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HQ 230236




April 1, 2004

DRA-4 RR:CR:DR 230236RDC

CATEGORY: PROTEST

Port Director
Customs and Border Protection
Houston Service Port
2350 N Sam Houston Parkway East
Suite 1000
Houston, Texas 77032-3126
Att: Deidra Golden

RE: Protest number 5301-03-10079; Vitol S.A., Inc.; Denial of drawback claim; 19 USC § 1313(p); finished petroleum derivatives; 19 USC § 1514; CF 7539; CF 7551; T.D. 98-16 (March 5, 1998): 19 C.F.R. § 191.176(c)(1); Canadian Fur Trappers Corp. v. United States, (884 F.2d 563 (Fed. Cir. 1989)); Rule 6(a) of the Federal Rules of Civil Procedure.

Dear Sir or Madam:

Protest number 5301-03-10079 was forwarded to this office for further review on December 27, 2003. We have considered the evidence provided and the points raised by your office and the protestant. Our decision follows.

FACTS:

The Protestant, Vitol S.A., Inc., (“Vitol”), protests the partial denial of drawback claim R56-xxxxx03-8 which part was denied by the Houston drawback Center, (“Houston”), according to Houston, “due to one export not being filed within the three-year time requirement.” The Houston Drawback Center liquidated the protested drawback claim on December 6, 2002, for $40,777.19. Houston states and Vitol does not dispute, that the amount claimed and paid to Vitol as accelerated drawback, $62,159.47, was reduced by $621.59 because drawback per §1313(p) is payable at 99 percent of the duty paid and Vitol claimed 100 percent of the duty as drawback. However, Houston also disallowed the drawback claimed on the export of 199,718 barrels on July 25, 1995, in the amount of $20,970.39. It is this $20,970.39 reduction that it disputes and for which the Protestant has been billed. Houston and Vitol agree that drawback was claimed per 19 U.S.C. § 1313(p).

Vitol submitted the drawback claim on a the CF 7539, Customs Form designated “drawback entry covering same condition merchandise,” per 19 U.S.C. § 1313(j). On this form the “J” has been crossed out by hand and replaced with a “P”. The claim filed by Vitol as drawback entry RS6-xxxxx03-8 also included a cover letter dated July 24, 1998, on Vitol S.A., Inc. letterhead, including address, phone and facsimile number for Vitol in Houston. In part this letter advised Houston that the drawback claim was filed per 19 U.S.C. § 1313(p) and that “an encoded floppy diskette (plus printout)” and a copy of Vitol’s continuous bond were enclosed. The CF 7539 is date stamped as received by Houston on July 27, 1998, and claims $62,159.47, i.e., 100 percent of the duty paid, in drawback on what is described as 984,272 barrels of bulk petroleum products. The value of the imports and exports is stated. This information appears in boxes 15, 16, 17, 18, and 19 on the CF 7539. The following information is supplied in the other numbered boxes on the form:

1. Drawback entry number: RS6-xxxxx03-8,
2. Drawback entry date: July 27, 1998,
3. Location of Merchandise: Exported (as listed) 4. Exporting Carrier: Various (as listed) 5. Port of Exportation: Various
6. Ultimate Port of Destination: Various
7. Name of Business Paying Duty: Vitol S.A., Inc. 8. Importer of Record: Vitol S.A., Inc.
9. Importer of Record Identification number: 13-xxxxxxx00; 11. Importing Carrier: Various (as listed); 12. Port of Importation: Various;
13. Date of Importation: Various;
14. Date Released by Customs: Various
20. Exported in the same condition as when imported; 21. Signature of Declarant: [signed];
22. Date: [blank];
23. Name and address of Declarant: [appropriate information supplied]; 24. Name of Firm/ Address: [information supplied]; 25. Accelerated Payment Requested;
27. Address: [address supplied];
28. Signature of Exporter: [signed];
29. Date: [blank];
30. Name and Address of Exporter: [information supplied]; 32. Date: [blank];
33. Signature / Title / Company Name: [signed, information supplied]; 35. Reference number: same
39. Bond Number: 72xxxxxx1;
40. Port Code: 1001
41. Import Entry Number(s): Various (as listed); 42. Import Entry Liquidation Date(s) If Known: not known

In addition, according to a letter dated July 24, 1998, from Vitol which accompanied the drawback claim, along with this CF 7539 Vitol filed “a signed drawback certification, a drawback designation worksheet, an encoded floppy diskette (plus printout), and complete documentation in support of the designated imports and claimed exports.” Additional details for the specific exports and imports is supplied on documents labeled “Information on Exported or Destroyed Articles,” “Drawback Coding Sheet,” “Import Summary,” “Section II - Imported Duty Paid, Designated Merchandise or Drawback Product,” “Section IV – Information on Exported or Destroyed Articles,” and the “Chronological Summary of Exports.

