OT:RR:CTF:EPDR H307577 SLJ
Center Director
Apparel, Footwear & Textiles Center
33 New Montgomery St., 16th Floor San Francisco, CA 94105
Attn: Import Specialist Catina L. Sinches
RE: Application for Further Review of Protest Number 530119101009; Drawback 19 U.S.C. § 1313(j)(1); direct identification
Dear Center Director:
This decision is in response to the Application for Further Review (“AFR”) of protest number 530119101009, filed on behalf of Weihai Bettex International Trading Co., Ltd (“Weihai”), on August 13, 2019. Our decision follows.
FACTS:
According to entry summary documents, on January 23, 2019, Weihai entered merchandise described and classified as women’s sweaters and cardigans. The entry was liquidated on December 6, 2019. According to the Notice of Intent to Export for Drawback, Weihai filed for direct identification unused merchandise drawback under 19 U.S.C. § 1313(j)(1) on April 23, 2019, for women’s sweaters and cardigans. The export invoice and packing lists show that Weihai exported women’s sweaters and cardigans. The drawback claim was denied on August 2, 2019, because, according to the San Francisco Drawback Office, the imported sweaters could not be directly identified with the exported sweaters. The Drawback Office noted that some of the bills of lading did not identify Weihai as the exporter, and thus the office could not verify that Weihai was eligible for drawback. Additionally, the office noted that an updated version of an import bill of lading was attributed to a different shipper than the prior version of the bill of lading after the office requested more information. Weihai filed a protest on August 13, 2019, protesting the denial of the drawback claim.
Weihai provided the following as evidence of the importation and exportation of the women’s sweaters and cardigans:
Import Purchase Order No. 18154945: A purchase order (“PO”) issued by Forever 21, Inc. to Weihai, which is dated July 13, 2018. The PO included a total of 9,960 camel/cream and blush/cream women’s sweaters. The order contained a total of 4,980 size small, 3,320 size medium, and 1,660 size large sweaters of camel/cream and blush/cream colors which are both listed under style no. 163S3301219VD.
Import Purchase Order No. 18154954: A second PO with the same number as the preceding PO, issued by Forever 21, Inc., and dated July 13, 2018. This PO between Weihai and Forever 21 included a total of 1,080 camel/cream and blush/cream women’s sweaters. The order contained a total of 540 size small, 360 size medium, and 180 size large, of camel/cream and blush/cream colors two color combinations which are both listed under style no. 163S3301219VD.
Import Purchase Order #18186409: A third PO issued by Forever 21, Inc. to Weihai, dated August 29, 2018, included a total of 1,200 women’s grey sweaters. The order contained 600 size small, 400 size medium, and 200 size large pieces, all listed under style no. DREAM161110-27.
Import Purchase Order # 18189454: A fourth PO issued by Forever 21, Inc. to Weihai, dated August 31, 2018, which included a total of 1,002 women’s red/black sweaters. The order contained 501 size small, 334 size medium, and 167 size large pieces, all listed under style no. DREAM161110-27.
Import Commercial Invoice: A commercial invoice, dated November 3, 2018, shows that Weihai as the shipper/exporter issued an invoice to Forever 21 Logistics LLC. The invoice number is BTX-181103-3082 and specified that payment was due for two different products. The first is described as a Lady’s Knit Sweater/Top, which is listed twice: one comprised of 66% acrylic and 33% polyester material, and another comprised of 61% acrylic and 37% polyester material. The style no. listed is DREAM161110-27, and the total quantity is 2,202 pieces or183.5 dozen. The classification specified is subheading 6110.30.3020, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). The second group of merchandise is described as a Lady’s Knit Sweater Cardigan/LSLV with style no. listed is 163S3301219VD, and the total quantity is 11,040 pieces or 920 dozen. The classification specified is subheading 6110.20.2020, HTSUSA.
