DRA-4 RR:CR:DR
230353RDC
Port Director, Houston Service Port
Bureau of Customs and Border Protection
2350 N. Sam Houston Parkway East, Suite 1000
Houston, TX 77032-3126
Att: Deidra Golden
RE: Application for Further Review of Protest number 5301-02-100396; 19 U.S.C. § 1313(j)(1); unused merchandise drawback; direct identification; proof of export.
Dear Port Director:
On August 29, 2003, Protest number 5301-02-100396 was forwarded to this office pursuant to a request for further review. We have considered the evidence provided by and the points raised by your office, the Protestant, and the statements made by the Protestant’s broker during a phone conversation with representatives of this office on 10/7/2004. Our decision follows.
FACTS:
The Protestant, Fi-Tech, Inc. protests the denial of drawback claim number AA6-xxxxx54-9, filed 10/18/2001. According to the provided CF 7551, Drawback Entry, Fi-Tech claimed drawback per 19 U.S.C. 1313(j)(1). The documents attached to the drawback entry were prepared by the drawback claimant and describe the imported and exported goods as “Mach. Fabric Isofil” in two pieces, one described as “Fabric W2005918” and the other described as “Fabric W2005919.”
The goods designated on the drawback claim were imported with entry number Q53-xxxxx97-6. The CF 7501, Entry Summary, for this entry shows Fi-Tech as the importer of record for ten lines of goods imported on 11/24/2000. Line items 001, 003, 007, and 009 describe imported goods as “Fab, Papr Mk=> 650g/M2, Paperform,” entered under subheading 5911.32.0030, Harmonized Tariff System of the United States, (HTSUS). The value for line item 001 is given.
According to the Protestant’s broker the exported goods on which the drawback is claimed were included in line 001 of the entry summary. Line 001 references “Inv[oice] # 001, 8 cartons.” The weight is given as 1100 kilograms. Line item 002 is a “finishing machine for felts / nonwoven” entered under subheading 8449.00.10, HTSUS, with a minimal value. Though the entry summary reflects that lines 001 and 002 should be on “invoice 001,” the Protestant’s broker states that line 002 is not included on the supplied invoice.
The carrier’s bill of lading (BOL), dated 11/24/2000, shows the shipper as “COFPA,” the consignee as Fi-Tech, and describes the goods as “Machinery And Parts.” The total weight is 3,230 kilograms in eight cases and one container. According to the Protestant’s broker, the supplied invoice corresponds to line item 001 on the entry summary. The invoice from COFPA to Fi-Tech, dated 11/17/2000, reflects 4 items, the first two of which, according to the Protestant’s broker, are the exported goods on which the drawback is claimed. The total value of the four times on this invoice equals the value of line 001 on the entry summary. The first item is described as:
Machine 1 Position [illegible]
Fabric W200[illegible]
Velostat 17 pc [illegible]
L. 51.85 x W 4.80
Isofil
Speedy / Paper Side
Reference parcels :SFR 144[illegible]
Net weight kg 275.00 Gross weight kg 550
The second item is described in the identical way and the same portions are illegible, except that the unit price is twice that of the first item.
A document labeled by hand “credit note” and issued from COFPA to Fi-Tech describes the first two units exactly as the legible portions of the above-described invoice. With regard to the illegible portions of the invoice, the two items on the credit note contains the following descriptions:
Machine 1 Position WNF1
Fabric W200918
Velostat 17 pc 500
Reference parcels : SFR 1448
Machine 1 Position WNF1
Fabric W200919
Velostat 17 pc 500
Reference parcels : SFR 1449
The values stated are the same as those on the invoice. This document is dated “[illegible] 05.2001.” It is not clear whether the “05” refers to the month or the day. The credit note also states “Fabrics Sent Back to COFPA. Credit Note of the Amount Of Fabrics.”
A document hand labeled “export invoice” is dated 3/30/2001 and was issued from Fi-Tech to “Reifenhauser GMBH.” This invoice states that “4 conveyors w/ polymer pumps” with a total value of $20,000 were sold and shipped to Reifenhauser in Germany. “Machine Fabrics W2005918 & W2005919 Returned Goods” is typed in a font different from the rest of the typeface. A carrier’s BOL shows Fi-Tech as the shipper and Reifenhauser as the consignee for 8 pieces (1 container), contents described as “S.T.C. Conveyor Belts And Lines,” gross weight of 9,072 kilograms and laden on 4/1/01. Fi-Tech also submits a letter from Reifenhauser dated 11/11/2001, stating that “Reifenhauser asked the customer to return the COFPA belts to Germany . . . . The belts W2005918 & W2005919, were not used . . . . Reifenhauser shipped both conveyor belts to COFPA in France.”
