Slip Op. 05-101
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
:
CARGILL CITRO-AMERICA, INC. :
:
Plaintiff, :
:
v. : Court No.
: 03-00348
UNITED STATES, :
:
Defendant. :
___________________________________:
[Plaintiff’s motion for summary judgment is granted. Defendant’s
cross-motion for summary judgment is denied.]
Dated: August 23, 2005
Neville Peterson LLP (John M. Peterson) for Cargill Citro-
America, Inc., plaintiff.
Peter D. Keisler, Assistant Attorney General; Barbara S.
Williams, Attorney-in-Charge, International Trade Field Office,
Mikki Graves Walser, Commercial Litigation Branch, Civil Division,
United States Department of Justice; of counsel: Chi S. Choy,
Office of the Assistant Chief Counsel, Bureau of Customs and Border
Protection, for the United States, defendant.
OPINION
TSOUCALAS, Senior Judge: Plaintiff, Cargill Citro-America,
Inc. (“Cargill”) moves pursuant to USCIT R. 56 for summary judgment
on the ground that there is no genuine issue as to any material
facts. Cargill argues that its claim for substitution unused
merchandise drawback with respect to certain exported frozen
concentrated orange juice for manufacturing (“FCOJM”) should be
Court No. 03-00348 Page 2
granted. The Bureau of Customs and Border Protection (“Customs”)1
cross-moves for summary judgment seeking an order dismissing the
case. Customs argues that the drawback claim was properly denied.
JURISDICTION
The Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1581(a) (2000).
STANDARD OF REVIEW
On a motion for summary judgment, the Court must determine
whether there are any genuine issues of fact that are material to
the resolution of the action. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A factual dispute is genuine if it might
affect the outcome of the suit under the governing law. See id.
Accordingly, the Court may not decide or try factual issues upon a
motion for summary judgment. See Phone-Mate, Inc. v. United
States, 12 CIT 575, 577, 690 F. Supp. 1048, 1050 (1988). When
genuine issues of material fact are not in dispute, summary
judgment is appropriate if a moving party is entitled to judgment
as a matter of law. See USCIT R. 56; see also Celotex Corp. v.
1
The United States Customs Service was renamed the Bureau
of Customs and Border Protection of the Department of Homeland
Security, effective March 1, 2003. See Homeland Security Act of
2002, Pub. L. No. 107-296, § 1502, 116 Stat. 2135 (2002);
Reorganization Plan for the Department of Homeland Security, H.R.
Doc. No. 108-32 (2003).
Court No. 03-00348 Page 3
Catrett, 477 U.S. 317, 322-23 (1986).
DISCUSSION
I. Factual Background
Cargill is a United States importer, producer, and exporter of
citrus products, including FCOJM. See Compl. ¶ 5. On May 30,
1997, Cargill filed a claim for substitution unused merchandise
drawback, pursuant to 19 U.S.C. § 1313(j)(2) (1994), with the
Customs Drawback Center in San Francisco. See Compl. ¶ 6. The
claim covered 8,422,861 single strength liters (“SSL”) of FCOJM
which Cargill exported to China, South Korea and Japan between
December 31, 1996, and April 30, 1997. See Compl. ¶ 7. A portion
of the drawback claim, 3,733,072 SSL, was based on FCOJM imported
by The Coca Cola Company under Consumption Entry No. 032-0197172-2,
on September 8, 1994. See Def.’s Opp’n Pl.’s Mot. Summ. J. Cross-
Mot. Summ. J. (“Customs’ Mem.”) Ex. 2. On March 7, 1997, Cargill
received from The Minute Maid Company (“Minute Maid”), a division
of The Coca Cola Company, the 3,733,072 SSL of FCOJM. See Pl.’s R.
56(i) Statement Material Facts Not Dispute (“Cargill’s Facts”) ¶ 5.
