DRA-4 RR:CR:DR 227679 CB
Port Director
U.S. Customs Service
423 Canal Street
Room 303
New Orleans, LA 70130
RE: Protest and Application for Further Review No. 2002-96-102300
Dear Sir/Madam:
The above-referenced protest was forwarded to this office for a
determination. We have considered the points raised and a
decision follows.
FACTS:
The subject protest covers the denial of 35 drawback claims,
all of which involve exportations to Canada after January 1,
1994. The claims were filed under 19 U.S.C. 1313(j)(1), direct
identification/unused merchandise drawback. A portion of the
claims involve exportations to Canada prior to January 1, 1996;
another portion is for exportations after January 1, 1996.
Protestant imports gloves which are placed in inventory in
its Memphis, Tennessee warehouse. Protestant also purchases or
manufactures domestic gloves. According to protestant's letter
of October 28, 1996, it issues a blanket purchase order to its
suppliers who subsequently ship many times against said purchase
order. Thus, it is common to have more than one entry per
purchase order. By way of a letter dated March 25, 1997,
Protestant states that under its current practice it may be
impossible to confirm that a given carton was duty paid on one
entry or another for that purchase order. The same carton
number/purchase order combination may be used more than once.
Per protestant, the only alteration performed on the exported
gloves is to replace the original label with a Canadian (French
language) label.
According to protestant, for shipments to Canada, the
Inventory Control Department issues an interfactory transfer
order. The stock is pulled and the purchase order number is
communicated to the traffic manager. Once the export file is
complete, it is held until the drawback claim is filed.
Based on correspondence received from protestant, as well as
telephonic conversations with the traffic manager, Customs
determined that the physical inventory method used by protestant
was not sufficient to identify the merchandise from importation
to exportation. protestant could not identify the specific
import entry on which the goods were entered. protestant could
only narrow it down to one of several entries. Additionally, as
an alternative to physical direct identification, Customs
requested that protestant provide information regarding its
accounting method. Customs determined that the information
provided did not show that protestant utilized an accounting
method previously approved by Customs (e.g., allowable under
Schedule X of the Appendix to 19 CFR Part 181). The accounting
procedures employed by protestant is used to determine profits
and tax liability.
At protestant's request, a meeting was held with
protestant's representatives on October 21, 1997. During this
meeting, this office advised the protestant that it had an
opportunity to cure the deficiencies which existed in its
documentary evidence to substantiate its drawback claims. By way
of a letter dated December 23, 1997, protestant's representative
indicated that it was still in the process of obtaining the
necessary evidence. On February 23, 1998, we sent a follow-up
letter advising protestant it had thirty days to make any
additional submission. On March 20, 1998, this office received a
letter from protestant indicating that further efforts to
reconstruct the required records would not be productive. Thus,
it was withdrawing its claims.
ISSUE:
Should the subject protest be granted?
LAW AND ANALYSIS:
Initially, we note that the protest, with application for
further review, was timely filed under the statutory and
regulatory provisions for protests (see 19 U.S.C. 1514 and 19
CFR Part 174) and that the decision protested, the denial of
drawback, is a protestable decision (see 19 U.S.C. 1514(a)(6)).
In view of the fact that, after having been afforded an
opportunity by this office, protestant is unable to provide the
necessary documentation to substantiate its direct identification
drawback claims, the subject protest must be denied.
HOLDING:
The subject protest is hereby DENIED in full.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office, with
the Customs Form 19, to the Protestant no later than 60 days from
the date of this letter. Any reliquidation of the entry in
accordance with the decision must be accomplished prior to
mailing of the decision. Sixty days from the date of the
decision the Office of Regulations and Rulings will take steps to
make the decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act, and other
public access channels.
Sincerely,
John A. Durant, Director
Commercial Rulings Division