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Texport Oil Co. v. United States

July 27, 1999

TEXPORT OIL COMPANY, PLAINTIFF-CROSS APPELLANT,
v.
UNITED STATES, DEFENDANT-APPELLANT.



Before Michel, Clevenger, and Bryson, Circuit Judges.

The opinion of the court was delivered by: Clevenger, Circuit Judge.

Appealed from: United States Court of International Trade Judge R. Kenton Musgrave

This case presents a question of interpretation of a statute that grants an exporter a refund (or "drawback") of up to 99 percent of "any duty, tax, or fee imposed under Federal law because of [the merchandise's] importation" if the exported goods are "commercially interchangeable with such imported merchandise." 19 U.S.C. § 1313(j)(2) (1994). The United States appeals from the decision of the United States Court of International Trade granting the exporter in this case, Texport Oil Company, drawbacks under section 1313(j)(2) on seven of eight disputed shipments of petroleum products. See Texport Oil Co. v. United States, 1 F. Supp. 2d 1393 (Ct. Int'l Trade 1998). Texport Oil Company cross-appeals the denial of its claim with respect to the eighth shipment. The United States also appeals the Court of International Trade's holding that sums paid to satisfy two non-duty charges--the Merchandise Processing Fee and the Harbor Maintenance Tax--were imposed "because of . . . importation," thus making them eligible for drawback under section 1313(j)(2).

Because we conclude that (1) the Court of International Trade's construction of the phrase "commercially interchangeable" in section 1313(j)(2) was erroneous, (2) the trial court correctly determined that the Merchandise Processing Fee is eligible for drawback, and (3) the Harbor Maintenance Tax is ineligible for drawback, we vacate-in-part, affirm-in-part, reverse-in-part, and remand.

I.

The relevant provisions of 19 U.S.C. § 1313(j)(2) are as follows, with the critical language highlighted:

"(2) . . . if there is, with respect to imported merchandise on which was paid any duty, tax, or fee imposed under Federal law because of its importation, any other merchandise (whether imported or domestic), that -"

"(A) is commercially interchangeable with such imported merchandise;"

". . ."

"then upon the exportation or destruction of such other merchandise the amount of each such duty, tax, and fee paid regarding the imported merchandise shall be refunded as drawback, but in no case may the total drawback . . . exceed 99 percent of that duty, tax, or fee."

Thus, section 1313(j)(2) evinces a clear congressional purpose to allow exporters to obtain refunds on sums paid as a result of the importation of goods that, although not identical to the exported goods, are nonetheless "commercially interchangeable" with the exported goods.

The shipments at issue here *fn1 were exported from the United States between September 1990 and May 1991 by Texport Oil Company ("Texport"), a petroleum product marketing company extant from 1987 to 1994. After initially granting some of the claims, the United States Customs Service ("Customs") denied drawback to Texport on all the shipments upon final liquidation. Customs determined that the merchandise exported--petroleum products ranging from heating oil to jet fuel--were not "commercially interchangeable" with their corresponding imported goods. Customs also denied drawback of amounts paid under two non-duty charges, the Merchandise Processing Fee ("MPF") and the Harbor Maintenance Tax ("HMT"), reasoning that those charges were not assessed "because of [the merchandise's] importation" and thus did not fall within the ambit of section 1313(j)(2).

Texport filed suit in the Court of International Trade, which conducted a trial in mid-1997. Based on its own construction of the statutory language, the Court of International Trade determined that each of the disputed shipments were "commercially interchangeable" with their corresponding imported goods, except for one--the shipment exported onboard the Al Deerah--where the imported merchandise was described as "jet fuel" and the exported merchandise was listed on the sales contract as "stove fuel." See id. at 1399. The Court of International Trade also held ...


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