The delivery of this FCOJM was documented by a certificate of
delivery issued by Minute Maid on September 8, 1997 (“Minute Maid
CD”). See Customs’ Mem. Ex. 2. The 3,733,072 SSL of FCOJM was not
the same merchandise which had been imported on September 8, 1994.
See Cargill’s Facts ¶ 8; Customs’ Mem. Ex. 2.
Court No. 03-00348 Page 4
On August 31, 1999, San Francisco Customs requested
information and records from Minute Maid with respect to the Minute
Maid CD. See Customs’ Mem. Ex. 2. In response, Minute Maid
submitted documents showing that it had transferred commercially
interchangeable FCOJM imported in 1997 to Cargill along with
drawback rights originating from FCOJM it had imported in 1994.
See id. San Francisco Customs believed that a “‘double
substitution’ occurred when Cargill subsequently exported its
domestic substituted FCOJM and designated the 1994 imports listed
in the certificate of delivery.” Customs Mem. Ex. 3. Accordingly,
San Francisco Customs sought internal advice from Customs
Headquarters because it believed that substitution occurred at the
time Minute Maid delivered the FCOJM to Cargill in March 1997. See
id.
On February 12, 2002, Customs Headquarters issued
Headquarter’s Ruling Letter (“HQ”) 228706 directing the San
Francisco Port Director to deny Cargill’s drawback claim. See
Cargill’s Facts Ex. B. On February 27, 2002, the drawback claim at
issue was liquidated and drawback with respect to the duty-paid on
the 3,733,072 SSL of FCOJM was denied. See Compl. ¶ 11. Cargill
timely filed a protest claiming that it could perfect its drawback
claim. See Compl. ¶ 12. In May 2003, Customs denied Cargill’s
protest and Cargill commenced the present action. See Compl.
Court No. 03-00348 Page 5
II. Statutory Background
Under the relevant drawback statute, Customs will fully repay,
less one percent, the amount of duties paid upon goods previously
imported into the United States and used in the manufacture or
production of “commercially interchangeable” merchandise which is
subsequently exported or destroyed. See 19 U.S.C. § 1313(j)(2).
Prior to exportation or destruction, however, the merchandise may
not be used within the United States and such merchandise must be
in the possession of the party claiming a drawback. See 19 U.S.C.
§ 1313(j)(2)(C). Moreover, the drawback claimant must have
“received from the person who imported and paid any duty due on the
imported merchandise a certificate of delivery transferring to the
party the imported merchandise, commercially interchangeable
merchandise, or any combination of imported or commercially
interchangeable merchandise . . . .” Id.
To be eligible for drawback, the claimant must demonstrate
compliance with 19 C.F.R. pt. 191 (1997), which sets forth
provisions applicable to all drawback claims. A “drawback claim”
is defined under Customs’ regulations as “the drawback entry and
related documents required by [the] regulations which together
constitute the request for drawback payment.” 19 C.F.R. §
191.2(i). Pursuant to Customs’ regulations, a party seeking to
export merchandise with drawback rights under 19 U.S.C. § 1313(j)
Court No. 03-00348 Page 6
must file a completed entry summary. See 19 C.F.R. § 191.141(b).
The claimant must identify the import entry, as well as the date
and port of entry. See id. The claimant is also required to
certify that the merchandise was in the same condition as when it
was imported and not used within the United States prior to
exportation or destruction. See id. Transfers of the merchandise
“shall be documented by certificates of delivery (see § 191.65).”
Id. A claimant must file Customs Form 331 (“CF 331”), entitled
“Manufacturing Drawback Entry and/or Certificate,” when the
merchandise exported or destroyed was not imported by the drawback
claimant. See 19 C.F.R. § 191.65(a). In such instances, the
drawback claimant’s CF 331 “must describe the merchandise
delivered, tracing it from the custody of the importer to the
custody of the manufacturer.” Id. Furthermore, “[i]f the
merchandise was not delivered directly from the importer to the
manufacture, each intermediate transfer shall be described on” the
CF 331. 19 C.F.R. § 191.65(b).
