H307577

HQ H307577 July 5, 2023 OT:RR:CTF:EPDR H307577 SLJ CATEGORY: ENTRY Center Director Apparel, Footwear & Textiles Center 33 New Montgomery St., 16th Floor San Francisco, CA 94105 Attn: Import Specialist Catina L. Sinches RE: Application for Further Review of Protest Number 530119101009; Drawback 19 U.S.C. § 1313(j)(1); direct identification Dear Center Director: This decision is in response to the Application for Further Review (“AFR”) of protest number 530119101009, filed on behalf of Weihai Bettex International Trading Co., Ltd (“Weihai”), on August 13, 2019. Our decision follows. FACTS: According to entry summary documents, on January 23, 2019, Weihai entered merchandise described and classified as women’s sweaters and cardigans. The entry was liquidated on December 6, 2019. According to the Notice of Intent to Export for Drawback, Weihai filed for direct identification unused merchandise drawback under 19 U.S.C. § 1313(j)(1) on April 23, 2019, for women’s sweaters and cardigans. The export invoice and packing lists show that Weihai exported women’s sweaters and cardigans. The drawback claim was denied on August 2, 2019, because, according to the San Francisco Drawback Office, the imported sweaters could not be directly identified with the exported sweaters. The Drawback Office noted that some of the bills of lading did not identify Weihai as the exporter, and thus the office could not verify that Weihai was eligible for drawback. Additionally, the office noted that an updated version of an import bill of lading was attributed to a different shipper than the prior version of the bill of lading after the office requested more information. Weihai filed a protest on August 13, 2019, protesting the denial of the drawback claim. Weihai provided the following as evidence of the importation and exportation of the women’s sweaters and cardigans: Import Purchase Order No. 18154945: A purchase order (“PO”) issued by Forever 21, Inc. to Weihai, which is dated July 13, 2018. The PO included a total of 9,960 camel/cream and blush/cream women’s sweaters. The order contained a total of 4,980 size small, 3,320 size medium, and 1,660 size large sweaters of camel/cream and blush/cream colors which are both listed under style no. 163S3301219VD. Import Purchase Order No. 18154954: A second PO with the same number as the preceding PO, issued by Forever 21, Inc., and dated July 13, 2018. This PO between Weihai and Forever 21 included a total of 1,080 camel/cream and blush/cream women’s sweaters. The order contained a total of 540 size small, 360 size medium, and 180 size large, of camel/cream and blush/cream colors two color combinations which are both listed under style no. 163S3301219VD. Import Purchase Order #18186409: A third PO issued by Forever 21, Inc. to Weihai, dated August 29, 2018, included a total of 1,200 women’s grey sweaters. The order contained 600 size small, 400 size medium, and 200 size large pieces, all listed under style no. DREAM161110-27. Import Purchase Order # 18189454: A fourth PO issued by Forever 21, Inc. to Weihai, dated August 31, 2018, which included a total of 1,002 women’s red/black sweaters. The order contained 501 size small, 334 size medium, and 167 size large pieces, all listed under style no. DREAM161110-27. Import Commercial Invoice: A commercial invoice, dated November 3, 2018, shows that Weihai as the shipper/exporter issued an invoice to Forever 21 Logistics LLC. The invoice number is BTX-181103-3082 and specified that payment was due for two different products. The first is described as a Lady’s Knit Sweater/Top, which is listed twice: one comprised of 66% acrylic and 33% polyester material, and another comprised of 61% acrylic and 37% polyester material. The style no. listed is DREAM161110-27, and the total quantity is 2,202 pieces or183.5 dozen. The classification specified is subheading 6110.30.3020, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). The second group of merchandise is described as a Lady’s Knit Sweater Cardigan/LSLV with style no. listed is 163S3301219VD, and the total quantity is 11,040 pieces or 920 dozen. The classification specified is subheading 6110.20.2020, HTSUSA. Import Packing List: The import packing list is dated November 3, 2018, and identifies Weihai as an exporter, acting “for the account” of Forever 21 Logistics LLC. The packing list pertains to two different products. The first is described as Lady’s Knit Sweater Top/LSLV, which is listed twice: one comprised of 66% acrylic and 33% polyester material, and another comprised of 61% acrylic and 37% polyester material). The style no. listed is DREAM161110-27, and the total quantity is measured by cartons (“CTNS”), for a total of 96 CTNS. The second is described as a Lady’s Knit Sweater Cardigan, listed under style no. of 163S3301219VD, and totaling 1714 CTNS. The cumulative total number of CTNS on the invoice is 1,810, with a gross weight of 5,826.30 KGS. Import Bill