have please the court i am august plenty with the department of justice here on behalf of the united states we think the core concept underlying this dispute is straightforward in the substitution drawback provisions congress wanted to allow a drawback of duties taxes and fees to promote export and allow fair competition between overseas and domestic producers thus an import could be substituted for a comparable export and get the same tax treatment as if the domestically produced product was sold in the united states but congress was quite clear in guarding against abuse of this privilege by prohibiting an importer export or from counting a drawback twice the us congress said that merchandise that is exploited to satisfy any claim for drawbacks shall now not be the basis for any other claim for drawback and historically this is judge historically congress has had an opportunity to legislate the changes one included in your rule and it's resisted that temptation correct congress has not passed anything since two thousand and four directly relevant to the issue before the court and there have been proposals and there was a prior rule making that didn't get concluded but we don't think that tells us anything about what congress me the ts t e a simplified some of the drawbacks provisions but did not address this issue at all and we we would submit that plaintiff's reliance on this and some of the discussion by the court of international trade was was not a reliable source of legislative history and that when the house report on tift talked about preserving treatment for wind it was referencing the substitution address j two at all it addresses a bunch of other provisions and it does not address that language added in subsection j two in two thousand and four that we think gives rise to the current dispute we think it's the far more relevant history of an accident is to look what happened in two thousand and four and i think that really gives the tells us why plaintiffs are and correct on their theory that the two thousand and four legislation resulted in a dramatic change in the legal landscape with respect to how excise taxes are handled under the substitution drawback system but going back to the two that it seems to me that congress was clear that the drawback the amount of draw back was to be paid was to be equal to the amount of the duties or taxes that would apply to an export article if the exported article were were imported that seems to  we submit that the reason for that was to make clear that you took the lesser value of the possible drawbacks so you could assume that's contrary to the language of the other s subsection l speaks to how to count determine the calculation of amounts refunded as drawbacks so subsection l tells you what the drawbacks amount will be it does not tell you how to apply the drawback anti abuse provision in subsection v and just like subsection j to subsection else here's what it shows that it tells you what the amount should be should be equal to something else you rule says subsection l tells you how to calculate the amount of the drawback if you have a a low value good and you exchange it for a value with a high duty you're going to draw back the amount of the low value good but that is the only the beginning of the process this is a but that prevention works against you your honor i think now we're moving to the right an act meant to really focus on which is the two thousand and four law which added that notwithstanding term it also changed the relevant provision of j two to say to refer to taxes imposed upon entry from to taxes imposed because of entry let me talk about the notwithstanding term was was added to explain that irrespective of the type of tax or duty they were those sorts of transactions resulted in that being a drawback notwithstanding other law in other words notwithstanding how the internal revenue code might define that only gets you again to the next question is what do you do with the drawback well subsection v tells you there's an anti abuse provision that applies and several other buz provisions also limits when that drawback can actually be collected so we think that notwithstanding provision does not carry the weight that the district court placed on the notwithstanding provision insurers i'm very sorry yes the court of international trade we think placed too much weight on that notwithstanding provision which was decide does design to define when a a tax fee or duty could be subject to drawback but not to override or or override the anti abuse provision for double drawbacks the not with and i want to take us back to the history of that two thousand and four law that we're all discussing here welcome any point you to that can i add this and notwithstanding the notwithstanding word the provisions that governor draw back refer to drawbacks were tax is paid or determine right and you would have a ban that you tell us that the situation of exploitation for bonded facility without the payment of tax is still a drawback and i'm not appreciating and understanding what i think is your redefinition of a drawback so can you help me out with that too sure sure you are and i want to the the the court of an international trade found that the plain language of  of the statute only only counted certain drawbacks and i we think that was incorrect and there are a couple reasons first as the coordinate of international trade said that the statute doesn't define drawback it leaves that for the agency to do and that's what the agency is and they have and ever did to hear nd statutes have used the term drawback to refer to exactly what we're talking about here that the agency adopted here which is straightforward and run through the trade laws since the beginning of the republic rd the supreme court talked about this concept in the possible case over one hundred years ago and it talked about the substance of the transaction rather than the specific label given to it and the substances and this is a quote a device resorted to for enabling a commodity affected by taxes to be exported and sold in the foreign market on the same terms as if it had not been taxed at all end quote and the words used for that were on a fixation refund rebate remission bonus and drop back this is a well understood not pate so we submit that in order to have a consistent meaning of the term drawback to these transactions when a product is