HQ W231061

May 2, 2007

DRA -- 4 RR:CTF:EP 231061 MAS

Category: Drawback

U.S. Customs and Border Protection

Port of Chicago

610 South Canal Street, 3^rd^ Floor

Chicago, IL 60607

Attn: Linda Golf

Re: Protest/AFR No. 3901-05-100542; 19 USC § 1313(j)(1); 19 C.F.R. §§
191.53 (1996) and 191.73 (2005); Drawback of Entry Nos. UC1-XXXXXX2-3
and UC1-XXXXXX5-6

Dear Ms. Golf:

The above-referenced protest, filed by Konica Minolta Business Solutions
(Protestant), through the law offices of Rode & Qualey, on June 14,
2005, has been forwarded to this Office for further review. We have
considered the arguments raised by Protestant against, and by your
office in favor of, the denial of two direct identification unused
merchandise drawback claims due to insufficient evidence of export. Our
decision follows.

FACTS

Konica Minolta Business Solutions contests the denial of two direct
identification unused merchandise drawback claims for toner, developer,
and analog photocopiers that were manufactured in Asia and imported by
the Protestant for sale in Canada and Mexico. The claims, UC1-XXXXXX2-3
and UC1-XXXXXX5-6, were filed pursuant to 19 USC § 1313(j)(1) with the
Port Director of Customs in Boston (Boston Port), Massachusetts, by
Konica Business Technologies (KBT), the predecessor company that merged
with Minolta Corporation in October 1, 2003 to form KMBS.

The first drawback claim, entry number UC1-XXXXXX2-3, was filed April
15, 1996, for merchandise exported during January 1996 and liquidated on
April 8, 2005 (April 15^th^ Claim). Protestant subsequently filed entry
number UC1-XXXXXX5-6 on June 20, 1996, for a second direct
identification unused merchandise drawback claim on the same type of
goods, exported during the month of April 1996 and liquidated on April
8, 2005 (June 20^th^ Claim).

The record shows that KBT sought approval for accelerated payment on
December 2, 1987 and was approved to utilize Accelerated Payment for
Same Condition Drawback Entries on April 12, 1988; Protestant's
accompanying \$1,000,000 bond was deemed sufficient by Customs'
Liquidation Branch. *See* Protestant's Protestant's Exhibit H: J. Rohan
Letter (Dec. 2, 1987)(requesting accelerated payment); Bernice L. Avila,
U.S. Customs Service Liquidation Branch Chief, Letter DRA-2-0:C:L (April
12, 1988)(granting accelerated payment).

The Port of Chicago (Chicago Port) denied both drawback claims due to
insufficient evidence of export in March 2005.[^1] For the April 15^th^
Claim**,** the denial was predicated the basis of no evidence of export
pursuant to 19 CFR § 191.72, no chronological summary of exports, and
imports that reliquidated at lower duty rates after the filing of the
drawback claim.[^2] *See* [Notice of Action, Customs Form
29]{.smallcaps} (Mar. 15, 2005). The Port similarly denied Protestant's
June 20^th^ claim, reasoning the requirements set out in Section 191.72
of the Regulations were not met. *See* [Notice of Action,]{.smallcaps}
Customs Form [29]{.smallcaps} (Mar. 15, 2005).

Protestant timely filed its protest against the denial of both claims
with an Application for Further Review on June 14, 2005. Protestant
objects to the denial of the drawback claims on the grounds that
sufficient proof of export was provided at the time the claim was
issued. Protestant further argues that its inability to reproduce this
evidence today does not merit the denial of these claims because a
request for "proof of export" was not received from the port until the
regulatory requirements for retention of such records had expired.

## DOCUMENTS IN EVIDENCE

The following are documents that were submitted with the protest:

-   [Chronological summary of exports]{.underline} for June 20^th^ Claim
    (UC1XXXXXX5-6) -- This handwritten document identifies the export
    carrier as "Kingsway," subsequently identified by KMBS Customs
    Manager to represent "Kingsway Trucking Company," and "C&F," which
    was later described to mean "Consolidated Freightways." Under the
    "Marks & Numbers Packages (Exported)" column, counsel for Protestant
    explains that the acronyms "KBM POC" and "KMB Mexico" mean "Konica
    business Machines Pickering Ontario Canada" and "Konica Business
    Machines Mexico" respectively. Additionally, under the column
    "Export Reference \# & Date of Export" are the acronyms "UBM" and
    "RDM"; Protestant has indicated the former refers to Mexico and the
    later refers to Canada. *See* Protestant's Exhibit E.

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-   [Affidavit]{.underline} executed by KMBS Traffic Manager John G.
    Rohan -- Mr. Rohan describes Protestant's drawback program and the
    facts surrounding the filing of the drawback claims at issue. Mr.
    Rohan explains Protestant's drawback process includes submission of
    the following: CF 7539; chronological summary; drawback coding
    sheet; drawback calculation worksheets, import 7501 and related
    import invoices, export invoice packing list, trucker's export bill
    of lading; and copies of import entry invoices from Canadian and
    Mexican importers. The affidavit is offered as evidence that all
    required documents to establish fact of export were submitted with
    the drawback claim. While not having specific recollection of the
    claims under review, Mr. Rohan states that under KBT/KMBS drawback
    procedures, all documents required for drawback were always filed
    with the claim. *See* Protestant's Exhibit A.