On April 6, 1998, new regulations took effect with respect to
the transfer of imported merchandise on which duty had been paid.
See 19 C.F.R. § 191.10 (1998). Under the new regulations, if the
importer, pursuant to 19 U.S.C. § 1313(j)(2), transfers to another
party imported merchandise, commercially interchangeable
merchandise or any combination thereof, then the transferor must
Court No. 03-00348 Page 7
record the transfer by issuing to the transferee a certificate of
delivery covering the transferred merchandise. See 19 C.F.R. §
191.34(b). Moreover, the certificate of delivery “must expressly
state that it is prepared pursuant to 19 U.S.C. § 1313(j)(2).” Id.
The regulations provide that each transfer of the imported
merchandise, commercially interchangeable merchandise, or
combination thereof “must be documented by its own certificate of
delivery.” Id. The certificate of delivery must, inter alia,
include the import entry number and provide a description of the
merchandise delivered to the party asserting a drawback claim. See
19 C.F.R. § 191.10. The regulations state that the certificate of
delivery documents the transfer of the merchandise, identifies
“such merchandise or article as being that to which a potential
drawback exists.” Id. Furthermore, the certificate of delivery
documents the assignment of such right to the transferee. See id.
III. Contentions of the Parties
A. Cargill’s Contentions
Cargill contends that Customs, in HQ 228706, improperly denied
its substitution unused drawback claim. See Pl.’s Mem. P. & A.
Supp. Mot. Summ. J. (“Cargill’s Mem.”) at 12-21. Cargill asserts
that HQ 228706 denied its drawback claim because the Minute Maid CD
did not contain an endorsement required by 19 C.F.R. § 191.34
(1998), indicating that the certificate of delivery was prepared
Court No. 03-00348 Page 8
pursuant to 19 U.S.C. § 1313(j)(2). See id. at 12; see also Pl.’s
Mem. P. & A. Opp’n Def.’s Cross-Mot. Summ. J. (“Cargill’s Reply”)
at 2. Cargill maintains that its drawback claim was not denied
because of a failure to establish the chain of custody of the
merchandise cited in the certificate of delivery. See Cargill’s
Reply at 6-7. Cargill argues that the requirement imposed by 19
C.F.R. § 191.34 is inapplicable because the regulation became
effective on April 6, 1998, after Cargill filed the drawback claim
presently at issue. See Cargill’s Mem. at 12. Cargill maintains
that “[i]t is well established that a substantive regulatory
requirement of general applicability cannot be imposed until
rulemaking proceedings have been conducted and completed pursuant
to the Administrative Procedure Act . . . .” Id. at 13. The 1998
regulation does not state that it will be applied retroactively and
does not provide for its retroactive application. See id. at 14.
The endorsement required by the 1998 regulation, Cargill argues,
cannot be required of a certificate of delivery issued prior to the
promulgation of the regulation. See id. Cargill further asserts
that HQ 228706 is not entitled to any deference because “it does
not take into consideration the fact that the Minute Maid CD and
the drawback claim at bar were filed in 1997, nearly a year before
. . . 19 C.F.R. § 191.34 entered into force.” Id. at 20 (emphasis
omitted).
Court No. 03-00348 Page 9
Cargill maintains that its drawback claim must be assessed
under the law that existed when it was filed and when the
underlying documents were issued. Here, the Minute Maid CD and the
drawback claim were events completed before 19 C.F.R. § 191.34 was
enacted. See id. at 17-18. Cargill argues that imposing the
endorsement requirement of 19 C.F.R. § 191.34 retroactively would
deprive it of the benefit of the claim it had filed before the new
regulation was enacted. See id. at 18. Cargill also notes that in
a response to San Francisco Customs’ inquiry, Minute Maid provided
information and documents indicating that the certificate of
delivery was provided to Cargill pursuant to 19 U.S.C. §
1313(j)(2). See id. at 18-19. Accordingly, Customs was aware that
the merchandise Minute Maid delivered was commercially
interchangeable with the merchandise in the designated import
entries listed on the certificate of delivery. See id.
