DRA-1-06-DRA-4
RR:CR:DR 228540 CK
Category: Drawback
Port Director of Customs
U.S. Customs Service
2350 N. Sam Houston Pkwy E.
Ste. 900
Houston, TX 77032
RE: Application for further review of Protest No. 5301-97-100338; Spencer Fruit Co.; drawback; 19 U.S.C. 1313(j)
Dear Sir or Madam:
The above-referenced protest was forwarded to this office for further review. We have considered the facts and issues raised, and our decision follows.
FACTS:
Protestant, Spencer Fruit Co. protests the denial of drawback claim number 635-xxxx914-2, liquidated on June 6, 1997. Protest was filed on August 18, 1997, against the denial of drawback that was based on the incomplete claim made by the Protestant.
According to the attached protest information report, CF 6445A, the merchandise claimed for drawback is asparagus, no value or classification is stated, and the drawback type is listed as “all other drawback types and direct id.” The Houston drawback office denied the drawback claim and this protest based on the incomplete chronological summary of exports provided by the Protestant. Additionally, the Houston drawback office sent a letter dated July 9, 1999 to Protestant requesting additional information to verify the elements of the claim, particularly information on the merchandise involved and the export documents relating to one of the asserted exportations involved in the claim. Protestant was given fourteen (14) days to respond, and as of August 2, 1999, Protestant had not responded. The Houston drawback office sent the protest for Further Review on August 5, 1999.
Attached to the protest is a copy of the above-mentioned letter from Houston drawback office to Protestant, dated July 9, 1999. That letter states that in order for its protest to be considered additional information was required, namely, documents that support the assertions made in the drawback claim. The additional information sought included a complete chronological summary of exports for the drawback entry as required by Customs Regulations section 191.53; clarification and verification of the type of drawback sought with applicable documentation if necessary; clarification of the merchandise, whether the asparagus was fresh or frozen; and documents evidencing proof of export for exports occurring on February 12, 1995.
Attached also is drawback claim 635-xxxx914-2, filed June 5, 1996, the subject of this protest. The claim lists the exporting carrier as Overland Truck, the port of exportation as various, the person paying duty as various, the importing carrier as various, and date of importation as various. The import boxes state, “Red Rooster Ranch, San Pablo, Tana, Gina,” the quantity listed is 2277 ctns, merchandise is described as asparagus, the value is approximately $64,000.00, and duty paid as approximately $10,000.00. The export boxes repeat the same information. In the box asking for date and place of exportation Protestant filled in January 14, 1995 to March 11, 1995. Handwritten on the claim is the notation that the drawback type is incorrect and the exporter’s summary is incomplete.
Also attached are the import entry lists for drawback claim 635-xxxx914-2. The first is dated September 25, 1999, states claim type is “all other drawback types,” and the description is asparagus. The following chart lists the 26 import entries on which the drawback claim is based and the amount of duty claimed for each import entry.
ENTRY NO.
ENTRY PORT
ENTRY DATE
IT/CLAIM/DUTY
635-XXXX761-1
2503
1/14/95
$24.13
635-XXXX763-7
2503
6/16/95
$103.42
635-XXXX765-2
2503
1/17/95
$5.14
635-XXXX766-0
2503
1/16/95
$636.73
635-XXXX768-6
2503
1/17/95
$174.42
635-XXXX773-6
2503
1/16/95
$176.40
635-XXXX070-9
2503
2/2/95
$497.48
635-XXXX131-9
2503
2/20/95
$845.71
635-XXXX214-3
2503
2/10/95
$1648.45
635-XXXX232-9
2503
2/10/95
$2102.39
635-XXXX344-8
2503
2/18/95
$237.75
635-XXXX346-3
2503
2/18/95
$336.67
635-XXXX351-3
2503
2/18/95
$210.41
635-XXXX353-9
2503
2/20/95
$203.40
635-XXXX357-0
2503
2/20/95
$168.33
635-XXXX467-7
2503
2/25/95
$315.12
635-XXXX468-5
2503
2/25/95
$978.17
635-XXXX536-9
2503
3/1/95
$8.26
635-XXXX559-1
2503
3/2/95
$269.68
635-XXXX573-2
2503
3/3/95
$165.25
635-XXXX574-0
2503
3/3/95
$99.15
635-XXXX579-9
2503
3/4/95
$52.33
635-XXXX586-4
2503
3/6/95
$63.55
635-XXXX626-8
2503
3/7/95
$154.23
635-XXXX698-7
2503
3/11/95
$78.77
635-XXXX699-5
2503
3/11/95
$55.80
A second list for claim 635-xxxx914-2, dated November 1, 1996, was also attached. The claim type again is “all other drawback types” and the description is asparagus. That attachment contains an export information chart with eighteen lines, all merchandise is listed as asparagus, and contains the following information.
Exporter
Carrier/
Bill No.
Dest.
Qty-Unit
Date
Disp.
MOT Ind
HTSUS
Spencer Fruit Co.
11495
JP
160
1/18/95
Exported
40
0709.20.
9000
Spencer Fruit Co.
11522
JP
160
1/19/95
Exported
40
0709.20.
9000
Spencer Fruit Co.
11718
JP
80
2/7/95
Exported
40
0709.20.
9000
Spencer Fruit Co.
11777
JP
136
2/7/95
Exported
40
0709.20.
9000
Spencer Fruit Co.
11788
JP
160
2/13/95
Exported
40
0709.20.
9000
Spencer Fruit Co.
