PRO-2-02-CO:R:C:E 220933 CB
Regional Commissioner
U.S. Customs Service
North Central Region
Suite 1501
55 East Monroe Street
Chicago, ILL 60603-5790
RE: Application for further review of Protest No. 3401-7-000047
under 19 U.S.C. 1514
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised and our
decision follows.
FACTS:
Forty nine (49) lifts of softwood lumber were consigned on a
revenue waybill issued on December 29, 1986. The lumber was
destined for Winnipeg, Manitoba, Canada. The record indicates
that fifteen (15) of the lifts were of 2x6's and thirty four (34)
of the lifts were of 2x4's.
On January 2, 1987, the Customs Service issued telex no.
016673 advising all field offices of the imposition of a
temporary 15 percent surcharge on all listed softwood lumber
products from Canada, effective as of December 31, 1986. The
surcharge was imposed by Presidential Proclamation 5595 of
December 30, 1986. Subsequently, the Customs Service sent out
telex no. 00563 dated January 14, 1987, advising the field
offices of the termination of the collection of the 15 percent
surcharge on shipments exported from Canada as of January 8,
1987. The telex indicated that the additional duty should still
be collected on shipments exported from Canada on or after
December 31, 1986, and on or before January 7, 1987, unless the
products were in transit on a through bill of lading to the
United States on or before December 30, 1986.
The subject lumber was unloaded at Winnipeg and resold for
export to the United States as evidenced by invoices no. 2935,
2879, and 2898. Sixteen (16) lifts of 2x6's were exported by
truck. Fifteen (15) lifts of 2x6's were on the rail car which is
claimed as on a through bill of lading. The record indicates -2-
that the revenue waybill submitted covers fifteen (15) lifts of
2x6's; however, invoice no. 2879 covers sixteen (16) lifts of
2x6's and invoice no. 2935 covers an additional sixteen (16)
lifts of 2x6's which are not covered at all by the submitted
waybill.
The merchandise covered by the four entries in question was
sold by the exporter from the distribution center in Winnipeg,
Manitoba, Canada. This transaction is shown by the invoice
between the exporter and the U.S. purchaser. Entry was made at
the price between these two parties. The District Office asserts
that the transaction shows the sale that caused the merchandise
to be exported to the United States, and it shows that the
merchandise could have been in transit to the United States only
at this point. According to the District Office, upon inquiries
to the U.S. purchaser, the purchaser complained that its name had
been used as a consignee although shipments were sold in transit
to other importers.
Protestant asserts that evidence of a through bill of lading
was presented to the District Office. These sales were direct
shipped to the U.S., with interlining carriers to provide
delivery. The lumber was sold to the U.S. purchaser and
delivered to Fargo, North Dakota. It is the District Office's
position that it is clear from the documents submitted that the
revenue waybill is not a through bill of lading to the United
States. Rather, it is a bill of lading to ship the merchandise
to Winnipeg. The documents also indicate that each shipment of
lumber destined for the United States was sold from the
distribution center in Winnipeg and each shipment was transported
by truck and exported on or after December 31, 1986.
ISSUE:
Whether the subject softwood lumber was subject to the
fifteen (15) percent surcharge?
LAW AND ANALYSIS:
Customs telex no. 00563 advised all field offices to collect
the surcharge on products exported from Canada, unless the
products were in transit on a through bill of lading. It is the
protestant's contention that the subject merchandise was not
subject to the surcharge because it was in transit on a through
bill of lading to the United States on or before December 30,
1986.
There is no question that the subject lumber was brought
into the United States during the period in issue. It was
entered after the Presidential Proclamation went into effect and -3-
had started the period running. The period was terminated by the
Secretary of Commerce under the delegated authority (to
terminate) given by the Presidential Proclamation. The notice
indicated that the period ended for goods that were exported from
Canada on or before January 7, 1987. The notice also contained
the further exemption that goods exported on or after December
31, 1986 and on or before January 7, 1987, were exempt if they
were in transit to the United States on a Through Bill of Lading
on or before December 30, 1986. The question that remains is
whether the subject lumber was in transit on a Through Bill of
Lading, as claimed by the protestant.
A general legal rule is that a protestant has the burden of
proof and that the claimant for an exemption must show
entitlement to that exemption. For the reasons stated below,
protestant has failed to show that the goods were on a through
bill of lading in transit to the United States on or before
December 30, 1986.
The Uniform Commercial Code notes that a through bill of
lading is one with the final destination noted thereon, although
transportation of goods may extend over lines of connecting
carriers. See U.C.C. 7-302 (1989). A through bill of lading has
been defined, by the courts, as governing the "entire
transportation of goods and applies to connecting carriers even
though they are not parties to the contract; whether a particular
bill so qualifies is a question of fact, and relevant indicia
include whether the final destination is designated thereon, the
method by which the connecting carriers are compensated and, more
generally, conduct of the carriers." Tokio Marine & Fire Ins.
Co., Ltd. v. Hyundai Merchant Marine Co., Ltd., 717 F. Supp.
1307, 1309 (N.D. Ill.).
In the instant case, the bill of lading issued by Butram
Enterprises to Alberta Stake and Lath, dated December 15, 1986,
shows the final destination as Fargo, North Dakota. However, the
second carrier is shown as MacCosham Cartage from Edmonton to
Winnipeg, Canada. The bill of lading shows only that the Butram
Enterprises shipment from Smith, Alberta to Edmonton, Alberta was
prepaid. The bill fails to show how MacCosham Cartage or Searcy
Trucking was to be compensated. The revenue waybill presented by
protestant appears to cover a shipment from Edmonton to Calgary
to Winnipeg, Manitoba. No connecting carriers are shown. Nor,
is there a final destination shown. The invoice to Burrows
Lumber Co. from Carponi Freight Services appears to cover only a
shipment from Edmonton, Alberta to Winnipeg, Manitoba on a
Canadian Pacific railcar. Additionally, the record shows that
MacCosham Cartage Co. billed Burrows Lumber rather than Alberta -4-
Stake and Lath. The record also shows that Searcy Trucking
billed Burrows Lumber for the shipment from Winnipeg, Manitoba.
Therefore, based on the record, protestant has failed to show
that the goods were in transit on a through bill of lading.
HOLDING:
The subject lumber was subject to the 15 percent surcharge
imposed by the Presidential Proclamation. The record fails to
support protestant's claim that the merchandise was in transit on
a through bill of lading and, thus, exempt from the surcharge.
This protest should be denied in full.
Sincerely,
John Durant, Director
Commercial Rulings Division