HQ 224890: Protest 2002 93 100299; Substitution Finished Petroleum Derivatives Drawback; Jet Fuel; 19 U.S.C. 1313(p); Public Law 103-182, Section 632 Dear Sir:

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 224890

                        February 18, 1994

DRA-2/DRA-4-CO:R:C:E 224890 PH

CATEGORY:  Drawback

Regional Director
Commercial Operations
New Orleans, Louisiana 70130

RE:  Protest 2002 93 100299; Substitution Finished Petroleum
     Derivatives Drawback; Jet Fuel; 19 U.S.C. 1313(p); Public
     Law 103-182, Section 632
 
Dear Sir:

     The above-referenced protest was forwarded to this office
for further review.  Our decision follows.

FACTS:

     The protest is of the liquidation of a drawback entry (or
claim) filed on November 15, 1990.  According to the file, the
imported merchandise designated as the basis of drawback for the
claim was imported on July 25, 1990, and entered on July 31, 1990
(219,052 barrels of merchandise designated), and the exportation
upon which the claim is based was on September 19, 1990.

     According to documents in the file and Customs records, the
protestant was the importer of the designated imported
merchandise (the entry summary for the July 25, 1990, importation
is for 219,052 barrels of jet fuel with an A.P.I. gravity of
45.0, classifiable under subheading 2710.00.15304, Harmonized
Tariff Schedule of the United States Annotated (HTSUSA), valued
at $4,833,426, with $115,002.55 in duty).  The protestant in a
"substitution affidavit" dated November 14, 1990, stated, among
other things, that "[the protestant has] not issued a certificate
of delivery covering the designated merchandise nor a certificate
of manufacture and delivery covering articles manufactured or
produced therefrom."  The affiant stated that records were
maintained to verify this and other statements in the affidavit.

     According to the Customs Form 7511 (Notice of Exportation of
Articles with Benefit of Drawback) for this claim, the exported
merchandise upon which drawback was claimed was 228,853 barrels
of "jet fuel - kerosene type", classifiable under subheading
2710.00.15304, HTSUSA, with a value of $8,771,03_ (the last digit
does not appear on the copy of the document in the file),
exported from Lake Charles, Louisiana, on the ULAN, ultimately
destined for Canada.

     For the importation, there is a "Vessel Gauging Report" and
a "Shore Tank Gauging Report" (both reports dated July 26, 1990)
showing that 219,052.48 barrels of jet fuel were unloaded from
the FAR SAGA at the protestant's terminal at Linden, New Jersey. 
There is a copy of a July 19, 1990, "Certificate of Quantity"
showing 219,402 barrels (9,214,884 U.S. gallons) of "jet fuel
DERD 2494[,] min[.] flash 105[,] 'without ASA-3 additive'" loaded
into the FAR SAGA at the Maraven S.A. Terminal in Punta Cardon,
Venezuela (the copy of this document shows only part of the
identification of the shore tanks from which this fuel was
loaded, but that part indicates that they are the same tanks
referred to in the "Certificate of Quality", described below). 
There is a copy of a July 19, 1990, "Certificate of Quality"
reporting on the specifications for samples from shore tanks D5-
06, D5-08, and D7-01 at the Maraven S.A. Terminal in Punta
Cardon, Venezuela.

     For the exportation, there is a copy of a "Tanker Bill of
Lading No. 1" issued on September 20, 1990, which states that
228,852.95 barrels of "jet fuel meeting Colonial Pipeline 54
grade specifications - in bulk" were shipped on board the ULAN by
the protestant.  The merchandise was stated to be licensed by the
United States for ultimate destination to Canada.  There is a
Certificate of Origin reflecting the same information for a like
quantity of jet fuel (described as in the bill of lading), loaded
at Lake Charles.  There are reports of inspection in the file,
including a "Trade Inspection Certificate" for 228,852.95 barrels
of cargo described as jet fuel loaded into the ULAN from tanks
19, 20, and 62 at [the protestant's] refinery, Lake Charles,
September 17 - 20, 1990.  There are "Shore Quantity Summary" and
"Vessel Quantity Summary" reports reflecting the same
information.  There are "Analytical Reports" for each of the
tanks from which the ULAN was loaded (i.e., tanks 19, 20, and 62)
reporting on the specifications of the samples taken from those
tanks.

     As stated above, on November 15, 1990, the protestant filed
a claim for drawback on the 219,052 barrels of jet fuel.  Customs
Regional Laboratory was requested to review the merchandise in
the claim for fungibility (the drawback claim was under 19 U.S.C.
1313(j)(2) which, at the time the claim was filed, required the
imported merchandise and the exported merchandise to be fungible)
and gave its opinion that the merchandise was not fungible
because the exported merchandise did not meet the specification
for aromatics content in the ASTM D 1655 standard for jet fuel
(two opinions were given, both to the same effect, the second
after the protestant had submitted additional information on the
effect of the aromatics content).  Our ruling 223769, October 20,
1992, concurred with this opinion, after reviewing evidence the
protestant had provided regarding the aromatics content.

