ENT-1-03-CO:R:C:E 222945 TLS
District Director
U.S. Customs Service
880 Front Street Room 5-S-9
San Diego, California 92188
RE: Protest #2501-89-000074; shipment of wrong merchandise
exportation or non-exportation; free of duty re-importation.
Dear Sir:
The above-referenced protest has been forwarded to this
office for further review. We have considered the points raised
by the protestant and your office. Our decision follows.
FACTS:
The protestant exported a surface grinder machine to Mexico
with the intent of it remaining there permanently. Allegedly,
the receiving company saw it to be the wrong machine upon receipt
without having opened the package. It is explained that the
markings on the package had shown it to be the wrong machine.
The package was shipped back to the United States not having been
opened and with the machine having been left intact, according to
the protestant. About a month later, the correct machine was
shipped to the receiving company.
Duties were paid on the reshipment of the first machine back
to the United States after the alleged discovery of the mistake
occurred. The importer protests the assessment of duties upon
the reshipment because it views the transaction as a non-
exportation/non-importation. It holds this view because it
claims that the first machine was never intended to be shipped to
and become part of the commerce of Mexico. The protestant
requests that the entry be cancelled and/or that the duties paid
be refunded.
Customs contends that it charged duties in this case because
even if the wrong machine was shipped, the overriding intent was
that a machine was to be exported and in fact was. The Service
considers this to be the controlling factor in whether or not an
exportation occurred. According to Customs officials, such
intent was evident because the importer did not submit any
evidence that a machine was not shipped with the intent that it
enter the trade and commerce of another country. They believe
the evidence submitted only shows that the wrong machine was
shipped, not that the shipment itself was not intended.
ISSUE:
Whether the shipment of the wrong merchandise to a foreign
country and the subsequent reshipment back to the United States
is a non-exportation/non-importation under Customs laws in
absence of a showing of lack of intent to export.
LAW AND ANALYSIS:
The case law on this particular issue has been well
established. The Supreme Court ruled that "exportation" is the
severance of goods from the mass of things belonging to [the
United States] with the intention of uniting them to the mass of
things belonging to some foreign country. Swan & Finch Co. v.
United States, 190 U.S. 143 (1903). The Swan & Finch holding has
been followed in at least two Customs Court cases, F.W. Myers &
Co. v. United States, 29 Cust. Ct. 202, C.D. 1468 (1952) and
Nassau Distributing Co., Inc. v. United States, 29 Cust. Ct. 151,
C.D. 1459 (1952). The controlling factor in each of these cases
was the intention of the party at the time of shipment.
Based on the protestant's own account of the transaction at
issue, it did intend to ship a machine to Mexico from this
country that would become part of the commerce of Mexico. As it
turns out, the shipping was meant to be done but the wrong
machine was shipped. The protestant cites to T.D. 55091(4)
(1960), which ruled that whenever merchandise is returned to the
United States following discovery that it was erroneously
shipped, the transaction may be regarded as a
nonexportation/nonimportation where it is clear that every effort
is made to prevent the shipment from leaving the United States
upon discovery of the error. At issue in this case is the
interpretation of the phrase, "erroneously shipped." It is
protestant's contention that the subject machine was erroneously
shipped because it was the wrong machine.
We cannot agree with protestant's reading of the law in this
case. It is clear that "erroneously shipped" refers to a
shipment that was never meant to take place but somehow did, and
not to any particular contents of the shipment. The error here
was not in the shipment itself but what was in fact shipped. The
case law on this subject is only concerned with the shipping
(i.e., exporting) aspect of the transaction. Customs law might
address an error in shipping the wrong package in another part of
the legal lexicon, but not under the guise of
nonexportation/nonimportation. Furthermore, it is clear that no
effort was made to prevent the shipment because the shipment was
meant to be made. Again, as noted before, the protestant
acknowledges such. Therefore, we do not find that the subject
transaction constitutes a nonexportation/nonimportation as it has
been defined in Customs law. If the wrong machine was shipped,
the exporter should pursue other options under Customs law.
HOLDING:
The shipping of the subject machine in this case is not a
nonexportation/nonimportation under Customs law. The Customs
Service was proper in assessing duties on the reimportation of
the machine absent any legitimate request for relief under
Customs laws. You are instructed to deny this protest in full.
A copy of this decision should be sent to the protestant with a
Notice of Denial on Customs Form 19.
Sincerely,
John Durant, Director