HQ 224879: Protest 0401-93-100374; tantalum metal ingots; 19 U.S.C.1313(b); 19 U.S.C. 1313(l); 19 CFR 191.61; 19 U.S.C. 1313 (r)(1);T.D. 53654; Lockheed Petroleum Services, Ltd. v. U.S.

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 224879

                         March 31, 1994

DRA-2-01-CO:R:C:E 224879 AJS

CATEGORY: Drawback

District Director
U.S. Customs Service
10 Causeway Street
Boston MA 02222-1059

RE: Protest 0401-93-100374; tantalum metal ingots; 19 U.S.C.
1313(b); 19 U.S.C. 1313(l); 19 CFR 191.61; 19 U.S.C. 1313 (r)(1);
T.D. 53654; Lockheed Petroleum Services, Ltd. v. U.S.

Dear Sir or Madame:

     This is our decision on Protest 0401-93-100374, dated June
30, 1993, concerning the liquidation on April 2, 1993, of seven
drawback entries. 

FACTS:

     The protestant entered seven shipments of tantalum powder
between April 1984 and May 1985 under the duty free provision for
scrap metal in item 870.60, Tariff Schedules of the United States
(TSUS).  Customs officials determined that item 870.60, TSUS, was
inapplicable and liquidated the entries under a dutiable
provision.  The only entry for which we possess documentation was
liquidated on May 31, 1985.  A bill for duties owed was also sent
to the protestant on May 31.  A protest was timely filed against
this liquidation on August 6, 1985.  In May of 1987, the protest
was approved for further review.  In March of 1991, an adverse
decision on the application for further review was issued.  

     The protestant asserts that it believed there was a
substantial probability of ultimate approval of the
classification protest and thus did not pay the duties assessed
in May of 1985.  In May of 1989, the protestant determined that
it should pay the still outstanding bills for additional duties. 
Customs records indicate that the bill 
was paid on January 30, 1989.  Contemporaneously, the protestant
prepared and filed the subject drawback claims, since some of the
imported material had been used to 

                               -2-

manufacture product for export.  The protestant believed that it
would have been improper to file drawback claims before this time
because the duties on the underlying consumption entries had
neither been paid nor ultimately determined.

     The Customs Form (CF) 331 for drawback was filed on February
10, 1989.  This CF states that the date of import for the
relevant material was March 30, 1984, the date of use in
manufacture was April 15, 1984, the date of export for the
finished product was May 30 and June 18, 1984.  A Treasury
Decision (T.D.) number is not given in box number 16 of the CF
331.  We note that T.D. 77-293(P) was issued to the protestant
for tantalum ingot.  

     The sole basis for the denial of drawback is that the
drawback claims were not filed within three years of export as
specified in 19 CFR 191.61.

ISSUE:

     Whether a Customs officer was responsible for the untimely
filing of the protestant's drawback claims, thus permitting the
extension of the 3-year filing requirement of 19 CFR 191.61. 
More specifically, whether awaiting results of a protest
establishes a Customs officer responsibility for untimely filing
even though the protestant possessed sufficient information to
timely file its drawback claim. 

LAW AND ANALYSIS:

     Initially, we note that the protest was timely filed
pursuant to 19 U.S.C. 1514.  The subject drawback entries were
liquidated on April 2, 1993, and the protest of this decision was
filed on June 30, 1993.  We note that the refusal to pay a claim
for drawback is a protestable issue pursuant to 19 U.S.C.
1514(a)(6).

     19 U.S.C. 1313(l) states that "[a]llowances of the
privileges provided for in this section shall be subject to
compliance with such rules and regulations as the Secretary of
the Treasury shall prescribe, which may include, but need not be
limited to, the fixing of a time limit within which drawback
entries . . . shall be filed and completed . . ."  

     19 CFR 191.61, which implements section 1313(l), provides
that a drawback entry and all documents necessary to complete a
drawback claim, including those issued by one 
Customs officer to another, shall be filed or applied for, 
as applicable, within 3 years after the date of exportation of
the articles on which drawback is claimed.  In addition, this
section states that claims not completed within the 3-

                               -3-

year period shall be considered abandoned.  Furthermore, no
extension will be granted unless it is established that a Customs
officer was responsible for the untimely filing.

     Section 191.61 was codified in the amendment of 19 U.S.C.
1313 by section 632(r)(1) of the North American Free Trade
Agreement Implementation Act (Act), Public Law 103-182, 107 Stat.
2057 (December 8, 1993).  Section 692 provided that this
codification was effective on the date of enactment of the Act. 
T.D. 53654 states that requirements of regulations which may be
waived in accordance with law may be waived by the Commissioner
of Customs.  Assuming that the requirements of section 191.61
could have been waived under T.D. 53654 prior to December 8,
1993, such waiver is no longer possible due to the codification
of section 191.61.  Therefore, Customs may only extend the
subject 3-year filing period if a Customs officer was responsible
for the untimely filing.      

