Section

[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR191.195]

[Page 581-632]

TITLE 19--CUSTOMS DUTIES

CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY

PART 191--DRAWBACK--Table of Contents

Subpart S--Drawback Compliance Program

Sec. 191.195 Combined application for certification in drawback compliance program and waiver of prior notice and/or approval of accelerated payment of
drawback.

An applicant for certification in the drawback compliance program
may also, in the same application, apply for waiver of prior notice of
intent to export and accelerated payment of drawback, under subpart I of
this part. Alternatively, an applicant may separately apply for
certification in the drawback compliance program and either or both
waiver of prior notice and accelerated payment of drawback. In the
former instance, the intent to apply for certification and waiver of
prior notice and/or approval of accelerated payment of drawback must be
clearly stated. In all instances, all of the requirements for
certification and the procedure applied for must be met (for example, in
a combined application for certification in the drawback compliance
program and both procedures, all of the information required for
certification and each procedure, all required sample documents for
certification and each procedure, and all required certifications must
be included in and with the application).

Appendix A to Part 191--General Manufacturing Drawback Rulings

Table of Contents

I. General Instructions
II. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D.
81-234; T.D. 83-123)
III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or
1313(b) for Agents (T.D. 81-181)
IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Burlap or Other Textile Material (T.D. 83-53)
V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Component Parts (T.D. 81-300)
VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Flaxseed (T.D. 83-80)
VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Fur Skins or Fur Skin Articles (T.D. 83-77)
VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Orange Juice (T.D. 85-110)

[[Page 582]]

IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Petroleum or Petroleum Derivatives (T.D. 84-49)
X. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Piece Goods (T.D. 83-73)
XI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Raw Sugar (T.D. 83-59)
XII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Steel (T.D. 81-74)
XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Sugar (T.D. 81-92)
XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Woven Piece Goods (T.D. 83-84)

I. General Instructions

A. There follow various general manufacturing drawback rulings which
have been designed to simplify drawback procedures. Any person who can
comply with the conditions of any one of these rulings may notify a
Customs drawback office in writing of its intention to operate under the
ruling (see Sec. 191.7 of this part). Such a letter of notification
shall include the following information:
1. Name and address of manufacturer or producer;
2. IRS (Internal Revenue Service) number (with suffix) of
manufacturer or producer;
3. Location[s] of factory[ies] which will operate under the general
ruling;
4. If a business entity, names of persons who will sign drawback
documents (see Sec. 191.6 of this part);
5. Identity (by T.D. number and title, as stated in this Appendix)
of general manufacturing drawback ruling under which the manufacturer or
producer intends to operate;
6. Description of the merchandise and articles, unless specifically
described in the general manufacturing drawback ruling;
7. Only for General Manufacturing Drawback Ruling Under 19 U.S.C.
1313(b) for Petroleum or Petroleum Derivatives, the name of each article
to be exported or, if the identity of the product is not clearly evident
by its name, what the product is, and the abstract period to be used for
each refinery (monthly or other specified period (not to exceed 1
year)), subject to the conditions in the General Manufacturing Drawback
Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives,
I. Procedures and Records Maintained, 4(a) or (b);
8. Basis of claim used for calculating drawback; and
9. Description of the manufacturing or production process, unless
specifically described in the general manufacturing drawback ruling.
For the General Manufacturing Drawback Ruling under Sec. 1313(a),
the General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Component Parts, and the General Manufacturing Drawback Ruling Under 19
U.S.C. 1313(a) or 1313(b) for Agents, if the drawback office has doubts
as to whether there is a manufacture or production, as defined in
Sec. 191.2(q) of this part, the manufacturer or producer will be asked
to provide details of the operation purported to be a manufacture or
production.
B. These general manufacturing drawback rulings supersede general
``contracts'' previously published under the following Treasury
Decisions (T.D.'s): 81-74, 81-92, 81-181, 81-234, 81-300, 83-53, 83-59,
83-73, 83-77, 83-80, 83-84, 83-123, 84-49, and 85-110.

Anyone currently operating under any of the above-listed Treasury
Decisions will automatically be covered by the superseding general
ruling, including all privileges of the previous ``contract''.

II. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D.
81-234; T.D. 83-123)

A. Imported Merchandise or Drawback Products \1\ Used

Imported merchandise or drawback products are used in the
manufacture of the exported articles upon which drawback claims will be
based.
---------------------------------------------------------------------------

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

B. Exported Articles on which Drawback will be Claimed

Exported articles on which drawback will be claimed will be
manufactured in the United States using imported merchandise or drawback
products.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture or produce
articles for the account of another or another manufacturer or producer
may manufacture or produce for the account of the manufacturer or
producer under contract within the principal and agency relationship
outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

D. Process Of Manufacture Or Production

The imported merchandise or drawback products will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.

[[Page 583]]

E. Multiple Products

1. Relative Values

2. Appearing-in method

The appearing in basis may not be used if multiple products are
produced.

F. Loss or Gain

Records will be maintained showing the extent of any loss or gain in
net weight or measurement of the imported merchandise, caused by
atmospheric conditions, chemical reactions, or other factors.

G. Tradeoff

The use of any domestic merchandise acquired in exchange for
imported merchandise that is of the same kind and quality as the
imported merchandise, meeting specifications set forth in the
application by the manufacturer or producer for a determination of same
kind and quality (see Sec. 191.11(c)), shall be treated as use of the
imported merchandise if no certificate of delivery is issued covering
the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the
applicable regulations and rulings (see 19 CFR 191.11).

H. Stock In Process

Stock in process does not result; or if it does result, details will
be given in claims as filed, and it will not be included in the
computation of the merchandise used to manufacture the finished articles
on which drawback is claimed.

I. Waste

No drawback is payable on any waste which results from the
manufacturing operation. Unless the claim for drawback is based on the
quantity of merchandise appearing in the exported articles, records will
be maintained to establish the value, the quantity, and the disposition
of any waste that results from manufacturing the exported articles. If
no waste results, records will be maintained to establish that fact.

J. Procedures And Records Maintained

Records will be maintained to establish:
1. That the exported articles on which drawback is claimed were
produced with the use of the imported merchandise, and
2. The quantity of imported merchandise \2\ used in producing the
exported articles.
---------------------------------------------------------------------------

\2\ If claims are to be made on an ``appearing in'' basis, the
remainder of the sentence should read ``appearing in the exported
articles.''
---------------------------------------------------------------------------

(To obtain drawback the claimant must establish that the completed
articles were exported within 5 years after importation of the imported
merchandise. Records establishing compliance with these requirements
will be available for audit by Customs during business hours. Drawback
is not payable without proof of compliance).

K. Inventory Procedures

L. Basis of Claim for Drawback

Drawback will be claimed on the quantity of merchandise used in
producing the exported articles only if there is no waste or valueless
or unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible merchandise that appears in the
exported articles, regardless of whether there is waste, and no records
of waste need be maintained. If there is valuable waste recovered from
the manufacturing operation and records are kept which show the quantity
and value of the waste, drawback may be claimed on the quantity of
eligible material used to produce the exported articles less the amount
of that merchandise which the value of the waste would replace.

M. General Requirements

[[Page 584]]

or the corporate name or corporate organization by succession or
reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or
1313(b) for Agents (T.D. 81-181)

Manufacturers or producers operating under this general
manufacturing drawback ruling must comply with T.D.s 55027(2), 55207(1),
and 19 U.S.C. 1313(b), if applicable, as well as 19 CFR part 191 (see
particularly, Sec. 191.9).

A. Name and Address of Principal

B. Process of Manufacture or Production

The imported merchandise or drawback products or other substituted
merchandise will be used to manufacture or produce articles in
accordance with Sec. 191.2(q) of this part.

C. Procedures and Records Maintained

Records will be maintained to establish:
1. Quantity, kind and quality of merchandise transferred from the
principal to the agent;
2. Date of transfer of the merchandise from the principal to the
agent;
3. Date of manufacturing or production operations performed by the
agent;
4. Total quantity and description of merchandise appearing in or
used in manufacturing or production operations performed by the agent;
5. Total quantity and description of articles produced in
manufacturing or production operations performed by the agent;
6. Quantity, kind and quality of articles transferred from the agent
to the principal; and
7. Date of transfer of the articles from the agent to the principal.

D. General Requirements

The manufacturer or producer will:
1. Comply fully with the terms of this general ruling when
manufacturing or producing articles for account of the principal under
the principal's general manufacturing drawback ruling or specific
manufacturing drawback ruling, as appropriate;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates the claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Burlap or Other Textile Material (T.D. 83-53)

Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation
of bags or meat wrappers manufactured with the use of imported burlap or
other textile material, subject to the following special requirements:

A. Imported Merchandise or Drawback Products \1\ Used

Imported merchandise or drawback products (burlap or other textile
material) are used in the manufacture of the exported articles upon
which drawback claims will be based.
---------------------------------------------------------------------------

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

B. Exported Articles on Which Drawback Will Be Claimed
Exported articles on which drawback will be claimed will be
manufactured in the United States using imported merchandise or drawback
products.

C. General Statement

D. Process of Manufacture or Production

The imported merchandise or drawback products will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.

[[Page 585]]

E. Multiple Products

Not applicable.

F. Loss or Gain

Not applicable.

G. Waste

H. Procedures and Records Maintained

Records will be maintained to establish:
1. That the exported articles on which drawback is claimed were
produced with the use of the imported merchandise; and
2. The quantity of imported merchandise \2\ used in producing the
exported articles.
To obtain drawback the claimant must establish that the completed
articles were exported within 5 years after importation of the imported
merchandise. Records establishing compliance with these requirements
will be available for audit by Customs during business hours. Drawback
is not payable without proof of compliance.

I. Inventory Procedures

J. Basis of Claim for Drawback

Drawback will be claimed on the quantity of merchandise used in
producing the exported articles only if there is no waste or valueless
or unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible merchandise that appears in the
exported articles, regardless of whether there is waste, and no records
of waste need be maintained. If there is valuable waste recovered from
the manufacturing operation and records are kept which show the quantity
and value of the waste, drawback may be claimed on the quantity of
eligible material used to produce the exported articles, less the amount
of that merchandise which the value of the waste would replace.

K. General Requirements

The manufacturer or producer will:
1. Comply fully with the terms of this general ruling when claiming
drawback;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation.
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with 19, United
States Code, Sec. 1313, part 191 of the Customs Regulations and this
general ruling.

