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HQ 228553




May 8, 2000

DRA-2-02-RR:CR:DR
228553 CK

Category: DRAWBACK

Port Director of Customs
Attn: Jane McKelvey, Drawback Specialist
2350 N. Sam Houston Pkwy, E. Ste. 1000
Houston, TX 77032-3126

RE: Protest and AFR No. 5301-99-100110; drawback; 19 U.S.C. 1313(j)(1); proof of export; 19 CFR 191.72; 19 CFR 181.47(b)(2)(ii)(G)

Dear Sir or Madame:

The above-referenced protest was forwarded to this office on August 11, 1999. We have considered the issues and arguments raised, and our reply follows.

FACTS:

Protestant, Aceto Corp., filed a claim for unused merchandise drawback under 19 U.S.C. 1313(j)(1), entry 411-XXXX961-8 on May 29, 1998. The Port of Houston, denying the drawback claim liquidated that entry on February 12, 1999. The present protest and application for further review, against the drawback denial was filed on April 1, 1999.

Drawback claim 411-XXXX961-8, filed May 29, 1998, covers a claim for drawback on 40 bags of Benzoin, CAS 119-53-9. The CF 7539 states that the merchandise claimed for drawback was imported in entry 411-XXXX418-9 on March 26, 1998, that entry consisted of 120 bags of Benzoin, CAS 119-53-9. The merchandise was imported from Korea, and Mexico is the destination of the merchandise claimed for drawback. We note that the Port made notation on the claim form, showing that the Protestant had miscalculated the amount of drawback due.

The Port of Houston denied the claim for drawback because no proof of export had been submitted with the claim. The Port states that along with the protest, a photocopy of a Mexican pedimento was submitted as proof of export. The Port states that neither the original nor a certified copy of the pedimento was ever submitted, as required by regulation.

Attached to the file is the CF 7501 for entry 441-XXXX418-9. The entry is a final withdrawal from warehouse, dated April 22, 1998. There is one line of merchandise: aromatic ketone- Alcs/hydes; other. The net weight was 3000 kgs, and the merchandise was classified in subheading 2914.40.4000, HTSUS. Attached is a commercial invoice from Miwon Commercial Co. Ltd., of Korea. The invoice is dated March 12, 1999, and is for 5000 kgs of Benzoin in 25 kg bags for Aceto Corp. for delivery to Houston, TX.

Attached to the file are two letters regarding the issue of proof of export. The first letter dated May 6, 1999 is from Customs to Protestant. In that letter Customs asks that Protestant submit a certified copy of the pedimento it had offered as proof of export of the merchandise claimed for drawback in entry 441-XXXX961-8, so that its protest may be considered. The second letter dated May 20, 1999 from Protestant to Customs asks for a 14-day extension as it is in the process of obtaining the requested pedimento.

We note this file does not contain an original pedimento, nor a certified copy of a pedimento, instead it contains a photocopy of a pedimento, without a signature certifying it. The pedimento has June 5, 1998 as the date of entry for 1000.00 of Benzoina, classified as 2914.50.01.

ISSUE:

Was the drawback claim correctly denied?

LAW AND ANALYSIS:

We note initially, that a protest is timely if filed within 90 days of liquidation. See, 19 U.S.C. 1514. We also note that the denial of a drawback claim is a protestable matter under 19 U.S.C. 1514(a)(6). In this case, Protestant filed the protest well within 90 days of the liquidation, and the denial of its drawback claim is protestable.

A drawback claim, under the drawback statute, 19 U.S.C. 1313, based on an exportation of merchandise, requires an exportation. See, e.g. section 1313(a) and (j)(1)(A)(i). Section 1313(l) of the drawback statute grants the Secretary of the Treasury authority to prescribe rules and regulations the compliance with which are to determine the allowance of the drawback privileges set forth in section 1313.

The issue of proof of export for satisfying a drawback claim was discussed in HQ 228272, dated November 8, 1999, in response to an internal advice request from the Port of New York. The Customs Regulations implementing the drawback statute provided for evidence of exportation in section 191.72 (19 CFR 191.72) as follows:

“Exportation of articles for drawback purposes shall be established by complying with one of the procedures provided for in this section (in addition to providing prior notice of intent to export if applicable (see §§ 191.35, 191.36, 191.42, and 191.91 of this part)). Supporting documentary evidence shall establish fully the date and fact of exportation and the identity of the exporter. The procedures for establishing exportation outlined by this section include, but are not limited to: (a) Actual evidence of exportation consisting of documentary evidence, such as an originally signed bill of lading, air waybill, freight waybill, Canadian Customs manifest, and/or cargo manifest, or certified copies thereof, issued by the exporting carrier;

(c) Certified export invoice for mail shipments (§ 191.74); (d) Notice of lading for supplies on certain vessels or aircraft (§ 191.112); or (e) Notice of transfer for articles manufactured or produced in the U.S. which are transferred to a foreign trade zone (§ 191.183).”

The regulation by its terms does not require a specific form. The regulation describes acceptable documentary evidence if that evidence identifies the goods in issue and shows the fact of exportation and the date of exportation. The requirement of providing either a signed original document or a copy certified to be a true copy provides a degree of authenticity to the evidence presented. Here, Protestant has relied on an uncertified copy of a pedimento. The pedimento states the date of entry into Mexico (June 5, 1998), the merchandise, the tariff number, the quantity of merchandise, the number of packages of merchandise, the value of the merchandise, and the stamps stating the duties have been paid.

