HQ 223154: Application for further review of Protest No. 3201-91- 100023, dated February 26, 1991; Duties on fuel consumed in foreign-trade subzone; FTZ grant restriction; administrative remedy futile; 19 U.S.C. 1514.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 223154

                       September 24, 1991

FOR-2-02-CO:R:C:E 223154 JR

CATEGORY:  Entry/Liquidation

Regional Commissioner of Customs
Pacific Region
One World Trade Center, Suite 765
Long Beach, California 90831-0700

RE:  Application for further review of Protest No. 3201-91-
     100023, dated February 26, 1991; Duties on fuel consumed in
     foreign-trade subzone; FTZ grant restriction; administrative
     remedy futile; 19 U.S.C. 1514. 

Dear Sir:

     The above-referenced protest from the Honolulu District was
forwarded to our office for further review on April 22, 1991.

FACTS:

     Chevron U.S.A., Inc. has filed a protest under 19 U.S.C.
1514 challenging the exaction of duties and merchandise
processing fees by Customs on several entries of imported fuel
which its refinery consumed as part of its operation in Foreign
Trade Subzone Number 9E, in Honolulu, Hawaii.  

     Chevron protests the exaction of duties and fees on the
import entries "because the merchandise never entered U.S.
Customs territory and because such exaction is discriminatory
treatment in comparison to the rights given to other refiners
operating in foreign-trade zones."  The District Director,
Honolulu, recommends that the protest be denied since the grant
establishing the Chevron refinery as a foreign trade subzone
specifically states: "1. Foreign crude oil used as fuel for the
refinery shall be dutiable."  See Foreign-Trade Zones Board Order
No. 415.

ISSUE:

     Does the Customs Service have the statutory authority to
grant the relief the protestant is seeking, that is, the repeal
of the grant restriction issued by the Foreign-Trade Zones Board?

 LAW AND ANALYSIS:

     It is manifestly inadequate for the protestant to protest
the exaction of duties and fees assessed on the imported fuel
consumed in its foreign trade subzone under 19 U.S.C. 1514
because no relief can be granted by Customs in this case at the
administrative level.  See United States v. Utex International
Inc., 6 Fed. Cir. (T) 166; 857 F.2d 1408 (1988).  It is well
established that exhaustion of remedies will not be required if
administrative review would be futile.  See Luggage and Leather
Goods Manufacturers of America, Inc. v. United States, 7 CIT 258,
588 F. Supp. 1413 (1984).  The District Director, Honolulu, as a
Board representative, is bound to carry out the grant restriction
of the Foreign-Trade Zones Board, and as such, Customs officials
are legally foreclosed from granting the relief sought, that is,
overturning the grant restriction.  See 19 U.S.C. 81b(a); 19
U.S.C. 81c; 19 CFR 146.2.

     Since Customs is bound by law to enforce the Foreign-Trade
Zones Board's Order and since Customs has no authority to
override the Foreign-Trade Zones Board's grant restriction, we
have no choice but to deny the protest.

HOLDING:

     The Customs Service is legally foreclosed from granting the
relief sought in this case under 19 U.S.C. 1514 since overturning
a foreign-trade subzone's grant restriction is a matter outside
the authority of the Customs Service.  You are instructed to deny
this protest.  A copy of this decision should be provided to the
protestant in accordance with 19 CFR 174.30.

                               Sincerely,




                               John A. Durant, Director
                               Commercial Rulings Division