ENT-1-03-CO:R:C:E 223430 CB/WR
District Director
U.S. Customs Service
Suite 301
4430 East Adamo Drive
Tampa, FL 33605
RE: Application for further review of Protest No. 1801-90-
000027 and 1801-91-000038; 26 U.S.C. 4461; Harbor
Maintenance Fee; 19 U.S.C. 1309(a); bonded jet fuel
Dear Madam:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised and our
decision follows.
FACTS:
Protest No. 1801-90-000027 is against the assessment of the
Harbor Maintenance Fee (HMF) on an importation of jet fuel that
was entered on August 29, 1988. Protest No. 1801-90-000038 is
against the assessment of the HMF on an importation of jet fuel
entered on July 16, 1990. The entry on the first protest was
liquidated on May 25, 1990 and the protest was filed on August
23, 1990, 90 days after liquidation. The entry on the second
protest was liquidated on the date of entry, May 10, 1991 and the
protest was filed on June 4, 1991, 25 days after the liquidation.
The jet fuel on the first protest was entered into a Customs
bonded warehouse. Most of that fuel was withdrawn from the
warehouse for exportation as aircraft supplies. There were three
withdrawals for consumption from the warehouse. The jet fuel on
the second protest was entered into a Customs bonded warehouse.
Most of the fuel was withdrawn for exportation as aircraft
supplies. There were a few withdrawals for consumption from the
warehouse, primarily for volume adjustments.
It is protestant's contention that pursuant to 19
U.S.C. 1309(a) and 26 U.S.C. 4462(d)(1), jet aircraft fuel
withdrawn from a bonded warehouse for use as aircraft supplies on
an aircraft leaving the United States for a foreign country is
not subject to the Harbor Maintenance Fee.
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ISSUE:
Whether bonded merchandise which is exported is subject to
the Harbor Maintenance Fee?
LAW AND ANALYSIS:
The protests apparently are asserted under 19 U.S.C. 1514
(a)(5), questioning the legality of the respective liquidations
of the entries. Both protests appear to have been filed within
the statutory 90-day period from liquidation.
Under 26 U.S.C. 4462(f), the administrative and enforcement
provisions of the Customs laws apply to the HMF. The HMF is
imposed on importations at the time of unloading in an applicable
port under 26 U.S.C. 4461(c)(2)(A). The HMF does not apply to
bonded commercial cargo entering the United States for
transportation and direct exportation under 26 U.S.C. 4462(d).
The provisions of 19 U.S.C. 1553 control transportation and
exportation movements. Inasmuch as both protests involve jet
fuel that was entered for warehouse under 19 U.S.C. 1557, rather
than a movement through the United States under 19 U.S.C. 1553,
the evidence does not support the claim that the exemption
provided by 26 U.S.C. 4462(d) applies to either protest.
The alternative claim is that the HMF is a duty or internal
revenue tax on the jet fuel when the jet fuel is entered for
warehouse. Under 19 U.S.C. 1309 merchandise in a Customs bonded
warehouse may be withdrawn free of duty or internal revenue tax.
Under General Note 1, Harmonized Tariff Schedule of the United
States (HTSUS) (19 U.S.C. 1202) goods imported into the United
States are made subject to duty under General Notes 3 and 4,
HTSUS. The duty is imposed by reason of importation. 19 CFR
141.1(a). The HMF is imposed by reason of port use under 26
U.S.C. 4461(a), and in this situation, the HMF becomes due at the
time of unloading from a vessel in an applicable port. The
language in 26 U.S.C. 4462(f) making all administrative and
enforcement provisions of the Customs laws and regulations
applicable to the HMF as if the HMF were a Customs duty does not
transform the HMF into a Customs duty. See also S. Rept. 99-126
(August 1, 1985) page 7, reprinted in U.S. Code Cong. & Ad. News
at 6644 (1986). There it is stated that the tax and fees were
imposed for the purpose of repayment of costs related to
servicing of commerce and not for the purpose of raising revenue.
In H. Rept. 99-228 (Jan. 8, 1986) page 3, reprinted in U.S. Code
Cong. & Ad. News at 6707 (1986), the purpose of having the
Customs Service administer the collection of the HMF was not to
create any new substantive rights but rather for reason of -3-
administrative and judicial procedures. The stated reason for
using the Customs Service was simply because the Customs Service
was present at ports. H. Rept. 99-228 (Jan. 8, 1986) page 10,
reprinted in U.S. Code Cong. & Ad. News at 6714-6715 (1986).
The next issue is whether the HMF, when imposed on imported
merchandise in a Customs bonded warehouse, after that merchandise
was unloaded at an applicable port, is an internal revenue tax
within the meaning of 19 U.S.C. 1309. There is no one meaning of
the term "internal revenue tax". In the case of United States v.
Leeb, 20 F.2d 335 (2d Cir. 1927), Judge Swan noted that point.
He observed that legislative intent may be defeated by an
invariable definition, and that the same word may be used with
different meanings in different statutes. The purpose of
statutory construction has been developed by the courts to
ascertain legislative intent.
The provisions of 19 U.S.C. 1309 had its genesis in the Act
of June 24, 1884, 23 Stat. 57. Section 16 of that Act allowed
articles of foreign production withdrawn from bonded warehouses
for vessel supplies to be withdrawn free of duty. See also R.S.
2982 (1874). Under the Act of July 20, 1868, an excise tax was
imposed on the manufacture of various articles. That Act
provided for drawback if the articles were exported. See also
R.S. 3330 and 3385. Under T.D. 13250 (1892), the Secretary of
the Treasury ruled that R.S. 2982 applied only to duty on
imported goods and that the provisions of R.S. 3330 and 3385 did
not apply to vessel supplies since there was no exportation.
By section 14 of the Tariff Act of 1897, Act of July 24,
1897, Section 16 of the Act of June 24, 1884 was amended to allow
the withdrawal of foreign and domestic goods free of duty or
internal revenue tax, as the case may be, for vessel supplies.
The stated purpose of the Act of July 24, 1897 was to provide
revenue for the Government and to encourage the industries of the
United States. It seems clear that the words "internal revenue
tax" refers to tax collected for revenue purposes or for the
protection of American industries from foreign competition. The
HMF, on the other hand, was expressly stated to not be collected
for revenue purposes but to repay the costs expended on harbor
maintenance. Further, having expressly provided for certain
exemptions in 26 U.S.C. 4462, it would be anomolous to find that
Congress intended a law enacted a century earlier would provide
an additional exemption.
HOLDING:
The Harbor Maintenance Fee is not an internal revenue tax
within the meaning of 19 U.S.C. 1309. Rather, it is an excise
tax collected to repay the costs expended on harbor maintenance.
Therefore, you should deny this protest in full.
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A copy of this decision should be attached to the CF 19,
Notice of Action, and sent to protestant to satisfy the notice
requirement of Section 174.30(a), Customs Regulations.
Sincerely,
John A. Durant, Director
Commercial Rulings Division