NAM, Joined by Beer Institute, Seeks Victory in Challenge to New CBP Excise Tax Drawback Restrictions

The National Association of Manufacturers filed a motion June 24 seeking court orders invalidating portions of CBP’s recent drawback regulations that bar substitution drawback on excise taxes. As in a complaint filed in April (see 1904180046), the trade association said the regulations issued by CBP following enactment of the Trade Facilitation and Trade Enforcement Act of 2016 ignore lawmakers’ general intention to expand drawback, as well as specific instances where Congress has in the past preserved the ability to claim substitution drawback on excise taxes.

“This is not the first time, or even the second, that Defendants have tried to bar excise-tax drawback (or to persuade Congress to do so). All of those efforts have failed. Indeed, Congress has consistently increased the reach of substitution drawback and rejected efforts to restrict it,” NAM said in its brief. “Yet Defendants insist that excise-tax drawback has in fact been illegal since Congress adopted” current drawback provisions preventing double drawback claims “with no fanfare, in 1993. That makes no sense,” NAM said.

The Beer Institute in recent days joined NAM’s lawsuit, and the consultancy Customs Advisory Services filed an amicus brief in support of the two trade groups’ challenge. The Beer Institute argues against the retroactive applicability of the new prohibition on substitution drawback for excise taxes to claims filed prior to the new regulations’ effective date of Feb. 19, 2019. “Any attempt” by the government to retroactively apply its “new drawback restrictions to limit already-filed claims, many of which concern exports that occurred as early as 2013,” would run afoul of strict limits on when agencies are allowed to apply regulations retroactively, the Beer Institute said in its brief.

“The Beer Institute joined the National Association of Manufacturers’ lawsuit against the U.S. Treasury Department on claims filed before the publication of the final rule because brewers filed drawback claims in good faith,” Beer Institute President and CEO Jim McGreevy said in an emailed statement. “We believe the Department of Treasury should not pick winners and losers and should honor all existing drawback claims from alcohol producers.”

Email ITTNews@warren-news.com for briefs from NAM and the Beer Institute.