-   [Notice of Action, Customs Forms 29]{.underline} (CF 29), Notices of
    Action for April 15^th^ and June 20^th^ Claims were both issued by
    drawback specialist Anna Rodriguez, indicating the amount of bill
    issued to, and paid by, Protestant.

> The CF 29 for the April 15^th^ Claim was issued on March 17, 2005.
> Rodriguez denied this claim because: (1) there is no evidence of
> export in the claim under Section 191.72 of the Regulations" and (2)
> three import entries that reliquidated after the filing of the
> drawback claim...potentially could cause a reduction in the
> accelerated payment amount...." *See* Protestant's Exhibit B.
>
> CF 29 for the June 20^th^ claim, issued on March 17, 2005, rejected
> the claim because: "There was no\[t\] sufficient evidence of
> exportation and the Summary of Exports provided does not contain
> enough information to establish exportation, including but not limited
> to Destination of Export \[pursuant to 19 CFR § 191.72\]." *See*
> Protestant's Exhibit C.

-   [Customs Forms 7539]{.underline}, Same Condition Merchandise Claims

> On both claims, Protestant listed "Information per Attached Sheets"
> for information regarding "Marks and Numbers of Packages" (Box 15),
> "Quantity" (Box 16), "Description of Merchandise" (Box 17), "Value"
> (Box 18), and "Duty Paid" (Box 19). *See* Protestant's Exhibit D.
>
> CF 7539 for the April 15^th^ Claim states drawback was entered on
> February 21, 1996 (Box 2); Ultimate Port of Destination (Box 6) is
> listed as "Pic.Ont.Canada." Mexico."
>
> CF 7539 for the June 20^th^ Claim states drawback was entered on June
> 4, 2006; Ultimate Port of Destination is also listed as
> "Pic.Ont.Canada Mexico".

-   [Cover Letter, from KMBS Traffic and Customs Manager]{.underline}
    Jack Rohan to the Drawback Unit of the Port of Boston, identifying
    the drawback claims as covering shipments to Canada and Mexico
    (dated February 21, 1996). The letter refers to "Same Condition
    Drawback EC96-01"; this code also appears on a drawback worksheet as
    corresponding with import entry 946-XXXXXX2-6. (See explanation of
    worksheets below). The letter specifies the shipments "have been
    made under the exporter's summary and accelerated payment procedures
    that are filed with your offices" and further notes that "We have
    prepared a chronological listing of all shipments made...." Copies
    of the documents referenced in this letter are not in the Customs
    file. *See* Protestant's Exhibit G.

-   [Accelerated Payment Request and Approval Letters]{.underline}

> Protestant provided two uncertified letters as evidence of authorized
> use of accelerated payment drawback. The first letter, from Mr. Rohan
> to the Boston Port, seeks approval for accelerated payment and posts
> \$1 million bond (dated Dec. 2, 1987). The second letter, from Customs
> Chief of the Liquidation Branch, approves KBT's use of accelerated
> payment for same condition drawback entries and acknowledges the bond
> as sufficient to cover the drawback entries (dated April 12, 1988).
> *See* Protestant's Exhibit H.

-   [Drawback Calculation Documents]{.underline}

> To support the April 15^th^ Claim, Protestant submitted: an unsigned,
> uncertified copy of a "Drawback Coding Sheet", supported by "Drawback
> Calculation Worksheets" for three import entries. The Coding Sheet
> document, entitled "Drawback Affidavit," lists: "KPI" reference
> numbers; Entry numbers, the port code; date and amount of entry; and
> the drawback claimed (at 99%). Entry 946-XXXXXX2-6 is referenced as
> KPI 5391; date of entry is listed as November 9, 1995, with a drawback
> of \$25.19 claimed on an Amount of Entry listed as \$25.44. The
> worksheet for entry 946-XXXXXX2-6, identified as KPI 5391, lists an
> original amount entered as \$36,408 with 600 pieces for a value of
> \$60.68 per piece and an original duty paid of \$1,274.28 for a duty
> of \$2.12 per piece; 12 pieces were claimed to have been exported at a
> value of \$728.16 and duty of \$25.44 per piece. *See* Protestant's
> Exhibit F.

## [Supplemental Submission of Protestant Documents]{.underline}

## Pursuant to this Office's request for additional information, Counsel for Protestant submitted: letter from KMBS Import/Export Manager Rohan to Regional Commissioner of the Boston Port requesting approval for accelerated payment of drawback and indicating that a separate request was being submitted to the Regional Commissioner of the Pacific Region to cover drawback entries filed in Los Angeles (date Dec. 2, 1987); letter from Pacific Region Liquidation Branch Chief approving this accelerated payment request (April 12, 1988); the Boston Port's response to Protestant's Freedom Of Information Act request; and photocopies of Mexican and Canadian Customs entry forms showing the business address for Konica Business Machines Mexico. *See* Protestant's Exhibit H.

