DRA-4-CO:R:C:E 222609 CB
Regional Commissioner
U.S. Customs Service
300 N. Los Angeles Street
Los Angeles, CA 90012
RE: Application for further review of Protest No. 3001-
000006 under 19 U.S.C. 1313(j)
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised and our
decision follows.
FACTS:
Protest is made against Customs refusal to pay a claim for
drawback. Protestant claims that examination of the subject
merchandise was waived by Customs in accordance with 19 CFR
191.141(b)(2)(ii) and that it is entitled to payment of drawback.
At issue are eight entries made between February 18, 1983,
and February 12, 1986. The drawback claims were liquidated in
October of 1989. Customs has taken the position that the entries
were filed subsequent to the exportation of the subject
merchandise, depriving Customs of an opportunity to examine the
merchandise. It is protestant's position that examination of the
merchandise was waived by the appropriate Customs officer.
According to the protestant, the practice of the District was to
allow retroactive waiver. Protestant continued to file in this
manner until 1987 when the Los Angeles region informed
protestant that it would no longer permit waiver of examination.
ISSUE:
Whether a drawback claim can be denied on the basis of
Customs inability to examine merchandise prior to exportation as
required by 19 CFR 191.141(b)(3)?
-2-
LAW AND ANALYSIS:
Section 313(j), of the Tariff Act of 1930, as amended (19
U.S.C. 1313(j)), generally provides for drawback on imported
merchandise exported in the same condition as when imported, or
destroyed under Customs supervision, and not used within the
United States before such exportation or destruction. Customs
administration of the same condition drawback laws is governed by
19 CFR 191.141. Generally, the regulations provide that
merchandise must be exported, or destroyed under Customs
supervision, within three years of importation; claimant must
file the required documentation at least five working days prior
to exportation; and Customs must be given an opportunity to
examine the merchandise prior to exportation. In some instances,
prior notice of intent to export may be waived by Customs.
You have based your denial of the subject drawback claim on
C.S.D. 86-25 dated December 9, 1986. In that decision, Customs
held that unless a retroactive waiver is given, a drawback
claimant who exports without filing a notice of intent to export
assumes the risk of a denial of drawback. C.S.D. 86-25 was
clarified by C.S.D. 88-14 dated May 4, 1988. In that decision,
Customs ruled that the requirement of prior notice may be waived
by Customs "...at any time for any exporter-claimant....This
would include retroactive waivers as provided for in C.S.D. 85-
35. To this end, in the absence of a clear abuse of discretion,
Customs Headquarters will not substitute its judgment for that of
the appropriate field office." In the instant case, all of the
subject entries were granted waivers. Although the waivers were
granted after exportation of the merchandise, the fact remains
that they were granted. In view of C.S.D. 88-14, we see no
reason or basis for a blanket denial of the subject drawback
claims.
However, with respect to drawback entry 85-553113-5,
drawback should be disallowed on import entry 81-543939-0 because
the merchandise was exported more than three years after
importation. The statute clearly requires that merchandise must
be exported or destroyed before the close of the three-year
period beginning on the date of importation in order to qualify
for drawback. See 19 U.S.C. 1313(j). The records indicate that
this particular import entry was made on September 12, 1981, but
was not exported until October 5, 1984. Therefore, import entry
81-543939-0 is ineligible for drawback.
-3-
HOLDING:
Failure to file a notice of intent to export is not a basis
to deny a drawback claim, if a valid waiver of notice has been
issued by Customs.
This protest should be APPROVED except for entry No. 85-
553113-5. The protest must be DENIED as to entry no. 85-553113-
5.
Sincerely,
JOHN DURANT, Director
Commercial Rulings Division
cc: CIE, NY Seaport
District Director, Seattle District