V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Component Parts (T.D. 81-300)

[[Page 586]]

The designated components will have been manufactured in accordance
with the same specifications and from the same materials, and identified
by the same part number as the substituted components. Further, the
designated and substituted components are used interchangeably in the
manufacture of the exported articles upon which drawback will be
claimed. Specifications or drawings will be maintained and made
available for Customs officers. The imported merchandise designated on
drawback claims will be so similar to the merchandise used in producing
the exported articles on which drawback is claimed that the merchandise
used would, if imported, be subject to the same rate of duty as the
imported designated merchandise. Fluctuations in market value resulting
from factors other than quality will not affect the drawback.
---------------------------------------------------------------------------

B. Exported Articles on Which Drawback Will Be Claimed

The exported articles will have been manufactured in the United
States using components described in the parallel columns above.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture or produce
articles for the account of another or another manufacturer or producer
may manufacture or produce for the account of the manufacturer or
producer under contract within the principal and agency relationship
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

D. Process of Manufacture or Production

The components described in the parallel columns will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.

E. Multiple Products

Not applicable.

F. Waste

No drawback is payable on any waste which results from the
manufacturing operation. Unless the claim for drawback is based on the
quantity of components appearing in the exported articles, records will
be maintained to establish the value (or the lack of value), the
quantity, and the disposition of any waste that results from
manufacturing the exported articles. If no waste results, records will
be maintained to establish that fact.

G. Tradeoff

The use of any domestic merchandise acquired in exchange for
imported merchandise that meets the same kind and quality specifications
contained in the parallel columns of this general ruling shall be
treated as use of the imported merchandise if no certificate of delivery
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon
compliance with the applicable regulations and rulings.

H. Procedures and Records Maintained

Records will be maintained to establish:
1. The identity and specifications of the designated merchandise;
2. The quantity of merchandise of the same kind and quality as the
designated merchandise \2\ used to produce the exported articles;
---------------------------------------------------------------------------

\2\ If claims are to be made on an ``appearing in'' basis, the
remainder of this sentence should read ``appearing in the exported
articles produced.''
---------------------------------------------------------------------------

[[Page 587]]

merchandise. Records establishing compliance with these requirements
will be available for audit by Customs during business hours. Drawback
is not payable without proof of compliance.
---------------------------------------------------------------------------

\3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

I. Inventory Procedures

The inventory records of the manufacturer or producer will show how
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b)
and part 191 of the Customs Regulations will be met, as discussed under
the heading ``Procedures And Records Maintained''. If those records do
not establish satisfaction of those legal requirements, drawback cannot
be paid.

J. Basis of Claim for Drawback

Drawback will be claimed on the quantity of eligible components used
in producing the exported articles only if there is no waste or
valueless or unrecovered waste in the manufacturing operation. Drawback
may be claimed on the quantity of eligible components that appear in the
exported articles, regardless of whether there is waste, and no records
of waste need be maintained. If there is valuable waste recovered from
the manufacturing operation and records are kept which show the quantity
and value of the waste, drawback may be claimed on the quantity of
eligible components used to produce the exported articles less the
amount of those components which the value of the waste would replace.

K. General Requirements

The manufacturer or producer will:
1. Comply fully with the terms of this general ruling when claiming
drawback;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Flaxseed (T.D. 83-80)

Drawback may be allowed under the provision of 19 U.S.C. 1313(a)
upon the exportation of linseed oil, linseed oil cake, and linseed oil
meal, manufactured or produced with the use of imported flaxseed,
subject to the following special requirements:

A. Imported Merchandise or Drawback Products \1\ Used

Imported merchandise or drawback products (flaxseed) are used in the
manufacture of the exported articles upon which drawback claims will be
based.
---------------------------------------------------------------------------

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

B. Exported Articles on Which Drawback Will Be Claimed

Exported articles on which drawback will be claimed will be
manufactured in the United States using imported merchandise or drawback
products.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture or produce
articles for the account of another or another manufacturer or producer
may manufacture or produce for the account of the manufacturer or
producer under contract within the principal and agency relationship
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

D. Process of Manufacture or Production

The imported merchandise or drawback products will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.

E. Multiple Products

Drawback law mandates the assignment of relative values when two or
more products necessarily are produced concurrently in the same
operation. If multiple products are produced records will be maintained
of the market value of each product at the time it is first separated in
the manufacturing process (when a claim covers a manufacturing period,
the entire period covered by the claim is the time of separation of the
products and the value per unit of product is the market value for the
period (see Secs. 191.2(u), 191.22(e)). The ``appearing in'' basis may
not be used if multiple products are produced.

[[Page 588]]

F. Loss or Gain

Records will be maintained showing the extent of any loss or gain in
net weight or measurement of the imported merchandise, caused by
atmospheric conditions, chemical reactions, or other factors.

G. Waste

H. Procedures and Records Maintained

I. Inventory Procedures

The inventory records of the manufacturer or producer will show how
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a)
and part 191 of the Customs Regulations will be met, as discussed under
the heading ``Procedures and Records Maintained''. If those records do
not establish satisfaction of those legal requirements, drawback cannot
be paid.
The inventory records of the manufacturer or producer shall show the
inclusive dates of manufacture; the quantity, identity, and value of the
imported flaxseed or screenings, scalpings, chaff, or scourings used;
the quantity by actual weight and value, if any, of the material removed
from the foregoing by screening prior to crushing; the quantity and kind
of domestic merchandise added, if any; the quantity by actual weight or
gauge and value of the oil, cake, and meal obtained; and the quantity
and value, if any, of the waste incurred. The quantity of imported
flaxseed, screenings, scalpings, chaff, or scourings used or of material
removed shall not be estimated nor computed on the basis of the quantity
of finished products obtained, but shall be determined by actually
weighing the said flaxseed, screenings, scalpings, chaff, scourings, or
other material; or, at the option of the crusher, the quantities of
imported materials used may be determined from Customs weights, as shown
by the import entry covering such imported materials, and the Government
weight certificate of analysis issued at the time of entry. The entire
period covered by an abstract shall be deemed the time of separation of
the oil and cake covered thereby.
If the records of the manufacturer or producer do not show the
quantity of oil cake used in the manufacture or production of the
exported oil meal and the quantity of oil meal obtained, the net weight
of the oil meal exported shall be regarded as the weight of the oil cake
used in the manufacture thereof.
If various tanks are used for the storage of imported flaxseed, the
mill records shall establish the tank or tanks in which each lot or
cargo is stored. If raw or processed oil manufactured or produced during
different periods of manufacture is intermixed in storage, a record
shall be maintained showing the quantity, identity, and kind of oil so
intermixed. Identity of merchandise or articles in either instance shall
be in accordance with Sec. 191.14 of this part.

J. Basis of Claim for Drawback

Drawback will be claimed on the quantity of merchandise used in
producing the exported articles only if there is no waste or valueless
or unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible merchandise that appears in the
exported articles, regardless of whether there is waste, and no records
of waste need be maintained. If there is valuable waste recovered from
the manufacturing operation and records are kept which show the quantity
and value of the waste, drawback may be claimed on the quantity of
eligible material used to produce the exported articles, less the amount
of that merchandise which the value of the waste would replace.

K. General Requirements

[[Page 589]]

by reporting promptly to the drawback office which liquidates its claims
any changes in the information required by the General Instructions of
this Appendix to be included therein (I. General Instructions, 1 through
9) or the corporate name or corporate organization by succession or
reincorporation.
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with 19, United
States Code, Sec. 1313, part 191 of the Customs Regulations and this
general ruling.

VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Fur Skins or Fur Skin Articles (T.D. 83-77)

Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation
of dressed, redressed, dyed, redyed, bleached, blended, or striped fur
skins or fur skin articles manufactured or produced by any one or a
combination of the foregoing processes with the use of fur skins or fur
skin articles, such as plates, mats, sacs, strips, and crosses, imported
in a raw, dressed, or dyed condition, subject to the following special
requirements:

A. Imported Merchandise or Drawback Products \1\ Used

Imported merchandise or drawback products (fur skins or fur skin
articles) are used in the manufacture of the exported articles upon
which drawback claims will be based.
---------------------------------------------------------------------------

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

B. Exported Articles on Which Drawback Will Be Claimed

Exported articles on which drawback will be claimed will be
manufactured in the United States using imported merchandise or drawback
products.

C. General Statement

D. Process of Manufacture or Production

The imported merchandise or drawback products will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.
Drawback shall not be allowed under this general manufacturing
drawback ruling when the process performed results only in the
restoration of the merchandise to its condition at the time of
importation.

E. Multiple Products

Not applicable.

F. Loss or Gain

Records will be maintained showing the extent of any loss or gain in
net weight or measurement of the imported merchandise, caused by
atmospheric conditions, chemical reactions, or other factors.

G. Waste

H. Procedures and Records Maintained

Records will be maintained to establish:
1. That the exported articles on which drawback is claimed were
produced with the use of the imported merchandise; and
2. The quantity of imported merchandise \2\ used in producing the
exported articles.
---------------------------------------------------------------------------

To obtain drawback the claimant must establish that the completed
articles were exported within 5 years after importation of the imported
merchandise. Records establishing compliance with these requirements
will be available for audit by Customs during business hours. Drawback
is not payable without proof of compliance.

I. Inventory Procedures

[[Page 590]]

with benefit of drawback, the lot number and date or inclusive dates of
manufacture or production, the quantity, identity, and description of
the imported merchandise used, the condition in which imported, the
process or processes applied thereto, the quantity and description of
the finished articles obtained, and the quantity of imported pieces
rejected, if any, or spoiled in manufacture or production.

J. Basis of Claim for Drawback

Drawback will be claimed on the quantity of merchandise used in
producing the exported articles only if there is no waste or valueless
or unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible merchandise that appears in the
exported articles, regardless of whether there is waste, and no records
of waste need be maintained. If there is valuable waste recovered from
the manufacturing operation and records are kept which show the quantity
and value of the waste, drawback may be claimed on the quantity of
eligible material used to produce the exported articles, less the amount
of that merchandise which the value of the waste would replace. (If
rejects and/or spoilage are incurred, the quantity of imported
merchandise used shall be determined by deducting from the quantity of
fur skins or fur skin articles put into manufacture or production the
quantity of such rejects and/or spoilage.)

K. General Requirements

VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Orange Juice (T.D. 85-110)

A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback Duty-Paid, Duty-Free or
Products \1\ To Be Designated as the Domestic Merchandise of the
Basis for Drawback on the Exported Same Kind and Quality as That
Products. Designated Which Will Be Used
in the Production of the
Exported Products
Concentrated orange juice for Concentrated orange juice for
manufacturing (of not less than 55 manufacturing as described in
deg. Brix) as defined in the standard the left-hand parallel column.
of identity of the Food and Drug
Administration (21 CFR 146.53) which
meets the Grade A standard of the U.S.
Dept. of Agriculture (7 CFR 52.1557,
Table IV).