> The Canadian Customs Invoice -- which included toner, developer, and
> legal case, cleaning roller, etc. -- shows Konica Business Machines
> USA as the Vendor and Konica Business Machines Canada, in Pickering,
> Ontario, as the consignee (dated Dec. 2, 1994). The Mexican invoice
> identified "Konia Business Machines De Mexico", in Colonia Lomas de
> Botelo, Mexico, as the importer and Konica Business Machines USA as
> the point of origin (dated July 2, 1994). It should be noted that
> these invoices are unrelated to the drawback entries at issue and are
> probative to the extent that they support Protestant's claim that the
> Mexican and Canadian importing companies are Konica Business Machines,
> Konica Business Machines Mexico, and Konica Business Machines Canada,
> in Pickering, Ontario. *See* Protestant's Exhibit I.
>
> There are no invoices, manifests, or bills of lading to support the
> underlying import entries and the coding sheet, calculation
> worksheets, or Status Refund reports do not refer to what merchandise
> underlies these import entries. Therefore, the record does not include
> evidence as to what the identity of the merchandise is underlying the
> April 15^th^ claim.

## 

Protestant explains that it is unable to provide documentary evidence
necessary to verify the April 15^th^ claim because all records relating
to this transaction were destroyed after the merger of KBT and Minolta
in 2003-05, when a new computer system was installed and it was
ascertained that this would be too costly and burdensome to maintain all
records of old KBT/Minolta files. At that time, KMBS had determined that
it had received payment on all drawback entries KBT had filed prior to
1998, that more than three years had passed since KBT had received the
last such payments, and Customs "had not indicated that any of the
drawback entries filed prior to 1998 were deficient in any respect nor
had Customs indicated \[to Protestant\] that any would be verified or
audited in the future." *See* [Memorandum in Support of Protest and
Application for Further Review]{.smallcaps} at 4 (June 15, 2006).
Therefore, Protestant submitted testimonial and the aforementioned
documents as evidence of "substantial compliance with \[the drawback\]
requirements." *See* Affidavit of John Rohan, Traffic and Customs
Manager, Protestant's Exhibit A, at 3-4.

## ISSUE

Whether Protestant provided sufficient evidence of exportation under 19
CFR 191.53 \[1996\], the standard required at the time of the
exportation, to support its claims for direct identification unused
drawback?

**LAW AND ANALYSIS**

We note initially that the refusal to pay a claim for drawback is
protestable pursuant to 19 U.S.C. § 1514(a)(6). As required by statutory
and regulatory provisions for protests, this protest was timely filed on
June 14, 2005, within ninety days of the date of liquidation for both
claims on April 8, 2005. *See* 19 USC § 1514 and 19 CFR Part 174.
Generally, under 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. To be eligible for an unused merchandise drawback under
this provision, the goods imported must be the same goods now being
exported.[^3] The Customs Regulations pertaining to drawback are found
in 19 CFR Part 191.

With respect to the subject protest, Protestant indicates that further
review is merited because the decision to deny its drawback claims is at
odds with Headquarters' rulings on the requirements to substantiate
evidence of export for drawback claims as well as with Headquarters'
decisions regarding whether there are limitations to the time within
which a claim for drawback must be verified. *See* [Memorandum in
Support of Protest]{.smallcaps} at 18. Where there is an alleged
inconsistency between HQ 222494 and the denial of a protest, a protest
which would otherwise be denied by the port director shall be accorded
further review. *See* 19 CFR § 174.25(a). Accordingly, further review is
granted; an assessment of the contested discrepancies is discussed
below.

# **Evidence of Exportation** 

Protestant filed the first drawback claim at issue on April15, 1996
(April 15^th^ Claim); the second claim was filed on June 20, 1996 (June
20^th^ Claim). The Port denied both drawback claims on April 8, 2005 for
lack of evidence of exportation. The requirements to establish evidence
of exportation for drawback purposes are set out in Section 191.51 of
the 1996 Regulations. *See Cargill Citro-America, Inc. v. United
States*, 395 F. Supp.2d 1222, 1227 (2006, U.S. Ct. Intl Trade)(finding:
"The 1998 Regulations took effect April 6, 1998, and, therefore, are
inapplicable to Cargill's drawback claim, which was filed on May 10,
1997. ...Customs Regulations will not be given retroactive effect unless
such treatment is called for in the language of the regulation"). As
noted above, the Port denied both drawback claims pursuant to 19 CFR §
191.72, which went into effect on March 5, 1998.[^4] Because the
drawback claims at issue were filed in 1996, the appropriate basis upon
which to assess evidence of export is stated in the 1996 Regulations.

Section 191.51 of the 1996 Regulations identifies the means by which
evidence of export may be established.[^5] In this instance, Protestant
submitted an exporter's summary in support its drawback claim on Customs
Form 7539 for both claims pursuant to 19 CFR § 191.53(e)(3) \[1996\].
That section provides: "The chronological summary of exports shall be in
a format acceptable to the drawback office and shall contain
substantially the data provided for in the following format...": (1)
Date of exportation; (2) Exporting carrier; (3) Freight or air waybill,
bill of lading, manifest number, etc.; (4) Marks and numbers; (5)
Description; (6) Net quantity; (7) Schedule B no.; (8) Destination. The
Regulations further note that for column 3, "this number is to be used
to associate the claim with exportation evidence retained by claimant."
*See* Note 1, 19 CFR § 191.53(e)(3).