The “Drawback Worksheet” filed with the claim contains the relevant information on the exports and imports constituting the claim. With regard to the exports the information includes the exporting carrier, date of export, product description, eight-digit Harmonized Tariff System of the United States, (HTSUS), classification number, the amount claimed exported in barrels. For the imports, the information supplied on this sheet is the entry numbers, date of entry, merchandise description, eight-digit HTSUS number, designated quantity, and the amount of duty paid on this quantity.

The “Import Summary” provides the importing carrier; date of entry; port of entry; entry number; products description; imported quantity in barrels; designated quantity in barrels; 8-digit HTSUS number; value of the designated quantity and the duty paid on the designated quantity. The attachment labeled “Section II – Imported Duty Paid Designated Merchandise or Drawback Product states for each entry designated the: entry number; port code; entry date; HTSUS number; a description of the merchandise, i.e., residual fuel oil or diesel / no. 2 fuel oil; quantity in barrels; entered value per barrel; duty rate per barrel; 100% of the duty and the total duty.

The document labeled “Section IV – Information on Exported or Destroyed Articles,” provides the: date of exportation, a unique identifier number (in four out of the seven exports); the exporter is Vitol: description of the exported article; the quantity exported in barrels; the country of export destination and the eight-digit HTSUS number. The “Chronological Summary of Exports” provides additional information: the exporting carrier; the port of export; the freight or air waybill, or bill of lading, or manifest number (in 4 out of the 7 exports); and the claimed quantity exported.

Also provided as evidence of the exported petroleum products is a document prepared by Vitol and labeled “drawback worksheet.” Among the seven exports listed is one exportation of 199,718 barrels of “diesel oil no. 2” exported aboard the “Iver Gemini” on July 25, 1995. Another document, also prepared by Vitol and labeled “information on exported or destroyed articles,” describes an export on July 25, 1996, of 199,718 barrels of diesel oil no. 2. A “tanker bill of lading” dated July 25, 1995, states that on that date 199,718.20 barrels of diesel oil no. 2 was laden on board the Iver Gemini. There is also a shipper’s export declaration, dated July 25, 1995, reflecting that 199,718.20 barrels of “diesel oil no. 2” was shipped on July 25, 1995, by Sunrise Shipping Agency, Inc. on behalf of Vitol. Houston does not dispute that 199,718.20 barrels was exported on July 25, 1995.

On July 31, 1998, Houston, by letter, advised Vitol that drawback claim RS6-xxxxx03-8 was incomplete because it was not filed on a CF 7551, drawback entry. That letter stated:

The new drawback regulations, effective April 6, 1998, outline the information / documents required for a “complete” claim. This claim is lacking the below marked information and / or documents.

We note that the letter also states that Vitol did not include a CF-7553, Notice of Intent to Export, Destroy or Return Merchandise for Purposes of Drawback, but that Houston advised this was incorrect; a CF 7553 was filed with the claim. In response, along with a letter dated August 12, 1998, Vitol submitted the drawback claim on a CF 7551, which was received by Houston on August 17, 1998. In its letter Vitol states that “the filing date for this drawback entry should remain July 27, 1998.”

On August 19, 1998, by letter, Houston advised Vitol that the drawback claim again was incomplete because the diskette was rejected for “invalid record type.” Vitol responded by letter dated August 31, 1998, which enclosed a reformatted floppy diskette. By letter dated September 1, 1998, Houston again informed Vitol that the drawback entry was incomplete because the diskette was rejected. This letter also advised that “if the [drawback] claim is rejected the ‘file date’ starts again when you resubmit the correct (complete) entry.” Vitol responded with a letter dated September 4, 1998, enclosing an “amended diskette" and stating, “our position is that a drawback claim is complete when filed regardless of any diskette error . . . .” On September 10, 1998, Vitol faxed to Houston a letter attaching copies of drawback claim RS6-xxxxxx3-8 as originally filed on July 27, 1998, and asserting its position that this drawback claim was complete as filed despite its filing on a CF 7539 instead of the new CF 7551.