The imported merchandise designated on drawback claims will be so
similar in quality to the merchandise used in producing the exported
articles on which drawback is claimed that the merchandise used would,
if imported, be subject to the same rate of duty as the imported
designated merchandise. Fluctuations in the market value resulting from
factors other than quality will not affect the drawback.

B. Exported Articles on Which Drawback Will Be Claimed

1. Orange juice from concentrate (reconstituted juice).
2. Frozen concentrated orange juice.
3. Bulk concentrated orange juice.

C. General Statement

[[Page 591]]

of the manufacturer or producer under contract within the principal and
agency relationship outlined in T.D.'s 55027(2) and 55207(1) (see
Sec. 191.9 of this part).

D. Process of Manufacture or Production

1. Orange juice from concentrate (reconstituted juice). Concentrated
orange juice for manufacturing is reduced to a desired 11.8 deg. Brix by
a blending process to produce orange juice from concentrate. The
following optional blending processes may be used:
i. The concentrate is blended with fresh orange juice (single
strength juice); or
ii. The concentrate is blended with essential oils, flavoring
components, and water; or
iii. The concentrate is blended with water and is heat treated to
reduce the enzymatic activity and the number of viable microorganisms.
2. Frozen concentrated orange juice. Concentrated orange juice for
manufacturing is reduced to a desired degree Brix of not less than
41.8 deg. Brix by the following optional blending processes:
i. The concentrate is blended with fresh orange juice (single
strength juice); or
ii. The concentrate is blended with essential oils and flavoring
components and water.
3. Bulk concentrated orange juice. Concentrated orange juice for
manufacturing is blended with essential oils and flavoring components
which would enable another processor such as a dairy to prepare finished
frozen concentrated orange juice or orange juice from concentrate by
merely adding water to the (intermediate) bulk concentrated orange
juice.

E. Multiple Products, Waste, Loss or Gain

Not applicable.

F. Tradeoff

G. Procedures and Records Maintained

3. That, within 3 years after receiving the designated merchandise
at its factory, the manufacturer or producer used the designated
merchandise to produce articles. During the same 3-year period, the
manufacturer or producer produced \3\ the exported articles.
---------------------------------------------------------------------------

\3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

To obtain drawback it must be established that the completed
articles were exported within 5 years after the importation of the
imported merchandise. Records establishing compliance with these
requirements will be available for audit by Customs during business
hours. No drawback is payable without proof of compliance.

H. Inventory Procedures

The inventory records of the manufacturer or producer will show how
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b)
and part 191 of the Customs Regulations will be met, as discussed under
the heading ``Procedures And Records Maintained'', and will show what
components were blended with the concentrated orange juice for
manufacturing. If those records do not establish satisfaction of those
legal requirements, drawback cannot be paid.

I. Basis of Claim for Drawback

The basis of claim for drawback will be the quantity of concentrated
orange juice for manufacturing used in the production of the exported
articles. It is understood that when fresh orange juice is used as
``cutback'', it will not be included in the ``pound solids'' when
computing the drawback due.

J. General Requirements

The manufacturer or producer will:
1. Comply fully with the terms of this general ruling when claiming
drawback;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim
predicated in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require

[[Page 592]]

all officials and employees concerned to familiarize themselves with the
provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Petroleum or Petroleum Derivatives (T.D. 84-49)

A. Parallel Columns--``Same Kind and Quality''
Imported Merchandise or Drawback Duty-Paid, Duty-Free or
Products \1\ To Be Designated as the Domestic Merchandise of the
Basis for Drawback on the Exported Same Kind and Quality as That
Products. Designated Which Will Be Used
in the Production of the
Exported Products.

The manufacturer or producer will substitute crude petroleum for
crude petroleum and a petroleum derivative for the same petroleum
derivative on a class-for-class basis only.
Class Designations:
Class I--API Gravity 0--11.9
Class II--API Gravity 12.0--24.9
Class III--API Gravity 25.0--44.9
Class IV--API Gravity 45--up
The imported merchandise which the manufacturer or producer will
designate on its claims will be so similar in quality to the merchandise
used in producing the exported articles on which drawback is claimed
that the merchandise used would, if imported, be subject to the same
rate of duty as the imported designated merchandise.

B. Exported Articles Produced From Fractionation

1. Motor Gasoline
2. Aviation Gasoline
3. Special Naphthas
4. Jet Fuel
5. Kerosene & Range Oils
6. Distillate Oils
7. Residual Oils
8. Lubricating Oils
9. Paraffin Wax
10. Petroleum Coke
11. Asphalt
12. Road Oil
13. Still Gas
14. Liquified Petroleum Gas
15. Petrochemical Synthetic Rubber
16. Petrochemical Plastics & Resins
17. All Other Petrochemical Products

C. Exported Articles on Which Drawback Will Be Claimed

See the General Instructions, I.A.7., for this general drawback
ruling. Each article to be exported must be named. When the identity of
the product is not clearly evident by its name, there must be a
statement as to what the product is, e.g., a herbicide.

D. General Statement

E. Process of Manufacture or Production

Heated crude oil is charged to an atmospheric distillation tower
where it is subjected to fractionation. The charge to the distillation
tower consists of a single crude oil, or of commingled crudes which are
fed to the tower simultaneously or after blending in a tank. During
fractionation, components of different boiling ranges are separated.

F. Multiple Products

1. Relative Values

Fractionation results in 17 products. In order to insure proper
distribution of drawback to each of these products, the manufacturer or
producer agrees to record the relative values as the time of separation.
The entire period covered by an abstract is to be treated at the time of
separation. The value per unit of each product shall be the average
market value for the abstract period.

2. Producibility

The manufacturer or producer can vary the proportionate quantity of
each product. The manufacturer or producer understands that drawback is
payable on exported products only to the extent that these products
could have been produced from the designated merchandise. The records of
the manufacturer or producer will show that all of the products exported
for which drawback will be claimed under this general manufacturing
drawback

[[Page 593]]

ruling could have been produced concurrently on a practical operating
basis from the designated merchandise.
The manufacturer or producer agrees to establish the amount to be
designated by reference to the Industry Standards of Potential
Production published in T.D. 66-16.\2\
---------------------------------------------------------------------------

\2\ A manufacturer who proposes to use standards other than those in
T.D. 66-16 must state the proposed standards and provide sufficient
information to the Customs Service in order for those proposed standards
to be verified in accordance with T.D. 84-49.
---------------------------------------------------------------------------

There are no valuable wastes as a result of the processing.

G. Loss or Gain

Because the manufacturer or producer keeps records on a volume basis
rather than a weight basis, it is anticipated that the material balance
will show a volume gain. For the same reason, it is possible that
occasionally the material balance will show a volume loss. Fluctuations
in type of crude used, together with the type of finished product
desired make an estimate of an average volume gain meaningless. However,
records will be kept to show the amount of loss or gain with respect to
the production of export products.

H. Tradeoff

I. Procedures and Records Maintained

Records will be maintained to establish:
1. The identity and specifications of the merchandise designated;
2. The quantity of merchandise of the same kind and quality as the
designated merchandise used to produce the exported articles.
3. That, within 3 years after receiving it at its refinery, the
manufacturer or producer used the designated merchandise to produce
articles. During the same 3-year period, the manufacturer or producer
produced the exported articles.
4(a). The manufacturer or producer agrees to use a 28-31 day period
(monthly) abstract period for each refinery covered by this general
manufacturing drawback ruling, or
(b). The manufacturer or producer agrees to use an abstract period
(not to exceed 1 year) for each refinery covered by this general
manufacturing drawback ruling. The manufacturer or producer certifies
that if it were to file abstracts covering each manufacturing period of
not less than 28 days and not more than 31 days (monthly) within the
longer period, in no such monthly abstract would the quantity of
designated merchandise exceed, for the same class of designated
merchandise, the material introduced into the manufacturing process
during that monthly period. (Select (a) or (b), and state which is
selected in the application, and, if (b) is selected, specify the length
of the particular abstract period chosen (not to exceed 1 year (see
General Instruction I.A.7.)).)
5. On each abstract of production the manufacturer or producer
agrees to show the value per barrel to five decimal places.
6. The manufacturer or producer agrees to file claims in the format
set forth in exhibits A through F which are attached to this general
manufacturing drawback ruling. The manufacturer or producer realizes
that to obtain drawback the claimant must establish that the completed
articles were exported within 5 years after importation of the imported
merchandise. Records establishing compliance with these requirements
will be available for audit by Customs during business hours. It is
understood that drawback is not payable without proof of compliance.
Records will be kept in accordance with T.D. 84-49, as amended by T.D.
95-61.

J. Residual Rights

It is understood that the refiner can reserve as the basis for
future payment the right to drawback only on the number of barrels of
raw material computed by subtracting from Line E the larger of Lines A
or B, of a given Exhibit E. It is further understood that this right to
future payment can be claimed only against products concurrently
producible with the products listed in Column 21, in the quantities
shown in Column 22 of such Exhibit E. Such residual right can be
transferred to another refinery of the same refiner only when Line B of
Exhibit E is larger than Line A. Unless the number of residual barrels
is specifically computed and rights thereto are expressly reserved on
Exhibit E, such residual rights shall be deemed waived. The procedure
the manufacturer or producer shall follow in preparing drawback entries
claiming this residual right is illustrated in the attached sample
Exhibit E-1. It is understood that claims involving residual rights
shall be filed only at the port where the Exhibit E reserving such right
was filed.

K. Inventory Procedures

The manufacturer or producer realizes that inventory control is of
major importance. In accordance with the normal accounting procedures of
the manufacturer or producer, each refinery prepares a monthly stock and
yield report, which accounts for inventories,

[[Page 594]]

production and disposals from time of receipt to time of disposition.
This provides an audit trail of all products.
The above-noted records will provide the required audit trail from
the initial source documents to the drawback claims of the manufacturer
or producer and will support adherence with the requirements discussed
under the heading PROCEDURES AND RECORDS MAINTAINED.

L. Basis of Claim for Drawback

The amount of raw material on which drawback may be based shall be
computed by multiplying the quantity of each product exported by the
drawback factor for that product. The amount of any one type and class
of raw material which may be designated as the basis for drawback on the
exported products produced at a given refinery and covered by a drawback
entry shall not exceed the quantity of such raw material used at the
refinery during the abstract period or periods from which the exported
products were produced. The quantity of raw material to be designated as
the basis for drawback on exported products must be at least as great as
the quantity of raw material of the same type and class which would be
required to produce the exported products in the quantities exported.