     A search of Customs computer records for the subject
drawback entry indicates that a bill was sent to the protestant
upon liquidation of the consumption entry on May 31, 1985, and
that this bill was paid on January 30, 1989.  The protestant
argues it would have been improper to timely file its drawback
claims because the duties on the consumption entry had neither
been paid nor ultimately determined until March of 1991.  We do
not agree with this assertion.  Once a bill was sent on May 31,
1985, the protestant was aware of the amount of drawback
applicable to its drawback entry.  From this date, approximately
two years remained for the protestant to timely file for
drawback.  These circumstances do not establish that a customs
officer was responsible for the protestant's untimely filing. 
Consequently, the granting of an extension to the 3-year filing
period pursuant to section 191.61 is not warranted in this
instance.

     The protestant cites to Lockheed Petroleum Services, Ltd. v.
United States, 4 CIT 25 (1982), rev'd 1 CAFC 63 (1983), in
support of its claim.  In that case, Lockheed was denied drawback
because it failed to comply with 19 CFR 22.4(g) which required
that an abstract of manufacture be filed before a vessel's
departure from the United States.  The abstract arrived late due
to the claimed unforeseen occurrence of slow mail delivery.  The
Court of International Trade (CIT) concluded that equitable
relief was appropriate 
because Lockheed was not to blame for the late arrival of the
abstract.  In this instance, the protestant claims that it should
receive drawback because it was not to blame for the failure to
timely file its drawback claims.  The protestant asserts that the
extended time period required to resolve the classification
protest led to its failure to satisfy the 3-year deadline for
filing drawback claims.
                               -4-

     The Court of Appeals for the Federal Circuit (CAFC) reversed
Lockheed on appeal and held that the CIT erred in its decision. 
The CAFC stated that there was neither compliance by Lockheed
with the controlling requirements nor acceptable excuse for that
failure.  CAFC at 65.  As stated beforehand, the protestant also
did not comply with the 
controlling requirements (i.e., section 191.61).  In addition,
there was not acceptable excuse for the protestant's failure to
comply.  The protestant was notified concerning the amount of
drawback applicable to its entry approximately two years before
the expiration of the filing deadline.  Claiming that it was
waiting for the ultimate resolution of the consumption entry
protest to file, when it could have filed for drawback, is not
acceptable excuse for its failure to comply.  

     The CAFC also stated that "[d]rawback privileges under the
Tariff Act of 1930 are expressly conditioned, by statute, upon
'compliance with such rules and regulations as the Secretary of
the Treasury shall prescribe . . .'"  CAFC at 
65.  The CAFC further added that "[n]umerous decisions have held
that compliance with drawback regulations is mandatory."  CAFC at
65.  Therefore, the protestant must comply with section 191.61 in
order to receive its drawback privileges.  As stated previously,
however, the protestant did not comply with the mandatory
regulation.  

     The CAFC additionally stated that Lockheed had several means
at its disposal which it could have employed to guarantee
compliance with the regulations, yet it neglected to use any of
them.  CAFC at 67.  In this case, the protestant could have
preserved its rights by filing for drawback when it received a
bill for duties owed.  Alternatively, the protestant could have
filed a claim based on estimated duties even if it did not
possess a bill.  Under 19 CFR 191.71(b), for the imported
merchandise that Customs determined to be dutiable, and which was
eligible for drawback, the protestant had the option to forgo its
protest rights and obtain a refund by drawback.  The protestant
failed to use that regulation.  At a minimum, the protestant
should have sought advice from Customs as to how to proceed 
with its drawback claims if unsure.  Based on the specific
language of section 191.61, the protestant also should have been
aware of the consequences (i.e., abandonment) for failure to file
claims in a timely manner.  Therefore, as in Lockheed, the
protestant had means at its disposal to guarantee compliance with
the required regulations but neglected to use them.  

     The CAFC further stated that equitable powers should not be
invoked to excuse the performance of a condition by a party that
has not acted with reasonable due care and 

                               -5-

diligence.  CAFC at 67.  As stated previously, the protestant
neglected to use the means at its disposal to guarantee
compliance with the regulations.  This neglect by the 
protestant would not appear to be the exercise of reasonable due
care and diligence.  Thus, despite the protestant's arguments to
the contrary, we find Lockheed instructive for determining that
the granting of an exception to the 3-year filing requirement
would be improper under the subject circumstances. 

HOLDING:

     The protest is denied.  A Customs officer was not
responsible for the untimely filing of the protestant's drawback
claims, thus an extension of the 3-year filing requirement of 19
CFR 191.61 is improper.  More specifically, awaiting the results
of a protest does not establish a Customs officer's
responsibility for untimely filing in circumstances where the
protestant possessed sufficient information to timely file its
drawback claims.

     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, with the CF 19, by
your office to the protestant no later than 60 days from the date
of this letter.  Any reliquidation of the entry in accordance
with the decision must be accomplished prior to mailing of the
decision.  Sixty days from the date of the decision the Office of
Regulations and Rulings will take steps to make the decision
available to customs personnel via the Customs Rulings Module in
ACS and the public via the Diskette Subscription Service, Lexis,
Freedom of Information Act and other public access channels.


                                 Sincerely,


                                 John Durant, Director