OT:RR:CTF:EPDR H303131 RD
Category: Entry
JoAnne Colonnello
Center Director
Pharmaceuticals, Health and Chemicals
Center for Excellence and Expertise
Buffalo Field Office
Buffalo, NY 14225
Attn: Melissa Garland, Customs Liquidator
Re: Application for Further Review of Protest No. 5301-18-100548; Iwatani Corporation of
America; 19 U.S.C. § 1313(j)(1); Direct Identification Unused Drawback
Dear Director Colonnello:
Protest No. 5301-18-100548 was forwarded to this office for further review and was
received on October 15, 2018. We have considered the points raised by your office and the
protestant. Our decision follows.
FACTS:
In October 2016, RCS Companies (“RCS”) imported a “bending roll machine” that was
sold to Iwatani Corporation of America (“Iwatani”) to be displayed at a trade show in Las Vegas,
NV. An invoice marked EBG72-00468, dated September 21, 2016, from Iwatani reflects that a
“bending roll” “of no commercial value” was to be delivered to the Las Vegas Convention Center
(“LVCC”). The same invoice notes the “Model” to be PRB-MJ25TNC-0615. A packing list of
the same date and reference number as the invoice, indicates that a “bending roll” in a crate was
to be delivered to the LVCC. A document labeled “combined commercial invoice / packing list,”
dated September 26, 2016, shows the shipper and exhibitor as Iwatani and the importer of record
as RCS Companies. The goods described include a “bending roll Model PRB-MJ25TNC-0615,”
manufactured in Japan. Iwatani is named as the “exhibitor” and the venue is the LVCC.
Iwatani states in its protest, that “[a]fter the trade show, the machine was moved to a
warehouse in Las Vegas to await a sale to a U.S. customer.” By February 2018, no sale had
materialized, so Iwatani decided to export the machine back to Japan. On March 5, 2018,
Iwatani filed a “Notice of Intent to Export, Destroy or Return Merchandise for Purposes of
Drawback,” also called a United States Customs and Border Protection (“CBP”) form 7553. On
the CBP Form 7553, the merchandise is described as “Bending Roll, Model: PRB-
MJ25TNC0615” in one crate. In the box for Unique Indentifer No., Iwatini listed “[t]o be
determined.” CBP waived examination on March 5, 2018.
Iwatani provided a bill of lading from Great Luck Inc., dated March 16, 2018, that shows
Iwatani Corporation of America as the shipper/exporter of “1 Wooden Packing of (Vacumed
[sic]) of Bending Roll Machine,” “Model: PRB-MJ25TNC-0615.” The port of origin is Los
Angeles, California, and the port of discharge is Kobe, Japan. Iwatani has also provided an
invoice, dated February 27, 2018, that reflects Iwatani Corporation in Japan as the buyer and
Iwatani Corporation of America as the seller of “bending rol [sic] machine. The invoice also
shows that the bending roll machine, model PRB-MJ25TNC-0615, of “no commercial value,”
but with a noted unit price in Japanese yen, was to be shipped from California to Japan.
According to Iwatani, the machine was exported to Japan on March 16, 2018.
On March 19, 2018, Iwatani filed a duty drawback claim under 19 U.S.C. § 1313(j)(1),
direct identification unused merchandise. According to Iwatani, the machine was not used after
importation from, and export back to, Japan.
Because Iwatani was a first-time filer for drawback, the drawback office conducted a
“full desk audit” of the drawback entry and sent a Request for Information to Iwatani’s broker on
May 7, 2018. This request stated: “In order to give full consideration to your claim for
drawback, it is necessary to verify the provision of drawback, selected exports, and your right to
drawback.” In response to this request Iwatani provided the following:
• An invoice dated December 20, 2016, showing that a company named Freeman
billed Iwatani Corp for an “international transportation import” to the Las Vegas
Convention Center. The document does not list any description of the
merchandise.
• A document labeled “Receipt of Cargo” dated November 22, 2016, showing that a
bending roll machine, “model: PRBMJ25TNC-0615” was received from Iwatani
into a warehouse in Las Vegas, NV.
• A document labeled “Pick Ticket for Outbound Shipment” dated March 1, 2018,
indicating that a large crate was picked up from a Las Vegas warehouse.
• A “Straight Bill of Lading” dated March 1, 2018, showing that a carrier named
HT Express Inc. transported “Crate stc: Machinery” for Iwatani to “TMI c/o
Westcoast Packers” in Long Beach, CA. The dimensions for the machinery were
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listed to be 130 inches long, 86 inches wide, and 91 inches high. The weight was
listed to be 7,011 pounds.
• A “Straight Bill of Lading” from West Coast Packer and Port Services dated
March 9, 2018, showing that a carrier named Dolse Trucking transported a crate.
