HQ 0223155 - Protest #4503-90-100028 concerning the denial of same condition drawback; 19 U.S.C. 1313(j)(1); 19 CFR 191.141(a)(2). - United States International Trade Commision Rulings

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HQ 223155

January 28, 1993

DRA-4-CO:R:C:E 223155 TLS

CATEGORY: ENTRY

District Director
U.S. Customs Service
7911 Forsythe Boulevard Suite 625
St. Louis, Missouri 63105

RE: Protest #4503-90-100028 concerning the denial of same condition drawback; 19 U.S.C. 1313(j)(1); 19 CFR 191.141(a)(2).

Dear Sir:

The above-referenced protest has been forwarded to this office for further review. We have considered the points raised by the protestant and your office. Our decision follows.

FACTS:

A claim for drawback was filed with your district on April 30, 1990 and denied on June 29, 1990. The drawback entry at question consisted of 16 containers of Trifluralin Technical (TT) valued at $1,462,500. The merchandise was exported through Detroit Customs.

The protestant contends that it attempted to submit a Form J with supporting documentation before the exportation took place. The merchandise had been exported by the time the papers arrived at Detroit Customs, however. Detroit Customs apparently did certify the Form J only for exportation as a result.

The protestant argues that St. Louis Customs should grant a waiver of the prior notice requirement even after the exportation because Customs laws allow for such when the merchandise is in fact in the same condition as imported. You denied same condition drawback because Customs did not examine the merchandise before it was exported as provided for under Customs regulations. The exporter did not submit a written request for a waiver of the prior notice of intent to export as required under C.S.D. 85-35. You state that there was no indication of an intent to export from the drawback entry documents submitted. You also note that the export documents show different container numbers than do the import documents.

ISSUE:

Whether Customs should allow same condition drawback when no prior notice to export was submitted before the merchandise was exported without being examined.

LAW AND ANALYSIS:

The protestant is claiming drawback under 19 U.S.C. 1313(j), which provides for the following:

(1) If imported merchandise, on which was paid any duty, tax, or fee imposed under Federal law because of its importation--
(A) is, before the close of the three-year period beginning on the date of importation- - (i) exported in the same condition as imported...
then upon such exportation or destruction 99 per centum of the amount of each such duty, tax, and fee so paid shall be refunded as drawback. (Emphasis added.)

Under Part 191.141(b)(2) of the Customs regulations, Customs Form (CF) 7539 is required to be filed with the appropriate Customs office at least five days before exportation is scheduled to take place. The provision also allows for a waiver of this requirement if a request to do so is submitted in writing to the appropriate Customs officer who will make the determination.

The protestant has cited to C.S.D. 85-35 to support the claim that Customs may waive the prior notice requirement "at any time", even after exportation has occurred. C.S.D. 85-35 states "[i]nasmuch as the appropriate Customs officer, by virtue of 191.141(b)(2)(ii), can waive the prior notice 'at any time,' this language is broad enough to allow the officer to waive the requirement in cases where the merchandise has already been exported." That ruling also held, however, that written permission for a waiver of the prior notice requirement must be made and permission granted to allow retroactive claims. We read C.S.D. 85-35 to allow Customs to waive the prior notice requirement at any time if the requisite written request for waiver has been submitted. The question at this point is whether there is sufficient cause to grant the waiver based on the evidence submitted.

The protestant also contends that the notice requirement under Customs regulations is "arbitrary and an artificial barrier" because the statute does not require such. The Customs Court has held before that the right to recover drawback... arises only when all of the provisions of the statute and the applicable and lawful regulations prescribed under its authority have been completed. Romar Trading Company v. United States, 27 Cust. Ct. 34, C.D. 1344 (1951), followed in 718 Fifth Avenue Corp. v. United States, 741 F. Supp. 1579, CIT slip op. 90-59 (1990). (Emphasis added.) The regulations must be adhered to before the exporter is eligible for drawback. Furthermore, the protestant even acknowledges Customs right to examine merchandise before exportation. The regulation in question is not inconsistent with this right. The purpose of this examination is to verify that the exported goods were the imported goods and that those goods bear no evidence of a change in condition or of use. Because of the discrepancies between the import documents and the export documents, those documents are inadequate to prove that the exported goods were the same imported goods. Unless that proof is made, there is no showing that the basic statutory requirements were met.

In this case, the protestant has submitted documents indicating that of the drums exported, they were transferred to different containers and in different amounts. Not all of the drums were exported. These documents show the export container numbers corresponding to the import container numbers and the number of drums imported contrasted with the number exported from the same lot. Furthermore, we have been informed by Customs headquarters' Office of Laboratory and Scientific Services that TT would not likely change in condition within the two or three months that the chemical was in the U.S. before it was exported, unless it is tampered with. Other than repacking the drums into different containers, there is no evidence that the TT was handled in any way before it was exported. Therefore, we find that the evidence submitted shows that it is very likely that the TT was exported in the same condition as imported and examination was not necessary in this case. Given these findings, we believe that the protestant should be allowed to submit a written waiver of notice of export to complete its claim for drawback.

HOLDING:

The protestant has submitted sufficient evidence to show that the imported product was exported in the same condition as imported. The exporter should be allowed to submit a waiver of notice of intent to export to complete its drawback claim because examination was not necessary in this case. This protest should be allowed. A Form 19, Notice of Action should accompany this decision when made available to the protesting party.

Sincerely,

John Durant, Director

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