According to ACS, this drawback entry was liquidated on December 6, 2002, for $21,382.28 less than claimed by the Protestant. Houston states: the claim was partially disallowed due to one export not being filed within the three-year time requirement . . . . The claim was filed on July 27, 1998 and it designates an export (Iver Gemini) dated July 25, 1995.” “The reduced liquidated amount is the result of untimely filing of export dated July 7, 1995, in the amount of $20,760.68 and recovery of 1% in the amount of $621.60.” On March 5, 2003, Vitol filed the instant Protested number 5301-03-100079, which was received by Houston on March 6, 2003. On February 3, 2004, representatives of this office conducted a teleconference with counsel for Vitol.

ISSUE:

1. Whether drawback per 19 U.S.C. § 1313(p) may be paid when the claim is filed on a CF 7539 after April 6, 1998?

2. Whether drawback per 19 U.S.C. § 1313(p) may be paid when the last day of the third year following the last export falls on a Saturday but claim was filed on the following Monday?

LAW AND ANALYSIS:

We note initially that the instant Protest was timely filed, i.e., within 90 days of the refusal to pay the drawback claim (19 U.S.C. § 1514(c)(3)(B)). Under 19 U.S.C. § 1514 “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the refusal to pay a claim for drawback . . .” (§ 1514(a)(6)) are final unless a protest of that decision is filed within 90 days of the decision (§ 1514(c)(3)(B)). The drawback claim was liquidated at a reduced amount on December 6, 2002, and this Protest was filed on March 6, 2003.

According to Houston, “further review is requested as the decision of the Port Director upon the liquidation of the subject entries is inconsistent with a ruling of the Commissioner of Customs or his designee or with a decision made at any port with respect to the same or substantially similar merchandise.” However, this statement by Houston does not constitute a basis for further review. The criteria required for granting a Request for Further Review are set forth in 19 C.F.R. § 174.24, which states, in part,

Further review of a protest which would otherwise be denied by the port director shall be accorded a party filing an application for further review which meets the requirements of § 174.25 when the decision against which the protest was filed:

(a) Is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise;

(b) Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts; . . . .

19 C.F.R. § 174.24. Vitol requests further review per 19 C.F.R. 174.24(b) by alleging that the Protest “requires U.S. Customs to decide questions of law and / or fact that have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts.” But, it seems to be the opinion of your office that this Protest warrants further review per 19 C.F.R. § 174.24(a), set forth above. We see no evidence that Vitol requested further review per § 174.24(a). However, we agree that this Protest is entitled to further review, however per § 174.24(b) not § 174.24(a).

1. Whether drawback per 19 U.S.C. § 1313(p) may be paid when the claim is filed on a CF 7539 after April 6, 1998?

It is undisputed that Vitol filed drawback claim RS6-xxxxx03-8 on a CF 7539 received by Houston on July 27, 1998, and designating an exportation on July 25, 1995. T.D. 98-16 revised the Customs Regulations to implement changes to the drawback law contained in the Customs modernization portion of the North American Free Trade Agreement Implementation Act (63 Fed. Reg. 10970, March 5, 1998). One of these revisions eliminated the Customs Form 7539, “drawback entry covering same condition merchandise,” and replaced it with the CF 7551, “drawback entry.” Among the stated purposes of the revisions contained in T.D. 98-16 was to implement changes to some administrative procedures used to claim drawback, and “for the purpose of expediting the filing and processing of drawback claims thereunder, while maintaining effective Customs enforcement and control over the drawback program.” (Id.) T.D. 98-16 also promulgated the new regulations implementing the procedures for claims filed under 19 U.S.C. 1313(p). Per 19 C.F.R. § 191.176(c)(1), among other requirements, drawback claims filed per § 1313(p) are to be filed on Customs Form 7551.

