HQ 222017: 19 USC 1558(b); 19 CFR 158.45; refund of duty on exportationof merchandise; 19 USC 1313(j); same condition drawback; noconflict between 19 USC 1558 and 19 USC 1313

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 222017

                          July 31, 1991

ENT-1-03 CO:R:C:E 222017 C

CATEGORY:  Drawback

Gary A. Ryan
President
AIRPORT BROKERS CORPORATION
P.O. Box 68668
Seattle, WA  98148

RE:  19 USC 1558(b); 19 CFR 158.45; refund of duty on exportation
of merchandise; 19 USC 1313(j); same condition drawback; no
conflict between 19 USC 1558 and 19 USC 1313

Dear Mr. Ryan:

     This responds to your letter of December 22, 1989,
concerning section 158.45(d) of the Customs Regulations.  You
suggested that the provision be deleted from the regulations
because it conflicts with the same condition drawback law, 19
U.S.C. 1313(j).

     You stated that your client was unable to benefit from the
provision of section 158.45, which authorizes the refund of duty
upon the exportation of merchandise in certain circumstances. 
The refund applies to merchandise in Customs custody for which
entry has not been completed (158.45(a)), merchandise which has
remained in Customs custody that is covered by a liquidated or
unliquidated consumption entry (158.45(a)), and merchandise
entered in good faith for consumption but later found to be
prohibited entry under any law of the United States (158.45(c)). 
Such merchandise can be exported under Customs supervision, with
refund of duty, in accordance with sections 18.25 - 18.27 of the
regulations.  However, section 158.45(d), pertaining specifically
to not legally marked merchandise, treats such merchandise
differently.  The exportation (or destruction) of merchandise not
legally marked "shall not exempt such merchandise from the
payment of duties other than the marking duties."  19 CFR
158.45(d).  Your client's merchandise was not legally marked, and
he was unable to recover regular duties upon its exportation.

     Based on your client's experience, you suggest that section
158.45(d) be deleted from the regulations.  You posit that if it
were deleted, such that not legally marked merchandise could be
exported with refund of duty in the circumstances contemplated
under section 158.45, an importer of such merchandise would not
have to go to the trouble of completing the entry process in
order to obtain a refund of duty through the same condition
drawback provisions.  This would be a convenience for Customs as
well.

     Subsection 158.45(d) of the Customs Regulations is based
upon statutory authority.  It implements the provision of 19
U.S.C. 1558(b).  Customs is obligated to implement the statutory
provision.  Therefore, the regulation cannot be deleted from the
Customs regulations without an amendment of the statute.  Customs
does not have the authority to amend the statute.

     Not only does Customs lack the authority to amend the
statute, or to simply delete the regulation so as to render the
statutory provision inoperative, we see no reason to do so.  Not
only are 19 U.S.C. 1558 and 19 U.S.C. 1313, the drawback law, not
in conflict with one another, they in fact complement one
another.  Under 19 U.S.C. 1558(a)(1), an exception to the
prohibition against (exportation based) duty refunds for
merchandise that has been released from Customs custody is
provided for articles exported under drawback conditions.  This
is provided by regulation under subsection 158.45(b).  Further,
we see no conflict between subsection 158.45(d) and 19 U.S.C.
1313(j).  The same condition drawback provision was not enacted
to accommodate not legally marked merchandise that is precluded
from a duty refund (other than marking duties) under 19 U.S.C.
1558(b) and subsection 158.45(d) of the regulations.  If Congress
had such an intent, and there is no evidence of such intent, we
suppose that it would have amended 19 U.S.C. 1558(b) at the time
it enacted the same condition drawback provision.  Congress did
not do so. 

     Although not legally marked merchandise, in some
circumstances, can be exported under drawback conditions, the
fact that an importer, who fails to return such merchandise to
Customs custody and pays a marking duty instead, would have to
meet the regulatory requirements under drawback (in order to
obtain a drawback refund) is not evidence of a conflict between
19 U.S.C. 1558(b) and the same condition drawback provision.  The
two statutes and their respective implementing regulations are
separate and distinct schemes with separate and distinct
purposes.  To the extent there is interplay, it is complementary,
not contradictory.

     Based on the foregoing, we respectfully conclude that there
is no merit to the suggestion that subsection 158.45(d) should be
deleted from the regulations.  Even if we were persuaded that
there is an inconsistency, we could not simply delete the
regulation and ignore the statutory provision it implements.

     If you have further questions regarding the marking law,
contact the Value and Marking Branch (202/566-2938).  Questions
concerning drawback can be addressed to the Entry Rulings Branch
(202/566-5856).

                               Sincerely,




                               William G. Rosoff
                               Chief
                               Entry Rulings Branch