The information required for the chronological summary of exports at the
time the claim was filed in 1996 and the requirements at the time the
claim was verified in 2005, while similar, do differ in what constitutes
proof of export. *See* Column 3, of chart below. Whereas a unique export
identification number is required under the current Regulations, the
1996 Regulations would allow freight or air waybill, bill of lading,
manifest, or *other evidence retained by claimant to be used to
associate the claim with exportation*. *Compare* 19 CFR § 191.73(b)
\[2005\] and 19 CFR § 191.53(e)(3) \[1996\]. A comparison of the
chronological summary of export information requirements for 1996 and
2005 is provided below.

+------+-----+------+-------+-------+-------+------+-------+------+
|      | 1   | 2    | 3     | 4     | 5     | 6    | 7     | 8    |
+------+-----+------+-------+-------+-------+------+-------+------+
| 19   | D   | E    | F     | Marks | D     | Net  | Sch   | Des  |
| CFR  | ate | xpor | reigh | &     | escri | Quan | edule | tina |
| 1    | of  | ting | t/air | Nu    | ption | tity |       | tion |
| 91.5 | Exp | Car  | way   | mbers |       |      | B \#  |      |
| 3(e) | ort | rier | bill, |       |       |      |       |      |
| (3)  |     |      | bill  |       |       |      |       |      |
| \[19 |     |      | of    |       |       |      |       |      |
| 96\] |     |      | la    |       |       |      |       |      |
|      |     |      | ding, |       |       |      |       |      |
|      |     |      | man   |       |       |      |       |      |
|      |     |      | ifest |       |       |      |       |      |
|      |     |      | \#    |       |       |      |       |      |
|      |     |      | ^n1^  |       |       |      |       |      |
+------+-----+------+-------+-------+-------+------+-------+------+
| 19   | D   | Expo | U     | D     | Net   | Sche | > D   | \_\_ |
| CFR  | ate | rter | nique | escri | Qua   | dule | estin | \_\_ |
| 1    | of  | if   | e     | ption | ntity |      | ation |      |
| 91.7 | Exp | not  | xport |       |       | B or |       |      |
| 3(b) | ort | clai | ident |       |       | H    |       |      |
|      |     | mant | ifier |       |       | TSUS |       |      |
| \[19 |     |      | #^n2^ |       |       | \#   |       |      |
| 98-p |     |      |       |       |       |      |       |      |
| rese |     |      |       |       |       |      |       |      |
| nt\] |     |      |       |       |       |      |       |      |
+------+-----+------+-------+-------+-------+------+-------+------+

^n1^ This number is to be used to associate the claim with exportation
evidence retained by claimant.

^n2^ This number is to be used to associate the export transaction
presented on the chronological summary of exports to the appropriate
documentary evidence of exportation (for example, bill of lading,
manifest, invoice, identification of vessel or aircraft and voyage or
aircraft number).

The distinction between the 1996 and current chronological summary
requirements is significant. Revisions to the original exporter's
summary requirements were prompted by interest in making the drawback
process more efficient.[^6] In response to numerous recommendations
during the period for comments on what type of information should be
included and what should be omitted, Customs acknowledged that some
categories of information may be unnecessary while other categories
remained critical.[^7] Most notably for purposes of review in this
instance, information on the "destination" of the subject merchandise
was considered to be an essential element of the exporter's summary
whereas specifics such as the "marks and numbers" was less critical to
the claim.[^8] *See* T.D. 83-212 (Dec. 12, 1983). Accordingly, evidence
of export for each claim is to be adjudged against the format set out
by, and data specified in, 19 CFR § 191.53(e)(3).

**1. June 20^th^ Claim, UC1-XXXXXX5-6**

As previously noted, although Customs denied the claim for entry of
UC1-XXXXXX5-6 for not providing sufficient evidence of exportation under
19 CFR § 191.72, the appropriate standard to assess evidence of export
is under 19 CFR § 191.53(e)(3). *See Cargil-Citro America v. U.S*., 395
F.Supp. 2d 1222; Customs Form 29 for Entry No. UC1-XXXXXX5-6
(Protestant's Exhibit C). Protestant disputes the CBP Specialist's
conclusion that information was missing from the chronological summary
of exports and agues that all required information was provided with the
chronological summary at the time the claim was submitted.

To support the contention that all required information is contained in
the chronological summary, Protestant instructs "Destination" of
exportation is provided on the fifth column of the chronological summary
of exports, under the "Marks & Numbers of Packages (Exported)" column.
Protestant advises that the acronyms listed under this column -- "KBM
POC" and "KBM Mexico" stand for "Konica Business Machines Pickering
Ontario Canada" and "Konica Business Machines Mexico." *See* Customs
Protest and Summons, CF 6445, Contin. of Protest No. 3901-05-100542,
para.3. Protestant further explains that references to "RDM" and "UBM"
under the column titled "Export Ref \# & Date of Export" refer to
shipments to Canada and Mexico respectively. *See* Chronological summary
of exports, column 1. Under the "Export Carrier" heading, Protestant
identifies all exports to Canada as being shipped via "Kingsway"
truckers and that exports to Mexico are shipped through Consolidated
Freightways ("CF"). *See* [Memorandum in Support of]{.smallcaps}
[Protest]{.smallcaps} at 9-10, (June 14, 2005). *See also* Chronological
Summary of exportation, Claim UC1-XXXXXX23, Exhibit E.

