Aectra Refining and Marketing Inc. v. U.S., Slip Op. 07-189. Court No. 04-00354.

• Decision Date: 28 December 2007
• Docket Number: Slip Op. 07-189. Court No. 04-00354.
• Citation: 533 F.Supp.2d 1318
• Parties: AECTRA REFINING AND MARKETING INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

Page 1318

533 F.Supp.2d 1318

AECTRA REFINING AND MARKETING INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 07-189. Court No. 04-00354.

United States Court of International Trade.

December 28, 2007.

Phelan & Mitri, Stamford, CT (Michael F. Mitri) for Aectra Refining and Marketing Inc., Plaintiff.

Michael F. Hertz, Deputy Assistant Attorney General; Jeanne E. Davidson, Director; Todd M. Hughes, Assistant Director; Commercial Litigation Branch, Civil Division, United States Department of Justice (Tara K. Hogan); of counsel: Richard McManus, Office of the Chief Counsel, United States Bureau of Customs and Border Protection, for United States, Defendant.

OPINION

TSOUCALAS, Senior Judge.

This matter is before the court on cross-motions for summary judgment pursuant to USCIT R. 56. Plaintiff Aectra Refining and Marketing Inc. ("Aectra") seeks drawback¹ of Harbor Maintenance Taxes ("HMTs")², Merchandise Processing Fees ("MPFs")³ and Environmental Taxes ("ETs")⁴ it paid on imported merchandise designated under the drawback entries at bar and seeks reliquidation of same. Defendant United States Bureau of Customs and Border Protection ("Customs") argues that Aectra's drawback claim was properly denied and seeks an order dismissing the case.

JURISDICTION

The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(a) (2000).

STANDARD OF REVIEW

On a motion for summary judgment, the court must determine whether there are any genuine issues of fact that are material to the resolution, of the action, See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505; 91 L.Ed.2d 202 (1986). A factual dispute is genuine if it might affect the outcome of the suit under the governing law. See id. Accordingly, the court may not decide or try factual issues upon a motion for summary judgment. See Phone-Mate, Inc. v. United States, 12 CIT 575, 577, 690 F.Supp. 1048, 1050 (1988). When genuine issues of material fact are not in dispute, summary judgment is appropriate if a moving party is entitled to judgment as a matter of law. See USCIT R. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

DISCUSSION

I. Background

Plaintiff Aectra imported certain petroleum products into the United States, then later exported "substitute finished petroleum derivatives." See Pl.'s Mot. Summ. J. ("Pl.'s Mot.") at 1. At issue are the ten claims for substitution drawback of famished petroleum derivatives Aectra filed with Customs during the period August 1997 through June 1998. See Pl.'s Statement Material Facts ("Aectra's Facts") ¶¶ 1, 2. All ten drawback claims sought drawback of Column I general customs duties only. See Pl.'s Mot. at 1.

On or about November 28, 2003, Customs liquidated Aectra's drawback entries and approved drawback refunds for the full amounts requested by Aectra. See Aectra's Facts ¶¶ 3, 4. On or about February 2, 2004, plaintiff timely filed a protest pursuant to 19 U.S.C. § 1514 contesting and requesting, for the first time, Customs' failure to issue drawback of the HMTs and MPFs imposed on the merchandise at issue. See Appendix Def.'s Resp. Summ. J. at 1. On or about February 6, 2004, Customs denied plaintiffs protest. See Aectra's Facts ¶ 9. On or about July 23, 2004, plaintiff commenced the instant action contesting Customs' denial of its protest and requesting drawback of HMTs, MPFs and ETs (collectively "taxes and fee"). See id. ¶ 10; Complaint.

II. Statutory Background

Pursuant to subsection 313(p) of the Tariff Act of 1930, as amended ("Act"), 19 U.S.C. § 1313(p), importers of certain petroleum products meeting the statutory requirements are entitled to receive drawback of the full amount of duties paid, less one percent, if they export "substitute finished petroleum derivatives." See North American Free Trade Agreement Implementation Act ("NAFTA Act"), Pub.L. No. 103-182, 107 Stat. 2192, 2194-95 (1993). As enacted by the NAFTA Act, "[a] drawback entry and all documents necessary to complete a drawback claim ... shall be filed or applied for, as applicable, within three years after the date of exportation or destruction of the articles on which drawback is claimed." 19 U.S.C. § 1313(r)(1).

In 1999, 19 U.S.C. § 1313(p)(4) was amended so as to provide that the drawback amount payable for uon-manufacturing claims shall be that attributable to the imported article under 19 U.S.C. § 1313(j) governing unused merchandise drawback. See Miscellaneous Trade and Technical Corrections Act of 1999 ("1999 Trade Act"), Pub.L. No. 106-36, § 2420(d), 113 Stat. 127, 178-79 (1999). At that time, 19 U.S.C. § 1313(j) permitted, drawback "[i]f imported merchandise, on which was paid any duty, tax, or fee imposed under Federal law because of its importation" was either 1) not used within the United States or 2) "commercially interchangeable" with the imported merchandise, before being subsequently exported or destroyed. See 19 U.S.C. § 1313(j). The 1999 amendment of 19 U.S.C. § 1313(p)(4) suspended the three-year time limitation to complete drawback claims set forth in 19 U.S.C, § 1313(r)(1) for drawback claims filed within six months after the date of enactment, June 25, 1999. See 1999 Trade Act, Pub.L. No. 106-36, § 2420(e), 113 Stat. 127, 179 (1999).