In the alternative, Cargill argues that if 19 C.F.R. § 191.34
did apply to its drawback claim, then Cargill satisfied Customs’
regulations by submitting an application for “perfection” in
accordance with 19 C.F.R. § 191.52(b)(4) (2002). See Cargill’s
Mem. at 21-25. Cargill submitted an amended certificate of
delivery from Minute Maid which was identical to the previously
submitted certificate except that it also contained the endorsement
required by 19 C.F.R. § 191.34. See id. at 21. Cargill maintains
Court No. 03-00348 Page 10
that the amended certificate of delivery did not constitute an
amendment of the claim. See id. at 22. Rather, the amended
certificate was “a timely perfection which may properly be
submitted beyond the time for filing the [drawback] claim itself.”
Id. at 22.
Cargill also argues that it was not required to provide
Customs with “intermediate certificates of delivery documenting the
entire chain of custody of the imported merchandise designated in
the claim.” Cargill’s Reply at 9. Customs never requested that
Cargill provide any certificates of delivery other than the Minute
Maid CD. See id. at 9. Cargill contends that a certificate of
delivery does not necessarily demonstrate the entire chain of
custody because “[i]f the issuer of the [certificate of delivery]
received the imported merchandise from another person who paid the
duty, it is not required to provide copies of earlier [certificates
of delivery].” Id. at 11. Moreover, a certificate of delivery
does not necessarily document the transfer of the imported
merchandise. See id. at 12. Under 19 U.S.C. § 1313(j)(2), the
merchandise transferred may be commercially interchangeable with
the imported merchandise designated on the certificate. See id.
Cargill asserts that any issues that arise from the Minute
Maid CD are “the government’s own making, and results from Customs’
shoddy administration of the drawback statute.” Cargill’s Reply at
Court No. 03-00348 Page 11
14. Congress amended the substitution unused merchandise drawback
statute, effective December 8, 1993, yet Customs failed to amend
its regulations to conform with those changes until more than four
years later. See id. Under the applicable regulations, Cargill
asserts that it was not required to file the Minute Maid CD as part
of its drawback claim, but rather it was furnished by Cargill upon
a request by Customs. See id. at 16-17. Accordingly, Cargill
contends that it adhered to the 1997 regulations and cooperated
with Customs once its drawback claim had been submitted. See id.
B. Customs’ Contentions
Customs first responds that HQ 228706 is entitled to deference
because it was consistent with the drawback statute and Customs’
regulations. See Customs’ Mem. at 7. Customs also contends that
Cargill’s assertion, that its drawback claim was denied because the
Minute Maid CD lacked an endorsement, pursuant to 19 C.F.R. §
191.34 (1998), is irrelevant. See id. at 9-10. Rather, Customs
argues that the drawback claim “was denied because the certificate
of delivery misrepresented the merchandise that was delivered to
Cargill by Minute Maid.” Id. at 10. Accordingly, Customs
maintains that Cargill’s drawback claim with respect to 3,733,072
of FCOJM was properly denied. See id. at 10-13.
Customs asserts that under 19 U.S.C. § 1313(j)(2), Cargill was
required to have “a certificate of delivery documenting the
Court No. 03-00348 Page 12
transfer of either the imported duty-paid merchandise or the
commercially interchangeable merchandise.” Def.’s Reply Pl.’s Mem.