exported and therefore excise tax or not excise taxes are not paid that counts as a drawback and it certainly reasonable for the agency to interpret that way what about the claim for a drawback where's this it's an odd way you're talking about  categorizing from a bonded facility without the payment of tax is a claim for a drawback that's your argument right isn't that an odd way to use the word claim what's the claim will congress  broadly of any claim for drawback which to suggest that congress wanted that term interpreted broadly to assure there was an abuse and i want to look dressing to draw what's being drawn back if something exported free of tax it is the tax liability that would have would have been paid if it had been sold in the united states and again that is what possible talks about that's what congress talked about in seven hundred and eighty nine  nothing on controversy or what's being what's being drawn back if there has been nothing paid at all as i said it is the liability that would it would be paid if the product was sold in the if under your definition you can have a draw back and nothing never having been paid yes we think that's what congress meant when it said any kind of drawback it was speaking broadly it was it was incorporating two hundred years of jurisprudence saying that this type of transaction is treated as a drawback and we certainly think it was reasonable to for the agency to interpret that way when the statue uses drawback in one thousand three hundred and thirteen d when the judicia i'm sorry i'm not you're not ok it's a value added tax ok i'm not going to be able to comment on that but we can address it in supplemental briefing it would be helpful i see my my time is expired i would like to save a minute or with questions raised by chief judge protest and judge raina as to what congress did in tift and also what judge laurie asked about concerning the notwithstanding clause because i think what those questions highlight is that the rule that issue here can't be reconciled either with the text of the governing statutes or with congress repeated rejection over the last sixteen years of the policy that the rule seeks to impose so to begin with fifty a fifty it did three things of the import or what would have been paid on the export if it had been imported meaning the excise taxes that would have applied to the export were imported customs has flouted that principle because what it says instead is it will it will refuse to refund what was actually paid on the export but the calculation methodology says that what was actually paid on the export is not the measure it's what would have been paid had been imported when there would have been an excise tax applied but if he did two other things or relevance here as well at the time to fifty it wasn't acted customs had been paying substitution drawback on wine for over a decade no one else among the alcoholic beverage community was able to claim substitution drawback because the standard for substitutability was much different and harder to meet for other beverages but wine had an easier substitution standard so it was getting substitution drawback paid so if he added two other things st it said in the conference report that the existing treatment of wine would be preserved and nd it expanded the subs to standard so that for the st time spirits and beer would also be eligible for substitution drawback now as to the notwithstanding clause the judge laurie mentioned that was passed in two thousand and four precisely as customs admitted below to overrule customs headquarters decisions which had denied excise tax drawback on alcoholic beverages and the notwithstanding clause at a minimum has to be construed to effectuate the precise purpose for which customs admits it was added to the statute which was to overrule customs previous denial of excise tax drawback but the statutory problems here run even further and that goes to the question chief judge probes asked later on which is the definition of drawback in the statute because the basic essential legal premise of customs theory here is that every untaxed export of out the holic beverages itself constitutes a claim for drawback and that's why they say relying on that export to claim substitution drawback on an import is an impermissible nd drawback prohibited by one thousand three hundred and thirteen dollars but the text doesn't permit that theory because when there is merely an export without payment of tax there's no drawback and there's no claim so the two dollars necessary elements of a claim for drawbacks are both missing so st of all as to the meaning of drawbacks the term appears  the earliest stages of draw back did begin in seven hundred and eighty nine but what we're dealing with here is something that was added in the modern era in one thousand nine hundred and four specifically for the purpose of encouraging exports and that was supposed to provide and does provide a tax benefit to those companies which increase their export ng activity because that congress believes encourages manufacturing and encourages job so the ancient history of drawbacks isn't really relevant here what is relevant is how in the modern era congress has used that word and the tax code on this is really very clear because the word appears in lots and lots of provisions and not once does any provision use it the way customs uses it in this rule as customs in fact admits the only provisions in the code that classify exports as a drawback are those that apply to the very small minority of instances in which the excise tax has already been paid or determined prior to export and by contrast the provisions that apply in the normal course to the vast majority of alcoholic beverage exports where they are just removed from the bonded facility directly for export and no tax is ever paid or determined those provisions never classify the expert export as a drawback at all and that's because as judge  said for those exports there is no payment or determination to be drawn back and the cases from the supreme court and this court and other court are legion that say that when congress includes a term in some provisions in xclusive from others and this applies in particular when you're talking about a specialized legal term of art like draw that when congress includes it in some places and omits it in others then an agency has to respect what congress has done