In Texport Oil Co. v. United States ("Texport CAFC"), the United States Court of Appeals for the Federal Circuit ("CAFC") held that the "because of its importation" language of 19 U.S.C. § 1313(j) excluded from drawback taxes and fees that do not discriminate against imports. See 185 F.3d 1291 (Fed.Cir. 1999). Thus, the CAFC found that HMTs are applied indiscriminately and are ineligible for drawback, but found that MPFs, which discriminate against imports, are eligible for drawback. See id. Subsequent to the 1999 amendment of 19 U.S.C. § 1313(p)(4), this court held in George E. Warren Corp. v. United States ("Warren CIT"), 26 CIT 486, 201 F.Supp.2d 1366 (2002), that Texport CAFC was controlling in finding that HMTs and ETs were not eligible for drawback. The CAFC affirmed Warren CIT finding that a reversal of Texport CAFC was not warranted. See Warren v. United States ("Warren CAFC"), 341 F.3d 1348 (Fed.Cir.2003).

In December 2004, 19 U.S.C. § 1313(j) was further amended to make eligible for drawback of "duty, tax, or fee" imposed under Federal law "upon entry or importation" to be applicable to any "drawback claim filed an or after [the date of the Act's enactment] and to any. drawback entry filed before that date if the liquidation of the entry, is not final on that date." See Miscellaneous Trade and Technical Corrections Act of 2004 ("2004 Trade Act"), Pub.L. 108-429, Title I, § 1557(a), (b), 118 Stat. 2579 (2004). The legislative history of the 2004 Trade Act reflects Congress' unequivocal intent to overturn Texport CAFC by the amendment. See S. Report 108-28, at 173 (noting that "allowing for drawback of the [HMTs] is consistent with original Congressional intent").

III. Contentions of the Parties

A. Aectra's Contentions

Aectra argues that it is entitled to drawback refund of HMTs, MPFs and ETs for the drawback entries at issue because it met the statutory requirements for a 1313(p) drawback of substitute finished petroleum derivatives. See Pl.'s Mot. at 7. According to Aectra, it followed the applicable administrative procedures for the recovery of the taxes and fee at issue, and timely filed the relevant drawback claims less than three years after the date of export or re-filed during the six-month suspension period provided for in the 1999 Trade Act. See id. at 8-9.

To support its claim, Aectra points to the language of the 2004 amendment authorizing 1313(j) drawback refund of taxes and fee imposed upon importation rather than because of importation applies to any drawback entry "filed before the date of the enactment if the liquidation of, the entry is not final on that date." See id. at 10. Pursuant to this provision, Aectra contends that the amended 1313(j) is expressly applicable to the drawback entries at issue because their liquidation was not final on the date of the enactment based on timely protest. See id. at 10-11.

Aectra concedes that it did not explicitly request the refund of the taxes and fee until the administrative protest filed in February 2004, but nevertheless takes the position that its claims were timely completed within the three-year period. See id. at 11-12. Relying on the Court of International Trade's opinion in Texport Oil Co. v. United States ("Texport CIT"), 22 CIT 118, 1 F.Supp.2d 1393 (1998), Aectra contends that its initial drawback claims incorporated drawback of taxes and fee. See id. at 14. Aectra then cites, to Warren CIT for the proposition that a drawback claimant that did not initially request a drawback refund of HMTs and ETs need not file a second drawback claim during the six-month "sunset" or "suspension" period provided for in the 1999 amendment See id. 14-16.

Responding to Customs' position that Aectra's failure to include taxes and fee in its calculation of the amount of drawback due demonstrates that its claims cannot implicitly include drawback of taxes and fee, discussed infra, Aectra contends that there is no statutory requirement that a drawback claimant calculate the amount of drawback due within the three-year period. See Pl.'s Resp. Opp' n Def.'s Cross-Mot. Summ. J. ("Pl.'s Resp.") at 9. Aectra notes that the requirement for a claimant to submit a calculation of the amount of drawback due is not set out in 19 C.F.R. 191.51(a)(1), the subsection defining a "complete claim," but in 19 C.F.R. § 191.51(b). Id. at 9-10. Aectra thus argues that the three-year time limit applies to (a)(1)'s completion requirement but not to (b)(1)'s calculation requirement. See id. at 10.

Moreover, Aectra's reading of 19 C.F.R. 191.51(b) (1998) requires a drawback claimant to calculate the amount of import duties due, not the amounts of taxes and fee. See id...