The dimensions for the crate were listed to be 130 inches long, 88 inches wide,
and 92 inches high. The weight was listed to be 6,910 pounds.
• A “Delivery Certificate for Purposes of Drawback,” signed on May, 18, 2018,
showing the transfer of a “Bending Roll, Model PRB-MJ25TNC-0615” from RCS
Companies to Iwatani Corporation of America.
• A bill of lading dated March 16, 2018, indicating the exportation of “Machinery, 1
Wooden Packing of (Vacumed [sic]) of Bending Roll Machine Model:
PRBMJ25TNC-0615” and referencing Booking Number 810091841.
• Other documents describing the rolling machine and photographs of the crated
bending roll machine.
CBP denied Iwatani’s drawback claim and the drawback entry liquidated on August 24, 2018,
without the requested refund of duties. CBP’s drawback specialist determined that the
documents provided by Iwatani were missing specific identifiers that allowed CBP to trace the
merchandise from import to export as required.
ISSUE:
Whether the evidence provided by the Protestant proves that the exported bending roll machine
was the imported bending roll machine as required by 19 U.S.C. § 1313(j)(1).
LAW AND ANALYSIS:
We note initially that the protest was filed timely per 19 U.S.C. § 1514(c)(3). The
relevant entry liquidated on August 24, 2018, and the protest was filed on September 14, 2018,
within 180 days of the liquidation. The matter protested, the refusal to pay a claim for drawback
is a protestable decision per 19 U.S.C. § 1514(a)(6). Finally, the application for further review is
valid in that the Protestant alleges that we have not addressed the issue previously per 19 C.F.R.
§ 174.24(b).
Drawback is a privilege, not a right, subject to compliance with the prescribed rules and
regulations. See 19 U.S.C. § 1313(l)(1); see also Chrysler Motors Corp. v. United States, 14 Ct.
Int’l Trade 807, 816 (1990), aff’d, 945 F.2d 1187 (Fed. Cir.1991); Guess? Inc. v. United States,
944 F.2d 855, 858 (1991) (“We are dealing [in discussing drawback] . . . with an exemption from
duty, a statutory privilege due only when the enumerated conditions are met.”). One of the
conditions that must be met when claiming drawback based on the exportation of an article, is
that sufficient evidence must be provided to establish the article’s exportation. See e.g., 19
U.S.C. § 1313(i) (“A person claiming drawback under this section based on the exportation of an
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article shall provide proof of exportation of the article.”). Under 19 U.S.C. § 1313(i), claimants
whose drawback-eligible goods are exported (in lieu of destruction) must provide proof of the
exportation of the article that “establish[es] fully the date and fact of exportation and the identity
of the exporter” and “may be established [, inter alia,] through the use of records kept in the
normal course of business[.]” Id.; see also 19 C.F.R. § 191.72.
Iwatani made its drawback claim under the provision for direct identification unused
merchandise drawback, provided for in 19 U.S.C. § 1313(j)(1). Pursuant to 19 U.S.C. §
1313(j)(1), drawback is authorized if imported merchandise on which was paid any duty, tax, or
fee imposed under Federal law because of its importation is, within three years of the date of
importation, exported or destroyed under Customs supervision and was not used in the United
States before such exportation or destruction. See also 19 C.F.R. § 191.31. No substitution is
permitted by 19 U.S.C. § 1313(j)(1). The drawback claimant must directly identify the exported
goods as those goods imported by the designated entry. Two options are available to the exporter
in directly identifying the goods: the actual goods imported must be identified as the goods that
are exported, i.e., not identical goods, but the same goods, or, the exported goods may be
identified as the imported goods by an accounting method as specified in 19 C.F.R. § 191.14.
Headquarters Ruling Letter (“HQ”) 230353 (Oct. 14, 2004); HQ H201710 (Jan. 5, 2015); HQ
H311759 (Nov. 28, 2023).
In HQ 230353 (Oct. 14, 2004), due to discrepancies in the description of the imported and
exported goods, CBP denied drawback because the claimant could not prove that the imported
goods (conveyor belts) were the exported goods. In that case, the claimant provided evidence of
importation and exportation, but the descriptions of the relevant goods were vague and
inconsistent. In HQ 230353, CBP held that “Fi-Tech has provided no credible proof that the
goods described on the import documents as two machine fabrics, W2005918 and W2005919,
weighing a total of 550 kilograms were exported.” In contrast, in HQ H008953 (February 17,
2010), CBP granted the protest because “the identity of the imported merchandise [mesh bags]
was maintained and traceable in the claimant’s records, from time of importation, through
receipt, entry into and withdrawal from inventory, and ultimate exportation or destruction of the
unused article. Consequently, the requirements of direct identification unused merchandise
drawback as set forth in 19 U.S.C. § 1313(j)(1) have been met.”