Import Packing List: The import packing list is dated November 3, 2018, and identifies Weihai as an exporter, acting “for the account” of Forever 21 Logistics LLC. The packing list pertains to two different products. The first is described as Lady’s Knit Sweater Top/LSLV, which is listed twice: one comprised of 66% acrylic and 33% polyester material, and another comprised of 61% acrylic and 37% polyester material). The style no. listed is DREAM161110-27, and the total quantity is measured by cartons (“CTNS”), for a total of 96 CTNS. The second is described as a Lady’s Knit Sweater Cardigan, listed under style no. of 163S3301219VD, and totaling 1714 CTNS. The cumulative total number of CTNS on the invoice is 1,810, with a gross weight of 5,826.30 KGS.
Import Bill of Lading: The first import bill of lading is dated November 5, 2018, between Weihai as the shipper and Forever 21 Logistics LLC as the consignee. The merchandise being shipped is described as Lady’s Knit Sweater and Lady’s Knit Cardigan, totaling 1,810 CTNS with a gross weight of 5,826.30 KGS. The container no. is listed as CAIU9954486. The bill of lading was issued by Pingye Foreign Transportation Corp. LTD (“Pingye”), who Weihai clarified was a co-loader and holds the sub-house bill. The merchandise is recorded as departing Qingdao, China in destination to Long Beach, California.
Import Bill of Lading: The second import bill of lading is dated November 5, 2018, between Pingye as the shipper, and Seiyo Shipping Co., LTD, as the consignee. The merchandise being shipped is described as Lady’s Knit Sweater and Lady’s Knit Cardigan, with a total gross weight of 5,826.30 KGS. The container no. is listed as CAIU9954486. The bill of lading was issued by Honour Lane Shipping Ltd. who, according to Weihai, is the AMS House bill carrier.
Import Bill of Lading: The third import bill of lading is dated November 5, 2018. The bill was issued by SMLine Corp. and identifies Honour Land Shipping as the shipper/exporter, with Jenson Logistics as the consignee. Weihai asserts that Jenson Logistics is the co-loader receiving agent for Pingye. The merchandise being shipped is described as Lady’s Knit Sweater, Lady’s Knit Cardigan, and garments, with a total gross weight of 5,826.30 KGS. The container no. is listed as CAIU9954486.
Entry Summary: The Entry Summary (CBP Form 7501) for entry no. XX-XXXXX43-0 lists an import date of November 23, 2018, an entry date of January 8, 2019, and a summary filing date of January 18, 2019. Weihai is listed as the importer of record, and Forever 21 as the consignee. There are two entry lines for the imported clothing. The first entry line identifies 184 dozen man-made women’s sweaters classified under subheading 6110.30.3020, HTSUSA. The second line identifies 920 dozen Women’s Sweaters classified under subheading 6110.20.2020, HTSUSA.
Warehouse Inbound Report: The warehouse inbound report is dated January 18, 2019, and lists Seiyo Shipping Company Ltd. (“Seiyo”) in Los Angeles, California as the receiving warehouse. The receipt shows a quantity of 1,810 packages with a unit of measurement of CTNS and described as “Garment.” The packages are stored on a total of 28 pallets. The container number is listed as CAIU9954486/LCL.
Warehouse Inventory Record: The Seiyo warehouse inventory record spans from January 19, 2019, through May 1, 2019. The record displays inventory updates on the first of each month. Although some columns of the inventory record table do not have specified units, the first column uses CTNS/PLT, so for purposes of this description, CTNS will be used as the unit for the remaining columns. The record shows a total of 1,810 CTNS inbound on January 18, 2019, and 28 pallets. These numbers reflect the inventory balance recorded in February, March, and April of 2019, without change. On April 4, 2019, the inventory record shows a withdrawal of 1,810 CTNS and then a balance on May 1, 2019, of 0 pallets and 0CTNS. The item no. for each line is listed as CAIU9954486.