Opp’n Def.’s Cross-Mot. Summ. J. (“Customs’ Reply”) at 3 (emphasis
omitted). Customs maintains that the Minute Maid CD certified that
the FCOJM imported in 1994 was delivered to Cargill in 1997,
although the merchandise which was actually delivered to Cargill
was imported in 1997. See Customs’ Mem. at 10. Customs argues
that the central purpose of the certificate of delivery “is to
demonstrate the chain of custody of the merchandise identified
thereunder.” Id. The regulations, according to Customs, have
“consistently explained that the certificate of delivery must
describe the imported merchandise and trace its custody from the
importer to the manufacturer, including all intermediate
transfers.” Id. at 6. Customs argues that Cargill failed to
submit a certificate of delivery that properly documented the chain
of custody. See id. Furthermore, Customs maintains that pursuant
to 19 U.S.C. § 1313(j)(2), “the merchandise identified in the
certificate of delivery was required to be exported or destroyed.”
Customs’ Reply at 4. Here, the merchandise Cargill exported was
not the merchandise received from Minute Maid; rather, it was other
domestically produced FCOJM. See id. Accordingly, Customs
contends that Cargill’s drawback claim was properly denied because
the certificate of delivery was fatally inaccurate. See id. at 4-
7.
Court No. 03-00348 Page 13
III. HQ 228706 is Not Entitled to Skidmore Respect
As a preliminary matter, the Court finds that HQ 228706 is not
entitled to Skidmore respect. In Skidmore v. Swift & Co., 323 U.S.
134, 140 (1944), the Supreme Court set forth the factors a
reviewing court is to consider in determining how much weight an
agency’s decision is to be afforded. The amount of respect an
agency’s decision is afforded by a court “will depend upon the
thoroughness evident in its consideration, the validity of its
reasoning, its consistency with earlier and later pronouncements,
and all those factors which give it the power to persuade, if
lacking power to control.” Id. The power to persuade of each
Customs’ ruling may vary depending on the Skidmore factors
articulated in United States v. Mead, 533 U.S. 218 (2001). See
Structural Indus., Inc. v. United States, 356 F.3d 1366, 1370 (Fed.
Cir. 2004).
Applying these factors to the case at bar, the Court finds
that HQ 228706 fails to exhibit a thorough, well reasoned and
consistent pronouncement of the Customs laws and regulations
applicable at the time Cargill submitted its drawback claim.
Specifically, HQ 228706 fails to properly apply the regulations
applicable at the time Cargill filed its drawback claim. The
analysis Customs offered in HQ 228706 solely applies Customs
regulations which were enacted subsequent to Cargill’s submission
Court No. 03-00348 Page 14
of the claim at issue. See Cargill’s Facts Ex. B. The 1998
regulations, however, do not indicate that they were to be applied
retroactively. See 19 C.F.R. pt. 191 (1998). Customs argues that
“inasmuch as Cargill’s drawback claim was not denied because of a
lack of ‘endorsement,’ [which the 1998 regulations require,] these
arguments are irrelevant . . . .” Customs’ Mem. at 9-10. The
Court, however, finds the denial of Cargill’s drawback claim,
because it lacked an endorsement pursuant to 19 C.F.R. § 191.34,
highly relevant. HQ 228706 fails to demonstrate how the law cited
applies to Cargill’s drawback claim, which was filed before the
regulations took effect. The 1998 regulations took effect April 6,
1998, and, therefore, are inapplicable to Cargill’s drawback claim,
which was filed on May 10, 1997. See Compl. ¶ 6.
Customs’ regulations will not be given retroactive effect
unless such treatment is called for in the language of the
regulation. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208
(“Retroactivity is not favored in the law. Thus, congressional
enactments and administrative rules will not be construed to have
retroactive effect unless their language requires this result.”).
The general rule disfavoring retroactivity applies to
administrative regulations. See Shakeproof Assembly Components
Div. of Ill. Tool Works, Inc. v. United States, 24 CIT 485, 492,
102 F. Supp. 2d 486, 492, 493 (2000). The Court recognizes that
Court No. 03-00348 Page 15
Customs has specialized experience which can aid the Court in its
review of issue at hand, see Mead, 533 U.S. at 234, and that such
rulings are entitled to “a respect proportional to [their] ‘power
to persuade.’” Mead, 533 U.S. at 235 (quoting Skidmore, 323 U.S. at
140). In the case at bar, the Court finds that HQ 228706 lacks
those qualities which would give it the power to persuade. The
Court has an independent responsibility to apply the law when
rulings, such as HQ 228706, lack thoroughness of consideration and
valid reasoning. Accordingly, the Court finds that, contrary to
Customs’ contention, HQ 228706 is not entitled to Skidmore respect.
