience, and making the best foreeast pos. sible for a future period as to the mumber of- units whieh might require repairs, the nature ofsthe repairs, atid the prospective-ecost of the repairs. At all jtimes the charge arrived at was intended to meet estimated expenses with a reasonable margin for possible increases in cost and-errors in forecasting, Thus, the original £5.00 charge has not been arbitrarily maintained froma the ineep- tion-of the program throngh the period of this claim but has been annually reviewed and reexamined. The -court thus found that: the $5 fee ‘twas a reasonable charge.” Finding 94, App. p.4a. "On January 9, 1956, after. the Court of Claims first opinion. 11 F.Supp. 82, the Treasury Department and the Joint Com mittes on Internal ‘Revenue Taxation submitted a “Report: te the House Subcommittee on Exeise Tax Technical and Administrative Problems. tn thet report, Conuress was strongly urged to revise 15 : Since the decision of the Court of Claimsyis entirely without precedent'and raises serious and cOmptlicated excise problems fOr a broad segment of the nation’s industry, the absence of coutlicting- decisions in other tribunals should not deter the Court from issuing the writ. If: conflict in this area be needed, however, the doctrine of “intra: circuit contliet’” warrants san exercise of ‘this Court’s certiorari jurisdiction. Ins accordance with that .doctrine, the Court ex- ercises jurisdiction to resolvg, a question that - chas ° heen inconsistently decided in but one of the eleven circuits, Certainly thre ¢ ‘ourt is warranted in clarifying the confusion created by this case in view of the fact that the Court of Claims ix vested with nationwide jurisdiction in excise tax refund, suits, and is the only: lower K ederal tribunal that enjoys such jurisdiction. the re ‘evant prov isions of the 1954 Code to preclude the **allow- ance” of expenses ine curred in the’ re pair ofa refrigerator under a warranty, and to provide that the excise tax would apply ‘‘ where the taxpayer makes a separate compulsory charge’’ for a repair con- tract. Thus, the Treasury Department recommended that “ithe definition of sale price for -purposes of the retailers’ and manu- facturers’, taxes be amended to include specifically’ compulsory charges for the warranty of the articles." It also asserted that any report accompanying sich recommended legislation ‘should, indicate that. these amendments are declaratory of the intent of Congress as originally expressed in enacting seetion 6416(b) (1) of the 1954 Code,and the corresponding provisions of the 1939 Code and prior laws.’ Despite these recommendations, Congress ‘refused to amend the provisions in question. This refusal is the more significant since in the subsequent Forand Bill (H.R. 7125, passed by both Houses of Congress and. now awaiting the approval of the President), though Congress made major revision in-the ex- cise tax provisions. of the 1954 Code, no change was'made in the “definition of sale price’* or in the ‘‘allowance”’ provision. Dickenson v. Petroleum Conversion Corp., 338 U.S. 507,' 508; Maggio Vv. Zeit, 833 US. O68; he John Hancock Mutual oat Fn- surance Co, Vv. Bartels, 308 ULS. 180. 16 ot CONCLUSION ‘ . tablished by the findings of fact below, pe- + for sound business reasons and hot as ~part "4 manufacturer’s obligation, ‘charged the pur- ‘eh¥sers of its refrigerators’a separate and reasonable fee for long term repair eontracts covering the cooling . units of such refrigerators. .'The ‘application sof the Manufacturer’s Excise Tax to this fee results in the collection of an excise on repair service charges—a Te- sult achieved only by a clear eXtension of the governing statute. ‘The Court of Claims has thus erroneously decided a question. of substantial importance which, for the reasons stated, should be reviewed: by this Court. Ae cordingly, the petition for a write of certiorari should be granted. Kins Ae. ew ° Respectfully submitted, ‘ ; NEWELL W. ELLISON > ; . tas , , Attorney for Petitioner Hexry M.-Hocan Sa | : Danie M. Grippon | C'aALVERT THOMAS ; Covincton & BURLING | Of Counsel August, 1958 Se a --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386419_0493%3A2. Public record. Not legal advice.