Appeals from the District Court of the United States for the Eastern District of Pennsylvania; William H. Kirkpatrick, Judge.
Before Woolley and Davis, Circuit Judges, and Avis, District Judge.
These cases were all tried in the District Court at one time; one opinion was rendered in all of the cases, and, although brought into this court by separate appeals, were heard in one argument.
Appellants are all manufacturers of sweet chocolate and sweet milk chocolate, the product of the cacao bean, and made certain payments of amounts alleged to be due the government as taxes, under the Revenue Acts of 1918 and 1921 and the regulations of the Internal Revenue Commissioner. All of said payments were made "under protest," and later, at different and sundry times, appellants filed claims for refund with the collectors of internal revenue, in the various districts in which payments had been made, for transmission to the Commissioner of Internal Revenue. All of said claims for refund were rejected by the Commissioner, and the suits followed.
The District Court, sitting without a jury, heard the testimony, held that the tax was lawfully imposed, and caused judgments to be entered in favor of the defendants, and from these judgments all of the cases are brought by appeal to this court.
Twenty-nine assignments of error were filed, and relied upon by the appellants, but as a matter of fact they are all merged in one question to be decided, i. e., Does the word "candy" in the Revenue Act of 1918 (title 9, § 900(9), 40 Stat. 1122), and the Revenue Act of 1921 (title 9, § 900(6), 42 Stat. 292), include sweet chocolate and/or sweet milk chocolate?
The portion of the act of 1918 under which the tax was assessed and paid, reads as follows:
" That there shall be levied, assessed, collected, and paid upon the following articles sold or leased by the manufacturer, producer, or importer, a tax equivalent to the following percentages of the price for which so sold or leased -- * * *
"(9) Candy, 5 per centum. * * *" 40 Stat. c. 18, pp. 1057, 1122.
The act of 1921 reads exactly the same, with the exception that the percentage of tax is placed at 3 per cent. instead of 5.
The decision of this question rests upon:
(1) The definition of the word "candy."
(2) Whether or not sweet chocolate and sweet milk chocolate is candy in accordance with its commonly accepted use?
(3) Did Congress intend to include sweet chocolate and sweet milk chocolate under the term "candy" in the Revenue Acts?
(4) Was the regulation of the Commissioner of Internal Revenue conclusive, and did he have authority, under the acts, to include sweet chocolate and sweet milk chocolate under the term "candy"?
(5) Do the classifications promulgated by the Secretary of Agriculture, under the Pure Food Laws, in any way affect the question ...