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HQ 225406




March 18, 1998

PRO-4/DRA-2 RR:CR:DR 225406 CB

CATEGORY: PROTEST

U.S. Customs Service
Protest and Control Branch, Rm. 762
New York Region
6 World Trade Center
New York, NY 10048-0945

RE: Protest and application for further review 1001-93-102291; 19 U.S.C. ?1313; 19 U.S.C. ?1520(a)(2); prior disclosure; 19 U.S.C.

Dear Sir or Madam:

This is our decision in protest 1001-93-102291, dated April 20, 1993, regarding availability of drawback on additional duties paid. We have considered the points raised and our decision follows.

FACTS:

Seven entries covering strawberry concentrate and cranberry concentrate were imported by the Protestant during the period of December, 1989, through March, 1992, and entered under subheading 2009.80.60, Harmonized Tariff Schedule of the United States (HTSUS). Subsequently, the Protestant discovered that the concentrate originated in a European Community country and was, therefore, subject to a special temporary duty of 100% ad valorem under subheading 9903.23.30, HTSUS.

Except for two entries, most of the concentrate had been delivered to the protestant's customers and had entered the commerce of the United States, thus the merchandise was not available for recall. Consumption entry no. 614-XXXX403-9, covered 4,128 gallons of strawberry juice concentrate in 89 drums and 165 gallons of strawberry essence and 772 50-liter capacity barrels. The strawberry juice concentrate was entered duty-free, the strawberry essence was entered dutiable, and the barrels were entered duty-free. The entry was made on April 19, 1990, and liquidated as entered on August 10, 1990.

The strawberry juice concentrate is claimed to have been exported on May 16, 1992 according to counsel's letter of October 29, 1992. Drawback claim 614-XXXXX75-6 was filed on May 6, 1992. It covered the exportation of 86 barrels of the strawberry juice concentrate and 3 barrels of the strawberry essence. The claim states that the export was to be on May 9, 1992. Since the file does not contain the export documents, the date discrepancy between counsel's asserted date of May 16, 1992 and the claim's stated export date of May 9, 1992 is unresolved. However, assuming that there was an export either date would meet the statutory time limit of 19 U.S.C. ?1313(j).

Import entry 614-XXXX291-4 covered 69 drums (35,811 gallons) of cranberry juice concentrate and 126 steel drums entered duty-free. The entry was liquidated as entered on June 12, 1992. Drawback claim 614-XXXXX87-1 dated September 17, 1992 asserted that 49.5 drums of the entered 69 drums of cranberry juice concentrate were to be exported on October 1, 1992. Counsel's letter of October 29, 1992, asserts that the export occurred as of September 17, 1992. There is no evidence of the exportation in the file, either as to the date or amount. If, in fact, the export occurred on October 1, 1992, it would be within the time limit set forth in 19 U.S.C. ?1313(j).

On May 27, 1992 by way of a letter to the District Director, Customs Service, protestant initiated prior disclosure proceedings. On August 14, 1992, the Area Director, New York Seaport, advised protestant of the total amount due as supplemental duties. The supplemental duties owed as a result of the actual loss of duties were paid on September 11, 1992, to the Area Director, New York Seaport.

Customs records show claim 1001-X-XXX567 was filed on October 4, 1992 and claim 1001-X-XXX079 was filed on January 15, 1993. The file lacks a copy of either claim but this office has been informed by the Protest Division that both claim numbers were assigned to counsel's letter of October 29, 1992. It appears that both claims may have asserted a return of the additional duties tendered on the merchandise said to have been exported on the two drawback claims. According to the ACS protest module, your office treated the October 29, 1992, as a request for reliquidation under 19 U.S.C. ?1520(c)(1) and assigned it two different petition numbers (1001-2-2XXX67 and 1001-3-2XXX79). Both claims are suspended according to the ACS protest module.

In addition, the subject protest against the denial of drawback on the liquidation of drawback claim 614-XXXXX75-6 on October 23, 1992 and of drawback claim 614-XXXXX87-1 on February 26, 1993, was filed on April 20, 1993. The protest is not without some discrepancies. The entry identified in block 5 of the CF 19 is drawback entry X87-1, which was liquidated February 26, 1993. In section III of the CF 19, the protestant's counsel also identifies drawback claim X75-6, which was liquidated October 23, 1992, and the subject of a 19 U.S.C. ?1520(c)(1) petition identified as protest number 1001-92-201567 with a filing date of November 4, 1992.

ISSUE:

May the subject protest be granted?

LAW AND ANALYSIS:

Initially, we note that the subject protest was timely filed pursuant to 19 U.S.C. ?1514(c)(2)(A) with respect to drawback claim 614-XXXXX87-1. The date of liquidation for the subject drawback entry was February 26, 1993, and this protest was filed on April 20, 1993. We note that the refusal to pay a claim for drawback is protestable pursuant to 19 U.S.C. ?1514(a)(6). We also note that all exactions of whatever character within the jurisdiction of the Secretary of the Treasury are protestable pursuant to 19 U.S.C. ?1514(a)(3).

Regarding drawback claim 614-XXXXX75-6, the claim was denied on October 23, 1992. The ACS record shows that your office received protestant's request for a refund of the voluntarily tendered duties on November 16, 1992. Although this request was received within the 90 day protest period, your office incorrectly treated protestant's request as a 19 U.S.C. assigned it protest number 1001-93-201567. Nonetheless, the October 23rd letter served to prevent liquidation of the drawback claim from becoming final. Thereafter, when protestant filed the subject protest, which references drawback claim 614-XXXXX75-6, the pending ?1520(c)(1) petition was subsumed into the subject protest. Thus, we conclude that the subject protest is timely with respect to this drawback entry also.

The Customs Service has published a final rule revising the Customs Regulations governing drawback. See 63 Fed. Reg. 10970 (1998). The revisions implemented the changes to the drawback law contained in the Customs Modernization portion of the North American Free Trade Agreement Implementation Act. These regulations will become effective on April 6, 1998. Section 191.3, of the new regulations, provides that duties subject to drawback include tenders of duties in connection with notices of prior disclosure under 19 U.S.C. ?1592(c)(4) and voluntary tenders, subject to the conditions and requirements of based on prior disclosures provided that: (1) the tender is specifically identified as duty on a specifically identified entry for consumption; (2) liquidation of the consumption entry became final prior to the tender; and (3) liquidation of the drawback entry has not become final. Furthermore, the regulations require that a written request be filed along with a waiver of any claim to payment or refund under other provisions of law.

In the instant protest, the requirements under 19 CFR 191.81(c)(1) are met. Protestant, through counsel, initiated a prior disclosure by way of a letter dated May 27, 1992, which specifically identified that additional duties were due on seven consumption entries identified by entry number. The prior disclosure was finalized on September 11, 1992, when protestant submitted payment of the additional duties. At the time of prior disclosure, liquidation had become final for the consumption entries which are the basis for the subject drawback claims. We note that at the time prior disclosure was initiated import entry 614-XXXX291-4 had not been liquidated. It was liquidated on June 12, 1992. However, by the time the additional duties due on the prior disclosure were tendered (September 11, 1992) liquidation on this entry had also become final (the 90th day being September 10, 1992). Finally, liquidation of the subject drawback entries has not become final. The only requirement which protestant needs to satisfy is to provide a written waiver of any claim to payment or refund under other provisions of law. This written waiver must include any other party responsible for payment of such additional duties. See 19 CFR ?191.81(c)(2).

HOLDING:

The subject protest should be GRANTED after April 6, 1998 provided protestant submits the required written waiver of any claim to payment or refund under other provisions of law.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, 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 take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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