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The following story is from the May 21 issue of International
Trade Reporter
Current Reports:
Duties
Appeals Court Says Trade Bill Did Not
Affect Limitations Period for Drawback
The 2004 Miscellaneous Trade Bill did not suspend the statutory requirement that drawback claims be filed within three years of the date of export, the U.S. Court of Appeals for the Federal Circuit ruled May 8 (Aectra Refining and Marketing, Inc. v. United States, Fed. Cir., No. 2008-1356, 5/8/09).
In so ruling, the appeals court affirmed the Court of International Trade's judgment dismissing the plaintiff's
(appellant here) claim for drawback of merchandise processing fees
(MPFs) and harbor maintenance taxes (HMTs) paid on imports of petroleum products as untimely.
Plaintiff-Appellant Aectra Refining and Marketing Inc. sought a refund from the Bureau of Customs and Border Protection
(CBP or Customs) of import taxes and fees paid on products that were subsequently used to produce exported goods. CBP denied the claim for refunds—known as drawback—and Aectra challenged the denial in the CIT which upheld CBP (30 ITRD 1214). This appeal followed.
Under the statute, claims for drawback must generally be filed and completed within a three year limitations period accruing from the time of export.
Between August 1997 and June 1998, Aectra timely filed 10 entries claiming drawback for customs duties paid on petroleum products. Aectra did not include calculations for MPFs or HMTs because Customs regulations at the time stated that neither MPF nor HMT was eligible for drawback under the statute.
Customs' position regarding the recoverability of MPF and HMT was being actively challenged in 1997 and 1998 in litigation. In 1999, the Federal Circuit ruled in Texport Oil Co. v. United States, that MPFs were eligible for drawback (16 ITR 1292, 8/04/99; 21 ITRD 1289). In 2004, the Miscellaneous Trade and Technical Corrections Act (MTB) extended drawback eligibility to HMTs.
Protest Denied
Aectra subsequently filed a protest seeking drawback on HMTs and MPFs, which was denied as untimely since it was filed after the three-year limitations period expired.
On appeal, Aectra contended that the 2004 MTB suspended the three-year limitation period for HMT drawback claims.
“We disagree. It is first important to recognize that the 2004 Trade Act amendment was not designed to create a new right to drawback for HMT, but rather to clarify that HMT was always subject to drawback under the statute. Read in that light, it was not unreasonable to assume that Congress would limit the right to those who had previously attempted to claim it within the three-year limitations period, absent some contrary language in the statute,”
Circuit Judge Timothy Dyk wrote.
“Nothing in the text of the statute states or suggests that it was intended to waive the normal three-year limit imposed by 19 U.S.C. § 1313(r)(1),” the court added.
The appeals court also found that the claim was not completed within the required time-frame. “[W]e agree with the Court of International Trade that a complete claim under 19 C.F.R. § 191.51(b) (1998) requires a calculation of the total amount of drawback sought even if the claim would have been rejected by Customs. Here, Aectra did not preserve its claim for taxes and fees by timely providing Customs with a calculation of the amount sought under § 191.51(b),” the court said.
The case was before a three-judge panel consisting of Dyk, Chief Judge Paul Michel, and Circuit Judge Robert Mayer.
Michael F. Mitri, Phelan & Mitri, of Norwalk, Conn., argued for plaintiff-appellant.
Tara K. Hogan, trial attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for the government.
By Rossella Brevetti
Full text of the court's opinion is available at: http://www.cafc.uscourts.gov/opinions/08-1356.pdf
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