DRA-1-01-CO:R:C:E 223070 PH
Regional Commissioner
Southeast Region
ATTN: Mr. P. T. Hill
RE: Internal Advice Request on Protest of Denial of Drawback;
Severability of Drawback Claim; Time for Completion of
Drawback Claim; 19 U.S.C. 1313; 19 CFR 191.61; Protest 1502-
88-000017
Dear Sir:
With a February 11, 1991, Transmittal and Routing Slip, you
forwarded the subject protest file. Because no action is
indicated to have been taken on the protest/application for
further review (see Customs Directive 3550-39, January 16, 1991),
we are treating your transmittal as a request for internal advice
(see 19 CFR 177.11). Included with the file were several
original documents which are returned with this ruling. Our
advice follows.
FACTS:
According to the file, the protestant filed an entry for
drawback under 19 U.S.C. 1313(a) and (b) for Oriental strip
tobacco and flue-cured and burley scrap tobacco. The date of
this entry was October 5, 1984. The protestant timely designated
the Oriental strip tobacco used in its exported products for its
claim under 19 U.S.C. 1313(a) but failed to designate imported
flue-cured and burley scrap tobacco for its claim under 19 U.S.C.
1313(b). Customs denied all drawback on the entry on the basis
of 19 CFR 191.61 and liquidated the entry accordingly on July 15,
1988. On October 11, 1988, the protestant filed this protest of
the liquidation, contending that drawback for the Oriental strip
tobacco should have been granted.
ISSUE:
When drawback is claimed in one drawback entry for one kind
of merchandise under 19 U.S.C. 1313(a) and another kind of
merchandise under 19 U.S.C. 1313(b) and the entry is timely
completed with regard to the 19 U.S.C. 1313(a) merchandise but no
imported merchandise is designated with regard to the 19 U.S.C.
1313(b) claim, may drawback be granted for the 19 U.S.C. 1313(a)
merchandise?
LAW AND ANALYSIS:
The statutory authority for drawback is found in section
313, Tariff Act of 1930, as amended (19 U.S.C. 1313). The
Customs Regulations issued under this statute are found in 19 CFR
Part 191. Under 19 CFR 191.61:
A drawback entry and all documents necessary to
complete a drawback claim ... shall be filed ...
within 3 years after the date of exportation of
the articles on which drawback is claimed ....
Claims not completed within the 3-year period
shall be considered abandoned. No extension will
be granted unless it is established that a
Customs officer was responsible for the untimely
filing.
In this case, we understand that a drawback entry and all
necessary documents were timely filed with regard to the Oriental
strip tobacco. However, no imported flue-cured and burley scrap
tobacco was designated for drawback under 19 U.S.C. 1313(b), even
though drawback was claimed for this tobacco in the same drawback
entry. Thus, this case presents the issue of severability of
drawback claims.
We have thoroughly reviewed cases which might address this
issue. While we have found no direct pronouncements on the
issue, we have found a case (ruling letter 200068, dated July 26,
1972) which indicates that drawback has been granted for the
portion of a drawback claim which was timely completed even if
the rest of the drawback claim was not timely completed.
Provided that all statutory and regulatory requirements are met
with regard to the portion of the drawback claim which is timely
completed, we believe that this is a reasonable interpretation of
the requirement in 19 CFR 191.61. Otherwise, Customs could be in
the position of denying an entire drawback claim because evidence
relating to a minute part of the claim is not filed or is filed
late (analogously, we note that drawback claims are frequently
granted in part and denied in part). Of course, this
interpretation could only be followed in cases, such as the one
under consideration, in which the portion of the claim which is
incomplete is clearly separable from the completed part of the
claim.
For your information, if, as is stated to be true in this
case, a drawback entry is filed claiming drawback under 19 U.S.C.
1313(b) and no imported merchandise is designated for the claim,
the entry should be rejected (see Customs Form 331 and the
directions issued for its completion and filing (Customs
Directive 3740-03, January 14, 1986)). Although we are limiting
our advice to the issue about which you inquired, it is not clear
to us that the documents in this file constitute a completed
claim for the 19 U.S.C. 1313(a) drawback (i.e., how is it shown
that the particular imported tobacco which is designated was used
to produce the particular articles which were exported?).
HOLDING:
When drawback is claimed in one drawback entry for one kind
of merchandise under 19 U.S.C. 1313(a) and another kind of
merchandise under 19 U.S.C. 1313(b) and the entry is timely
completed with regard to the 19 U.S.C. 1313(a) merchandise but no
imported merchandise is designated with regard to the 19 U.S.C.
1313(b) claim, drawback may be granted for the 19 U.S.C. 1313(a)
merchandise, provided that all statutory and regulatory
requirements pertaining to drawback are met for the 19 U.S.C.
1313(a) merchandise and that the portion of the claim which is
incomplete is clearly separable from the completed part of the
claim.
Sincerely,
John Durant, Director
Commercial Rulings Division