In this case, Iwatani is unable to prove that the imported good is the exported good.
Iwatani attempts to prove direct identification of the bending roll machine by tracing its
movements in the U.S. from importation to exportation. Iwatani does not claim that the machine
was identified by a serial number or other singular identifier or accounting method.
What can be determined from the documents provided by Iwatani and discussed above is
that on October 19, 2016, RCS Companies imported and entered a machine under subheading
8462.21.0000, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), and the
entry referenced Invoice Number 001/JP-415721-C20172. Iwatani did not provide Invoice
Number 001/JP-415721-C20172 with its entry summary. Rather, Iwatani provided an invoice
with Reference No. EBG72-00468 and a packing list with the same reference number. Both list
under “description of goods,” a “Bending Roll Model: PRB-MJ25TNC-0615.”
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Iwatani has provided documents showing that in December 2016, it was invoiced for the
international transportation of undescribed merchandise by Freeman to the Las Vegas Convention
Center in November 2016. Shortly thereafter, Iwatani received a “’Kurimoto’ Bending Roll
Machine Model: PRB-MJ25TNC-0615” into warehouse in Las Vegas.
Iwatani has also provided documents that demonstrate a large heavy crate was transported
from a warehouse in Las Vegas. For example, Iwatani provided a “Pick Ticket for Outbound
Shipment #: SHU-0000001,” dated March 1, 2018, which indicates that “For the account of:
SHU Mitsubishi Houston” a “Large Crate” was picked up from a warehouse in Las Vegas by
“TMI c/o Westcoast Packers.” There is nothing in this document that describes the merchandise
in the crate, its weight, dimensions, value, or quantity. It does, however, reference “PO
18030102.” On the same date, a “Straight Bill of Lading Short Form,” with a shipment
identification number that matches the purchase order number on the pick ticket (18030102),
indicates a consignee of TMI c/o Westcoast Packers, a shipper of “Iwatani c/o Advantage,” and a
“Bill To” of Transport Management Intl, Inc. for a “Crate stc: Machinery, dims: 130x86x91
inches L/W/H and a weight of 7011. Iwatani provided an additional straight bill of lading dated
March 9, 2018, with the same identification number (08030102) that notes “Booking No.
810091841,” and the shipment of a “Crate Dims: 130x88x92” and a weight of 6,910. Finally,
Iwatani provided a bill of lading proving the exportation of “Machinery, 1 Wooden Packing of
(Vacumed [sic]) of Bending Roll Machine Model: PRB-MJ25TNC-0615,” in March 2018. The
bill of lading references Booking Number 810091841, which links what was removed from
warehouse to be the merchandise exported to Japan.
In sum, Iwatani has provided documentary evidence that a bending roll machine of model
number PRB-MJ25TNC-0615 was imported and entered into a warehouse in November 2016.
Iwatani has also provided documentation that establishes a basis to believe that in March 2018 a
bending roll machine of model number PRB-MJ25TNC-0615 was removed from a warehouse
and exported to Japan. The missing connection for purposes of direct identification drawback is
demonstrating that the machine imported was the same machine that was exported.
Similar to HQ 230353, Iwatani is only able to show that a potentially identical machine,
as described by the model number was imported and then exported, but Iwatani has not
demonstrated that the same machine that was exported was the machine that was imported.
Drawback claimants must strictly adhere to the requirements set forth in the statutes and
applicable regulations. United States v. W. C. Hardesty Co, Inc., 36 C.C.P.A. 47, 52 (C.A.D. 396)
(1949); Spencer, Kellogg & Sons (Inc.) v. United States, 13 C.C.A. 612, 616 (1926). See also
Guess? Inc. v. United States, 944 F.2d 855, 858 (Fed. Cir. 1991). Unlike the claimant’s mesh
bags in HQ H008953, the lack of a singular identifier for Iwatani’s bending roll machine
provides no method to link the imported machine to the exported item. Taken together, the
evidence proffered by Iwatani is too vague and incomplete to conclusively identify that the
machine imported was the machine exported. Accordingly, the direct identification unused
merchandise drawback claim was properly denied.
HOLDING:
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The evidence provided by the Protestant does not prove that the exported bending roll
machine was the imported bending roll machine as required by 19 U.S.C. § 1313(j)(1).
Accordingly, the protest should be DENIED.
You are instructed to notify the Protestant of this decision no later than 60 days from the
date of this decision. Any reliquidation of the entry or entries in accordance with the decision
must be accomplished prior to this notification. Sixty days from the date of the decision, the
Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and
the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or
other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division
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