DRA-4-CO:R:C:E 223155 TLS
District Director
U.S. Customs Service
7911 Forsythe Boulevard Suite 625
St. Louis, Missouri 63105
RE: Protest #4503-90-100028 concerning the denial of same
condition drawback; 19 U.S.C. 1313(j)(1); 19 CFR 191.141(a)(2).
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:
A claim for drawback was filed with your district on April
30, 1990 and denied on June 29, 1990. The drawback entry at
question consisted of 16 containers of Trifluralin Technical (TT)
valued at $1,462,500. The merchandise was exported through
Detroit Customs.
The protestant contends that it attempted to submit a Form J
with supporting documentation before the exportation took place.
The merchandise had been exported by the time the papers arrived
at Detroit Customs, however. Detroit Customs apparently did
certify the Form J only for exportation as a result.
The protestant argues that St. Louis Customs should grant a
waiver of the prior notice requirement even after the exportation
because Customs laws allow for such when the merchandise is in
fact in the same condition as imported. You denied same
condition drawback because Customs did not examine the
merchandise before it was exported as provided for under Customs
regulations. The exporter did not submit a written request for a
waiver of the prior notice of intent to export as required under
C.S.D. 85-35. You state that there was no indication of an
intent to export from the drawback entry documents submitted.
You also note that the export documents show different container
numbers than do the import documents.
ISSUE:
Whether Customs should allow same condition drawback when no
prior notice to export was submitted before the merchandise was
exported without being examined.
LAW AND ANALYSIS:
The protestant is claiming drawback under 19 U.S.C. 1313(j),
which provides for the following:
(1) If imported merchandise, on which was paid any
duty, tax, or fee imposed under Federal law because of
its importation--
(A) is, before the close of the three-year
period beginning on the date of importation-
- (i) exported in the same condition
as imported...
then upon such exportation or destruction 99 per centum
of the amount of each such duty, tax, and fee so paid
shall be refunded as drawback. (Emphasis added.)
Under Part 191.141(b)(2) of the Customs regulations, Customs Form
(CF) 7539 is required to be filed with the appropriate Customs
office at least five days before exportation is scheduled to take
place. The provision also allows for a waiver of this
requirement if a request to do so is submitted in writing to the
appropriate Customs officer who will make the determination.
The protestant has cited to C.S.D. 85-35 to support the
claim that Customs may waive the prior notice requirement "at any
time", even after exportation has occurred. C.S.D. 85-35 states
"[i]nasmuch as the appropriate Customs officer, by virtue of
191.141(b)(2)(ii), can waive the prior notice 'at any time,' this
language is broad enough to allow the officer to waive the
requirement in cases where the merchandise has already been
exported." That ruling also held, however, that written
permission for a waiver of the prior notice requirement must be
made and permission granted to allow retroactive claims. We read
C.S.D. 85-35 to allow Customs to waive the prior notice
requirement at any time if the requisite written request for
waiver has been submitted. The question at this point is whether
there is sufficient cause to grant the waiver based on the
evidence submitted.
The protestant also contends that the notice requirement
under Customs regulations is "arbitrary and an artificial
barrier" because the statute does not require such. The Customs
Court has held before that the right to recover drawback...
arises only when all of the provisions of the statute and the
applicable and lawful regulations prescribed under its authority
have been completed. Romar Trading Company v. United States, 27
Cust. Ct. 34, C.D. 1344 (1951), followed in 718 Fifth Avenue
Corp. v. United States, 741 F. Supp. 1579, CIT slip op. 90-59
(1990). (Emphasis added.) The regulations must be adhered to
before the exporter is eligible for drawback. Furthermore, the
protestant even acknowledges Customs right to examine merchandise
before exportation. The regulation in question is not
inconsistent with this right. The purpose of this examination is
to verify that the exported goods were the imported goods and
that those goods bear no evidence of a change in condition or of
use. Because of the discrepancies between the import documents
and the export documents, those documents are inadequate to prove
that the exported goods were the same imported goods. Unless
that proof is made, there is no showing that the basic statutory
requirements were met.
In this case, the protestant has submitted documents
indicating that of the drums exported, they were transferred to
different containers and in different amounts. Not all of the
drums were exported. These documents show the export container
numbers corresponding to the import container numbers and the
number of drums imported contrasted with the number exported from
the same lot. Furthermore, we have been informed by Customs
headquarters' Office of Laboratory and Scientific Services that
TT would not likely change in condition within the two or three
months that the chemical was in the U.S. before it was exported,
unless it is tampered with. Other than repacking the drums into
different containers, there is no evidence that the TT was
handled in any way before it was exported. Therefore, we find
that the evidence submitted shows that it is very likely that the
TT was exported in the same condition as imported and examination
was not necessary in this case. Given these findings, we believe
that the protestant should be allowed to submit a written waiver
of notice of export to complete its claim for drawback.
HOLDING:
The protestant has submitted sufficient evidence to show
that the imported product was exported in the same condition as
imported. The exporter should be allowed to submit a waiver of
notice of intent to export to complete its drawback claim because
examination was not necessary in this case. This protest should
be allowed. A Form 19, Notice of Action should accompany this
decision when made available to the protesting party.
Sincerely,
John Durant, Director