In addition to the evidence of export and in accordance with the note
appended to column 3 of the 1996 requirements for exporter's summary
(stating: "This number is to be used to associate the claim with the
exportation evidence retained by claimant"), the Port is directed to
review other export numbers associated with the claim. Other documents
in the Customs file which contain numbers that associate the June 20^th^
claim with exportation include Customs Forms 7539, which lists "Pick.
Ont. Canada Mexico" (Box 6) as the Ultimate Port of Destination; a copy
of the Mexican Customs entry, "Pedimento de Importacion" (Feb. 7, 1994);
and a cover letter from Mr. Rohan to the Liquidation Unit of the Boston
Port, which identifies the destination of the disputed claims as Canada
and Mexico. Although these documents are not of the type specifically
identified in column 3 as evidence of exportation, the explanatory note
indicates that these documents are to be used to associate the claim
with exportation evidence. Therefore, in aggregate, these documents
furnish evidence of destination of export, the missing element in the
chronological summary.

Accordingly, while on its face, this chronological summary of exports is
insufficient because it lacks a "Destination" column, thereby appearing
to have omitted information required on the exporter's summary, upon
Protestant's explanation of the meaning of the acronyms in the first and
fifth column, it is apparent that the chronological summary did include
information about the export carrier and ultimate destination, as
required pursuant to 19 CFR § 191.53(e)(3), albeit without the proper
column heading.

When the evidence in Customs file and the evidence provided by
Protestant are considered in the aggregate, mislabeling the "Port of
Destination" column as "Marks and Numbers" and the omission of details
pertaining to the later column constitutes harmless error because
information on destination was provided.[^9] Under CBP Mitigation
Guidelines, in situations where there is an omission as to material fact
which was required to be stated in an application for a license or
permit, mistakes which could not possibly harm the government\'s
interests should be construed as "harmless error" and should be
mitigated in full. 19 CFR Part 171, Appendix C, [Customs Regulations
Guidelines for the Imposition and Mitigation of Penalties for Violations
of 19 USC 1641(d)(1)(A)]{.smallcaps}. The acknowledgement in the
regulatory history that "there may some merit" to complaints that not
all information in the exporter's summary is needed, and the subsequent
elimination of the "Marks and Numbers" category in the current
Regulations, suggests that an omission of the "Marks & Number" would not
be found to harm the government's interests. The essential information
-- date of export, exporting carrier, net quantity, Schedule B number,
destination, and numbers associating the claim with the exportation
evidence -- were all provided. With all requisite information available,
CBP had the ability to verify the accuracy of the drawback claim and
evaluate the assertions of exportation. Therefore, the Protestant's
failure to provide this information in the precise format specified
under the Regulations constitutes harmless error.

Imperfections in export documentation which are harmless error do not
provide a sufficient basis upon which to deny drawback. *See* *St. Paul
& Fire & Marine Ins. Co. v. United States*, 799 F.Supp. 120 (CIT 1992),
reversed, 6 F. 3d 763 (Fed. Cir. 1993)(finding "the failure to give a
statutory reason for extension of liquidation on a notice of extension
of liquidation was harmless error and, therefore, the entries should not
have been liquidated solely as a result of the defect in the notice of
liquidation"). Accordingly, the omission of this information in the
chronological summary does not provide a basis upon which to deny the
June 20^th^ Claim.

It is thus apparent that the June 20^th^ claim substantially comported
with the requirements of 19 CFR § 191.53(e)(3). For all the reasons set
forth above, there is sufficient evidence of export. The failure to
verify that information within three years of payment of the claim is
not a basis to deny drawback.

**2. April 15^th^ Claim, UC1-XXXXXX2-3**

Protestant also contests the denial of drawback on merchandise for which
a claim was filed on April 15, 1996 and liquidated on April 8, 2005. As
with the prior claim, although the port rejected the claim for drawback
due to a lack of evidence pursuant to 19 CFR § 191.72, sufficiency of
evidence of export should be adjudged pursuant to the 1996 Regulations,
the standards at the time the claim was filed. *See Cargill,* 395 F.
Supp.2d 1222, *supra* at 6. *See also* [Notice of Action]{.smallcaps},
CF 29 (March 15, 2006). Unlike with the June 20^th^ claim, however, in
this instance, there is no chronological summary of exportation on file.
Instead, the only records available to support this claim are: the Same
Condition Merchandise Claim, CF 7539 (Protestant's Exhibit D); a cover
letter, from KMBS to the Boston Port, identifying the entries as
covering shipments to Canada and the United States" (Protestant's
Exhibit G) and related drawback "calculation worksheets." Also included
is an affidavit from KMBS Traffic and Customs Manager Rohan, stating the
requisite documentation was submitted with all claims as regular course
of business in Protestant's drawback program (Protestant's Exhibit A).
Pursuant to a FOIA request, Protestant received from the Port, and
subsequently submitted to this Office, a Drawback Affidavit which
included information on the port code, date and amount of entry and
establishes that drawback claimed for EC96-01 (Protestant's Exhibit F)
and the ACS Drawback Status Refund information for entry numbers under
this claim (Protestant's Exhibit G). The Drawback Affidavit establishes
entry number 946XXXXX2-6 is referred to "KPI 5391" for KMBS internal
tracking purposes. *See* Protestant's Exhibit F. KPI 5391 and Drawback
number EC 96-01 share the same invoice number (GC 540A) on a coding
sheet submitted by the Protestant, thereby establishing KPI 5391 and
Drawback EC 9601 are part of the same entry. *See* Protestant's Exhibit
F. The ACS "Status Refund" for entry 946XXXXX2-6 shows that of the
\$1,029.13 paid, \$1,204 was refunded (\$175.55 in interest accrued) as
antidumping duties on November 21, 1997. *See* Protestant's Exhibit G.