T.D. 98-16 adopting as the final rule § 191.176(c)(1) requiring drawback entries under § 1313(p) to be filed on a Customs Form 7551 was effective April 6, 1998. With regard to drawback entries per § 1313(p) where there is no manufacture, a CF 7551 requires:

1. Drawback entry number;
2. Entry Type Code:
3. Port Code;
4. Surety Code:
5. Bond Type’
6. Claimant Identification Number
10. Total Drawback Claimed;
13. Method of Filing;
15. Export Summary Procedure;
16: Privileges Authorized;
17. Drawback Section;
18. Name and Address of Claimant;
19. Contact Name, Address, Phone and Facsimile number of Preparer; 20. Imported Entry;
21. Port Code;
22. Entry date;
25. HTSUS No. – for petroleum claims provide the eight digit number; 26. Description of Merchandise;
27. Quantity and Unit of Measure;
28. Entered Value Per Unit;
29. Duty rate;
39. Date (of exportation);
41. Unique Identifier Number;
42. Name of Exporter;
43. Description of Articles;
44. Quantity and Unit of Measure;
45. Export Destination;
46. HTSUS No.

The instant CF 7539 was filed on July 27, 1998, after the effective date of the revised regulations that implemented use of the CF 7551. It is unclear when the new CF 7551 was available to drawback claimants and Houston representatives are unable to say with certainty when the new CF 7551 was available to drawback claimants. However, the document attached to Vitol’s drawback entry, labeled “Section II – Imported Duty Paid Designated Merchandise or Drawback Product” is identical in information and in the way it is organized to the “Section II – Imported Duty Paid, Designated Merchandise or Drawback Product” on the CF 7551. Also, the document attached to the drawback entry, labeled “Section IV – Information on Exported or Destroyed articles” is identical in information and organization to the “Section IV – Information on Exported or Destroyed articles” on the CF 7551. Because the format and information required by the CF 7551 is markedly different than that required on the CF 7539 it is clear that the Protestant was aware of and familiar with the new CF 7551.

Consequently, the CF 7539 filed by Vitol, when combined with the other documents filed: “Information on Exported or Destroyed Articles,” “Drawback Coding Sheet,” “Import Summary,” “Section II - Imported Duty Paid, Designated Merchandise or Drawback Product,” “Section IV – Information on Exported or Destroyed Articles,” the “Chronological Summary of Exports,” and the drawback designation worksheet, contain all of the relevant information required by 19 C.F.R. § 191.51 and CF 7551 and constitute a complete drawback claim per § 1313(p). Below is a table comparing, in the left column, the information required to be supplied on the CF 7551, and in the right column, the information actually supplied by the Protestant on the CF 7539 and the attachments. We note that only the information relevant to Vitol’s claim per § 1313(p) has been included. For example, box 30 on the CF 7551 requires a calculation of 99 percent of the duty paid; because this information is not relevant to a claim under § 1313(p) it has been omitted.

CF 7551
CF 7539
Box

Box

1
Drawback entry number
1
RS6-xxxxx03-8
2
Entry Type Code:
38
46
3
Port Code
10
5301
4
Surety Code
copy of bond provided
5
Bond Type
38
8
6
Claimant Identification Number
34
13-xxxxxxx00
10
Total Drawback Claimed
36 $62,159.47
13
Method of Filing
disk (cover letter)
15
Export Summary Procedure (ESP
25 filed under ESP
16
Privileges Authorized
25 accelerated
17
Drawback Section

1313(p (top of form
18
Name and Address of Claimant;
27 provided
19
Preparer’s information
phone and fax on cover letter
20
Imported Entry
12 provided on attached Import Summary
21
Port Code
provided on attached Import Summary
22 entry date for § 1313(p claims
provided on attached Import Summary
25 eight digit HTSUS number

2710.00.05 (on attached Import Summary
26
Description of Merchandise
17 residual fuel oil (on attached Import Summary) 27
Quantity and Unit of Measure
16 provided on attached Import Summary
28
Entered Value Per Unit
provided on attached Section II
29
Duty rate
provided on attached Section II
39
Date (of exportation)
provided on attached Summary of Exports
41
Unique Identifier Number
provided for 4 of 7
42
Name of Exporter
30
Vitol S.A., Inc.
43
Description of Articles
provided on attached Section IV
44
Quantity and Unit of Measure
provided on attached Summary of Exports
45
Export Destination
provided on attached Summary of Exports
46
HTSUS No.
provided on attached Summary of Exports

Specifically, the document labeled “Import Summary” when combined with the “Section II - Imported Duty Paid, Designated Merchandise or Drawback Product,” document provides all the essential information that is to appear on the face of a completed CF 7551, i.e., all of the information required in boxes 20, 21, 22, 25, 26, 27, 28, and 29 of the CF 7551. (Boxes 23, 24, 30 and 31 are not required for a claim under § 1313(p)). Further, the “Section IV – Information on Exported or Destroyed Articles,” document and the “Chronological Summary of Exports,” together provide all the essential information on the exported oil.

