Ammex, Inc. v. US, 04-1604.

• Citation: 419 F.3d 1342
• Decision Date: 17 August 2005
• Docket Number: No. 04-1604.,04-1604.
• Parties: AMMEX, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

419 F.3d 1342

AMMEX, INC., Plaintiff-Appellee,
v.
UNITED STATES, Defendant-Appellant.

No. 04-1604.

United States Court of Appeals, Federal Circuit.

August 17, 2005.

419 F.3d 1343

Brian S. Goldstein, Duane Morris LLP, of New York, New York, argued for plaintiff-appellee. On the brief were J. William Koegel, Jr., Herbert C. Shelley and Alice A. Kipel, Steptoe & Johnson, LLP, of Washington, DC. Of counsel was Bruce C. Bishop.

Amy M. Rubin, Attorney, International Trade Field Office, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellant. With her on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, of Washington, DC; and, Barbara S. Williams, Attorney in Charge, International Trade Field Office. Of counsel on the brief was Beth C. Brotman, Chief Counsel, United States Customs and Border Protection, of New York, New York.

Before LOURIE, RADER, and GAJARSA, Circuit Judges.

RADER, Circuit Judge.

The United States Court of International Trade determined that the United States Customs Service (Customs) wrongfully revoked permission for Ammex to sell duty-free fuel from its Class 9 Customs bonded warehouse. Ammex, Inc. v. United States, 116 F.Supp.2d 1269 (Ct. Int'l Trade 2000) (Ammex I). Because Customs issued its Revocation Ruling without first ascertaining whether any federal tax had actually been assessed on Ammex's fuel, the revocation was an abuse of discretion. Therefore, this court affirms.

I.

Ammex operates a duty-free store, i.e., a Class 9 Customs bonded warehouse, and gas station, at Ambassador Bridge between Detroit, Michigan and Windsor, Ontario. The geography offers no direct physical route for products stored or sold at the store to enter the United States. Thus, cars entering the gas station must proceed into Canada upon exit. In other words, the products sold in the store must be exported.

Ammex has long confronted Customs over the question of duty-free import of fuels. In late 1993 and early 1994 Ammex requested approval to add gasoline and diesel fuel to its duty-free offerings. In June 1994, Customs denied that request. Customs explained in its denial that fuel is an "unidentifiable fungible" good that could be reimported without any way for Customs to collect duties.

After Customs affirmed its decision in a second opinion letter, Ammex brought the case to the Court of International Trade. In August 2000, that court declared unlawful Customs' prohibition on selling fuel duty-free. The court pointed out that the statute that governed duty-free treatment of warehoused merchandise specifically excluded only perishable articles and explosives,

419 F.3d 1344

but not diesel fuel and gasoline. Ammex I, 116 F.Supp.2d at 1273. The court refused to allow Customs to expand the statutory exemption to exclude "unidentified fungibles." Id. Therefore, on September 5, 2000, Customs granted Ammex permission to bring its fuel supplies within its bonded warehouse "in order to facilitate the immediate availability of the bonded fuel for sale."

In October 2000, Ammex asked Customs to confirm that fuel sold at its Ambassador Bridge facility would not be subject to taxes at the time of bonded entry into the United States. Customs forwarded the request to the Internal Revenue Service (IRS). The IRS declined to make a formal ruling on the question in the absence of a formal request. Instead, the IRS offered Ammex "general information that may be useful to you." This information was that "Section 4081 of the Internal Revenue Code imposes a tax on certain removals, entries and sales of taxable fuel."

Customs immediately revoked its permission for duty-free sales, because "the imported gasoline and diesel fuel in issue here was assessed with a tax under 26 U.S.C. 4081 .... Consequently that fuel does not meet the statutory definition of duty-free merchandise ...."

Ammex returned to the United States Court of International Trade, asking it to find Customs in contempt for revoking the authorization that followed the decision in Ammex I. The trial court denied that motion in February, 2002. Ammex, Inc. v. United States, 193 F.Supp.2d 1325 (Ct. Int'l Trade 2002) (Ammex II). On appeal, this court affirmed the decision in Ammex II. 334 F.3d 1052 (Fed.Cir.2003) (Ammex III).

Ammex then brought the present action in the Court of International Trade under 28 U.S.C. § 1581(i) and the Administrative Procedures Act, 5 U.S.C. § 706(2)(A). The trial court found in favor of Ammex, reasoning that "it was error for Customs to issue the Revocation Ruling without first ascertaining whether any taxes had been assessed on Ammex's fuel." Ammex, Inc. v. United States, 341 F.Supp.2d 1308, 1312 (Ct. Int'l Trade 2004) (Ammex IV). Customs appeals.

II.

Here, the Court of International Trade rendered judgment upon the administrative record under U.S. Court of International Trade Rule 56.1, and made no factual determinations of its own. This court reviews such a judgment without deference. See Defenders of Wildlife v. Hogarth, 330 F.3d 1358, 1364 (Fed.Cir. 2003); see also Bannum v....