M. Agreements

The manufacturer or producer specifically agrees that it will:
1. Comply fully with the terms of this general ruling when claiming
drawback;
2. Open its refinery and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this application;
4. Keep this application current by reporting promptly to the
drawback office which liquidates its claims any changes in the
information required by the General Instructions of this Appendix to be
included therein (I. General Instructions, 1 through 9) or the corporate
name or corporate organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

[[Page 595]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.000

[[Page 596]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.001

[[Page 597]]

Exhibit C.--Inventory Control Sheet: ABC Oil Co., Inc.; Beaumont, Texas Refinery, Period from January 1, 1995 to January 31, 1995
[All quantities exclude non-petroleum additives]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aviation gasoline Residual oils Lubricating oils Petrochemicals, all
------------------------------------------------------------------ other
---------------------
Bbls. Drawback Bbls. Drawback Bbls. Drawback Drawback
factor factor factor Bbls. factor
--------------------------------------------------------------------------------------------------------------------------------------------------------
(10) Opening Inventory.......................................... 11,218 1.00126 21,221 .45962 9,242 4.52178 891 1.00244
(11) Production................................................. 108,269 1.01300 308,002 .43642 292,492 4.64041 7,996 1.07895
(11-A) Receipts................................................. ......... ......... ......... ......... ......... ......... ......... .........
(12) Exports.................................................... 11,218 1.00126 21,221 .45962 8,774 4.52178 195 1.00244
176 1.01300 104,397 .43642 ......... ......... ......... .........
(13) Drawback Deliveries........................................ ......... ......... ......... ......... ......... ......... 696 1.00244
......... ......... ......... ......... ......... ......... 319 1.07895
(14) Domestic Shipments......................................... 97,863 1.01300 180,957 .43642 468 4.52178 6,867 1.07895
......... ......... ......... ......... 278,286 4.64041 ......... .........
(15) Closing Inventory.......................................... 10,230 1.01300 22,648 .43642 14,206 4.64041 810 1.07895
--------------------------------------------------------------------------------------------------------------------------------------------------------
Line (10)--Opening inventory from previous period's closing inventory.
Line (11)--From production period under consideration.
Line (11-A)--Product received from other sources.
Line (12)--From earliest on hand (inventory or production). Totals from drawback entry or entries recapitulated (see column 18).
Line (13)--Deliveries for export or for designation against further manufacture--earliest on hand after exports are deducted.
Line (14)--From earliest on hand after lines (12) and (13) are deducted.
Line (15)--Balance on hand.

[[Page 598]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.002

[[Page 599]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.003

[[Page 600]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.004

[[Page 601]]

Exhibit E (Combination).--Producibility Test for Products Exported (Including Drawback Deliveries) ABC Oil Co.,
Inc.; Beaumont, Texas Refinery, Period From January 1, 1995 to January 31, 1995
[Type and Class of Raw Material Designated--Crude, Class III]
----------------------------------------------------------------------------------------------------------------
(24) Quantity of
raw material of (20)
(22) (23) type and class (19) Crude
(21) Product Quantity Industry designated needed Drawback allowed
in barrels standard to produce factor for
(%) product per drawback
barrel
----------------------------------------------------------------------------------------------------------------
Aviation Gasoline \1\........................ \1\ 11,218 40 28,045 1.00126 11,232
\1\ 176 40 440 1.01300 178
Residual Oils \1\............................ \1\ 21,221 83 25,567 .45962 9,754
\1\ 104,39 83 125,780 .43642 45,561
7
Lubricating Oils \1\......................... \1\ 8,774 50 17,548 4.52178 39,674
Petrochemicals, Other \1\.................... \1\ 195 29 672 1.00244 195
Petrochemicals, Other \2\.................... \2\ 696 29 2,400 1.00244 698
Petrochemicals, Other \2\.................... \2\ 319 29 1,100 1.07895 344
------------------------------------------------------------------
Total.................................. 146,996 .......... ................. .......... 107,636
----------------------------------------------------------------------------------------------------------------
\1\ Exports.
\2\ Drawback deliveries.
A--Crude allowed (column 20: 107,636 bbls. (106,594 for export, plus 1,042 for drawback deliveries)).
B--Total quantity exported (including drawback deliveries) (column 22): 146,996.
C--Largest quantity of raw material needed to produce an individual exported product (see column 24): 151,347.
D--The excess of raw material over the largest of lines A, B, or C, required to produce concurrently on a
practical operating basis, using the most efficient processing equipment existing within the domestic
industry, the exported articles (including drawback deliveries) in the quantities exported (or delivered):
None.
E--Minimum quantity of raw material required to be designated (which is A, B, or C, whichever is largest, plus
D, if applicable): 151,347 bbs.
I hereby certify that all the above drawback deliveries and products exported by the Beaumont refinery of ABC
Oil Co., Inc. during the period from January 1, 1995 to January 31, 1995, could have been produced
concurrently on a practical operating basis from 151,347 barrels of imported Class III crude against which
drawback is claimed.

[[Page 602]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.005

[[Page 603]]

Exhibit F.--Designations for Drawback Claim, ABC Oil Co., Inc.; Beaumont, Texas Refinery
[Period From January 1, 1995 to January 31, 1995]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Quantity
of
Certificate of delivery No. Entry No. Date of Kind of materials materials Date Date consumed Rate of
importation in received duty
barrels
--------------------------------------------------------------------------------------------------------------------------------------------------------
26192 04/13/93 Class III Crude............... 75,125 04/13/93 May 1993................ $.1050
23990 08/04/94 ......do...................... 37,240 08/04/94 Oct. 1994............... .1050
3155................................. 22517 10/05/94 ......do...................... 38,982 10/05/94 Nov. 1994............... .1050
--------------------------------------------------------------------------------------------------------------------------------------------------------

X. General Manufacturing Drawback Ruling under 19 U.S.C. 1313(b) for
Piece Goods (T.D. 83-73)

A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback Duty-Paid, Duty-Free or
Products ¹ to be Designated as the Domestic Merchandise of the
Basis for Drawback on the Exported Same Kind and Quality as that
Products. Designated which will be Used
in the Production of the
Exported Products.
Piece goods............................ Piece goods.

¹ Drawback products are those produced in the United States in
accordance with the drawback law and regulations. Such products have
``dual status'' under 19 U.S.C. 1313(b). They may be designated as the
basis for drawback and also may be deemed to be domestic merchandise.

The piece goods used in manufacture will be the same kind and
quality as the piece goods designated as the basis of claim for
drawback, and are used interchangeably without change in manufacturing
processes or resultant products (including, if applicable, multiple
products), or wastes. Some tolerances between imported-designated piece
goods and the used-exported piece goods will be permitted to accommodate
variations which are normally found in piece goods. These tolerances are
no greater than the tolerances generally allowed in the industry for
piece goods of the same kind and quality as follows:
1. A 4% weight tolerance so that the piece goods used in manufacture
will be not more than 4% lighter or heavier than the imported piece
goods which will be designated;
2. A tolerance of 4% in the aggregate thread count per square inch
so that the piece goods used in manufacture will have an aggregate
thread count within 4%, more or less of the aggregate thread count of
the imported piece goods which will be designated. In each case, the
average yarn number of the domestic piece goods will be the same or
greater than the average yarn number of the imported piece goods
designated, and in each case, the substitution and tolerance will be
employed only within the same family of fabrics, i.e., print cloth for
print cloth, gingham for gingham, greige for greige, dyed for dyed,
bleached for bleached, etc. The piece goods used in manufacture of the
exported articles will be designated as containing the identical
percentage of identical fibers as the piece goods designated as the
basis for allowance of drawback; for example, piece goods containing 65%
cotton and 35% dacron will be designated against the use of piece goods
shown to contain 65% cotton and 35% dacron. The actual fiber composition
may vary slightly from that described on the invoice or other acceptance
of the fabric as having the composition described on documents in
accordance with trade practices. The substituted piece goods used in the
manufacture of articles for exportation with drawback will be so similar
in quality to the imported piece goods designated for the basis of
allowance of drawback, that the piece goods used, if imported, would
have been subject to the same or greater amount of duty as was paid on
the imported designated piece goods. Differences in value resulting from
factors other than quality, as for example, price fluctuations, will not
preclude an allowance of drawback.

B. Exported Articles on Which Drawback Will Be Claimed

Finished piece goods.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture or produce
articles for the account of another or another manufacturer or producer
may manufacture or produce for the account of the manufacturer or
producer under contract within the principal and agency relationship
outlined in T.D.'s. 55027(2) and 55207(1) (see Sec. 191.9 of this part).

[[Page 604]]

D. Process of Manufacture or Production

Piece goods are subject to any one of the following finishing
productions:
1. Bleaching,
2. Mercerizing,
3. Dyeing,
4. Printing,
5. A combination of the above, or
6. Any additional finishing processes.

E. Multiple Products

Not applicable.

F. Waste

Rag waste may be incurred. No drawback is payable on any waste which
results from the manufacturing operation. Unless the claim for drawback
is based on the quantity of merchandise appearing in the exported
articles, the records of the manufacturer or producer will show the
quantity of rag waste, if any, and its value. If necessary to establish
the quantity of merchandise (eligible piece goods) appearing in the
exported articles, such waste records will also be kept. In instances
where rag waste occurs and it is impractical to account for the actual
quantity of rag waste incurred, it may be assumed that such rag waste
constituted 2% of the piece goods put into the finishing processes.

G. Shrinkage, Gain, and Spoilage

Unless the claim for drawback is based on the quantity of
merchandise appearing in the exported articles, the records of the
manufacturer or producer will show the yardage lost by shrinkage or
gained by stretching during manufacture or production, and the quantity
of remnants resulting and of spoilage incurred, if any. If necessary to
establish the quantity of merchandise (eligible piece goods) appearing
in the exported articles, such records for shrinkage, gain and spoilage
will also be kept.

H. Tradeoff

I. Procedures and Records Maintained

Records will be maintained to establish:
1. The identity and specifications of the designated merchandise;
2. The quantity of merchandise of the same kind and quality as the
designated merchandise ² used to produce the exported
articles;
---------------------------------------------------------------------------

3. That, within 3 years after receiving the designated merchandise
at its factory, the manufacturer or producer used the merchandise to
produce articles. During the same 3-year period, the manufacturer or
producer produced ³ the exported articles.
---------------------------------------------------------------------------

\3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

J. Inventory Procedures

K. Basis of Claim for Drawback

Drawback will be claimed on the quantity of eligible piece goods
used in producing the exported articles only if there is no waste or
valueless or unrecovered waste in the manufacturing operation. Drawback
may be claimed on the quantity of eligible piece goods that appears in
the exported articles, regardless of whether there is waste, and no
records of waste need be maintained. If there is valuable waste
recovered from the manufacturing operation and records are kept which
show the quantity and value of the waste from each lot of piece goods,
drawback may be claimed on the quantity of eligible piece goods used to
produce the exported articles less the amount of piece goods which the
value of the waste would replace.