IV. Customs Improperly Denied Cargill’s Substitution Unused
Merchandise Drawback Claim
The Court finds that Cargill’s substitution unused drawback
claim was improperly denied by Customs. Pursuant to 19 U.S.C. §
1313(j)(2)(C), a drawback claimant must have imported merchandise
or have received from the importer, who paid any duty on the
imported merchandise, a certificate of delivery transferring to the
claimant the imported merchandise, commercially interchangeable
merchandise, or any combination thereof. The transferred
merchandise is treated as the imported merchandise and, upon
exportation or destruction of such merchandise, drawback shall be
refunded. See id. To qualify for drawback, Cargill was required
to receive from Minute Maid a certificate of delivery documenting
Court No. 03-00348 Page 16
the transfer of the merchandise, commercially interchangeable
merchandise or a combination thereof. See id. Furthermore,
Cargill was required under the 1997 regulations to submit a
certificate of delivery recording the transfer of merchandise
between Minute Maid and Cargill. See 19 C.F.R. § 191.141(b). The
Court finds that Cargill fulfilled its statutory and regulatory
obligations and, therefore, is entitled to substitution unused
merchandise drawback.
Customs concedes that Cargill followed its statutory and
regulatory obligations to timely submit a certificate of delivery
with its drawback claim. See Customs’ Mem. at 10. Customs argues,
however, that Cargill’s drawback claim was fundamentally flawed
because the certificate “misrepresented the merchandise that was
delivered to Cargill by Minute Maid.” Id. Customs maintains that
19 U.S.C. § 1313(j)(2)(C)(ii)(II) required the Minute Maid CD to
document the transfer of either the imported duty-paid merchandise
or the commercially interchangeable merchandise. See Customs’
Reply at 3. The Court finds, however, that Customs arguments are
flawed and without merit. The Minute Maid CD identifies FCOJM
imported in 1994 under Consumption Entry No. 032-0197172-2 by the
parent company of Minute Maid. See Customs’ Mem. Ex. 2. The
merchandise transferred by Minute Maid to Cargill was commercially
interchangeable merchandise that had been imported in 1997. See
Court No. 03-00348 Page 17
id. The statute provides that a party claiming drawback pursuant
to 19 U.S.C. § 1313(j)(2) does not have to receive, from the issuer
of the certificate of delivery, the merchandise identified in the
certificate of delivery. Rather, a claimant may receive
commercially interchangeable merchandise or a combination of the
imported merchandise and commercially interchangeable merchandise.
See 19 U.S.C. § 1313(j)(2).
The certificate of delivery reflects the transfer of imported
merchandise or commercially interchangeable merchandise or a
combination thereof. See id. Under the 1997 regulations, the
certificate of delivery had to identify the imported merchandise
because the commercially interchangeable merchandise did not have
drawback rights independently of the imported merchandise.
Consequently, failing to identify the imported merchandise on the
certificate of delivery would cause Customs to reject a drawback
claim because there would be no indication from which merchandise
drawback rights arose. If Cargill’s drawback claim solely
identified the 1997 merchandise it received from Minute Maid, then
Cargill would not have been entitled to unused substitution
merchandise drawback. The merchandise imported in 1994 and not in
1997 had drawback rights attached thereto. Consequently, Cargill
could not have pursued a drawback claim with respect to the 1997
imported merchandise. If the certificate of delivery had not
Court No. 03-00348 Page 18
identified the 1994 merchandise, then Customs would have denied
drawback. The Court finds that the 1997 regulations and 19 U.S.C.
