DRA-1-06-CO:R:C:E 224107 SLR
Deputy Regional Director
Commercial Operations
Pacific Region
U.S. Customs Service
One World Trade Center, Ste. 705
Long Beach, CA 90831-0700
RE: Application for Further Review of Protest
No. 2809-91-101693; Request to Amend Original Drawback
Claims; Request Made Beyond Three Years of Exportation of
Drawback Article; 19 CFR 191.61; 19 CFR 191.64
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have reviewed the facts and the issues
presented, and our decision follows.
FACTS:
During the first quarter of 1990, the protestant, Silgan
Containers Corporation (hereinafter "Silgan"), submitted claims
for drawback under the accelerated payment provision of the
drawback regulations. Liquidation of the accelerated drawback
entries was suspended by Customs upon the referral of Silgan
unliquidated drawback entries to Customs Regulatory Audit
Division for verification. The audit was announced March 30,
1990.
On April 22, 1991, the audit commenced at Silgan's factory
in Riverbank, California. A Customs auditor reviewed the records
in support of the claimed drawback entries and, at the exit
conference, related that generally Silgan's drawback claims could
be verified by the records provided except for certain import
entries delivered to one of Siligan's factories. In the
auditor's opinion, the records provided for the said import
entries were not sufficient to support receipt and manufacture
of the imported material. More specifically, the audit found
the following:
-2-
* Unable to Support Audit
Drawback Entry Date : 8-17-90
Exportations Occurred: 3-1-88 to 4-30-88
Import Date : 4-17-85
5-25-85
1-18-86 *
Drawback Entry Date : 4-13-90
Exportations Occurred: 9-1-87 to 12-30-87
Import Date : 1-18-86 *
2-15-85 *
1-15-85 *
Drawback Entry Date : 2-9-90
Exportations Occurred: 7-1-87 to 9-30-87
Import Date : 1-18-86 *
1-18-86 *
1-15-85 *
2-15-85 *
Drawback Entry Date : 7-20-90
Exportations Occurred: 11-1-87 to 12-31-87
Import Date : 1-18-86 *
1-18-86 *
1-15-85 *
3-9-85
Drawback Entry Date : 2-9-90
Exportations Occurred: 7-1-87 to 9-30-87
Import Date : 1-18-86 *
1-18-86 *
1-15-85 *
4-17-85
6-23-86
2-15-85 *
1-15-85 *
Accordingly, the Customs auditor recommended partial denial
of the drawback entries which contained the deficient imports.
The subject drawback entries were liquidated on July 19, 1991,
based upon the audit findings of May 28, 1991.
Subsequent to liquidation, Silgan asked Customs if it could
amend the subject claims with imports that were encompassed and
verified in the audit, yet still had unused portions available
to claim. The Customs liquidator was willing to accept the
amendments provided all Customs regulatory requirements
had been met.
-3-
The amended import designations were submitted to Customs
on September 16, 1991. Subsequent to their submission, Customs
rejected the amendments due to the fact that more than 3 years
had passed since the date of exportation of the articles on which
drawback was being claimed and, therefore, their acceptance would
contradict 19 CFR 191.61.
A timely protest was filed on October 17, 1991, against
the liquidation and subsequent rejection of the amended
designations by the Pacific Region Liquidation Branch.
The protestant claims that it complied with 19 CFR 191.61 when
the drawback entries were initially submitted for accelerated
payment with all documents necessary to complete the drawback
claim. The protestant maintains that 19 CFR 191.61 does not
specifically prohibit the amendment or correction of drawback
claims encompassing exports older than three years, and that
it has been Customs practice to accept these amendments provided
the original claims were timely filed.
ISSUE:
Whether the protestant may amend a claim for drawback after
more than three years have expired after exportation.
LAW AND ANALYSIS:
The proper completion of a drawback claim is provided for in
19 CFR 191.61, which states as follows:
A drawback entry and all documents necessary to
complete a drawback claim, including those issued
by one Customs officer to another, shall be filed
or applied for, as applicable, 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.
A complete drawback entry consists of (1) the filing of
the appropriate drawback entry form completely filled out with
all necessary information required on the form; (2) proof of
exportation (i.e., the "Notices of Exportation of Articles with
the Benefit of Drawback" (CF 7511)) and its supporting documents;
and (3) certificate(s) of delivery, when necessary, or
certificate(s) of manufacture and delivery. T.D. 83-212;
19 CFR 191.2(i) and 191.62.
-4-
Customs May 28, 1991, audit report was able to verify
the existence of several completed claims (i.e., for the drawback
entry dated 8-17-90, import entries 4-17-85 and 5-25-85;
for the drawback entry dated 7-20-90, import entry 3-9-85;
for the drawback entry dated 2-9-90, import entries 4-17-85
and 6-23-86). Silgan wishes to amend its original drawback
claims to include the unused portions of these verified import
entries. More than 3 years have passed since the exportation of
the articles on which drawback is being claimed.
Supplementary filing of drawback claims is provided for in
19 CFR 191.64 as follows: "With the permission of the regional
commissioner, a claimant may amend or correct a drawback entry or
file a timely supplemental entry. Corrections shall be certified
by the appropriate parties." Section 191.64, however, does not
provide an extension of time beyond the three years allowed in
Section 191.61. Section 191.61 provides that a drawback entry
must be complete within 3 years after the date of exportation
of the articles on which drawback is claimed.
Corrections which only perfect a drawback claim may be
permitted after the 3-year period provided for in 19 CFR 191.61.
However, a claim may not be amended by expanding the scope of the
claim after the expiration of the 3-year period. For example,
proof that merchandise met same-kind-and-quality specifications
could be provided after the 3-year period, but entries or
exportations not included in the original claim may not be
added after the 3-year period. Substitution of different
imported merchandise or different exported merchandise by
designating different import entries or exports creates a new
claim for drawback in the same manner that a protest against the
liquidation of one entry does not cover a protest against some
other liquidation.
In proposing the instant amendment, the protestant is
attempting to designate different import entries than those
originally designated as the basis for the claim to drawback
(e.g., for drawback entry 2-9-90, designating the unused portions
of import entry 3-9-85 of drawback entry 7-20-90; for drawback
entry 4-13-90, designating the unused portions of import entries
4-17-85 and 5-25-85 of drawback entry 8-17-90). As previously
indicated, however, entries not included in the original claim
may not be added after the 3-year period.
The 3-year period exists so Customs can audit and
verify claims. Here, certain imports entries were verified
but only to the extent amounts from those entries had been
designated.
-5-
Customs current policy of restricting the amendment of
drawback claims after the 3-year exportation period is consistent
with the regulatory history on this subject. In T.D. 53025,
Customs, in amending section 22 of the Customs Regulations of
1943 (which provided for a 2-year period for completing drawback
claims with extensions authorized by the Bureau), explained that:
"Some difficulty has been experienced in attempting to fix a
uniform standard as a basis for granting extensions, and it has
been concluded that extensions should not be permitted but that a
longer period of time (3 years) should be allowed for the filing
and completion of claims."
HOLDING:
When more than 3 years have passed after the exportation
upon which drawback is being claimed, the protestant may not
amend its original drawback claims to include different import
entries than those originally claimed as the basis for drawback.
Accordingly, this protest should be denied. A copy of this
decision should be attached to the Customs Form 19 and mailed to
the protestant as part of the notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division