of Lading: The first import bill of lading is dated November 5, 2018, between Weihai as the shipper and Forever 21 Logistics LLC as the consignee. The merchandise being shipped is described as Lady’s Knit Sweater and Lady’s Knit Cardigan, totaling 1,810 CTNS with a gross weight of 5,826.30 KGS. The container no. is listed as CAIU9954486. The bill of lading was issued by Pingye Foreign Transportation Corp. LTD (“Pingye”), who Weihai clarified was a co-loader and holds the sub-house bill. The merchandise is recorded as departing Qingdao, China in destination to Long Beach, California. Import Bill of Lading: The second import bill of lading is dated November 5, 2018, between Pingye as the shipper, and Seiyo Shipping Co., LTD, as the consignee. The merchandise being shipped is described as Lady’s Knit Sweater and Lady’s Knit Cardigan, with a total gross weight of 5,826.30 KGS. The container no. is listed as CAIU9954486. The bill of lading was issued by Honour Lane Shipping Ltd. who, according to Weihai, is the AMS House bill carrier. Import Bill of Lading: The third import bill of lading is dated November 5, 2018. The bill was issued by SMLine Corp. and identifies Honour Land Shipping as the shipper/exporter, with Jenson Logistics as the consignee. Weihai asserts that Jenson Logistics is the co-loader receiving agent for Pingye. The merchandise being shipped is described as Lady’s Knit Sweater, Lady’s Knit Cardigan, and garments, with a total gross weight of 5,826.30 KGS. The container no. is listed as CAIU9954486. Entry Summary: The Entry Summary (CBP Form 7501) for entry no. XX-XXXXX43-0 lists an import date of November 23, 2018, an entry date of January 8, 2019, and a summary filing date of January 18, 2019. Weihai is listed as the importer of record, and Forever 21 as the consignee. There are two entry lines for the imported clothing. The first entry line identifies 184 dozen man-made women’s sweaters classified under subheading 6110.30.3020, HTSUSA. The second line identifies 920 dozen Women’s Sweaters classified under subheading 6110.20.2020, HTSUSA. Warehouse Inbound Report: The warehouse inbound report is dated January 18, 2019, and lists Seiyo Shipping Company Ltd. (“Seiyo”) in Los Angeles, California as the receiving warehouse. The receipt shows a quantity of 1,810 packages with a unit of measurement of CTNS and described as “Garment.” The packages are stored on a total of 28 pallets. The container number is listed as CAIU9954486/LCL. Warehouse Inventory Record: The Seiyo warehouse inventory record spans from January 19, 2019, through May 1, 2019. The record displays inventory updates on the first of each month. Although some columns of the inventory record table do not have specified units, the first column uses CTNS/PLT, so for purposes of this description, CTNS will be used as the unit for the remaining columns. The record shows a total of 1,810 CTNS inbound on January 18, 2019, and 28 pallets. These numbers reflect the inventory balance recorded in Febr

As an initial matter, we note that this protest was timely filed. A protest must be filed within 180 days from the date of liquidation. See 19 U.S.C. § 1514(a)(5); 19 C.F.R. § 174.12(e). Here, CBP denied Weihai’s drawback claim on August 2, 2019, when it liquidated the subject drawback entry without the benefit of drawback, and this protest was timely filed on August 13, 2018, within 180 days of that liquidation. Additionally, further review of the protest is warranted because “the protest involves questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee, or by the Customs courts.” See 19 C.F.R. § 174.24(b). Specifically, we will examine the sufficiency of Weihai’s documents to determine whether the merchandise that was exported was the same merchandise that it imported, for purposes of claiming direct identification drawback. Accordingly, the criteria for further review are satisfied.Drawback is the refund of certain duties, taxes, and fees imposed on imported merchandise that is granted when all applicable legal requirements are met. 19 U.S.C. § 1313. Compliance with all applicable legal requirements is subject to verification by U.S. Customs and Border Protection (“CBP”). 19 C.F.R. § 190.61(a). It is well established that drawback laws confer a privilege, not a right. See Swan & Finch Company v. United States, 190 U.S. 143 (1903). The privilege of claiming direct identification drawback is contingent on the exportation of imported merchandise, which is unused, and is exported or destroyed within three years of the date of importation. 19 U.S.C. § 1313(j)(1). This privilege may be claimed by the exporter or destroyer of the imported merchandise. 19 C.F.R. § 190.33(a)(1). A direct identification claim specifically requires that the exported merchandise be the same merchandise that was initially imported. In order to prove this fact, “the identity of the imported merchandise must be maintained, and traceable in the claim