The protested drawback entry was denied on 5/15/2002, because, according to the letter sent to the claimant: “the originally signed export BOL describes the exported goods as ‘8 pcs of conveyor belts and lines,’ and the export invoice described the goods as ‘4 conveyors with polymer pumps.’ Although the export invoice was later amended by the claimant to reflect a different item, to ‘machine fabrics, W2005918 & W2005919’ actual exportation of the designated import was not fully satisfied.” Essentially, the claim was denied because the evidence of export shows that conveyor belts were exported, but the evidence of import shows that “machine fabrics” were imported.
The instant Protest was received by CBP Houston on 10/23/2002, and received in this office on 3/3/ 2003. Included with the forwarded file is a product specification sheet from COFPA for “Velostat 17 PC 500” which states that this is “black anti-static monofilament fabric” and that “Isofil” seams are “in line loops seam with 2 rows of loops.” The applications for this are stated as “forming fabric for spunbond and melt-blown processes” and “well suited for high speed machine.” There is also a photocopy describing COFPA’s capabilities which states in part, “COFPA supplies worldwide, fabrics or conveyer belts . . . .”
ISSUE:
Whether the Protestant has proved that the goods imported with entry number Q53-xxxxx97-6 were exported so that drawback per 19 U.S.C. § 1313(j)(1) is payable?
LAW AND ANALYSIS:
Initially, we note that this Protest was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. § 1514 and 19 C.F.R. Part 174). The drawback claim was liquidated without drawback on 7/26/2002; Fi-Tech filed the instant Protest on 10/23/2002, hence within the 90 day period (19 CFR § 174.12(e)). We also note that the refusal to pay a claim for drawback is a protestable issue (see 19 U.S.C. § 1514(a)(6)). Finally, it is the opinion of the Port that this Protest warrants further review because it meets the criteria of §174.25 and “involves questions of law or fact that have not been ruled upon by the Commissioner of Customs or his designee” per 19 C.F.R. § 174.24(b). This office does not disagree.
Fi-Tech claims drawback per 19 U.S.C. § 1313(j)(1), unused merchandise drawback on fabrics W2005918 and W2005919 which “are conveyor belts.” The Protestant asserts that these fabrics were among the “four machine fabrics and four pumps” shipped to Reifenhauser in Germany. According to Fi Tech, COFPA, the supplier, requested that the goods be shipped to Reifenhauser, who in turn, returned them to COFPA. Fi-Tech offers no explanation as to why a pro forma invoice showing that Fi-Tech sold the goods to Reifenhauser was prepared when Fi-Tech states that the goods were not sold but returned to COFPA.
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 CBP's supervision, within three years from the date of importation, and not used within the United States before such exportation or destruction. No substitution of goods is permitted by § 1313(j)(1). The drawback claimant must directly identify the exported goods as those goods imported by the designated entry. Two options are available to the exporter in directly identifying the goods: the actual goods imported must be identified as the goods that are exported, i.e., not identical goods, but the same goods, or, the exported goods may be identified as the imported goods by an accounting method as specified in 19 C.F.R. § 191.14.
As evidence of what was imported Fi-Tech supplied the entry summary, import invoice and a carrier’s BOL. We note that Fi-Tech also supplied two pages from Reifenhauser, which according to Fi-Tech, confirm that the exported fabrics were received in Germany, but these pages are of no evidentiary value here because they are in German. Section 141.86 of 19 C.F.R. requires that “The invoice and all attachments shall be in the English language, or shall have attached thereto an accurate English translation containing adequate information for examination of the merchandise and determination of duties.” (19 C.F.R. § 141.86(d)). No translation of these documents was supplied.
Line 001 on the entry summary describes eight cartons of goods as “Fab, Papr Mk=> 650g/M2, Paperform,” entered under subheading 5911.32.0030, HTSUS, and weighing 1,100 kilograms. Chapter 59 of the HTSUS covers “Impregnated, coated, covered or laminated textile fabrics; textiles of a kind suitable for industrial use.” Subheading 5911.32.00, (HTSUS), encompasses, “textile products and articles, for technical uses,” specifically, “textile fabrics and felts, endless or fitted with linking devices, of a kind used in papermaking or similar machines.” Also, according to NY G84182 (11/29/2000) goods described as “belt units,” endless or fitted with linking devices made of a “woven filament man-made fiber,” for use with paper making machinery is properly classified under subheading 5911.32.00, (HTSUS).
Therefore, classification of the imported goods is consistent with fabrics for use with industrial machinery and also consistent per NY G84182 with conveyor belts. The import carrier’s BOL describes the goods as “Machinery And Parts” and the total weight is 3,230 kilograms in eight cases and one container. The import invoice describes the relevant imported goods in part as: “Machine 1,” “Fabric W200[illegible],” Velostat 17 pc [illegible],” “Isofil,” weighing 275 kilograms.
