Cigarette Importer's Drawback Claim Lacked Supporting Evidence, US Says
In a Dec. 1 cross-motion for judgment, the U.S. said certain 2018 and 2019 cigarette entries imported by Scottsdale Tobacco didn’t qualify for a substitution of unused merchandise drawback because it hadn’t provided the necessary paperwork to prove its claim. Further, the government said, the drawback claim hadn’t automatically liquidated, either (see 2508250048) (Scottsdale Tobacco v. United States, CIT # 24-00022).
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The evidence Scottsdale provided in support of its drawback claim contained “numerous deficiencies,” despite “repeated requests for additional documentation,” the U.S. said. In particular, the cigarette importer failed to prove it had, first, received the entered cigarettes into its inventory, and, second, withdrawn them for export later.
To show that its Canada-origin cigarettes had been admitted into a foreign-trade zone in Fort Lauderdale, Florida, Scottsdale provided CBP six Form 214s -- “Application for Foreign Trade Admission and/or Status Designation.” But none were complete, with five out of the six missing one out of their two pages, the government said.
Scottsdale then made 23 entries of the cigarettes into the United States, which it tried to demonstrate using invoices and Form 7501 entry summaries, the U.S. said. But they, too, were missing important information, and they contradicted the Form 214s Scottsdale submitted earlier, it said. For example, a number of documents provided by Scottsdale contained “repeated typographical errors in CBP Form 214 numbers listed on import invoices,” it said.
Adding further confusion, the company’s president affirmed at one point that only 21 entries had been made, not 23, the government said. The affirmation also misstated the number of imports and exports Scottsdale made during the period in question, it said.
And Scottsdale’s motion for judgment referred to the relevant foreign-trade zone as FTZ 35 when, actually, the entries were made to FTZ 25, it said.
Scottsdale also had been required to provide evidence that it “substituted” some cigarettes for exportation by withdrawing them from existing U.S. inventory, the government said. The importer provided that in a few instances, but not adequately to support a drawback claim, it said.
The government also disagreed that the drawback claim had automatically liquidated after a year.
Such automatic drawback only “pertains to so-called ‘workable’ drawback claims, in which the underlying import entries have all liquidated and become final,” it said. That wasn’t the case here, it said. And Scottsdale took no steps under 19 U.S.C. 1504(a)(2)(B) to have its drawback liquidated in the importer’s claimed time period, it said.