L. General Requirements

[[Page 605]]

predicated in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

XI. General Manufacturing Drawback Ruling under 19 U.S.C. 1313(b) for
Raw Sugar (T.D. 83-59)

Drawback may be allowed under 19 U.S.C. 1313(b) upon the exportation
of hard or soft refined sugars and sirups manufactured from raw sugar,
subject to the following special requirements:
A. The drawback allowance shall not exceed 99 percent of the duty
paid on a quantity of raw sugar designated by the refiner which contains
a quantity of sucrose not in excess of the quantity required to
manufacture the exported sugar or sirup, ascertained as provided in this
general rule.
B. The refined sugars and sirups shall have been manufactured with
the use of duty-paid, duty-free, or domestic sugar, or combinations
thereof, within 3 years after the date on which designated sugar was
received by the refiner, and shall have been exported within 5 years
from the date of importation of the designated sugar.
C. All granulated sugar testing by the polariscope 99.5 deg. and
over shall be deemed hard refined sugar. All refined sugar testing by
the polariscope less than 99.5 deg. shall be deemed soft refined sugar.
All ``blackstrap,'' ``unfiltered sirup,'' and ``final molasses'' shall
be deemed sirup.
D. The imported duty-paid sugar selected by the refiner as the basis
for the drawback claim (designated sugar) shall be of the same kind and
quality as that used in the manufacture of the exported refined sugar or
sirup and shall have been used within 3 years after the date on which it
was received by the refiner. Duty-paid sugar which has been used at a
plant of a refiner within 3 years after the date on which it was
received by such refiner may be designated as the basis for the
allowance of drawback on refined sugars or sirups manufactured at
another plant of the same refiner.
E. For the purpose of distributing the drawback, relative values
shall be established between hard refined (granulated) sugar, soft
refined (various grades) sugar, and sirups at the time of separation.
The entire period covered by an abstract shall be deemed the time of
separation of the sugars and sirups covered by such abstract.
F. The sucrose allowance per pound on hard refined (granulated)
sugar established by an abstract, as provided for in this general
ruling, shall be applied to hard refined sugar commercially known as
loaf, cut loaf, cube, pressed, crushed, or powdered sugar manufactured
from the granulated sugar covered by the abstract.
G. The sucrose allowance per gallon on sirup established by an
abstract, as provided for in this general ruling, shall be applied to
sirup further advanced in value by filtration or otherwise, unless such
sirup is the subject of a special manufacturing drawback ruling.
H. As to each lot of imported or domestic sugar used in the
manufacture of refined sugar or sirup on which drawback is to be
claimed, the raw stock records shall show the refiner's raw lot number,
the number and character of the packages, the settlement weight in
pounds, and the settlement polarization. Such records covering imported
sugar shall show, in addition to the foregoing, the import entry number,
date of importation, name of importing carrier, country of origin, the
Government weight, and the Government polarization.
I. The melt records shall show the date of melting, the number of
pounds of each lot of raw sugar melted, and the full analysis at
melting.
J. There shall be kept a daily record of final products boiled
showing the date of the melt, the date of boiling, the magma filling
serial number, the number of the vacuum pan or crystallizer filling, the
date worked off, and the sirup filling serial number.
K. The sirup manufacture records shall show the date of boiling, the
period of the melt, the sirup filling serial number, the number of
barrels in the filling, the magma filling serial number, the quantity of
sirup, its disposition in tanks or barrels and the refinery serial
manufacture number.
L. The refined sugar stock records shall show the refinery serial
manufacture number, the period of the melt, the date of manufacture, the
grade of sugar produced, its polarization, the number and kind of
packages, and the net weight. When soft sugars are manufactured, the
commercial grade number and quantity of each shall be shown.
M. Each lot of hard or soft refined sugar and each lot of sirup
manufactured, regardless of the character of the containers or vessels
in which it is packed or stored, shall be marked immediately with the
date of manufacture and the refinery manufacture number applied to it in
the refinery records provided for and shown in the abstract, as provided
for in this general ruling, from such

[[Page 606]]

records. If all the sugar or sirup contained in any lot manufactured is
not intended for exportation, only such of the packages as are intended
for exportation need be marked as prescribed above, provided there is
filed with the drawback office immediately after such marking a
statement showing the date of manufacture, the refinery manufacture
number, the number of packages marked, and the quantity of sugar or
sirup contained therein. No drawback shall be allowed in such case on
any sugar or sirup in excess of the quantity shown on the statement as
having been marked. If any packages of sugar or sirup so marked are
repacked into other containers, the new containers shall be marked with
the marks which appeared on the original containers and a revised
statement covering such repacking and remarking shall be filed with the
drawback office. If sirups from more than one lot are stored in the same
tank, the refinery records shall show the refinery manufacture number
and the quantity of sirup from each lot contained in such tank.
N. An abstract from the foregoing records covering manufacturing
periods of not less than 1 month nor more than 3 months, unless a
different period shall have been authorized, shall be filed when
drawback is to be claimed on any part of the refined sugar or sirup
manufactured during such period. Such abstract shall be filed by each
refiner with the drawback office where drawback claims are filed on the
basis of this general ruling. Such abstract shall consist of: (1) A raw
stock record (accounting for Refiner's raw lot No., Import entry No.,
Packages No. and kind, Pounds, Polarization, By whom imported or
withdrawn, Date of importation, Date of receipt by refiner, Date of
melt, Importing carrier, Country of origin); (2) A melt record [number
of pounds in each lot melted] (accounting for Lot No. Pounds, and
Polarization degrees and pounds sucrose); (3) Sirup stock records
(accounting for Date of boiling, Refinery serial manufacture No.,
Quantity of sirup in gallons, and Pounds sucrose contained therein); (4)
Refined sugar stock record (accounting for Refinery serial production
No., Date of manufacture, Hard or soft refined, Polarization and No.,
Net weight in pounds); (5) Recapitulation (consisting of (in pounds):
(a) sucrose in process at beginning of period, (b) sucrose melted during
period, (c) sucrose in process at end of period, (d) sucrose used in
manufacture, and (e) sucrose contained in manufacture, in which item (a)
plus item (b), minus item (c), should equal item (d)); and (6) A
statement as follows:
I, --------, the -------- refiner at the -------- refinery of ------
--, located at --------, do solemnly and truly declare that each of the
statements contained in the foregoing abstract is true to the best of my
knowledge and belief and can be verified by the refinery records, which
have been kept in accordance with Treasury Decision 83-59 and Appendix A
of 19 CFR Part 191 and which are at all times open to the inspection of
Customs.
. Date_________________________________________________________________
. Signature____________________________________________________________
O. The refiner shall file with each abstract a statement, showing
the average market values of the products specified in the abstract and
including a statement as follows:
I, --------, (Official capacity) of the -------- (Refinery), do
solemnly and truly declare that the values shown above are true to the
best of my knowledge and belief, and can be verified by our records.
Date__________________________________________________________________
Signature_____________________________________________________________
P. At the end of each calendar month the refiner shall furnish to
the drawback office a statement showing the actual sales of sirup and
the average market values of refined sugars for the calendar month.
Q. The sucrose allowance to be applied to the various products based
on the abstract and statement provided for in this general ruling shall
be in accordance with the example set forth in Treasury Decision 83-59.
R. Certificates of manufacture and delivery under this general
ruling shall be in the following form:
Certificate of manufacture and delivery--Sugar and Sirup No. ------
--
Certificate of manufacture and delivery of -------- manufactured by
-------- under abstract No. -------- filed at the port of --------.

------------------------------------------------------------------------
Description Quantity Polarization
------------------------------------------------------------------------

------------------------------------------------------------------------

Designation of Imported Sugar
--------------------------------------------------------------------------------------------------------------------------------------------------------
By whom imported or Quantity of
Import entry No. withdrawn from Name of importing When Where imported raw sugar Polarization Sucrose
warehouse carrier imported (pounds) (pounds)
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 607]]

--------------------------------------------------------------------------------------------------------------------------------------------------------

I, --------, the -------- of --------, located at --------, declare
that the sugar (or sirup) described in the within certificate of
manufacture and delivery was manufactured by said company at its
refinery at -------- and is part of the sugar (or sirup) covered by
abstract No. ------------, filed at the port of -------- and was
delivered to -------- on or about --------, ------------, and that no
other certificate of manufacture and delivery has been issued covering
the above merchandise; that, subject to 19 U.S.C. 1508 and 1313(t), the
refinery and other records of the company verifying the statements
contained in said abstract are now and at all times hereafter will be
open to inspection by Customs.
I further declare that the above-designated imported sugar (upon
which the duties have been paid) was received by said company on ------
-- and was used in the manufacture of sugar and sirup on --------.
. Date_________________________________________________________________
. Signature____________________________________________________________
S. Drawback entries under this general ruling shall be on Customs
Form 7551 and, in addition to the information required thereon, shall
state the polarization in degrees and the sucrose in pounds for the
designated imported sugar. Drawback claims under this general ruling
shall include a statement as follows:
I, --------, the -------- of --------, located at -------- declare
that the sugar (or sirup) described in this entry, was manufactured by
said company at its refinery at -------- [or, if the claim is based on a
certificate of manufacture and delivery, was manufactured by -------- at
its refinery at -------- for which the accompanying certificate of
manufacture and delivery was received by this company] and is part of
the sugar (or sirup) covered by abstract No. --------, filed at the port
of --------; that, subject to 19 U.S.C. 1508 and 1313(t), the refinery
and other records of the company verifying the statements contained in
said abstract are now and at all times hereafter will be open to
inspection by Customs. I further declare that the above-designated
imported sugar (upon which the duties have been paid) was received by
said company on -------- and was used in the manufacture of sugar and
sirup during the period covered by abstract No. --------, Customs No. --
------, on file with the port director at --------.
I further declare that the sugar or sirup specified therein was
exported as stated in the entry.
. Date_________________________________________________________________
. Signature____________________________________________________________
T. General Statement. The refiner manufactures or produces for its
own account. The refiner may manufacture or produce articles for the
account of another or another manufacturer or producer may manufacture
or produce for the refiner's account under contract within the principal
and agency relationship outlined in T.D.'s 55027(2) and 55207(1) (see
Sec. 191.9 of this part).
U. Waste. No drawback is payable on any waste which results from the
manufacturing operation. Unless drawback claims are based on the
``appearing in'' method, records will be maintained to establish the
value (or the lack of value), the quantity, and the disposition of any
waste that results from manufacturing the exported articles. If no waste
results, records to establish that fact will be maintained.
V. Loss or Gain. The refiner will maintain records showing the
extent of any loss or gain in net weight or measurement of the sugar
caused by atmospheric conditions, chemical reactions, or other factors.
W. Tradeoff. The use of any domestic merchandise acquired in
exchange for imported merchandise that meets the same kind and quality
requirements provided for in this general ruling shall be treated as use
of the imported merchandise if no certificate of delivery is issued
covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance
with the applicable regulations and rulings.
X. Procedures And Records Maintained. Records will be maintained to
establish:
1. The identity and specifications of the designated merchandise;
2. The quantity of merchandise of the same kind and quality as the
designated merchandise \1\ used to produce the exported articles; and
---------------------------------------------------------------------------

\1\ If claims are to be made on an ``appearing in'' basis, the
remainder of this sentence should read ``appearing in the exported
articles produced.''
---------------------------------------------------------------------------

3. That, within 3 years after receiving the designated merchandise
at its factory, the refiner used the designated merchandise to produce
articles. During the same 3-year period, the refiner produced\2\ the
exported articles.