Export Commercial Invoice: The export commercial invoice is dated March 8, 2019. Weihai is identified as the shipper/exporter. The invoice number is BTX-181103-3082 and pertains to two different product types. The first is described as a Lady’s Knit Sweater/Top, which is listed twice: one comprised of 66% acrylic and 33% polyester material, and another comprised of 61% acrylic and 37% polyester material. The style no. listed is DREAM161110-27, with a total quantity of 2,202 pieces or 183.5 dozen. The classification specified is subheading 6110.30.3020, HTSUSA. The second is described as a Lady’s Knit Sweater Cardigan. The style no. listed is 163S3301219VD, with a total of 11,040 pieces or 920 dozen. The classification specified is subheading 6110.20.2020, HTSUSA.
Export Packing List: The export packing list is dated March 8, 2019. Weihai is identified as the exporter. The list pertains to two different product types. The first is described as a Lady’s Knit Sweater/Top, which is listed twice: one comprised of 66% acrylic and 33% polyester material, and another comprised of 61% acrylic and 37% polyester material). The style no. listed is DREAM161110-27, with a total quantity is 96 CTNS. The second is described as a Lady’s Knit Sweater Cardigan, listed under style no. 163S3301219VD and totaling 1,714 CTNS. The total cumulative quantity for the packing list is 1,810 CTNS.
Notice of Intent to Export for Drawback: The notice of intent to export includes dates for March 11-12, 2019, and references import entry # XX-XXXXX43-0. The drawback claim is for unused merchandise under the J1 direct identification option and describes the merchandise as Lady Acrylic/Poly Knit Sweater under style DREAM161110-27. It also described the merchandise as Ladies Cotton/Poly Knit Sweater under style 163S3301219VD. The total quantity is listed as 1,104 dozen and the invoice number is listed as BTX-190308-101.
Export Bill of Lading: The export bill of lading document is dated March 23, 2019, with a ship date of April 15, 2019. The bill of lading was issued by Dyna Logistics Inc., identified as the forwarding agent, to Weihai, who is identified as the shipper and consignee. The merchandise is described as “Dress,” with a quantity of 1,810 CTNS. The document references invoice BTW-190308-101 and drawback entry #XXX-XXXXX66-3. Finally, the listed container no. is YMLU843517.
Pickup Receipt: The pickup receipt is dated April 4, 2019, and shows Dynatrans Inc., identified as an export trucking company, picking up merchandise from Seiyo shipping. The only other legible information lists container no. YMLU843517.
Sea Waybill: The Sea Waybill is dated April 15, 2019, and was issued by Yang Ming to Dyna Logistics, identified as the shipper, and Sinoglory Logistics, identified as the consignee. The Merchandise is described as “Dress,” with a total quantity of 1,810 CTNS, and a drawback entry reference no. of XXX-XXXXX66-3.
Tracking of Bill of Lading Sea Waybill: A tracking document issued by Yang Ming shows an arrival date for container no. YMLU8435317 on May 12, 2019, conveying a total quantity of 1,810 packages with a unit of measurement designated as “CT.” The last event date notes the container was “Empty Returned” on May 18, 2019.
Our office inquired as to why the description of the merchandise varied between the export invoice and export bill of lading, and between various other documents. In an email response dated March 9, 2022, Weihai responded that it did not know why the merchandise was described differently but assumed there may have been “a clerical error by the US export agent.”
ISSUE:
Whether Weihai has substantiated that it exported the exact merchandise which it imported, for purposes of claiming direct identification unused merchandise drawback under 19 U.S.C. § 1313(j)(1)?
LAW AND ANALYSIS:
As an initial matter, we note that this protest was timely filed. A protest must be filed within 180 days from the date of liquidation. See 19 U.S.C. § 1514(a)(5); 19 C.F.R. § 174.12(e). Here, CBP denied Weihai’s drawback claim on August 2, 2019, when it liquidated the subject drawback entry without the benefit of drawback, and this protest was timely filed on August 13, 2018, within 180 days of that liquidation. Additionally, further review of the protest is warranted because “the protest involves questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee, or by the Customs courts.” See 19 C.F.R. § 174.24(b). Specifically, we will examine the sufficiency of Weihai’s documents to determine whether the merchandise that was exported was the same merchandise that it imported, for purposes of claiming direct identification drawback. Accordingly, the criteria for further review are satisfied.
