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Keywords

summary judgment
summary judgment

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Precision Specialty Metals, Inc. v. U.S., 25 C.I.T. 1375, 182 F.Supp.2d 1314, 23 ITRD 2327

Facts

On October 23, 1991, Precision submitted a letter to Customs expressing its intention to adhere to and comply with the terms of T.D. 81–74. Precision filed 116 drawback entries under T.D. 81–74 between December 11, 1991 and May 13, 1996. Customs liquidated 69 of these entries with full benefit of drawback, in which Precision had claimed exports of stainless steel trim, stainless steel strip, stainless steel scrap and stainless steel coils. In January 1996, Customs first questioned the eligibility of Precision's claims involving stainless steel trim for drawback, and in June 1996, Precision received a Notice of Action informing it that 38 of its drawback entries were being liquidated without the benefit of drawback on the basis that 'scrap was shown on the export bill(s) of lading' and that 'drawback is not available upon exports of valuable waste.'

On October 23, 1991, Precision submitted a letter to Customs expressing its intention to adhere to and comply with the terms of T.D. 81–74. Precision filed 116 drawback entries under T.D. 81–74 between December 11, 1991 and May 13, 1996. Customs liquidated 69 of these entries with full benefit of drawback, in which Precision had claimed exports of stainless steel trim, stainless steel strip, stainless steel scrap and stainless steel coils. In January 1996, Customs first questioned the eligibility of Precision's claims involving stainless steel trim for drawback, and in June 1996, Precision received a Notice of Action informing it that 38 of its drawback entries were being liquidated without the benefit of drawback on the basis that 'scrap was shown on the export bill(s) of lading' and that 'drawback is not available upon exports of valuable waste.'

Issue

Whether Customs Service's denial of drawback on certain entries of stainless steel trim and scrap was valid, given that it did not follow the notice-and-comment procedure required by 19 U.S.C. § 1625(c)(2).

Whether Customs Service's denial of drawback on certain entries of stainless steel trim and scrap was valid, given that it did not follow the notice-and-comment procedure required by 19 U.S.C. § 1625(c)(2).

Rule

Customs is required to follow a notice-and-comment procedure before retroactively changing the treatment of merchandise under 19 U.S.C. § 1625(c)(2).

Customs is required to follow a notice-and-comment procedure before retroactively changing the treatment of merchandise under 19 U.S.C. § 1625(c)(2).

Analysis

The court found that the facts stipulated by the parties established that Customs had previously approved drawback on substantially identical transactions and failed to follow the required notice-and-comment procedure before issuing its ruling that denied drawback on the entries in question. The court determined that the prior treatment of the 69 entries constituted a 'treatment' under § 1625(c) and that Customs' failure to provide notice and an opportunity for comment invalidated its denial of drawback.

The court found that the facts stipulated by the parties established that Customs had previously approved drawback on substantially identical transactions and failed to follow the required notice-and-comment procedure before issuing its ruling that denied drawback on the entries in question. The court determined that the prior treatment of the 69 entries constituted a 'treatment' under § 1625(c) and that Customs' failure to provide notice and an opportunity for comment invalidated its denial of drawback.

Conclusion

The court granted summary judgment in favor of Precision, concluding that Customs' denial of drawback was invalid due to its failure to follow the required notice-and-comment procedure.

The court granted summary judgment in favor of Precision, concluding that Customs' denial of drawback was invalid due to its failure to follow the required notice-and-comment procedure.

Who won?

Precision Specialty Metals, Inc. prevailed in the case because the court found that Customs failed to follow the necessary procedures before changing its treatment of the merchandise.

Precision Specialty Metals, Inc. prevailed in the case because the court found that Customs failed to follow the necessary procedures before changing its treatment of the merchandise.

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