Duty Drawback Claims Automatic Only After an Entry’s Liquidation 'Becomes Final,' DOJ Says
An importer’s duty drawback claim was not automatically liquidated after one year because that importer failed to file the necessary paperwork, as the entries its drawback claim was made on had liquidated but not “become final,” the U.S. said Jan. 19 in response to comments on its motion for summary judgment (Performance Additives v. U.S., CIT # 22-00044).
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Importer Performance Additives, which sells plastic additives, brought its case to CIT in February 2022 alleging CBP illegally and untimely liquidated its entries without including the importer’s duty drawback claims. The statutory expiration date beyond which those entries should have been liquidated with drawback automatically included had already come and gone, the importer said.
Liquidation laws say that a drawback claim not liquidated within one year of entry is automatically liquidated at the requested drawback amount, with several exceptions.
In its Jan. 19 brief, the Justice Department said an exception described in subparagraph (B) applied (see 2312260057). The subparagraph says that a “claim for drawback whose designated or identified import entries have not been liquidated and become final within the 1-year period … shall be deemed liquidated upon the deposit of estimated duties on the unliquidated imported merchandise, and upon the filing with the Customs Service of a written request for the liquidation of the drawback entry or claim.”
DOJ claimed that the importer fails to include the words “and become final” -- which the department defined as having passed the 180-day mark beyond which protests cannot be made -- in its analysis of subparagraph (B). Only those claims involving entries that had liquidated “and become final” invoke the automatic receipt of drawback claims in subparagraph (A), DOJ said.
“These are so-called ‘workable’ drawback claims in CBP’s parlance,” it said. “In contrast, ‘non-workable’ drawback claims, such as the claims at issue here, in which all of the underlying import entries have not liquidated and become final, are subject to subparagraph (B).”
The importer was wrong to say DOJ was making the statute overly broad with its reading, the department said. It said the statute itself carved out the various exceptions to automatic liquidation of duty drawback claims.