In furtherance of its contention that sufficient evidence of export
accompanied the April 15^th^ drawback claim, KMBS Customs Manager Rohan
states: "It was always the standard operating procedure at KBT to
prepare the chronological summary of exports and submit it to Customs
along with the other documents which comprised each drawback entry,
since we were all aware that this document was explicitly required for
drawback claims under the export summary procedure, and I always look
for the chronological summary of exports when conducting my final review
of the claim before filing...." *See* Rohan, Affidavit at paragraph 26
(Protestant's Exhibit A, p.7). While an affidavit cannot be afforded the
same evidentiary weight as that of testimony, it may be used in
conjunction with other evidence to support a position.[^10] *See* HQ
223235 (stating "Protestant's argument that the lack of records showing
entry into production can be cured by testimony or affidavit is
misplaced. An affidavit is not the equivalent of testimony at trial
because an affidavit is not subject to cross-examination and, therefore,
not entitled to the same weight as testimony in court", *citing Andy
Mohan, Inc. v. U.S*., 537 F.2d 516, (1976)). *See generally
Mannesmann-Meer, Inc. v. United States,* 58 C.C.P.A. 6, 433 F.2d 829
(1970) (concluding: "The strength of the evidence should be assessed in
practical terms, considering such factors as completeness, adequacy of
bases, and possible motives to deceive").

Accordingly, when viewed in the aggregate, the affidavit and
aforementioned documents lend credence to the assertion that evidence of
exportation had been documented with Customs at that time the claim was
filed (February 21, 1996). The cover letter stating the claim covers
shipments to Canada and Mexico, which "have been made under the
exporter's summary and accelerated payment procedures that are filed
with your office," includes the code "EC 96-01" as a tracking or
reference number. The "EC 96-01" code again appears in a KMBS coding
sheet with entry as KPI 5391. KPI 5391, in turn, appears in association
with entry number 946XXXXX26 on the Drawback Affidavit.

CBP Regulations, policy and case law further support a conclusion that
evidence of exportation was present. At the time this claim was
accelerated, CBP Regulations for verification of drawback claims
mandated: "A drawback claim filed under a drawback contract *shall* be
subject to verification by the director at whose port the claim is filed
when the factory covered by the claim also is located at the same port."
19 CFR § 191.10(a) \[1996\]. It is further provided under the 1996
Regulation for: "The verifying official *shall* verify the claim and
material set forth in the related drawback contract. Verification shall
include an examination of the manufacturing records and all the
accounting and financial records relating to the transaction(s)." 19 CFR
§ 191.10(c) \[1996\] (*emphasis added*). The CF 7539 associated with the
April 15^th^ Claim indicates that documents to support the drawback
claim are "per attached sheets." Under the 1996 Regulations, CBP
officials would have been obligated to review not only the chronological
summary but also all associated materials to ensure the claim was
complete prior to accelerating the April 15^th^ drawback claim.[^11]

Furthermore, it is a well-established principle that CBP officers are
presumed to fulfill their duties correctly and responsibly.[^12] *See*
28 USC § 2639. *See also Pillsbury Co. v. United States*, 293 F.Supp. 2d
1351, 1354 (2003, CIT), 25 BNA Intl Trade Rep. 2349 (holding: "Customs's
decision\[s\] enjoy a statutory presumption of correctness, and the
burden of proving otherwise rests upon the party challenging such
decisions"), *The American Grenier Electronic, Inc.,* 79 Cust. Ct. 92,
441 F. Supp. 915, 920 (Nov. 4, 1977)(stating: "\[T\]he appraiser's
action is presumed correct"); *Frank P. Dow Co. v. United States,* 59
Cust. Ct. 697, 276 F.Supp. 1013 (1967), and on other grounds, on reh
(1968, Cust Ct) [60 Cust Ct
758.](https://www.lexis.com/research/buttonTFLink?_m=21b06000b400e0a785a2af71081b94b8&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B28 USCS %A7 2639%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=34&_butInline=1&_butinfo=<cite  )
*See also Lee & Co. v. United States*, 15 Ct. Cust. App. 202, 205
(1927), citing [*Morse Bros.* v. *United States,* 13 Ct. Cust. App.
553](https://www.lexis.com/research/buttonTFLink?_m=345ffd44046087601ded92b82dbe5a8b&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B15 Ct. Cust. 202%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=2&_butInline=1&_butinfo=<cite c )
(finding: "This court has heretofore held that the presumption of
correctness of the collector\'s finding stands until, at the trial, some
substantial evidence to the contrary is offered and that then the
presumption ceases to exist, and the one asserting the correctness of
the collector\'s finding must then meet the testimony submitted in
opposition to the collector\'s finding*"); E. I. Du Pont de Nemours &
Co. v. United States*, 27 C.C.P.A. 146, 148 (1939) citing [*United
States* v. *Marshall Field & Co.*, 17 C.C.P.A. 1, T. D.
43309](https://www.lexis.com/research/buttonTFLink?_m=179b2b5ece776aefad16ff9d597d792c&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B27 C.C.P.A. 146%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=3&_butInline=1&_butinfo=<cite cc%253 )
(holding: "It is well established that the collector is presumed to have
found every fact to exist that was necessary to sustain his
classification"). It is further presumed under predecessor to [28 USCS §
2639](https://www.lexis.com/research/buttonTFLink?_m=21b06000b400e0a785a2af71081b94b8&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B28 USCS %A7 2639%5D%5D><%2Fcite>&_butType=4&_butStat=0&_butNum=57&_butInline=1&_butinfo=28 USC%252 )
that appraisers have found every existing fact necessary to sustain
their appraisements. *See* *James C. Goff Co. v. United States*, 61
Cust. Ct. 506 (1968), 290 F.Supp. 769, *affd* (1971) 58 CCP 147, CAD
1019, 441 F.2D 671. In accordance with the presumption of correctness,
it is appropriate to assume that CBP officers would not have accelerated
an incomplete claim without the information referenced as in the CF
7539, "Information per Attached Sheets".

