CAFC: Drawback Claims Must Be Complete
Just when I though I had some breathing room, things are getting busy again. Not that I am complaining. The Courts have been busy too. The Federal Circuit just issued a decision in a drawback case called Shell Oil Company v. United States in which is affirmed the Court of International Trade's decision. Oddly, I can't find a post on the earlier case. You can read the opinion here.
Shell involves drawback claims for Harbor Maintenance Tax and Environmental Tax Shell paid on petroleum imports that were then exported or substitute merchandise was exported. Shell made the claims but, because the ability to claim drawback on HMT and ET were being hotly contested at the time, it did not include those amounts in its calculation of the amount claimed. Subsequently, in 1999, Congress amended the drawback law to clarify that any duty, fee, or tax imposed under federal law because of importation could be the subject of refunds under drawback. To facilitate this, Congress also created a six-month period in which claims could be made despite the normal three-year period having run. Then, in 2004, Congress further amended the law to clarify that any duty, tax, or fee imposed upon entry. This amendment was applicable to claims made after the effective date or claims not final on that date.
After the three-year period for filing drawback claims had expired, Customs liquidated the claims and did not refund HMT or ET (presumably because it had not been requested). Shell protested and in the protest asserted that HMT and ET should also be refunded. In 1997, Customs denied the protests, in part on the grounds, later reversed by Congress, that HMT is simply not subject to drawback. In 1998, Shell filed a summons in the Court of International Trade.
Unfortunately for Shell, the Federal Circuit found that the effort to include HMT and ET in the claims was too late. A party seeking drawback must make a claim for an "amount certain." It cannot put the burden on Customs to determine the correct amount to be paid the claimant. The six-month window for filing a claim did not correct or complete the previously filed claim and Shell did not assert those claims until it filed protests more than three years after the date of export. Further, the fact that Customs would likely have denied the claims, making them subject to protest, did not (in this case) excuse Shell from filing the protest. Finally, the subsequent amendment in 2004 applied only to unliquidated claims. Because Shell's claims were liquidated, it had no impact on the case.
Shell involves drawback claims for Harbor Maintenance Tax and Environmental Tax Shell paid on petroleum imports that were then exported or substitute merchandise was exported. Shell made the claims but, because the ability to claim drawback on HMT and ET were being hotly contested at the time, it did not include those amounts in its calculation of the amount claimed. Subsequently, in 1999, Congress amended the drawback law to clarify that any duty, fee, or tax imposed under federal law because of importation could be the subject of refunds under drawback. To facilitate this, Congress also created a six-month period in which claims could be made despite the normal three-year period having run. Then, in 2004, Congress further amended the law to clarify that any duty, tax, or fee imposed upon entry. This amendment was applicable to claims made after the effective date or claims not final on that date.
After the three-year period for filing drawback claims had expired, Customs liquidated the claims and did not refund HMT or ET (presumably because it had not been requested). Shell protested and in the protest asserted that HMT and ET should also be refunded. In 1997, Customs denied the protests, in part on the grounds, later reversed by Congress, that HMT is simply not subject to drawback. In 1998, Shell filed a summons in the Court of International Trade.
Unfortunately for Shell, the Federal Circuit found that the effort to include HMT and ET in the claims was too late. A party seeking drawback must make a claim for an "amount certain." It cannot put the burden on Customs to determine the correct amount to be paid the claimant. The six-month window for filing a claim did not correct or complete the previously filed claim and Shell did not assert those claims until it filed protests more than three years after the date of export. Further, the fact that Customs would likely have denied the claims, making them subject to protest, did not (in this case) excuse Shell from filing the protest. Finally, the subsequent amendment in 2004 applied only to unliquidated claims. Because Shell's claims were liquidated, it had no impact on the case.
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