ENT-1-03-RR:IT:EC 113868 GOB
Port Director of Customs
Attn: Entry Unit
9901 Pacific Highway
Blaine, Washington 98230
RE: Application for Further Review of Protest No. 3004-96-100100; Subheadings 9801.00.10 and 9801.00.80, HTSUS;
Headings 8703 and 8704, HTSUS; 19 U.S.C. 1315(d); Uniform
and established practice
Dear Sir or Madam:
The above-referenced protest was forwarded to this office
for further review. We have considered the issues raised by your
office and by the representative of Yogo Travelers
("protestant"). Our decision follows.
FACTS:
The protestant claims that the merchandise at issue on the
subject entry, one Ford Econoline van, should be duty-free under
heading 8703 or 8704, Harmonized Tariff Schedule of the United
States ("HTSUS") by virtue of the "Special" subcolumn in those
headings and "B" which denotes the Automotive Products Trade Act
("APTA").
The entry was liquidated as dutiable pursuant to subheading
9801.00.80, HTSUS.
The protestant states:
Protest is hereby made against the collection of duty
equal to the amount of duty-drawback claimed by the
original vehicle manufacturer upon exportation from the
United States.
It is our contention that such vehicles should be
entitled to duty-free entry under HTS# B 8703 or B
8704.
...
In early January, 1995, more than one year after the
implementation of the North American Free Trade
Agreement, the U.S. Customs Service decided that
Customs should collect duties equal to the amount of
duty drawback claimed by and returned to the original
U.S. vehicle/truck manufacturer -- and so instructed
all Customs field offices.
This action clearly constituted a change to the
standard, uniform practice of prior years. Yet, to our
knowledge, notification of this change in practice was
never published in the Federal Register.
We contend that the collection of duties in an amount
equal to the duty drawback refunded to the U.S.
vehicle/truck manufacturer is both improper and
illegal, and all amounts collected should be refunded
to the importer.
ISSUES:
Whether a uniform and established practice existed with
respect to the classification of the subject vehicle.
Whether the protestant has established that the subject
vehicle was incorrectly classified.
LAW AND ANALYSIS:
We note initially that the protest was timely filed under
the statutory and regulatory provisions for protests, 19 U.S.C.
1514(c)(3)(B) and 19 CFR 174.12(e)(2). The record reflects that
the subject entry was liquidated on January 12, 1996, and that
the protest was received by Customs on February 7, 1996.
Pursuant to 19 U.S.C. 1514(a)(5), the liquidation of an
entry is a protestable item.
The entry was liquidated as dutiable pursuant to subheading
9801.00.80, HTSUS, which provides:
Articles previously exported from the United States
which -- except for U.S. note 1 of this subchapter --
would qualify for free entry under one of the foregoing
items and are not otherwise free of duty:
Other, except articles excluded by U.S. note 1(c)
of this subchapter...
U.S. Note 1 to Subchapter I provides in pertinent part:
The provisions in this subchapter (except subheadings
9801.00.70 and 9801.00.80) shall not apply to any
article:
(a) Exported with benefit of drawback;
* * * * *
(c) Manufactured or produced in the United States in a
customs bonded warehouse or under heading 9813.00.05
and exported under any provision of law.
(Emphasis supplied.)
The "General" subcolumn of subheading 9801.00.80 provides:
A duty (in lieu of any other duty or tax) equal to the
sum of any duty and internal-revenue tax imposed upon
the importation of like articles not previously
exported, but in no case in excess of the sum of (a)
any customs drawback proved to have been allowed upon
such exportation of the article, and (b) any internal-revenue tax imposed, at the time such article is
entered, upon the importation of like articles not
previously exported[.]
19 U.S.C. 1315(d) provides as follows:
No administrative ruling resulting in the imposition of
a higher rate of duty or charge than the Secretary of
Treasury shall find to have been applicable to imported
merchandise under an established and uniform practice
shall be effective with respect to articles entered for
consumption or withdrawn from warehouse for consumption
prior to the expiration of thirty days after the date
of publication in the Federal Register of notice of
such ruling; but this provision shall not apply with
respect to the imposition of anti-dumping duties or the
imposition of countervailing duties under section 1303
of this title.
The record indicates the following. The vehicle
identification number ("VIN") of the subject vehicle is
1FDGS24H5MHA18369. All 1990's-manufactured Ford pick-up trucks
and cargo vans with a VIN beginning with a 1 or 4 are subject to
the collection of drawback fees under subheading 9801.00.80,
HTSUS, which is not a new HTSUS provision. However, there was a
period of time during which the Customs Service, or one or more
of its offices, was not aware that drawback had previously been
paid with respect to these vehicles. During this period, your
office did not classify these vehicles under subheading
9801.00.80, HTSUS because it was not aware of its applicability,
i.e., your office was not aware that drawback had previously been
paid on these vehicles. We are advised that during this period
these vehicles were classified by your office under subheading
9801.00.10, HTSUS, and were therefore duty free.