The claim refers to attachments that were not present when the file was
received from the Boston CBP office. Protestant insists, however, that
the exporter's summary was present when the subject claim was filed. To
corroborate this claim, Protestant refers to: the statement of its
manager that it was his practice to use the exporter's summary
procedure; the use of the exporter's summary procedure on the June
claim; and the presumption that the Boston CBP office adhered to the
requirement to check for completeness of a claim before authorizing an
accelerated payment.

The Chicago Port also denied the April 15^th^ Claim due to three import
entries that "reliquidated after the filing of the drawback claim and
thus potentially could cause a reduction in the accelerated payment
amount." *See* Notice [of Action]{.smallcaps}, CF 29 (March 15, 2005).
Protestant argues that that the refunds on the contested entries were
for antidumping duties that were deposited on certain Japanese belts and
bearings for which Protestant did not claim drawback. *See* Protestant's
Exhibit G, M[emorandum in Support of Protest]{.smallcaps} at 14;
[Drawback Status Refund]{.smallcaps} ACS Screens for Liquidations
946XXXXXX26/82/58 (listing "Refund RSN" as "Antidumping Duties"). *See
also* Protestant's Exhibit A, Rohan [Affidavit]{.smallcaps} at 7, para.
28 (stating "In 1996, the only merchandise imported by KBT on which
antidumping duties were deposited consisted of certain belts and
bearings. KBT did not export such belts and bearings to Canada and
Mexico, and KBT did not identify any such merchandise or the duties paid
thereon as the basis for any claim of drawback, including those two
claims which are in question"). The Chicago Port has subsequently
acknowledged that the reliquidation of the three drawback entries should
not have been a basis for denying the entire claim, but instead should
have served to reduce only in the drawback in the amount of those
entries. *See* Exhibit J. The Port further confirmed, however, that
there is no record of Notice of Correction to verify that the
merchandise underlying the import entries is part of the April 15^th^
claim. Without any evidence to controvert Protestant's assertion, there
is no basis upon which to proportionally reduce drawback refunded for
this claim. For the reasons set forth above, drawback of this claim
should not have been denied.

**HOLDING**:

The protest of the denial of both drawback claims is granted. The
protest is GRANTED in regard to the June 20^th^, 1996 (\$38,604.92)
claim. The protest is GRANTED in regard to the April 15, 1996
(\$38,847.47) claim.

Consistent with the decision set forth above, you are hereby directed to
grant the June 20^th^ and the April 15^th^ protests. In accordance with
Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4,
1993, Subject: Revised Protest Directive, this decision should be mailed
by your office to the protestant no later than 60 days from the date of
this letter. Sixty days from the date of the

decision the Office of International Trade will take steps to make the
decision available to CBP personnel and to the public on the CBP Home
Page on the World Wide Web at www.cbp.gov, by means of the Freedom of
Information Act, and other methods of public distribution.

> Sincerely,
>
> Myles B. Harmon, Director
>
> Commercial and Trade Facilitation Division

[^1]: The port of Boston was closed subsequent to the filing of
    Protestant's drawback claims and related records were transferred to
    the Port of Chicago upon this closing.

[^2]: On this last basis, the Chicago Port identified three entries that
    had previously been liquidated: entry numbers 946-XXXXX26, which was
    liquidated in the amount of \$803.81; entry number 946-XXXXXX58,
    liquidating for \$15,973.36; and entry number 946-XXXXXX82, which
    liquidated for \$22,937.80.

[^3]: 19 USC § 1313(j), Unused Merchandise Drawback, requires in part:
    "(1) If imported merchandise, on which was paid any duty, tax, or
    fee imposed under Federal law upon entry or importation - (A) is,
    before the close of the 3-year period beginning on the date of
    importation - (i) exported, or (ii) destroyed under customs
    supervision; and (B) is not used within the United States before
    such exportation or destruction; then upon such exportation or
    destruction 99 percent of the amount of each duty, tax, or fee so
    paid shall be refunded as drawback. The exporter (or destroyer) has
    the right to claim drawback under this paragraph, but may endorse
    such right to the importer or any intermediate party."