The pedimento states the quantity received as 1000.00, without a unit of measurement. However, a copy of the Mexican Tariff for subheading 2914.50.01 shows that the reporting quantity is kilograms. Therefore, the measurement is probably kilograms, making the amount 1000.00 kilograms. However, Protestant did not submit any additional documents such as receipts, bills of lading, or any other documents showing the amount of merchandise sent to Mexico. Also, the pedimento covers 2 packages. Yet, the CF 7501, the withdrawal from warehouse, states that 120 packages were withdrawn, and the CF 7539, the drawback claim form, is for 40 packages of merchandise which would conflict with the assertion that the 1000 kilograms were contained in 40 25-kilogram bags, rather than 2 packages. Again, this discrepancy in the number of packages and, therefore, the amount of merchandise claimed could be explained if the Protestant had submitted any supporting documents showing the amount and identity of the merchandise asserted to have been exported to Mexico. This lack of documentation results in the inability to determine that the merchandise claimed for drawback is the merchandise that was withdrawn from warehouse in entry 441-XXXX418-9. No documents or explanation of the existing documents has been provided to link the merchandise on the pedimento by either specific identification or by accounting method with the imported merchandise on which drawback is asserted.

An additional discrepancy regarding this drawback claim concerns the dates of removal of the merchandise from the warehouse, and the date of entry into Mexico. The merchandise was removed from the warehouse on April 22, 1998. The date of entry of the merchandise asserted to be that removed from the warehouse, into Mexico, according to the pedimento is June 5, 1998. That is approximately a six week period in which no information is offered regarding where the merchandise was held, or what was being done with the merchandise. Again, this six-week time lag, and the discrepancy regarding the number of packages imported into Mexico, in addition to the lack of certainty regarding the measurement unit for the merchandise imported into Mexico, casts into doubt that the merchandise removed from the warehouse is the same merchandise imported on the pedimento into Mexico.

These discrepancies and the lack of information supplied by the Protestant may not be filled in with supposition or conjecture on the part of Customs. The United States Court of Customs Appeals in United States v. Enrique C. Lineiro, 37 C.C.P.A. 5 (1949), stated that where the trial court based its decision not on documented evidence, but on Customs speculation regarding the classification of merchandise, such a decision may not stand. In that case, Customs determined the classification of grain sorghum based on its visual review of the grain, and on the visual evaluation of the grain by an expert of such merchandise. Customs had not had the grain scientifically tested or sampled prior to their classification. Such sampling occurred only when the case went to the appellate court. The Appellate Court stated that determinations of issues in Customs litigation may not be based on supposition. The Court stated that such supposition is merely speculation or guess. Therefore, Customs may only evaluate the evidence presented by the parties in evaluating a case before it, Customs may not speculate so as to fill-in missing information.

In view of the discrepancies, in the documentation, discussed above, the uncertified pedimento, by itself, without a certified copy of other supporting documents does not satisfy the requirements of 19 CFR 191.72.

Moreover, for exportations to Canada or Mexico, in addition to the requirements set forth in 19 CFR 191.72, there are additional regulations implementing the North American Free Trade Act (NAFTA) in 19 CFR part 181. The completion of drawback claims and evidence of exportation is covered in 19 CFR 181.74, which states in paragraph (a), that unless stated otherwise in Subpart E, the procedural and documentation requirements shall be in accordance with Part 191. We note that Part 181 does not apply to Mexican exports until January 1, 2001. See, 19 CFR 181.41. However, since that date is less than one year away, we address this protest in terms of both 19 CFR 191.72, and part 181. In general, section 181.47(a) provides that, in addition to other requirements, a claim for drawback requires “evidence of exportation to Canada or Mexico” and “satisfactory evidence of payment of duties to Canada or Mexico.” Evidence of exportation is provided for in section 181.47(b)(2)(ii)(G), for claims under section 1313(c) and 1313(j)(1).

Section 181.47(b)(2)(ii)(G) provides:

“Acceptable documentary evidence of exportation to Canada or Mexico shall include a bill of lading, air waybill, freight waybill, export ocean bill of lading, Canadian customs manifest, cargo manifest, or certified copies thereof, issued by the exporting carrier. Supporting documentary evidence shall establish fully the time and fact of exportation, the identity of the exporter, and the identity and location of the ultimate consignee of the exported goods.”

Again, this regulation by its terms does not require a specific form. This regulation, along with 19 CFR 191.72, describes acceptable documentary evidence if that evidence identifies the goods in issue and shows the fact of exportation and the date of exportation. The requirement of providing either a signed original document or a copy certified to be a true copy provides a degree of authenticity to the evidence presented. Here, Protestant has relied on an uncertified copy of a pedimento. The pedimento states the date of entry into Mexico, the merchandise, the tariff number, the quantity of merchandise, the number of packages of merchandise, the value of the merchandise, and the stamps stating the duties have been paid.

In view of the discrepancies, noted above, the uncertified pedimento, by itself, without a certified copy of other supporting documents would not satisfy the requirements of 19 CFR 181.47(b)(2)(ii)(G).

HOLDING:

The Port correctly denied the claim for drawback under 19 U.S.C. 1313(j)(1). Protestant failed to comply with the requirements found in 19 CFR 191.72.

The protest should be DENIED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, 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 or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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