and here customs has done the opposite it indiscriminately applies the word drawback to every export and the cases are mr kaiser can i take you back to the point you were making about notwithstanding because your government says you can't just interpret notwithstanding to mean the statute overrides literally every other provision of law and in your brief i think wisely you kind of agree with that and you say everyone agrees that notwithstanding may not be taken to it logical extreme and that subsection v and other provisions in section thirteen rd can appropriately limit substitution drawback so my question to you is how do we know then when to draw the line yes well i think i honor has stated it correctly which is that the cases say that you don't interpret enough with standing cause literally to that extreme as if it obliterates every other provision that might apply so for example the government says that our reading would mean th it has to be given some meaning and customs gives it no meaning at all the government has an identified a single respect in which it says that the notwithstanding clause limits what the government can do under drawback so st it has to have some meaning and nd at a minimum it should have a meaning that is in keeping with the specific purpose that congress enacts it to accomplish and as customs acknowledged below here the notwithstanding clause was and acted specifically to overrule the customs decisions denying excise tax fraud back so the court doesn't need in this case to figure out what the outer limits are because this lies within the core of the reason it was inactive but i would also add your honor  even if the notwithstanding clause didn't exist it's obviously a very strong argument for us but even if it didn't exist the result would be the same because it would still be customs burden to justify its definition of drawback to include every export regardless of whether congress called it draw back or not and in addition customs would have to separately demonstrate that an export without payment of tax somehow constitute a claim for drawback and as your honor pointed out that is a separate legal issue here because when there is merely an export without payment of tax no one dollar is making any claim against the government for anything arguing to the contrary the only thing the government points to in this brief is its own forms but they are in the appendix and they prove our point they track the statutory distinctions between drawbacks and non drawback claims and no claims exactly the the forms that apply to the minority of instances in which taxes already paid are determined they talk about claims there's a claim number on that form they talk about drawbacks and they require the person filing the form to certify that it is entitled to draw back in the amount claimed the other forms the ones that apply to the vast majority of exports and that operate under the statutory provisions that say where tax hasn't been paid or determine the good can simply be exploited from the bonded facility and those statutes never use draw back the forms likewise never use the word draw back never use the word claim don't assign a claim number don't require the filer to certify that it is entitled to the amount claimed so neither is there a claim nor is there are drawbacks not only under the statutes but under the forms the customs itself is prepared because it's only in this rule that customs for the st time chief ju as you say redefined the meaning of drawback and added to the regulation for the st time the proposition that drawback includes simply the remission of excise taxes that are not paid on exports and in addition to being irreconcilable with the particular textual provisions that govern here that's just a broader reflection of the fact that customs policy is irreconcilable with congress's repeated rejection over the last sixteen years in two thousand and four when they added the notwithstanding clause in two thousand and sixteen when they enacted to fifty with its precise calculation methodology preserving the treatment of wine and expanding the substitution standard so as to enable other alcoholic beverages to enjoy the treatment that wine had enjoyed for over a decade and we've noted in our brief and i won't repeat it here but all the touch points in between twenty million forty two thousand  sixteen where congress rejected legislation that would have adopted customs rules were customs proposed a rule to accomplish in two thousand and nine what it seeks to accomplish here and withdrew it in the face of congressional opposition in all of these instances i don't know of a case in which there has been a more consistent history with as many touch points over the course of this number of years in which an agency has repeatedly tried to implement a policy rebuttal the st has to do with the purpose of the substitution drawback scheme counts on the other side says well it's to encourage exports but it's also to have leveled the playing field to have these compete fairly and what they're asking this court to do and congress hasn't clearly done it what they're asking this court to do is to create an excise tax free zone for imports into the united states of alcohol the cigarettes of gasoline that is not possibly what congress intended and that brings me to my nd point which is the two thousand and four an act meant the other side said ripley repeatedly that was designed to expressly designed to allow excise tax drawbacks but it wasn't designed to allow double excise tax drawbacks and in fact the legislative history of that enactment which changed to minor things in j two said very specifically the point of that was to address this court's decision on the heart harbor maintenance tax congress was focused on the harbor maintenance tax the excise tax is fifty times the size of the harbor maintenance tax and it's shocking that the legislative history would focus on the harbor its tax but make no mention of the excise tax what actually happened was congress broadened with that notwithstanding clause what could be counted as drawn back excise taxes are now potentially countable but it all that the commerce department did here and a ruling the other way will leave a a signal can't imbalance by allowing excise tax free imports into the united states which congress certainly never the honorable court is adjourned until tomorrow morning at ten a