DRA-1-CO:R:C:E 223363 CB
Regional Director
Commercial Operations
Southwest Region
5850 San Felipe Street
Houston, TX 77057-3012
RE: Application for further review of Protest No. 5301-0-000496;
trade-off provision 19 CFR 191.27; 19 U.S.C. 1313(k)
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:
According to the facts provided in the file, protestant has
requested drawback under the provisions of 19 U.S.C. 1313(b) and
(k) and Treasury Decision 55027(2) - Substitution and T.D. 83-
59. Protestant has applied for and has been approved to use the
Exporter's Summary Procedures as provided for in 19 CFR 191.53.
Protestant has claimed drawback based on the exportation of sugar
refined by a separate manufacturer. Additionally, protestant has
claimed drawback based on the exportation of refined sugar
exported by protestant.
Protestant entered into sugar refining agreements with
Company A, a manufacturer. The terms of these agreements are set
forth in separate contracts, each covering a specific period of
time and specified quantities of sugar. Protestant states that
each contract provides that it deliver a sufficient amount of raw
sugar to the manufacturer to produce a specified tonnage of
refined sugar. According to protestant, the parties were able to
determine the exact amount of sugar in pounds, months before
shipment, by using a formula established by the United States
Department of Agriculture which requires 107 pounds of imported
raw sugar to equal 100 pounds of refined sugar for export. The
raw sugar is delivered to the refinery in Georgia, where it is
refined and then delivered pursuant to protestant's instructions.
Apparently, the contracts also cover other issues including the
time and date of shipment, refined sugar quality, packing
instructions, insurance, drawback, etc.
-2-
Protestant maintains that it is entitled to drawback based
on "tradeoff". According to protestant, the subject sugar was
introduced into Company A's bonded warehouses by Company B
pursuant to an agreement between protestant and Company B and
agreements between protestant and Company A. "The sugar was
entered under bond and was not withdrawn until after the sugar
delivered pursuant to [protestant's] instructions was refined."
The application for further review states that it is Company A's
position that under the tradeoff provisions the refiner is
permitted to dedicate any sugars in its possession for refining
purposes under the tolling agreement between Company A and
protestant.
ISSUE:
Whether protestant is entitled to drawback based on the
"tradeoff" provision found in 19 U.S.C. 1313(k)?
LAW AND ANALYSIS:
Section 313(k) of the Tariff Act of 1930, as amended (19
U.S.C. 1313(k)), provides:
For purposes of subsections (a) and (b) of this
section, the use of any domestic merchandise acquired
in exchange for imported merchandise of the same kind
and quality shall be treated as the use of such
imported merchandise if no certificate of delivery is
issued with respect to such imported merchandise.
The Customs Service's administration of the statutory
"tradeoff" provision is found in 19 CFR 191.27, which provides in
section 191.27(c):
.... For those users manufacturing under substitution
drawback, this request [to operate under the tradeoff
provision] should be contained in the drawback
proposal.
Protestant asserts that the raw sugar in the possession of
Company A, the manufacturer, was exchanged or "traded off" for
imported sugar. Accordingly, protestant asserts that its claim
for drawback on these entries should be allowed.
The scope of review of this protest is on the administrative
record, and protestant has not presented any evidence in support
of its assertions. To establish drawback eligibility, a claimant
must establish with proper evidence the facts of importation,
manufacture, exportation and compliance with the applicable -3-
regulations. Ciba Company, Inc. v. United States, 27 Cust. Ct.
144, CD 1359 (1951); Romar Trading Co., Inc. v. United States, 27
Cust. Ct. 34, CD 1344 (1951); and United States v. Lockheed
Petroleum Services, Ltd., C.A.F.C. Appeal No. 82-35 (1983).
Protestant claims that it has complied with the tradeoff
provision but has failed to submit any documentary evidence to
support such allegation. The Customs Service has and will
continue to fully consider any relevant allegation in a protest
supported by competent evidence. However, assertions made by a
protestant or its counsel are not a substitute for documentary
evidence. Bar Bea Truck Leasing Co., Inc. v. United States, 5
CIT 124, 126 (1983). For example, protestant has failed to prove
that it complied with the notice requirement set forth in 19 CFR
191.27(b) or (c).
HOLDING:
Inasmuch as protestant's assertions of compliance are
unsupported by any evidence, it cannot be said that the claimant
has established that it is eligible for drawback on the basis of
tradeoff. Therefore, this protest should be denied.
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