[[Page 608]]

To obtain drawback the claimant must establish that the completed
articles were exported within 5 years after the importation of the
imported merchandise. Records establishing compliance with these
requirements will be available for audit by Customs during business
hours. Drawback is not payable without proof of compliance.
Y. General requirements. The refiner will:
1. Comply fully with the terms of this general ruling when claiming
drawback;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

XII. General Manufacturing Drawback Ruling under 19 U.S.C. 1313(b) for
Steel (T.D. 81-74)

A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback Duty-Paid, Duty-Free or
Products \1\ to be Designated as the Domestic Merchandise of the
Basis for Drawback on the Exported Same Kind and Quality as that
Products. Designated which will be Used
in the Production of the
Exported Products.
Steel of one general class, e.g., an Steel of the same general
ingot, falling within one SAE, AISI, class, specification, and
or ASTM \2\ specification and, if the grade as the steel in the
specification contains one or more column immediately to the left
grades, falling within one grade of hereof.
the specification.

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations. Such products have
``dual status'' under section 1313(b). They may be designated as the
basis for drawback and also may be deemed to be domestic merchandise.
\2\ Standards set by the Society of Automotive Engineers (SAE), the
American Iron and Steel Institute (AISI), or the American Society for
Testing and Materials (ASTM).

1. The duty-paid, duty-free, or domestic steel used instead of the
imported, duty-paid steel (or drawback products) will be interchangeable
for manufacturing purposes with the duty-paid steel. To be
interchangeable a steel must be able to be used in place of the
substituted steel without any additional processing step in the
manufacture of the article on which drawback is to be claimed.
---------------------------------------------------------------------------

\2\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

2. Because the duty-paid steel (or drawback products) that is to be
designated as the basis for drawback is dutiable according to its value,
the amount of duty can vary with its size (gauge, width, or length) or
composition (e.g., chrome content). If such variances occur, designation
will be by ``price extra'', and in no case will drawback be claimed in a
greater amount than that which would have accrued to that steel used in
manufacture of or appearing in the exported articles. Price extra is not
available for coated or plated steel, covered in paragraph 5, infra,
insofar as the coating or plating is concerned.
3. The duty-paid steel (or drawback products) will be so similar in
quality to the steel used to manufacture the articles on which drawback
will be claimed that the steel so used, if imported, would be
classifiable in the same tariff subheading number and at the same rate
of duty as the duty-paid imported steel.
4. Any fluctuation in market value caused by a factor other than
quality does not affect drawback.
5. If the steel is coated or plated with a base metal, in addition
to meeting the requirements for uncoated or unplated steel set forth in
the parallel columns, the base-metal coating or plating on the duty-
paid, duty-free, or domestic steel used in place of the duty-paid steel
(or drawback products) will have the same composition and thickness as
the coating or plating on the duty-paid steel. If the coated or plated
duty-paid steel is within a SAE, AISI, ASTM specification, any duty-
paid, duty-free, or domestic coated or plated steel covered by the same
specification and grade (if two or more grades are in the specification)
is considered to meet this criterion for ``same kind and quality.''

[[Page 609]]

B. Exported Articles on Which Drawback Will Be Claimed

The exported articles will have been manufactured in the United
States using steels described in the parallel columns above.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture or produce
articles for the account of another or another manufacturer or producer
may manufacture or produce for the account of the manufacturer or
producer under contract within the principal and agency relationship
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

D. Process of Manufacture or Production

The steel described in the parallel columns will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.

E. Multiple Products

Not applicable.

F. Waste

No drawback is payable on any waste which results from the
manufacturing operation. Unless the claim for drawback is based on the
quantity of steel appearing in the exported articles, records will be
maintained to establish the value (or the lack of value), the quantity,
and the disposition of any waste that results from manufacturing the
exported articles. If no waste results, records to establish that fact
will be maintained.

G. Loss or Gain

The manufacturer or producer will maintain records showing the
extent of any loss or gain in net weight or measurement of the steel
caused by atmospheric conditions, chemical reactions, or other factors.

H. Tradeoff

I. Procedures and Records Maintained

Records will be maintained to establish:
1. The identity and specifications of the designated merchandise;
2. The quantity of merchandise of the same kind and quality as the
designated merchandise \3\ used to produce the exported articles;
---------------------------------------------------------------------------

\3\ If claims are to be made on an ``appearing in'' basis, the
remainder of this sentence should read ``appearing in the exported
articles produced.''
---------------------------------------------------------------------------

3. That, within 3 years after receiving the designated merchandise
at its factory, the manufacturer or producer used the merchandise to
produce articles. During the same 3-year period, the manufacturer or
producer produced \4\ the exported articles.
To obtain drawback the claimant must establish that the completed
articles were exported within 5 years after the importation of the
imported merchandise. Records establishing compliance with these
requirements will be available for audit by Customs during business
hours. Drawback is not payable without proof of compliance.
---------------------------------------------------------------------------

\4\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

J. Inventory Procedures

K. Basis of Claim for Drawback

Drawback will be claimed on the quantity of steel used in producing
the exported articles only if there is no waste or valueless or
unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible steel that appears in the exported
articles, regardless of whether there is waste, and no records of waste
need be maintained. If there is valuable waste recovered from the
manufacturing operation and records are kept which show the quantity and
value of the waste from each lot of steel, drawback may be claimed on
the quantity of eligible steel used to produce the exported articles
less the amount of that steel which the value of the waste would
replace.

L. General Requirements

[[Page 610]]

4. Keep its letter of notification to operate under this general
ruling current by reporting promptly to the drawback office which
liquidates its claims any changes in the information required by the
General Instructions of this Appendix to be included therein (I. General
Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for
Sugar (T.D. 81-92)

A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback Duty-Paid, Duty-Free or
Products \1\ to be Designated as the Domestic Merchandise of the
Basis for Drawback on the Exported Same Kind and Quality as that
Products. Designated which will be Used
in the Production of the
Exported Products.
1. Granulated or liquid sugar for 1. Granulated or liquid sugar
manufacturing, containing sugar solids for manufacturing, containing
of not less than 99.5 sugar degrees. sugar solids of not less than
99.5 sugar degrees.
2. Granulated or liquid sugar for 2. Granulated or liquid sugar
manufacturing, containing sugar solids for manufacturing, containing
of less than 99.5 sugar degrees. sugar solids of less than 99.5
sugar degrees.

The sugars listed above test within three-tenths of a degree on the
polariscope. Sugars in each column are completely interchangeable with
the sugars directly opposite and designation will be made on this basis
only. The designated sugar on which claims for drawback will be based
will be so similar in quality to the sugar used in manufacture of the
products exported with drawback that the sugar used in manufacture
would, if imported, be subject to the same amount of duty paid on a like
quantity of designated sugar. Differences in value resulting from
factors other than quality, such as market fluctuation, will not affect
the allowance of drawback.

B. Exported Articles on Which Drawback Will Be Claimed

Edible substances (including confectionery) and/or beverages and/or
ingredients therefor.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture or produce
articles for the account of another or another manufacturer or producer
may manufacture or produce for the account of the manufacturer or
producer under contract within the principal and agency relationship
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

D. Process of Manufacture or Production

The sugars are subjected to one or more of the following operations
to form the desired product(s):
1. Mixing with other substances,
2. Cooking with other substances
3. Boiling with other substances,
4. Baking with other substances,
5. Additional similar processes

E. Multiple Products

Not applicable.

F. Waste

No drawback is payable on any waste which results from the
manufacturing operation. Unless the claim for drawback is based on the
quantity of sugar appearing in the exported articles, records will be
maintained to establish the value (or the lack of value), the quantity,
and the disposition of any waste that results from manufacturing the
exported articles. If no waste results, records to establish that fact
will be maintained.

G. Loss or Gain

The manufacturer or producer will maintain records showing the
extent of any loss or gain in net weight or measurement of the sugar
caused by atmospheric conditions, chemical reactions, or other factors.

H. Tradeoff

The use of any domestic merchandise acquired in exchange for
imported merchandise that meets the same kind and quality specifications
contained in the parallel columns

[[Page 611]]

of this general ruling shall be treated as use of the imported
merchandise if no certificate of delivery is issued covering the
imported merchandise (19 U.S.C. 1313(k)) upon compliance with the
applicable regulations and rulings.

I. Procedures And Records Maintained

3. That, within 3 years after receiving the designated merchandise
at its factory, the manufacturer or producer used the merchandise to
produce articles. During the same 3-year period, the manufacturer or
producer produced \3\ the exported articles.
To obtain drawback the claimant must establish that the completed
articles were exported within 5 years after the importation of the
imported merchandise. Records establishing compliance with these
requirements will be available for audit by Customs during business
hours. Drawback is not payable without proof of compliance.
---------------------------------------------------------------------------

\3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

J. Inventory Procedures

K. Basis of Claim for Drawback

Drawback will be claimed on the quantity of sugar used in producing
the exported articles only if there is no waste or valueless or
unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible sugar that appears in the exported
articles regardless of whether there is waste, and no records of waste
need be maintained. If there is valuable waste recovered from the
manufacturing operation and records are kept which show the quantity and
value of the waste, drawback may be claimed on the quantity of eligible
material used to produce the exported articles less the amount of that
sugar which the value of the waste would replace.