Drawback is the refund of certain duties, taxes, and fees imposed on imported merchandise that is granted when all applicable legal requirements are met. 19 U.S.C. § 1313. Compliance with all applicable legal requirements is subject to verification by U.S. Customs and Border Protection (“CBP”). 19 C.F.R. § 190.61(a). It is well established that drawback laws confer a privilege, not a right. See Swan & Finch Company v. United States, 190 U.S. 143 (1903). The privilege of claiming direct identification drawback is contingent on the exportation of imported merchandise, which is unused, and is exported or destroyed within three years of the date of importation. 19 U.S.C. § 1313(j)(1). This privilege may be claimed by the exporter or destroyer of the imported merchandise. 19 C.F.R. § 190.33(a)(1). A direct identification claim specifically requires that the exported merchandise be the same merchandise that was initially imported. In order to prove this fact, “the identity of the imported merchandise must be 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.” Headquarters Ruling Letter (“HQ”) H008953 (Feb. 17, 2010).
CBP has previously ruled on the sufficiency of the evidence tracing imported goods through exportation in order to claim direct identification drawback. For example, in HQ H008953, bags were imported into the United States and stored in a warehouse pending sale. When the bags were rejected by the intended purchaser, the bags remained in the warehouse until a new purchaser, located abroad, was identified. HQ H008953. The bags were then exported to the new purchaser, and the exporter claimed direct identification drawback. In order to support its claim, the exporter submitted various documents for verification. The import documents consistently described the bags on which drawback was claimed “either as bags or mesh bags, red color, with black drawstring, with size 18X30.” The export documents identified the bags as “size 18X30.” Both import and export documents have identical quantities of 400,000 bags listed. CBP found that the evidentiary records submitted sufficiently established that the exported bags were the same as the imported bags. CBP highlighted that “both the imported and exported merchandise have substantially similar descriptions . . . [and the] quantity of the imported and exported bags is identical.” Id. Additionally, most of the documents “reference[d] the same reference number” and the warehouse inventory record showed “receipt and withdrawal of the same container. . . with no withdrawal of the product for use in the intervening period.” Id. Although the description of the bags on the various supporting documents varied slightly, CBP still found that the data on the import documents sufficiently matched the data on the export documents to support a claim for direct identification unused merchandise drawback.
In the present case, Weihai’s documentation is similar to that assessed in HQ H008953 because there are slight differences in a consistent description of the goods which indicates that the various documents submitted are referencing the same set of goods. The chart below summarizes the relevant documents submitted to provide a direct comparison of the import and export documents.
IMPORT
EXPORT
Entry Summary
XX-XXXXX43-0
Line 1: 6110.30.3020 Man-made women’s sweater knit.
Quantity: 184 dozen
Line 2: 6110.20.2020 Women’s sweaters (cardigan).
Quantity: 920 dozen
Total quantity: 1,104
Notice of Intent to Export for Drawback
XXX-XXXXX66-3
For Import Entry # XX-XXXXX43-0
Lady Acrylic/Poly Knit Sweater style DREAM161110-27
Ladies Cotton/Poly Knit Sweater Style 163S3301219VD
Total quantity: 1,104 dozen
Commercial Invoice
Lady’s Knit Sweater/Top (listed twice, one with 66% acrylic and 33% polyester and one with 61% acrylic and 37% polyester)
DREAM161110-27
HTSUS 6110.30.3020
2,202 pieces
Lady’s Knit Sweater Cardigan
163S3301219VD
HTSUS 6110.20.2020
11,040 pieces
Commercial Invoice
Invoice #: BTX-190308-101
Lady’s Knit Sweater/Top (listed twice, one with 66% acrylic and 33% polyester and one with 61% acrylic and 37% polyester)
DREAM161110-27
HTSUS 6110.30.3020
2,202 pieces
Lady’s Knit Sweater Cardigan
163S3301219VD
HTSUS 6110.20.2020
11,040 pieces
Packing List
Merchandise:
Lady’s Knit Sweater/Top (listed twice, one with 66% acrylic and 33% polyester and one with 61% acrylic and 37% polyester).
