BAG-5-09-PRO-2 CO:R:C:E 223592 TLS
District Director
U.S. Customs Service
Portway Plaza Suite 400
1717 East Loop
Houston, Texas 77029
RE: Protest #5301-1-100241 concerning denial of exemption of duty
on automobile returned to this country; Harmonized Tariff
Schedule of the United States (HTSUSA) subheading 9805.00.50.
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:
You received a request for duty-free treatment under HTSUSA
subheading 9805.00.50 for a vehicle returned to this country
through your district. The request was made by the lienholder on
the automobile. The vehicle was purchased in the United States,
having been manufactured to all U.S. government standards. The
buyer had shipped the automobile to Germany subsequent to the
purchase after having received the assignment orders from the
U.S. Air Force. The shipment had been approved by the
lienholder.
The lienholder makes a request for duty-free treatment of
the automobile because it was an involved and interested party in
shipment of the auto overseas and has secured its return to the
U.S. at the owner's expense. The auto has been repossessed
because of the buyer's default on the finance contract. After
receiving a denial of it request from your district, the
lienholder submits this protest of that decision.
ISSUE:
Whether the lienholder of a vehicle returned to the United
States after having been shipped to a foreign country may enter
the vehicle duty free under HTSUSA subheading 8705.00.50.
LAW AND ANALYSIS:
Chapter 98 of HTSUSA provides for, inter alia, personal
exemptions from duty for individuals returning to this country
with certain items. With regards to the vehicle in question, the
relevant provision reads as follows:
9805.00.50 The personal and household
effects... of any person in the
service of the United States upon
the termination of assignment to
extended duty... at a post or
station outside of the customs
territory of the United States, or
of returning members of his family
who have resided with him at such
post or station, or of any person
evacuated to the United States
under Government orders or
instructions.................Free
(Emphasis added.)
The protestant is a financing corporation that holds a lien on
the subject vehicle. The company made arrangements to repossess
the vehicle and have it returned to the U.S. after the buyer
defaulted on the finance contract. The protestant now wishes to
enter the auto free of duty.
As noted above, duty free treatment under 9805.00.50 is
available to 1) any person 2) in the service of the United States
3) who returns to the United States 4) upon termination of
assignment to extended duty 5) at a post or station outside the
customs territory of the United States. Setting aside the
question of whether the protestant qualifies as a "person" under
this provision, we find that the finance company does not meet
the other requirements for the exemption. Of course, it is quite
obvious that the protestant could not possibly have been in the
service of the U.S. at a post outside the customs territory of
the U.S. (or inside the customs territory, for that matter). The
protestant's request for exemption under the subject provision
implies that we should grant such because the expenses for the
shipment of the auto back to the U.S. were incurred by the buyer,
who is in fact in the service of the U.S. at a post outside the
customs territory. We disagree.
The buyer is not the party entering the vehicle into the
customs territory, even if he paid the expenses for its return.
The protestant is the party of record in this entry transaction
and the buyer's involvement is only incidental. Furthermore,
even if the buyer was the party of record in this entry
transaction, he also has not met all of the requirements of
9805.00.50. While he has met some of the requirements, the buyer
has not returned to the United States and has not had his
assignment to extended duty terminated. Thus, even if he were a
party to this transaction, the buyer is not eligible for
exemption from duty under 9805.00.50, or any other duty-free
provision under HTSUSA (if the buyer was eligible for the
exemption, the automobile would have to be entered on his
behalf). The protestant of course is not eligible either.
Therefore, we find the district's decision to deny duty-free
treatment to the protestant on the entry of the subject vehicle
to be proper.
HOLDING:
The protestant is not eligible for exemption from duty under
HTSUSA subheading 9805.00.50. The assessment of duties on the
vehicle entered by the protestant for its own benefit should
stand. This protest is denied in full. Form 19, Notice of
Action, should be attached to this ruling.
Sincerely,
John Durant, Director