HQ 0223516 - Application for further review of Protest No. 3901-91- 100729; 19 U.S.C. 1313(j); 19 CFR 191.141; - United States International Trade Commision Rulings

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HQ 223516

January 27, 1992

DRA-4-CO:R:C:E 223516 CB

CATEGORY: ENTRY DRAWBACK

Chief, NCR Drawback Branch
U.S. Customs Service
North Central Region
Suite 402
610 S. Canal Street
Chicago, ILL 60607

RE: Application for further review of Protest No. 3901-91- 100729; 19 U.S.C. 1313(j); 19 CFR 191.141;

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised and our decision follows.

FACTS:

According to protestant, 950 cases of cigarettes were imported between March 26, 1990 and April 30, 1990. On January 14, 1991, protestant submitted a Customs Form (CF) 3499 to notify Customs of its intention to destroy the imported cigarettes under Customs supervision and with the benefit of drawback. The CF 3499 was certified by a Supervisor of Customs Inspection. The cigarettes were destroyed on January 22, 1991 under the supervision of a Customs Inspector. The inspector witnessed the destruction and checked box 30 on the Customs Form (CF) 7539 which states, "I have examined the merchandise and found it to be the same merchandise described above, in the same condition as imported or changed in condition as allowable by law."

The Customs Service has disallowed the same condition drawback claim on the grounds that the cigarettes were "stale and old" and, thus, not in the same condition as when imported. This conclusion regarding the condition of the cigarettes was based on a telephone conversation with protestant's traffic manager. During the telephone conversation the employee stated that the cigarettes were destroyed because they were old and stale.

ISSUE:

Whether the written evidence presented is sufficient for recovery of same condition drawback under 19 U.S.C. 1313(j)?

LAW AND ANALYSIS:

Section 313(j), of the Tariff Act of 1930, as amended (19 U.S.C. 1313(j)), generally provides for drawback on imported duty paid merchandise exported in the same condition as when imported, or destroyed under Customs supervision, and not used within the United States prior to such exportation or destruction. The Customs Regulations issued under authority of this provision are found in 19 CFR 191.141.

Under 19 CFR 191.141(f), an exporter who desires to destroy merchandise with benefit of drawback under 19 U.S.C. 1313(j) is required to file a completed CF 7539 (Drawback Entry Covering Same Condition Merchandise). Under the regulation, the exporter- claimant shall notify Customs of the time and place of destruction, by filing a CF 3499 with a CF 7539 at the location wherein the destruction is to occur at least 7 working days prior to the intended date of destruction.

In C.S.D. 83-26 the Customs Service indicated that if deterioration occurs which significantly changes the condition of the imported merchandise, same condition drawback law is inapplicable. Prima facie evidence to show that the merchandise was in the same condition as imported may consist of the completed CF 7539, marked and signed by the appropriate Customs officer to indicate whether the merchandise was in the same condition prior to destruction. In the instant case, protestant has provided the required prima facie evidence. On the other hand, Customs denial of the drawback claim is based on hearsay evidence. There is no written statement, in the record, from the traffic manager stating that the cigarettes were stale. Nor, is there any written testimony from the Customs inspector to clarify or contradict why he certified that he found the cigarettes to be in the same condition when they were imported on the CF 7539 at the time of destruction.

In the instant case, the record shows that protestant complied with the regulations. The Customs Service was given the opportunity to examine the merchandise prior to exportation to determine its condition. The Customs inspector found the cigarettes to be in the same condition as imported or changed in condition as allowed by law. Compliance with the drawback regulations is a mandatory condition precedent to securing drawback. See United States v. Lockheed Petroleum Services, Ltd., 1 Fed. Cir. (T) 63, 709 F.2d 1472 (1983), and cases cited therein. In view of the fact that the substantive evidence required to establish the condition of the cigarettes has been submitted and accepted by Customs, we conclude that protestant is entitled to drawback on the subject claim.

HOLDING:

The evidence with regard to the drawback entries in which Customs examined the merchandise for which drawback is claimed and found it to be the described merchandise in the same condition as imported or changed in condition as allowed by law is sufficient for recovery of same condition drawback under 19 U.S.C. 1313(j)(1). Therefore, this protest should be allowed in full.

A copy of this decision should be attached to the CF 19, Notice of Action, to satisfy the notice requirement of section 174.30(a), Customs Regulations.

Sincerely,

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