§ 1313(j)(2) did not require Cargill to identify the 1997
merchandise on the Minute Maid CD.
The present case exemplifies the situation whereby Customs
failed to update its regulations subsequent to the amendment of a
statute. In 1993, 19 U.S.C. § 1313 was amended to allow for
substitution drawback. Customs, however, failed to amend its
regulations to conform with the 1993 statutory amendments until
after Cargill’s drawback claim was filed with Customs. See 19
C.F.R. § 191.34 (1998). The regulations in place at the time of
Cargill’s claim did not require Cargill to identify the
commercially interchangeable merchandise which had been substituted
for the imported merchandise.2 The statute required Cargill to
receive from the person who paid duties on the imported merchandise
a certificate of delivery for the imported merchandise or
commercially interchangeable merchandise. Here, the Court finds
2
The Court notes that Customs amended CF 331 in 2001,
subsequent to Cargill’s drawback claim, to allow the issuer of the
certificate of delivery to indicate that commercially
interchangeable merchandise and not the imported merchandise had
been delivered to another party. See Cargill’s Reply Ex. B. Prior
to the amended CF 331, the issuer of the certificate of delivery
was unable to indicate that, pursuant to 19 U.S.C. § 1313)j)(2),
the merchandise delivered was not the imported, duty-paid
merchandise but rather commercially interchangeable merchandise.
See Customs’ Mem. Ex 2.
Court No. 03-00348 Page 19
that the certificate of delivery was valid because it identified
the imported merchandise which formed the basis of Cargill’s
drawback claim.
Customs argues that the Minute Maid CD misrepresented that the
merchandise transferred to Cargill was commercially interchangeable
merchandise imported in 1997 and not the merchandise imported in
1994. See Customs’ Mem. at 10. A drawback claim, however, does
not solely consist of a certificate of delivery. Rather, a
“drawback claim” consists of “the drawback entry and related
documents required by [the] regulations which together constitute
the request for drawback payment.” 19 C.F.R. § 191.2(i). Here,
Customs may not convincingly assert that it did not know that the
merchandise delivered to Cargill was commercially interchangeable
merchandise imported in 1997. On August 31, 1999, Customs
requested information from Minute Maid relating to the Minute Maid
CD. See Customs’ Mem. Ex. 1. In its response dated November 24,
1999, Minute Maid provided Customs with the requested information
and documents. See Customs’ Mem. Ex. 2. The documents indicate
that the FCOJM delivered to Cargill was not merchandise imported in
1994 but rather was commercially interchangeable merchandise
imported in 1997. See id. Accordingly, Customs knew that the
merchandise identified on the Minute Maid CD was commercially
interchangeable merchandise and not the 1994 FCOJM. The Court
Court No. 03-00348 Page 20
finds that Customs improperly relied on the 1998 regulations in
denying Cargill’s drawback claim and that the Minute Maid CD was
not improperly completed. Consequently, Cargill is entitled to
duty drawback on 3,733,072 SSL of FCOJM imported under the cover of
Consumption Entry No. 032-0197172-2.
CONCLUSION
The Court finds that Customs improperly denied Cargill’s
drawback claim with respect to 3,733,072 SSL of FCOJM. HQ 228706
is not entitled to Skidmore respect because it lacks the power to
persuade. The Court finds that the neither the statute nor Customs
regulations required Cargill to identify the 1997 merchandise on
the Minute Maid CD because such merchandise did not form the basis
for its claim. Accordingly, the Court concludes that Cargill’s
drawback claim was not fatally inaccurate and should have been
granted. Cargill’s motion for summary judgment is granted and
Customs’ cross-motion for summary judgement is denied.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: August 23, 2005
New York, New York
Cargill Citro-America, Inc. v. United States
Court: United States Court of International Trade
Date filed: 2005-08-23
Citations: 395 F. Supp. 2d 1222, 29 Ct. Int'l Trade 941
Copy CitationsCombined Opinion