11789
JP
160
2/13/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
11794
JP
80
2/13/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
11804
JP
160
2/13/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
11805
JP
120
2/13/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
11861 A
JP
108
2/20/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
11861 B
JP
108
2/20/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
11904
JP
106
2/21/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
12000
JP
200
2/28/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
12001
JP
194
2/28/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
12033
JP
3
3/6/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
12078
JP
39
3/8/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
12083
JP
183
3/7/95
Exported
41
0709.20.
9000
Spencer Fruit Co.
12180
JP
120
3/14/95
Exported
41
0709.20.
9000
Also attached to the protest file is the same computer generated printout as described above, however this one is dated January 10, 1997. This printout contains the same charts as described above, but contains handwritten notations such as marks, carrier, additionally, the description “asparagus” is circled as is the claim type “all other drawback types, and dest. “JP.” Finally, this printout is date stamped received January 27, 1997. In addition, another copy of the same computer generated printout, containing the same charts, as described above, dated February 2, 1997, is also attached.
ISSUE:
Was the drawback claim correctly denied?
LAW AND ANALYSIS:
We note initially that the refusal to pay a claim for drawback is a protestable issue pursuant to 19 U.S.C. 1514 (a) (6). Drawback for the entry at issue, 635-xxxx914-2 was denied on June 6, 1997, when it was liquidated without payment of the drawback amount claimed. This protest was timely filed on August 18, 1997 which is within the 90-day statutory and regulatory filing deadline under 19 U.S.C. 1514 and 19 C.F.R. Part 174.
Section 313(j) of the Tariff Act of 1930, as amended (19 U.S.C. §1313(j)(1)), provides for a refund of duties on imported merchandise, exported or destroyed under Customs’ supervision, within three years from the date of importation, and not used within the U.S. before such exportation or destruction. Prior to the amendment of the drawback statute by section 632, title VI - Customs Modernization, Pub. L. No. 103-182, the North American Free Trade Agreement Implementation (“NAFTA”) Act (107 Stat. 2057), enacted December 8, 1993, an additional requirement under section 1313(j) was that the merchandise be in the same condition as when it was imported
It is well established that drawback laws confer a privilege, not a right. Swan & Finch Company v. United States, 190 U.S. 143, 23 Sup. Ct. 702 (1903). When merchandise is imported and a drawback statute may potentially be applicable, an accruing or inchoate right may be said to arise. However, the right to recover drawback ripens only when all provisions of the statute and applicable regulations prescribed under its authority have been met. Romar Trading Co., Inc. v. United States, 27 Cust. Ct. 34 (1951); General Motors Corporation v. United States, 32 Cust. Ct. 94 (1954). Drawback claimants must strictly adhere to the requirements set forth in the statutes and applicable regulations. United States v. W. C. Hardesty Co, Inc., 36 CCPA 47, C.A.D. 396 (1949); Spencer, Kellogg & Sons (Inc.) v. United States, 13 CCPA 612 (1926).
This claim consists of the three documents: the claim form, CF 7539, a list of the applicable import entries, and a list of the applicable exports, described in the FACTS portion of this ruling.
The first list contains 26 different import entries that Protestant states were made during the period from January 14, 1995 to June 16, 1995. The list states the amount of duty claimed for each import entry, but fails to list the amount of asparagus imported in each import entry. The second list contains 18 exports that Protestant states were exported during the period February 7, 1995 to March 14, 1995. The export list contains a column, which might contain quantities since it lists items such as 80ct, 136 ct. and 3 ct. However, no explanation is given as to the significance of “ct.” That “ct.” may refer to a carton, the size of which is not further specified.
Nowhere is the country or countries of exportation identified, unless we make the assumption, JP is Japan. However, that is listed as dest. On the export list, and no country of export is listed on the CF 7539.
Additionally, asparagus was classifiable in at least two tariff, subheadings during 1995, the year of the asserted imports and exports, namely, 0709.20.10, TSUS, dutiable at 5% ad valorem and 0709.20.90, TSUS, dutiable at 24.4% ad valorem.
Because the drawback specialist was unsure of the exports, a more complete description of the export merchandise was requested, but was never provided. Because of the discrepancy in the claimant’s identification as the relevant type of drawback provision, whether claim was made under 19 U.S.C. 1313(j)(1) or 19 U.S.C. 1313(j)(2), the drawback specialist asked the claimant to specify the relevant provision. None has been provided, even on the protest.
Additionally, another discrepancy is that the second listed import is stated to have been made June 16, 1995, however, the last listed exportation occurred March 14, 1995. That is about 3 months before that importation. It is impossible that the goods were exported before they were imported.
Since there are 26 imports and 18 exports, it is clear that exports are not matched to the imports on a one-to-one relationship and the evidence is non-existent about that relationship. Since, the asserted method of exportation is by truck, it is possible that an export destination among the claimed, “various” countries might be Canada. However, that again would not be consistent if the JP listed as the destination in the export list, means Japan, as discussed earlier. Furthermore, if one of the “various” countries is Canada, by virtue of 19 U.S.C. 1313(j)(4) and 19 CFR 181.42(d), the exports to Canada could not be claimed under 19 U.S.C. 1313(j)(2). Additionally, Protestant would also be required to show that there was compliance with 19 U.S.C. 1313(j)(1).
Customs attempted to verify the claim as set forth in former section 191.10, Customs Regulations (1996 ed.), currently 19 CFR 191.61. Based on the above noted discrepancies, the denial of drawback was not improper.
HOLDING:
The denial of the drawback claim was correct since the Protestant has not submitted any evidence showing compliance with the drawback requirements in
19 U.S.C. 1313(j)(1).
The protest should be DENIED.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John A. Durant, Director
Commercial Rulings Division