As evidence of what was purportedly exported, Fi-Tech supplies a BOL showing Fi-Tech as the shipper, the “credit note” issued from COFPA, and an invoice from Fi-Tech to Reifenhauser. With regard to the export invoice, there are irregularities which were not explained satisfactorily. First, the invoice reflects “4 conveyors with polymer pumps.” However, Fi-Tech states that only two machine fabrics were sent to Reifenhauser. Second, the value of the goods on the invoice is less than one half of that on the import invoice. Third, Fi-Tech has explained and in a letter COFPA has corroborated, that COFPA requested that Fi-Tech send the returned goods to Reifenhauser, which in turn would return them to COFPA. However, there is no explanation as to why, if Fi-Tech was returning the goods for credit to COFPA, was an invoice prepared showing different goods as sold to Reifenhauser. Finally, “Machine Fabrics W2005918 & W2005919 Returned Goods” is typed in a font different from the rest of the typeface and appears to have been added after the invoice was prepared.
The “credit note” contains a description of the goods identical to the first and second items on the import invoice, with respect to the legible portions of the invoice. However, because the credit note does not by itself evidence that the described goods were exported, but is only evidence that Fi-Tech received credit for the first two items on the invoice, the credit note can only be used to substantiate the evidence of exportation, i.e., the BOL. But, in this case the export BOL reflects that 8 pieces of “S.T.C. Conveyor Belts and Lines” weighing 9,072 kilograms were shipped from Virginia to Germany. This BOL then is evidence that “S.T.C. Conveyer belts and lines” were exported, but is not useful in proving that two machine fabrics, W2005918 and W2005919, weighing a total of 550 kilograms were exported.
Therefore, since the description of the goods on the credit note does not correspond to that of the export BOL, the credit note only evidences that Fi-Tech received a credit from COFPA, not that the described goods necessarily were exported. Second, the credit note only supports that Fi-Tech was credited by COFPA for essentially identical – not the same – goods as imported. Third, the value of the credit note as evidence is undermined because at least one fact represented on it is incorrect. The credit represents that the fabrics were “sent back to COFPA,” which statement Fi-Tech states is untrue; the goods relevant to the credit were sent to Reifenhauser, which sent them back to COFPA.
Consequently, Fi-Tech has provided no credible proof that the goods described on the import documents as two machine fabrics, W2005918 and W2005919, weighing a total of 550 kilograms were exported. The following table presents the import and export evidence in a side-by-side comparison. This evidence contains the following descriptions:
Import Documents
Export Documents
CF 7501, Entry Summary
FAB, PAPR MK=> 650G/M2, PAPERFORM
total weight 1,100kg
invoice from Fi-Tech
“4 conveyors w/ polymer pumps”
“Machine Fabrics W2005918 & W2005919”
carrier’s bill of lading
8 cs (1 ctnr)
“Machinery And Parts”
3,230 kg
carrier’s bill of lading
8 pieces, or 1 container
“S.T.C. Conveyor Belts And Lines”
gross weight of 9,072 kilograms
invoice from COFPA
Machine 1 Position [illegible]
Fabric W200[illegible]
Velostat 17 pc [illegible]
L. 51.85 x W 4.80
Isofil
Speedy / Paper Side
Reference parcels: SFR 144[illegible]
Net wt kg 275.00 Gross wt kg 550
Machine 1 Position [illegible]
Fabric W200[illegible]
Velostat 17 pc [illegible]
L. 51.85 x W [illegible]
Isofil
Speedy / Paper Side
Reference parcels: SFR 144[illegible]
Net wt kg 275.00 Gross wt kg 550
credit note from COFPA
Machine 1 Position WNF1
Fabric W200918
Velostat 17 pc 500
L. 51.85 x W 4.80
Isofil
Speedy / Paper Side
Reference parcels: SFR 1448
Net wt kg 275.00 Gross wt kg 550
Machine 1 Position WNF1
Fabric W200919
Velostat 17 pc 500
L. 51.85 x W 4.80
Isofil
Speedy / Paper Side
Reference parcels: SFR 1449
Net wt kg 275.00 Gross wt kg 550
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 drawback may be applicable, an accruing or inchoate right arises. 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). See also Guess?, Inc. v. United States, 944 F.2d 855 (Fed. Cir .1991).
HOLDING: The Protestant has not demonstrated that the imported duty paid goods were exported and is therefore not entitled to drawback per 19 U.S.C. § 1313(j)(1).
The Protest should be DENIED in full. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 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 make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division