CIT Rules on Manufacturing Substitution Drawback
In E.I. DuPont de Nemours & Company v. U.S., the Court of International Trade ruled on the amount of manufacturing substitution drawback due to Dupont from Customs on a single entry.
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The case began in December 1991 when DuPont filed a drawback claim of $37,540 for duty paid on Australian-origin synthetic rutile. DuPont used synthetic rutile, as well as other imported and domestic raw materials known collectively as "feedstocks," to obtain the titanium it required for manufacturing the titanium dioxide used in its pigments.
Customs denied the drawback claim on the grounds that no drawback contract had been approved, and that the designated synthetic rutile and the substituted feedstocks were not of the same kind and quality.
In 2000, the CIT ordered Customs to accept the proposed drawback contract and ruled that the synthetic rutile and the substituted feedstocks were of the same kind and quality.
On July 13, 2001, Customs reliquidated the entry, but limited the duty refund to $20,839.63, approximately 55% of the drawback Dupont had claimed, based on three determinations, two involving the claim of same kind and quality, the third involving the limitation of drawback to the duty paid on the titanium content (55%) of the imported synthetic rutile. DuPont protested the amount of the duty refund determined by Customs.
The CIT has now ruled that the refund must be determined in accordance with DuPont's approved drawback contract which authorized drawback only on an "appearing-in" basis, and certain 19 CFR 191.22 and 191.32(a)(1)-(2) regulations as amended by TD 83-212.
DuPont had designated 6,762,693 pounds for drawback; however, only 3,713,335 pounds of titanium or approximately 55%, "appeared in" the exported product. Based on this, the CIT determined that the total duty drawback allowable would be $20,614.
Since Customs had already paid DuPont $20,839.63, the CIT ruled that DuPont did not qualify for drawback exceeding the amount it had already been paid.
(See ITT's Online Archives or 10/26/00 and 12/08/00 news, 00102566 4, and 00120762, for BP summaries of Slip Op. 00-122 (Dupont I).)
CIT Slip Op. 08-56 (dated 05/27/08) available at http://www.cit.uscourts.gov/slip_op/Slip_op08/08-56.pdf