For numerous reasons, the protestant has not made a case for
relief.
First, the protestant has not provided any substantive
information or evidence with respect to the claimed change of
practice. See Customs Law and Administration by Ruth F. Sturm
(3rd ed., 1995) at Chapter 52, p. 29:
Long-continued administrative practice must be shown by
positive evidence. It is not established by the
rulings of one or two collectors as to a few
shipments...
Additionally, the fact that a Customs office (or certain
Customs offices) may have changed its classification of Ford
Econoline vans after Customs was made aware that drawback had
been paid on those vehicles is not a change in practice within
the meaning of 19 U.S.C. 1315(d). See Heraeus-Amersil, Inc. v.
United States, 9 CIT 412, 417 (1985), where the court stated:
Prior discussions demonstrate that when Customs has not
had a reasonable opportunity to investigate adequately
the proper classification for a type of imported
merchandise, an established and uniform practice will
not arise in the interim.
Further, although it is not clear from the protest, it would
appear that the protestant may be claiming that Customs' practice
existed with respect to classifying these vehicles under
subheading 9801.00.10, HTSUS, while at the same time the
protestant is asserting that the vehicles should now be
classified under headings 8703 or 8704 (duty-free by virtue of
the "Special" subcolumn in these headings and "B" which denotes
the APTA). At any rate, the protestant has failed to establish a
uniform and established practice under subheading 9801.00.10, or
under headings 8703 and/or 8704.
Beyond that, the protestant has not established that the
merchandise was incorrectly classified in subheading 9801.00.80,
HTSUS. It has not established, nor has it articulated, a case
supported by any documentation which would prove that the subject
vehicle is classifiable under headings 8703 or 8704 (duty-free
under APTA) or under subheading 9801.00.10. In this regard, we
note that the vehicle is not eligible for duty-free treatment
under APTA (see the "Special" subcolumn in headings 8703 and
8704) because it is not a Canadian article within the meaning of
General Note 5(a)(i), HTSUS.
Concerning the issue of a uniform and established practice
with respect to subheading 9801.00.10, HTSUS, in Ruling 559052
dated July 7, 1995, we stated:
Furthermore, we believe that a uniform and established
practice cannot exist for entries which are claimed to
be duty-free under subheading 9801.00.10, HTSUS. In
order for an entry to be free of duty under this
provision, certain documentation requirements must be
satisfied, or the District Director must be satisfied
that all of the requirements for eligibility under this
provision have been satisfied so that the documentation
requirements may be waived. Therefore, the fact that a
Ford Taurus may enter into the U.S. at a free rate of
duty under subheading 9801.00.10, HTSUS, does not
necessarily mean that a similar Ford Taurus is eligible
to enter into the U.S. duty-free under subheading
9801.00.10, HTSUS. We recognize that the courts have
found that a section 1315(d) "established and uniform
practice" can be predicated on uniform classifications
and liquidations at various ports over a period of
time. Heraeus-Amersil, Inc. v. United States, 617 F.
Supp. 89, 9 CIT 412 (1985), (where the court found that
a uniform and established practice had been established
with regard to the classification of fused quartz/fused
silica under items 540.11 and 540.41, TSUS). The facts
at issue in this case, however, do not involve the
question of whether or not a certain tariff
classification applies, but rather whether the subject
vehicles have satisfied all of the requirements for
duty-free eligibility under a Chapter 98, HTSUS,
provision. Entries under subheading 9801.00.10, HTSUS,
are fact specific; each entry stands on its own
particular fact situation. Hence, liquidations
covering the same type of merchandise at a free rate of
duty are not enough to establish a uniform and
established practice under subheading 9801.00.10,
HTSUS.
Finally, we note that your office opined that the protestant
may have confused in the subject protest certain arguments used
in other protests involving different factual situations. In
this regard, we note that in Ruling 559517 dated January 2, 1997
with respect to an application for further review forwarded from
your office (Protest No. 3004-95-100150), the protestant in that
case claimed that a uniform and established practice existed
concerning the entry of a Ford Explorer produced in a foreign
trade zone in the United States and its claimed classification
under subheading 9801.00.10, HTSUS. The protestant's claim with
respect to a uniform and established practice was denied. The
facts and most of the issues in Ruling 559517 are different from
those in the subject protest, e.g., the vehicle in this protest
was not manufactured in a foreign trade zone.
Based upon all of the above, we find that the protest should
be denied.
HOLDINGS:
The protestant has not established the existence of a
uniform and established practice under headings 8703 and/or 8704
or under subheading 9801.00.10 with respect to the subject
vehicle.
The subject vehicle was correctly classified under
subheading 9801.00.80.
The protest should be denied.
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 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, the Freedom of Information
Act and other public access channels.
Sincerely,
Director,
International Trade Compliance
Division