HQ 0223070 - Internal Advice Request on Protest of Denial of Drawback; Severability of Drawback Claim; Time for Completion of Drawback Claim; 19 U.S.C. 1313; 19 CFR 191.61; Protest 1502- 88-000017 - United States International Trade Commision Rulings

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HQ 223070

June 18, 1991

DRA-1-01-CO:R:C:E 223070 PH

CATEGORY: DRAWBACK

Regional Commissioner
Southeast Region
ATTN: Mr. P. T. Hill

RE: Internal Advice Request on Protest of Denial of Drawback; Severability of Drawback Claim; Time for Completion of Drawback Claim; 19 U.S.C. 1313; 19 CFR 191.61; Protest 1502- 88-000017

Dear Sir:

With a February 11, 1991, Transmittal and Routing Slip, you forwarded the subject protest file. Because no action is indicated to have been taken on the protest/application for further review (see Customs Directive 3550-39, January 16, 1991), we are treating your transmittal as a request for internal advice (see 19 CFR 177.11). Included with the file were several original documents which are returned with this ruling. Our advice follows.

FACTS:

According to the file, the protestant filed an entry for drawback under 19 U.S.C. 1313(a) and (b) for Oriental strip tobacco and flue-cured and burley scrap tobacco. The date of this entry was October 5, 1984. The protestant timely designated the Oriental strip tobacco used in its exported products for its claim under 19 U.S.C. 1313(a) but failed to designate imported flue-cured and burley scrap tobacco for its claim under 19 U.S.C. 1313(b). Customs denied all drawback on the entry on the basis of 19 CFR 191.61 and liquidated the entry accordingly on July 15, 1988. On October 11, 1988, the protestant filed this protest of the liquidation, contending that drawback for the Oriental strip tobacco should have been granted.

ISSUE:

When drawback is claimed in one drawback entry for one kind of merchandise under 19 U.S.C. 1313(a) and another kind of merchandise under 19 U.S.C. 1313(b) and the entry is timely completed with regard to the 19 U.S.C. 1313(a) merchandise but no imported merchandise is designated with regard to the 19 U.S.C. 1313(b) claim, may drawback be granted for the 19 U.S.C. 1313(a) merchandise?

LAW AND ANALYSIS:

The statutory authority for drawback is found in section 313, Tariff Act of 1930, as amended (19 U.S.C. 1313). The Customs Regulations issued under this statute are found in 19 CFR Part 191. Under 19 CFR 191.61:

A drawback entry and all documents necessary to complete a drawback claim ... shall be filed ... 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.

In this case, we understand that a drawback entry and all necessary documents were timely filed with regard to the Oriental strip tobacco. However, no imported flue-cured and burley scrap tobacco was designated for drawback under 19 U.S.C. 1313(b), even though drawback was claimed for this tobacco in the same drawback entry. Thus, this case presents the issue of severability of drawback claims.

We have thoroughly reviewed cases which might address this issue. While we have found no direct pronouncements on the issue, we have found a case (ruling letter 200068, dated July 26, 1972) which indicates that drawback has been granted for the portion of a drawback claim which was timely completed even if the rest of the drawback claim was not timely completed. Provided that all statutory and regulatory requirements are met with regard to the portion of the drawback claim which is timely completed, we believe that this is a reasonable interpretation of the requirement in 19 CFR 191.61. Otherwise, Customs could be in the position of denying an entire drawback claim because evidence relating to a minute part of the claim is not filed or is filed late (analogously, we note that drawback claims are frequently granted in part and denied in part). Of course, this interpretation could only be followed in cases, such as the one under consideration, in which the portion of the claim which is incomplete is clearly separable from the completed part of the claim.

For your information, if, as is stated to be true in this case, a drawback entry is filed claiming drawback under 19 U.S.C. 1313(b) and no imported merchandise is designated for the claim, the entry should be rejected (see Customs Form 331 and the directions issued for its completion and filing (Customs Directive 3740-03, January 14, 1986)). Although we are limiting our advice to the issue about which you inquired, it is not clear to us that the documents in this file constitute a completed claim for the 19 U.S.C. 1313(a) drawback (i.e., how is it shown that the particular imported tobacco which is designated was used to produce the particular articles which were exported?).

HOLDING:

When drawback is claimed in one drawback entry for one kind of merchandise under 19 U.S.C. 1313(a) and another kind of merchandise under 19 U.S.C. 1313(b) and the entry is timely completed with regard to the 19 U.S.C. 1313(a) merchandise but no imported merchandise is designated with regard to the 19 U.S.C. 1313(b) claim, drawback may be granted for the 19 U.S.C. 1313(a) merchandise, provided that all statutory and regulatory requirements pertaining to drawback are met for the 19 U.S.C. 1313(a) merchandise and that the portion of the claim which is incomplete is clearly separable from the completed part of the claim.

Sincerely,

John Durant, Director

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