OT:RR:CTF:VS H291254 JMV
Port Director
U.S. Customs and Border Protection
Port of Houston
7141 Office City Drive
Houston, TX 77087
Re: Application for Further Review of Protest No. 5309-16-100128; Generalized System of Preferences; Request for Refund of Duties Paid During Lapse Period
Dear Port Director:
This is in response to the Application for Further Review (“AFR”) of Protest No. 5309-2016-100128, timely filed by Givens & Johnston, PLLC on behalf of the protestant, Seatex, Ltd. (“Seatex”). The protest concerns whether goods entered during the lapse period of the Generalized System of Preferences (“GSP”) are eligible for a refund of duties paid.
FACTS:
Seatex is service provider of chemical compounding, toll manufacturing, and private label packaging. This protest involves 16 entries of Hexamine, all of which occurred in 2015, prior to renewal of the Generalized System of Preferences program (“GSP”). Seatex's Hexamine is stated to be wholly produced in India, a beneficiary developing countries (“BDC”), as listed in General Note 4, Harmonized Tariff Schedule of the United States (“HTSUS”). The Hexamine is classified under 2933.69.50, a GSP eligible provision containing the Special Program Indicator (“SPI”) "A."
Inquiries on these entries began on August 31, 2015, when CBP sent a Request for Information on one of the entries. Seatex responded on September 28, 2015, and provided a sample, which CBP tested. On December 07, 2015, CBP sent a Notice of Action stating that the HTSUS was recently changed and that based on the lab results, at the time of entry the Hexamine was misclassified under subheading 2933.99.89, HTSUS. The Notice of Action further requested that Seatex review its records for the last five years for any additional errors and provide a response. Seatex responded on December 21, 2015, correcting all 16 entries and claiming GSP. Seatex’s response included amended entry summaries correcting the classification to subheading 2933.69.50, HTSUS, and utilizing the GSP prefix “A”. On February 01, 2016, CBP sent two documents: 1) a Notice of Action on one entry requesting duties in the amount of $5,151.13, and 2) Requests for Information on the remaining 15 entries that were not subject to the August 31, 2015 Request for Information. Seatex responded on February 23, 2016, reiterating its December 21, 2015, response to CBP regarding the misclassifications and claim for GSP. In addition, Seatex provided a number of documents to substantiate its eligibility for GSP. On April 06, 2016, CBP sent a Notice of Action stating that it intended to deny the retroactive GSP claims after 20 days because of the misclassification. Seatex responded to the Notice of Action on April 25, 2016, claiming that Seatex made a timely written claim for GSP, and that its products qualified for GSP treatment. However, CBP issued a Notice of Action on May 16, 2016, rejecting Seatex's response stating: "Based on the fact a classification change was proposed, the GSP claim in a letter format and not a Post-entry amendment is not sufficient to substantiate the GSP claim." CBP further stated that “It is unclear whether a retroactive GSP claim is allowed on originally misclassified articles where GSP was not an option.”
ISSUE:
Whether a letter, rather than a Post-Entry Amendment (“PEA”), is sufficient to make a retroactive GSP claim.
LAW AND ANALYSIS:
Whether a letter, rather than a PEA, is sufficient to substantiate a retroactive GSP claim
The GSP is a renewable preferential trade program that allows eligible products of designated beneficiary developing countries to directly enter the United States free of duty. The GSP program expired on July 31, 2013, but was renewed effective July 29, 2015 through December 31, 2017 via the Trade Preferences Extension Act of 2015 (“The Act”) P.L. 114-27, 129 Stat. 362. A provision in The Act allowed for retroactive effect from August 1, 2013 to July 29, 2015.
In a Federal Register Notice dated July 28, 2015, CBP provided notice that it would accept claims for GSP duty-free treatment for merchandise entered, or withdrawn from a warehouse, for consumption, and that CBP would process refunds on duties paid on GSP-eligible merchandise that was entered during the period that the GSP program was lapsed. See Federal Register Vol. 80. No. 144. Entries that were filed electronically via the Automated Broker Interface (“ABI”) using SPI Code “A” as a prefix to the tariff number would be automatically processed by CBP. For entries that either were not filed through the ABI or were filed through the ABI without the SPI Code “A” prefix, importers were required to timely submit a duty refund request to CBP. In accordance with Section 202(b)(2) of The Act, the deadline for making such requests was December 28, 2015.
A duty refund may be requested through a variety of written mediums. Customs Message 15-000892 (Dec. 1, 2015), which addresses GSP Retroactive Refund Processing, states:
An importer may submit written duty refund requests for entry summaries submitted during the GSP lapse period on which the special program indicator "A" was not transmitted. Refund requests may be submitted as letters, Post Entry Amendments (PEA), Post Summary Corrections (PSC), Protests, or using other written medium.
. . .
The GSP refund request should include the entry summary line-level details, specifically:
The entry number
The line number
The HTS number
The estimated total refund
The Point of Contact Phone Number and Email Address (emphasis added).
Here, the entries at issue were filed without the SPI Code “A” prefix because they were originally filed under a free tariff rate of duty and the filing for preferential tariff treatment under the GSP was not necessary. However, before the goods were liquidated, CBP issued a Notice of Action on December 7, 2015, advising Seatex that Seatex used the wrong tariff classification and that CBP proposed to classify the Hexamine under subheading 2933.69.50, HTSUS. The Notice of Action further noted that the entry will be changed as proposed within 20 days, indicating that Seatex need not take any further action in order to properly classify the imported Hexamine. Prior to December 28, 2015, the deadline for requesting GSP treatment for imports entered during the lapse period, Seatex filed a response requesting GSP treatment for the imported Hexamine.
CBP has not designated any particular form or format as the proper method to request a duty refund, only that certain information be included in the request and that the request be in a written medium. Thus, we find the letter Seatex used in its Response to the Notice of Action with the corrected entry summaries was sufficient to substantiate a retroactive GSP claim.
HOLDING:
Based on the facts described above, the Protestant’s GSP retroactive refund claim was improperly denied by the Port. Therefore, the protest should be granted.
In accordance with the Protest/Petition Processing Handbook (CIS HB December 2007), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any re-liquidation of the entry or entries in accordance with the decision should be accomplished prior to mailing of this decision. Sixty days from the date of this 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
Commercial & Trade Facilitation Division