     In a letter dated October 28, 1992, Customs advised the
protestant that drawback was being denied because the imported
merchandise and the exported merchandise were not fungible,
citing ruling 223769 (see above).  The protested drawback claim
was liquidated, without drawback allowed, on November 20, 1992. 
The protestant filed the protest under consideration on February
16, 1993.

ISSUE:

     Is there authority to grant the protest of denial of
drawback in this case?

LAW AND ANALYSIS:

     Initially, we note that the protest was timely filed under
the statutory and regulatory provisions for protests (see 19
U.S.C. 1514 and 19 CFR Part 174).  We note that the refusal to
pay a claim for drawback is a protestable issue (see 19 U.S.C.
1514(a)(6)).

     Under 19 U.S.C. 1313(p) (the following describes the
provision as it is pertinent to this case and not as it is
applicable in all instances), if an article of the same kind and
quality as a qualified article is exported, certain requirements
are met, and a drawback claim is filed regarding the exported
article, drawback may be granted.  "Qualified article", for
purposes of this subsection, means an article described in
heading 2710, HTSUSA (among other headings), which is imported
duty-paid.  An exported article is of the "same kind and quality"
as the qualified article for which it is substituted under this
subsection if it is a product that is commercially
interchangeable with or referred to under the same eight-digit
classification of the HTSUS as the qualified article.  The
"requirements" required to be met for purposes of this subsection
are that the exporter of the exported article imported the
qualified article in a quantity equal to or greater than the
quantity of the exported article; that the exported article is
exported within 180 days after the date of entry of the imported
qualified article; that the drawback claimant complies with all
requirements of section 1313, including providing certificates
which establish the drawback eligibility of articles for which
drawback is claimed; and that the manufacturer, producer,
importer, exporter, and drawback claimant of the qualified
article and the exported article maintain all records required by
regulation.

     The drawback law was substantively amended by section 632,
title VI - Customs Modernization, Public Law 103-182, the North
American Free Trade Agreement Implementation Act (107 Stat.
2057), enacted December 8, 1993.  The foregoing summary of
section 1313(p) is based on the law as amended by Public Law 103-
182.  Title VI of Public Law 103-182 took effect on the date of
enactment of the Act (section 692 of the Act).  The amendments to
section 1313(p) apply to claims filed or liquidated on or after
January 1, 1988, and claims that are unliquidated, under protest,
or in litigation on the date of enactment of Public Law 103-182. 
(According to the applicable legislative history, the amendments
to the drawback law (19 U.S.C. 1313, other than subsection (p))
are applicable to any drawback entry made on or after the date of
enactment as well as to any drawback entry made before the date
of enactment if the liquidation of the entry is not final on the
date of enactment (H. Report 103-361, 103d Cong., 1st Sess., 132
(1993); see also provisions in the predecessors to title VI of
the Act; H.R. 700, 103d Cong., 1st Sess., section 202(b); S. 106,
103d Cong., 1st Sess., section 202(b); and H.R. 5100, 102d Cong.,
2d Sess., section 232(b)).)

     Compliance with the Customs Regulations on drawback is
mandatory and a condition of payment of drawback (United States
v. Hardesty Co., Inc., 36 CCPA 47, C.A.D. 396 (1949); Lansing
Co., Inc. v. United States, 77 Cust. Ct. 92, C.D. 4675; see also,
Guess? Inc. v. United States, 944 F.2d 855, 858 (1991) "We are
dealing [in discussing drawback] with an exemption from duty, a
statutory privilege due only when the enumerated conditions are
met" (emphasis added)).

     In the protested claim, the imported merchandise is a
"qualified article" for purposes of 19 U.S.C. 1313(p) (i.e., it
is classified under heading 2710, HTSUSA, and it was imported
duty-paid).  The exported merchandise is of the same kind and
quality as the imported qualified article (i.e., both are
classified under subheading 2710.00.15, HTSUSA).  The exporter of
the exported article imported the qualified article in a quantity
equal to the exported article (i.e., 219,052 barrels).  The
exported article was exported within 180 days after the date of
entry of the imported qualified article (i.e., date of entry of
imported article: July 31, 1990; date of export of exported
article:  September 19, 1990).  Based on the information
available to us, there are no requirements under the drawback law
which would be applicable to a claim for drawback under section
1313(p) for this importation which have not been complied with.

     We note that under 19 U.S.C. 1313(r)(2), a drawback entry
filed pursuant to any subsection of section 1313 shall be deemed
filed pursuant to any other subsection of section 1313 if it is
determined that drawback is not allowable under the entry as
originally filed but is allowable under such other subsection. 
(House Report 103-361, supra, at page 131, makes it clear that
this provision is not intended to require Customs "to investigate
all alternatives in addition to the claimed basis before
liquidating [a] drawback claim as presented.")  Accordingly, the
protest is GRANTED.  Because of our decision in this regard, we
are not addressing the issue of whether the imported merchandise
and the exported merchandise are commercially interchangeable
(the current standard for substitution under 19 U.S.C.
1313(j)(2), as that provision was amended by Public Law 103-
182).

HOLDING:

     There is authority (under the amended 19 U.S.C. 1313(p)) to
grant the protest of the denial of drawback.

     The protest is GRANTED.  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 Customs Form 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