Driving Constitutes 'Use' of Truck for Drawback Purposes, Says CBP

The driving of a truck out of the U.S. for export constitutes "use" for drawback claims, said CBP in a June 16 ruling, HQ H240038. The ruling, a further review of protest, involves a truck imported and entered into the U.S. that was eventually driven out of the country after sitting unused at the work site it was imported for. CBP previously denied the drawback claims filed by the importer/exporter because "the exported merchandise did not meet the requirements," said CBP.

The truck in question, a 1990 Chevrolet, had been imported in 2008 under subheading 8704.31.0000 as “Motor vehicles for the transport of goods: Other, with spark-ignition internal combustion piston engine: G.V.W. not exceeding 5 metric tons,” said CBP. The importer, MV Mark, drove the truck to Massachusetts from Canada under its own power. Later that year, it drove the truck back to Canada and in 2010 submitted a claim for unused merchandise drawback. CBP denied the request in 2011 because "the truck was driven under its own power and was considered 'used'" and "it could not qualify under unused merchandise drawback."

MV Mark protested the denied claim, saying "because there was no operation or combination of operations amounting to manufacture or production performed on it," CBP said. The company also said the truck was eligible for drawback because it was not put to the intended use at the Massachusetts job site. MV Mark also said because value and condition of the truck were unchanged from the time of import because it was undamaged, driven only a short distance and was in the same condition when exported to Canada.

While CBP has previously ruled that in some cases vehicles are eligible for drawback when used under their own power, those cases involved use as a means for advertising, the agency said. In this case, "the distance traveled was hundreds of miles, not a short duration cruise contained in a single location, and it was not done for purposes related to advertising the sale of the truck," it said. Although MV Mark argued "that the conveyance moving under its own power was incidental to the intended purpose for importation, i.e., being put to work at the intended job site," CBP disagreed with that characterization. "Driving the truck from Canada to Massachusetts is a transportation, the purpose for which it was built, and therefore, a 'use,'" said CBP. "The fact that the equipment on the truck was not used at the intended job site has no impact on our analysis, As such, this truck was used prior to exportation and is therefore, ineligible for drawback."