CAFC Rules that CBP Incorrectly Revoked Permission to Sell Duty-Free Fuels
In Ammex, Inc. v. U.S., the Court of Appeals for the Federal Circuit (CAFC) affirmed a Court of International Trade (CIT) ruling that U.S. Customs and Border Protection (CBP) wrongly revoked permission for Ammex to sell fuel from its duty-free store (a Class 9 Customs bonded warehouse) at Ambassador Bridge, where all products are sold to be exported.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
In its ruling the CAFC considers two statutory provisions i) 26 USC 4081, under which an IRS tax is imposed on the entry into the U.S. of any taxable fuel for consumption, use, or warehousing, and ii) 19 USC 1555(b)(8)(E), which defines duty-free merchandise as merchandise sold by a duty-free sales enterprise on which neither Federal duty nor Federal tax has been assessed pending exportation from the Customs territory.
The CAFC concludes that merchandise in a bonded warehouse remains duty-free until a Federal duty or tax has been assessed.
As the record in this case on appeal does not show that the IRS has ever assessed Ammex with a specific tax liability, the CAFC rules that CBP should have looked into whether Ammex had in fact been assessed or paid any taxes on its fuel prior to taking any further action in this case. CBP's not doing so was an abuse of its discretion.
(See ITT's Online Archives or 03/29/04 news, 04032935, for BP summary of an earlier CAFC decision finding CBP not in contempt for revoking Ammex's permission to sell duty-free fuel.)
CAFC Court No.04-1604 (decided 08/17/05) available at http://www.fedcir.gov/opinions/04-1604.pdf
CIT Slip Op. 04-89 (decided 07/20/04) available at http://www.cit.uscourts.gov/slip_op/Slip_op04/04-89.pdf