Parkdale America Accuses CBP in Trade Court of Erring in Drawback Denial

CBP improperly denied an importer's "mixed use" drawback claim, despite provisions in CBP's regulations allowing claims based on imports used for both pre- and post-Trade Facilitation and Trade Enforcement Act (TFTEA) drawback, an importer told the Court of International Trade in a complaint filed May 16 (Parkdale America LLC v. United States, CIT #22-00019).

Parkdale America said CBP refused to pay drawback on its rayon staple fiber, classifiable under Harmonized Tariff Schedule subheading 5503.00.25; and viscose rayon staple fiber, classifiable under subheading 5504.10.0000. Some of the merchandise designated as the basis for drawback previously had been designated for claims filed by Parkdale under the drawback law as it existed prior to the implementation of TFTEA.

Parkdale said it provided to CBP an accounting, showing how much of the designated merchandise on the import entries had been used in connection with the previously filed drawback claims, and what quantities were for designation on the updated TFTEA claim. CBP drawback entry specialists at the San Francisco drawback processing office demanded that Parkdale remove the “mixed use” entries from its drawback claim, and when Parkdale refused, the claim was denied.

CBP did intend to prohibit mixed used claims under its proposed TFTEA drawback rule in 2018, but CBP's published final regulations authorized “mixed use” claims in TFTEA drawback, Parkdale said. Parkdale requested that CIT "order the appropriate CBP officer to reliquidate the claim with full drawback allowed."