CIT Nixes Tugboat Operator's Duty Refund Bid, Says Letter to CBP Wasn't Formal Protest
Customs protests must be unambiguously identified as protests, said the Court of International Trade on July 10 as it dismissed a tugboat operator’s bid for preferential duties on a vessel returned after foreign repair. Puerto Rico Towing & Barge Co. argued that a letter its lawyer sent to a CBP vessel repair specialist was an official protest, despite not having been submitted on CBP Form 19. But CIT found that the letter didn’t include certain information required on protests, and made statements that appeared to indicate that it wasn’t intended as a protest at all. A subsequently filed CF 19 filed by PR Towing came too late, apparently as a result of a misunderstanding over the applicable deadline for protests, so the company had no basis for its lawsuit, said CIT.
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The tugboat at issue had been repaired in the Dominican Republic before being returned to San Juan in 2003. PR Towing subsequently filed an Application for Relief from Foreign Vessel Repair Duties, claiming that under the Caribbean Basin Economic Recovery Act (CBERA) the repairs were exempt from the normal 50 percent duty. CBP liquidated the entry on Sept. 28, 2007, partially denying the application because PR Towing hadn’t demonstrated what portion of the materials and equipment used in the repairs was a product of the Dominican Republic.
PR Towing’s lawyer sent a letter to the relevant vessel repair specialist in New Orleans in December 2007, saying that CBP should have granted the application in full based on an earlier customs ruling. The specialist replied that “each ruling stands on its own,” and said the company needed to file a protest. The lawyer sent a second letter five days later that reiterated its arguments, and said PR Towing hoped to avoid “preparing a very exhaustive protest.” The CBP specialist was unmoved, again replying with instructions to file a protest. PR Towing finally filed a formal protest in late January of 2009 on the standard CF 19. It said the protest was timely because it was filed within 180 days of liquidation. But CBP said the applicable deadline was 90 days after liquidation, and denied the protest as untimely. PR Towing filed suit at CIT.
The trade court rejected PR Towing’s claims that its letters had constituted a formal protest. They failed to include the name and address of the importer record, the date of entry, and other elements required by CBP’s protest regulations under 19 CFR 174. And more importantly, “the language of the letters makes it clear that PR Towing never intended them to serve as protests,” said CIT, citing sections of the letter that said the company intended to file a formal protest at a future date.
CIT also agreed that the formal protest filed in January 2009 was untimely. The deadline for protests were changed from 90 to 180 days after liquidation by the Miscellaneous Trade and Technical Corrections Act of 2004. But the change only applied to entries on or after Dec. 18, 2004. The entry in this case occurred in 2003, so the shorter 90-day deadline applied, and the protest was too late, said CIT.
(Puerto Rico Towing & Barge Co. v. U.S., Slip Op. 14-81, CIT No. 12-00020, dated 07/10/14, Judge Pogue)
(Attorneys: Peter Herrick for plaintiff Puerto Rico Towing & Barge Co.; Jason Kenner for defendant U.S. government)