6110.30.3020.
Style: DREAM161110-27.
Quantity: 60 CTNS and 36 CTNS – total 96 CTNS
Lady’s Knit Sweater Cardigan.
6110.20.2020
Style: 163S3301219VD
Quantity:1,714 CTNS
Total quantity: 1,810 CTNS
Weight: 5,826 Kgs
Packing List
Merchandise:
Lady’s Knit Sweater/Top (listed twice, one with 66% acrylic and 33% polyester and one with 61% acrylic and 37% polyester).
6110.30.3020.
Style: DREAM161110-27.
Quantity: 60 CTNS and 36 CTNS – total 96 CTNS
Lady’s Knit Sweater Cardigan.
6110.20.2020
Style: 163S3301219VD
Quantity:1,714 CTNS
Total quantity: 1,810 CTNS
Weight: 5,826 Kgs
Warehouse Inventory Record
1,810 CTNS inbound January 18, 2019
Item number CAIU9954486
Warehouse Inventory Record
1,810 CTNS outbound April 4, 2019
Item number CAIU9954486
Bill of Lading (all three reflect the same information)
Merchandise:
Lady’s Knit Sweater
Lady’s Knit Cardigan
1,810 CTNS
Container # CAIU9954486
Bill of Lading (both reflect the same information)
For invoice # BTW-190308-101
Merchandise
“Dress”
1,810 CTNS
Gross weight: 5,826 Kgs
Container #: YMLU843517
Combined Transport Bill of Lading also lists Drawback # XXX-XXXXX66-3
As shown in the chart, most of Weihai’s relevant documentation contains information and descriptions that are consistent between the importation and exportation of the sweaters and cardigans. The total weight listed for the garments, 5,286 kgs, is identified on both the import and export packing list. The 1,810 CTNS number is also consistently identified on the import and export packing lists, bills of lading, and the warehouse inventory record. Significantly, the import and export commercial invoices and packing lists all contain the same description of the sweaters and cardigans, the same total number of pieces for each, the same HTSUS subheadings, and the same style numbers. Further, the warehouse inventory record lists 1,810 CTNS entered into warehouse on January 18, 2019, with no other withdrawals occurring until all 1,810 containers were listed on the outbound warehouse report on April 4, 2019. The pickup receipt by the export trucking company Dynatrans shows the garments were picked up from the warehouse on April 4, 2019. The export bill of lading and sea waybill evidence the goods were subsequently shipped to the foreign purchaser on April 15, 2019. The records thus clearly demonstrate the movement of the sweaters and cardigans from importation through exportation.
An inconsistency among the export documents is the change in one letter of the invoice numbers between the export commercial invoice and export bills of lading: BTX-190308-101 and BTW-190308-101, respectively. Further, the only description of the merchandise on the export bill of lading and sea waybill is “Dress,” while all other documents describe the merchandise as at minimum a “sweater” or “cardigan.” Despite these discrepancies in the description of the merchandise and invoice number, we find that there is a consistent description of the merchandise, to include its weight and quantity, listed on the documents submitted by Weihai. Consequently, we find that Weihai has submitted sufficient documentation to show that the same sweaters and cardigans that were exported on April 15, 2019, were the same imported sweaters and cardigans that Weihai entered on January 23, 2019. As in HQ H008953, wherein there were differences in the description of the merchandise but the quantity, reference numbers, and warehouse receipts all matched across the import and export documents, here the quantity, weight, and warehouse receipts all match across the import and export documents submitted by Weihai. Significantly, the description of the merchandise was consistent throughout all the documentation except the export bill of lading and sea waybill. Therefore, we find that the documentation submitted is sufficient to establish that Weihai exported the exact merchandise which it imported for purposes of claiming direct identification unused merchandise drawback.
HOLDING:
Based on the above, we find Weihai has established it exported the exact merchandise which it imported, in accordance with the requirements under 19 U.S.C. § 1313(j)(1), and protest number 530119101009 is hereby GRANTED IN FULL.
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