[^4]: 19 CFR § 191.72, Exportation procedures \[2005\] provides:
    "Exportation of articles for drawback purposes shall be established
    by complying with one of the procedures provided for in this section
    (in addition to providing prior notice of intent to export if
    applicable (see §§ 191.35, 191.36, 191.42, and 191.91 of this
    part)). Supporting documentary evidence shall establish fully the
    date and fact of exportation and the identity of the exporter. The
    procedures for establishing exportation outlined by this section
    include, but are not limited to: (a) Actual evidence of exportation
    consisting of documentary evidence, such as an originally signed
    bill of lading, air waybill, freight waybill, Canadian Customs
    manifest, and/or cargo manifest, or certified copies thereof, issued
    by the exporting carrier; (b) Export summary (§ 191.73); (c)
    Certified export invoice for mail shipments (§ 191.74); (d) Notice
    of lading for supplies on certain vessels or aircraft (§ 191.112);
    or (e) Notice of transfer for articles manufactured or produced in
    the U.S. which are transferred to a foreign trade zone (§ 191.183)."

[^5]: 19 CFR § 191.51, Alternative procedures \[1996\] provides:
    "Exportation of articles for drawback purposes shall be established
    by complying with one of the following procedures: (a) Notice of
    exportation (§191.52); (b) [Exporter\'s summary (§
    191.53)]{.underline}; (c) Certified notice of exportation for mail
    shipments (§ 191.54); (d) Notice of lading for supplies on certain
    vessels or aircraft (§ 191.93); or (e) Notice of transfer for
    articles manufactured or produced in the United States which are
    transferred to a foreign trade zone (§ 191.163)".

[^6]: The evidentiary value placed upon the chronological summary to
    establish the fact of exportation is apparent in the regulatory
    history relating to this section. In response to complaints that it
    caused "needless excessive paperwork with no apparent benefits to
    claimants or Customs." Customs insisted: "\[The Exporter's summary\]
    is necessary so that the timeliness of exportation can be determined
    after a rapid review by the liquidator." *See* T.D. 83-212 (Dec. 12,
    1983).

[^7]: *See Id.* (acknowledging "there may be some merit" to requests for
    eliminating other categories of information and, by consequence,
    revised the language of section 191.53(e)(3) to provide for a format
    that "shall be acceptable to the regional commissioner an shall
    contain '*substantially the data provided for in the following
    sample format"*' (emphasis added)).

[^8]: *Id*. (concluding that, despite comments objecting to, and seeking
    the removal of, requirements for "identity and location of the
    ultimate consignee of the exported articles," such information was
    still needed").

[^9]: [USCS Federal Rules of Civil Procedure]{.smallcaps}**,** Rule 61,
    Harmless Error: "No error in either the admission or the exclusion
    of evidence and no error or defect in any ruling or order or in
    anything done or omitted by the court or by any of the parties is
    ground for granting a new trial or for setting aside a verdict or
    for vacating, modifying, or otherwise disturbing a judgment or
    order, unless refusal to take such action appears to the court
    inconsistent with substantial justice. The court at every stage of
    the proceeding must disregard any error or defect in the proceeding
    which does not affect the substantial rights of the parties."

[^10]: To bolster the position that Rohan's affidavit has probative
    value, Protestant refers to the Court's decision in *Aurea Jewelry
    Creations, Inc. v. United States*, which held that gaps in the
    documentary evidence could be satisfied by testimony by the
    manufacturer's personnel at trial which corroborated the documentary
    evidence. *See* 720 F. Supp. 189 (Ct. Int'l Trade 1989), aff'd,
    \_\_\_ F.2d \_\_. Court No. 90-1147 (CAFC May 6, 1991). The
    situation here, however, is distinguishable from that in *Aurea
    Jewelry* because testimony is not at issue in this case.

[^11]: Under the current provision, 19 CFR § 191.61(b), CBP officials
    are not obligated to, but "may" review related documents: "The
    verifying office shall verify compliance with the law and this part,
    the accuracy of the related general manufacturing drawback ruling or
    specific manufacturing drawback ruling (as applicable), and the
    selected drawback claims. Verification *may* include an examination
    of all records relating to the transaction(s) (*emphasis added*). 19
    CFR §191.61(b).

[^12]: 19 USC § 2639, Burden of proof; evidence of value, provides: (a)
    (1) "Except as provided in paragraph (2) of this subsection, in any
    civil action commenced in the Court of International Trade under
    section 515, 516, or 516A of the Tariff Act of 1930 \[[19 USCS §§
    1515](https://www.lexis.com/research/buttonTFLink?_m=88d21cb457eb20c8fbadd5d1add2088a&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B28 USCS %A7 2639%5D%5D><%2Fcite>&_butType=4&_butStat=0&_butNum=2&_butInline=1&_butinfo=19 USC  ),
    [1516](https://www.lexis.com/research/buttonTFLink?_m=88d21cb457eb20c8fbadd5d1add2088a&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B28 USCS %A7 2639%5D%5D><%2Fcite>&_butType=4&_butStat=0&_butNum=3&_butInline=1&_butinfo=19 USC  ),
    or
    [1516a](https://www.lexis.com/research/buttonTFLink?_m=88d21cb457eb20c8fbadd5d1add2088a&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B28 USCS %A7 2639%5D%5D><%2Fcite>&_butType=4&_butStat=0&_butNum=4&_butInline=1&_butinfo=19 USC  )\],
    the decision of the Secretary of the Treasury, the administering
    authority, or the International Trade Commission is presumed to be
    correct. The burden of proving otherwise shall rest upon the party
    challenging such decision."