The only information missing from Vitol’s claim that is requested on a CF 7551 is a unique identifier for three of the exports. Since this information is not required by § 1313(p) nor by the regulations (see 19 C.F.R. § 19.176), the lack of unique identifiers for three exports is not a fatal defect to Vitol’s claim. Therefore, since all of the information essential to process the claim was provided, the drawback claimant’s using the old CF 7539 instead of the new CF 7551, in this instance when the claim was filed less than four months after the new form became effective, is not fatal to its claim under § 1313(p).

2. Whether drawback per 19 U.S.C. § 1313(p) may be paid when the last day of the third year following the last export falls on a Saturday but claim was filed on the following Monday?

According to Houston, the protested drawback claim was reduced by $20,970.39 because the claim was filed on July 27, 1998, but it designated an export dated July 25, 1995, more than three years prior to the filing of the claim. 19 U.S.C. § 1313(r), filing drawback claims, provides:

A drawback entry and all documents necessary to complete a drawback claim, including those issued by the Customs Service, shall be filed or applied for, as applicable, within 3 years after the date of exportation or destruction of the articles on which drawback is claimed, . . . . Claims not completed within the 3-year period shall be considered abandoned. . . . .

19 U.S.C. § 1313(r)(1). (See also 19 C.F.R. § 191.51(e)(1)). (Emphasis added.) However, per the Federal Rules of Civil Procedure,

In computing any period of time prescribed or allowed by these rules, by the local rules of any district court, by order of court, or by any applicable statute, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, a Sunday, or a legal holiday, . . . .

(Fed. R. Civ. Proc. R. 6(a)). In both Hawaiian Oke & Liquors v. United States, (28 Cust. Ct. 58 (1952) (C.D. 1388)), and Railway Express Agency, Inc. v. United States, (30 Cust. Ct. 424 (1953)), the Customs Court heard arguments on motions to dismiss based on the untimely filing of protests where the last day to timely file a protest fell on a weekend. In both cases the court cited to the Federal Rule of Civil Procedure 6(a). In Hawaiian Oke the court held that when the last day in which to file a protest fell on Saturday, a protest filed on Monday, which was the next business day was timely filed. In Railway Express the last day to file the protest was a Sunday and the court ruled that a protest filed on the Monday after was timely. (See also HQ 227879, October 30, 1998).

It is undisputed that the protested drawback claim RS6-xxxxx03-8 was received by Houston on July 27, 1998, and designated an exportation on July 25, 1995. Per Rule 6(a) of the Federal Rules of Civil Procedure, in calculating “3 years after the date of exportation” since the day of the act, . . . from which the designated period of time begins to run shall not be included the day of exportation, July 25, 1995, shall not be included, so the three years begins to run on July 26, 1995. Therefore, July 25, 1998, is the final day of the third year after July 25, 1995, (i.e., July 26, 1998, is the first day of the fourth year). However, July 25, 1998, was a Saturday. According to the Federal Rule of Civil Procedure 6(a)), “[t]he last day of the period so computed shall be included, unless it is a Saturday . . . .” Consequently, that Saturday July 25, 1998, is not included and instead Monday, July 27, 1998, is the last day of the third year after July 25, 1995. Therefore, Vitol’s filing of the CF 7539 on July 27, 1998 was within three years of the designated export of July 25, 1995. Consequently, Vitol’s protested drawback entry was timely.

HOLDING:

1. Drawback per 19 U.S.C. § 1313(p) may be paid when the claim is filed on a CF 7539 less than four months after the CF 7551 became effective and all the information required on the CF 7551 was provided.

2. Drawback per 19 U.S.C. § 1313(p) may be paid when the last day of the third year following the last export falls on a Saturday but claim was filed on the following Monday.

Therefore, this Protest should be GRANTED in full. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 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 make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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