L. General Requirements

The manufacturer or producer will:
1. Comply fully with the terms of this general ruling when claiming
drawback;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this general ruling;
4. Keep its letter of notification of intent to operate under this
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by
the General Instructions of this Appendix to be included therein (I.
General Instructions, 1 through 9) or the corporate name or corporate
organization by succession or reincorporation;
5. Keep a copy of this general ruling on file for ready reference by
employees and require all officials and employees concerned to
familiarize themselves with the provisions of this general ruling; and
6. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this general ruling.

XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for
Woven Piece Goods (T.D. 83-84)

Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation
of bleached, mercerized, printed, dyed, or redyed piece goods
manufactured or produced by any one or a combination of the foregoing
processes with the use of imported woven piece goods, subject to the
following special requirements:

A. Imported Merchandise or Drawback Products \1\ Used

Imported merchandise or drawback products (woven piece goods) are
used in the manufacture of the exported articles upon which drawback
claims will be based.
---------------------------------------------------------------------------

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

B. Exported Articles on Which Drawback Will Be Claimed

Exported articles on which drawback will be claimed will be
manufactured in the United States using imported merchandise or drawback
products.

C. General Statement

The manufacturer or producer manufactures or produces for its own
account. The manufacturer or producer may manufacture

[[Page 612]]

or produce articles for the account of another or another manufacturer
or producer may manufacture or produce for the account of the
manufacturer or producer under contract within the principal and agency
relationship outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of
this part).

D. Process of Manufacture or Production

The imported merchandise or drawback products will be used to
manufacture or produce articles in accordance with Sec. 191.2(q) of this
part.
The piece goods used in manufacture or production under this general
manufacturing drawback ruling may also be subjected to one or more
finishing processes. Drawback shall not be allowed under this general
manufacturing drawback ruling when the process performed results only in
the restoration of the merchandise to its condition at the time of
importation.

E. Multiple Products

Not applicable.

F. Waste

Rag waste may be incurred. No drawback is payable on any waste which
results from the manufacturing operation. Unless the claim for drawback
is based on the quantity of merchandise appearing in the exported
articles, the records of the manufacturer or producer will show the
quantity of rag waste, if any, its value, and its disposition. If
necessary to establish the quantity of merchandise (eligible piece
goods) appearing in the exported articles, such waste records will also
be kept. If no waste results, records will be maintained to establish
that fact. In instances where rag waste occurs and it is impractical to
account for the actual quantity of rag waste incurred, it may be assumed
that such rag waste constituted 2% of the woven piece goods put into
process.

G. Shrinkage, Gain, and Spoilage

Unless the claim for drawback is based on the quantity of
merchandise appearing in the exported articles, the records of the
manufacturer or producer will show the yardage lost by shrinkage or
gained by stretching during manufacture, and the quantity of remnants
resulting and of spoilage incurred, if any. If necessary to establish
the quantity of merchandise (eligible piece goods) appearing in the
exported articles, such records for shrinkage, gain, and spoilage will
also be kept.

H. Procedures and Records Maintained

Records will be maintained to establish:
1. That the exported articles on which drawback is claimed were
produced with the use of the imported merchandise; and
2. The quantity of imported merchandise \2\ used in producing the
exported articles.
---------------------------------------------------------------------------

I. Inventory Procedures

J. Basis of Claim for Drawback

Drawback will be claimed on the quantity of merchandise used in
producing the exported articles only if there is no waste or valueless
or unrecovered waste in the manufacturing operation. Drawback may be
claimed on the quantity of eligible merchandise that appears in the
exported articles, regardless of whether there is waste, and no records
of waste need be maintained. If there is valuable waste recovered from
the manufacturing operation and records are kept which show the quantity
and value of the waste, drawback may be claimed on the quantity of
eligible material used to produce the exported articles, less the amount
of that merchandise which the value of the waste would replace. (If
remnants and/or

[[Page 613]]

spoilage occur during manufacture or production, the quantity of
imported merchandise used shall be determined by deducting from the
quantity of piece goods received and put into manufacture or production
the quantity of such remnants and/or spoilage. The remaining quantity
shall be reduced by the quantity thereof which the value of the rag
waste, if any, would replace.)

K. General Requirements

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 13105, Mar. 17, 1998; 63
FR 15291, Mar. 31, 1998; 63 FR 65060, Nov. 25, 1998; T.D. 02-16, 67 FR
16638, Apr. 8, 2002]

Appendix B to Part 191--Sample Formats for Applications for Specific
Manufacturing Drawback Rulings

Table of Contents

I. General.
II. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(a) and 1313(b) (Combination).
III. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(b).
IV. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(d).
V. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(g).

I. General

These sample formats for applications for specific manufacturing
drawback rulings must be submitted to and reviewed and approved by
Customs Headquarters. A specific manufacturing drawback ruling consists
of the letter of approval that Customs issues to the applicant, a
synopsis of which is published in the Customs Bulletin, as provided in
19 CFR 191.8. In these application formats, remarks in parentheses and
footnotes are for explanatory purposes only and should not be copied.
Other material should be quoted directly in the applications.

II. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(a) and 1313(b) (Combination).

COMPANY LETTERHEAD (Optional)

U.S. Customs Service, Duty and Refund Determination Branch, 1300
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
Dear Sir: We, (Applicant's Name), a (State, e.g. Delaware)
corporation (or other described entity) submit this application for a
specific manufacturing drawback ruling that our manufacturing operations
qualify for drawback under title 19, United States Code, Secs. 1313 (a)
& (b), and part 191 of the Customs Regulations. We request that the
Customs Service authorize drawback on the basis of this application.

NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

(Section 191.8(a) of the Customs Regulations provides that each
manufacturer or producer of articles intended for exportation with the
benefit of drawback shall apply for a specific manufacturing drawback
ruling, unless operating under a general manufacturing drawback ruling
under Sec. 191.7 of the Customs Regulations. Customs will not approve an
application which shows an unincorporated division or company as the
applicant (see Sec. 191.8(a)).)

LOCATION OF FACTORY

(Give the address of the factory(s) where the process of manufacture
or production will take place. If the factory is a different legal
entity from the applicant, so state and indicate if operating under an
Agent's general manufacturing drawback ruling.)

PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

[[Page 614]]

power of attorney for the company may sign. A Customs power of attorney
may also be given to a licensed Customs broker. This heading should be
changed to Names of Partners or Proprietor in the case of a partnership
or sole proprietorship, respectively (see footnote at end of this sample
format for persons who may sign applications for specific manufacturing
drawback rulings).)

CUSTOMS OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

(The 8 offices where drawback claims can be filed are located at:
Boston, MA; New York, NY; Miami, FL; New Orleans, LA; Houston, TX; Long
Beach, CA; Chicago, IL; San Francisco, CA)
(An original application and two copies must be filed. If the applicant
intends to file drawback claims at more than one drawback office, one
additional copy of the application must be furnished for each additional
office indicated.)

GENERAL STATEMENT

(The following questions must be answered:)
1. Who will be the importer of the designated merchandise?
(If the applicant will not always be the importer of the designated
merchandise, does the applicant understand its obligations to obtain the
appropriate certificates of delivery (19 CFR 191.10), certificates of
manufacture and delivery (19 CFR 191.24), or both?)
2. Will an agent be used to process the designated or the
substituted merchandise into articles?
(If an agent is to be used, the applicant must state it will comply with
T.D.'s 55027(2) and 55207(1) and Sec. 191.9, as applicable, and that its
agent will submit a letter of notification of intent to operate under
the general manufacturing drawback ruling for agents (see Sec. 191.7 and
Appendix A) or an application for a specific manufacturing drawback
ruling (see Sec. 191.8 and this Appendix B).)
3. Will the applicant be the exporter?
(If the applicant will not be the exporter in every case but will be the
claimant, the manufacturer must state that it will reserve the right to
claim drawback with the knowledge and written consent of the exporter
(19 CFR 191.82).)
(Since the permission to grant use of the accelerated payment procedure
rests with the Customs office with which claims will be filed, do not
include any reference to that procedure in this application.)

Procedures Under Section 1313(b) (Parallel Columns--``Same Kind and
Quality'')
Imported Merchandise or Drawback Duty-paid, Duty-free or Domestic
Products \1\ to be Designated as Merchandise of the Same Kind and
the Basis for Drawback on the Quality as That Designated Which
Exported Products Will be Used in the Production of
the Exported Products.
1. 1.
2. 2.
3. 3.

(Following the items listed in the parallel columns, a statement will be
made, by the applicant, that affirms the ``same kind and quality'' of
the merchandise. This statement should be included in the application
exactly as it is stated below:)
The imported merchandise which we will designate on our claims will
be so similar in quality to the merchandise used in producing the
exported articles on which we claim drawback that the merchandise used
would, if imported, be subject to the same rate of duty as the imported
designated merchandise.
Fluctuations in the market value resulting from factors other than
quality will not affect the drawback.
(In order to successfully claim drawback it is necessary to prove that
the duty-paid, duty-free or domestic merchandise which is to be
substituted for the imported merchandise is the ``same kind and
quality''. ``Same kind and quality'' does not necessarily mean that the
merchandise is identical. It does mean that the merchandise is of the
same nature or character (``same kind'') and that the merchandise to be
substituted is interchangeable with the imported merchandise with little
or no change in the manufacturing process to produce the same exported
article (``same quality''). In order to enable Customs to rule on ``same
kind and quality'', the application must include a detailed description
of the designated imported merchandise and of the substituted duty-paid,
duty-free or domestic merchandise to be used to produce the exported
articles.)
(It is essential that all the characteristics which determine the
quality of the merchandise are provided in the application in order to
substantiate that the merchandise meets the ``same kind and quality''
statutory requirement. These characteristics should clearly distinguish
merchandise of different qualities. For example, USDA standards; FDA
standards; industry standards, e.g.,

[[Page 615]]

ASTM; concentration; specific gravity; purity; luster; melting point,
boiling point; odor; color; grade; type; hardness; brittleness; etc.
Note that these are only a few examples of characteristics and that each
kind of merchandise has its own set of specifications that characterizes
its quality. If specifications are given with a minimum value, be sure
to include a maximum value. The converse is also true. Often
characteristics are given to Customs on attached specification sheets.
These specifications should not include Material Safety Data sheets or
other descriptions of the merchandise that do not contribute to the
``same kind and quality'' determination. When the merchandise is a
chemical, state the chemical's generic name as well as its trade name
plus any generally recognized identifying number, e.g. CAS number; Color
Index Number, etc.)
(In order to expedite the specific manufacturing drawback ruling
process, it will be helpful if you provide copies of technical
standards/specifications (particularly industry standards such as ASTM
standards) referred to in your application.)
(The descriptions of the ``same kind and quality'' merchandise should be
formatted in the parallel columns. The left-hand column will consist of
the name and specifications of the designated imported merchandise under
the heading set forth above. The right-hand column will consist of the
name and specifications for the duty-paid, duty-free or domestic
merchandise under the heading set forth above.)

EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

PROCESS OF MANUFACTURE OR PRODUCTION

(Drawback under Sec. 1313(b) is not allowable except where a manufacture
or production exists. Manufacture or production is defined, for drawback
purposes, in Sec. 191.2(q). In order to obtain drawback under
Sec. 1313(b), it is essential for the applicant to show use in
manufacture or production by giving a thorough description of the
manufacturing process. This description should include the name and
exact condition of the merchandise listed in the Parallel Columns, a
complete explanation of the processes to which it is subjected in this
country, the effect of such processes, the name and exact description of
the finished article, and the use for which the finished article is
intended. When applicable, give equations of the chemical reactions. The
attachment of a flow chart in addition to the description showing the
manufacturing process is an excellent means of illustrating whether or
not a manufacture or production has occurred. Flow charts can clearly
illustrate if and at what point during the manufacturing process by-
products and wastes are generated.)
(This section should contain a description of the process by which each
item of merchandise listed in the parallel columns above is used to make
or produce every article that is to be exported.)

MULTIPLE PRODUCTS

1. Relative Values

(Some processes result in the separation of the merchandise used in the
same operation into two or more products. List all of the products.
State that you will record the market value of each product at the time
it is first separated in the manufacturing process. If this section is
not applicable to you, then state so.)
Drawback law mandates the assignment of relative values when two or more
products necessarily are produced concurrently in the same operation.
For instance, the refining of flaxseed necessarily produces linseed oil
and linseed husks (animal feed), and drawback must be distributed to
each product in accordance with its relative value. However, the
voluntary election of a steel fabricator, for instance, to use part of a
lot of imported steel to produce automobile doors and part of the lot to
produce automobile fenders does not call for relative value
distribution.)
(The relative value of a product is its value divided by the total value
of all products, whether or not exported. For example, 100 gallons of
drawback merchandise are used to produce 100 gallons of products,
including 60 gallons of product A, 20 gallons of product B, and 20
gallons of product C. At the time of separation, the unit values of
products A, B, and C are $5, $10, and $50 respectively. The relative
value of product A is $300 divided by $1500 or \1/5\. The relative value
of B is \2/15\ and of product C is \2/3\, calculated in the same manner.
This means that \1/5\ of the drawback product payments will be
distributed to product A, \2/15\ to product B, and \2/3\ to product C.)
(Drawback is allowable on exports of any of multiple products, but is
not allowable on exports of valuable waste. In making this distinction
between a product and valuable waste, the applicant should address the
following significant elements: (1) the nature of the material of which
the residue is composed; (2) the value of the residue as compared to the
value of the principal manufactured product and the raw material; (3)
the use to which it is put; (4) its status under the tariff laws, if
imported; (5) whether it is a commodity recognized in commerce; (6)

[[Page 616]]

whether it must be subjected to some process to make it saleable.)

2. Producibility

(Some processes result in the separation of fixed proportions of each
product, while other processes afford the opportunity to increase or
decrease the proportion of each product. An example of the latter is
petroleum refining, where the refiner has the option to increase or
decrease the production of one or more products relative to the others.
State under this heading whether you can or cannot vary the
proportionate quantity of each product.)
(The MULTIPLE PRODUCTS section consists of two sub-sections: Relative
Values and Producibility. If multiple products do not result from your
operation state ``Not Applicable'' for the entire section. If multiple
products do result from your operation Relative Values will always
apply. However, Producibility may or may not apply. If Producibility
does not apply to your multiple product operation state ``Not
Applicable'' for this sub-section.)

WASTE

(Many processes result in residue materials which, for drawback
purposes, are treated as wastes. Describe any residue materials which
you believe should be so treated. If no waste results, include a
positive statement to that effect under this heading.)
(If waste occurs, state: (1) whether or not it is recovered, (2) whether
or not it is valueless, and (3) what you do with it. This information is
required whether claims are made on a ``used in'' or ``appearing in''
basis and regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost
in the process. Valueless wastes are those which may be recovered but
have no value. These irrecoverable and valueless wastes do not reduce
the drawback claim provided the claim is based on the quantity of
imported material used in manufacturing. If the claim is based upon the
quantity of imported merchandise appearing in the exported article,
irrecoverable and valueless waste will cause a reduction in the amount
of drawback.)
(Valuable wastes are those recovered wastes which have a value either
for sale or for use in a different manufacturing process. However, it
should be noted that this standard applies to the entire industry and is
not a selection on your part. An option by you not to choose to sell or
use the waste in some different operation does not make it valueless if
another manufacturer can use the waste. State what you do with the
waste. If you have to pay someone to get rid of it, or if you have
buyers for the waste, you must state so in your application regardless
of what ``Basis'' you are using.)
(If you recover valuable waste and if you choose to claim on the basis
of the quantity of imported or substituted merchandise used in producing
the exported articles (less valuable waste), state that you will keep
records to establish the quantity and value of the waste recovered. See
``Basis of Claim for Drawback'' section below.)

STOCK IN PROCESS

(Some processes result in another type of residual material, namely,
stock in process, which affects the allowance of drawback. Stock in
process may exist when residual material resulting from a manufacturing
or processing operation is reintroduced into a subsequent manufacturing
or processing operation; e.g., trim pieces from a cast article. The
effect of stock in process on a drawback claim is that the amount of
drawback for the period in which the stock in process was withdrawn from
the manufacturing or processing operation (or the manufactured article,
if manufacturing or processing periods are not used) is reduced by the
quantity of merchandise or drawback products used to produce the stock
in process if the ``used in'' or ``used in less valuable waste'' methods
are used (if the ``appearing in'' method is used, there will be no
effect on the amount of drawback), and the quantity of merchandise or
drawback products used to produce the stock in process is added to the
merchandise or drawback products used in the subsequent manufacturing or
production period (or the subsequently produced article)).
(If stock in process occurs and claims are to be based on stock in
process, the application must include a statement to that effect. The
application must also include a statement that merchandise is considered
to be used in manufacture at the time it was originally processed so
that the stock in process will not be included twice in the computation
of the merchandise used to manufacture the finished articles on which
drawback is claimed.)

TRADEOFF

(If an applicant proposes to use tradeoff (19 CFR 191.11), the applicant
should so state and the applicant should describe the contractual
arrangement between the applicant and its partner for tradeoff. The
person claiming drawback under the tradeoff provision has the burden of
establishing compliance with the law and regulations. In this regard,
the terms of a written contract are always easier to establish than
those of an oral contract.)

LOSS OR GAIN (Separate and distinct from WASTE)

(Some manufacturing processes result in an intangible loss or gain of
the net weight or measurement of the merchandise used. This

[[Page 617]]

loss or gain is caused by atmospheric conditions, chemical reactions, or
other factors. State the approximate usual percentage or quantity of
such loss or gain. Note that percentage values will be considered to be
measured ``by weight'' unless otherwise specified. Loss or gain does not
occur during all manufacturing processes. If loss or gain does not apply
to your manufacturing process, state ``Not Applicable.'')

PROCEDURES AND RECORDS MAINTAINED

We will maintain records to establish:
1. The identity and specifications of the merchandise we designate;
2. The quantity of merchandise of the same kind and quality as the
designated merchandise \2\ we used to produce the exported articles;
---------------------------------------------------------------------------

\2\ If claims are to be made on an ``appearing in'' basis, the
remainder of this sentence should read ``appearing in the exported
articles we produce.''
---------------------------------------------------------------------------

3. That, within 3 years after receiving it at our factory, we used
the designated merchandise to produce articles. During the same 3-year
period, we produced \3\ the exported articles.
---------------------------------------------------------------------------

\3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

We realize that to obtain drawback the claimant must establish that
the completed articles were exported within 5 years after the
importation of the imported merchandise. Our records establishing our
compliance with these requirements will be available for audit by
Customs during business hours. We understand that drawback is not
payable without proof of compliance.

INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b)
and part 191 of the Customs Regulations as discussed under the heading
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following
areas, as applicable, should be included in your discussion:)
RECEIPT AND STORAGE OF DESIGNATED MERCHANDISE
RECORDS OF USE OF DESIGNATED MERCHANDISE
BILLS OF MATERIALS
MANUFACTURING RECORDS
WASTE RECORDS
RECORDS OF USE OF DUTY-PAID, DUTY-FREE OR DOMESTIC MERCHANDISE OF THE
REQUIRED SAME KIND AND QUALITY WITHIN 3 YEARS AFTER THE RECEIPT OF THE
DESIGNATED MERCHANDISE
FINISHED STOCK STORAGE RECORDS
SHIPPING RECORDS
(Proof of time frames may be specific or inclusive, e.g. within 120
days, but specific proof is preferable. Separate storage and
identification of each article or lot of merchandise usually will permit
specific proof of exact dates. Proof of inclusive dates of use,
production or export may be acceptable, but in such cases it is well to
describe very specifically the data you intend to use to establish each
legal requirement, thereby avoiding misunderstandings at the time of
audit.)
(If you do not describe the inventory records that you will use, a
statement that the legal requirements will be met by your inventory
procedures is acceptable. However, it should be noted that without a
detailed description of the inventory procedures set forth in the
application a judgement as to the adequacy of such a statement cannot be
made until a drawback claim is verified. Approval of this application
for a specific manufacturing drawback ruling merely constitutes approval
of the ruling application as submitted; it does not constitute approval
of the applicant's record keeping procedures if, for example, those
procedures are merely described as meeting the legal requirements,
without specifically stating how the requirements will be met. Drawback
is not payable without proof of compliance.)

BASIS OF CLAIM FOR DRAWBACK

[[Page 618]]

are made on the ``Appearing In'' basis. Drawback is payable on 99
percent of the duty paid on the quantity of material designated, which
may not exceed the quantity of eligible material that appears in the
exported articles. ``Appearing In'' may not be used if multiple products
are involved.)
(Based on the previous example, drawback would be payable on the 90
pounds of merchandise which actually went into the exported product
(appearing in) rather than the 100 pounds used in as set forth
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the
manufacturer recovers valuable waste, and keeps records of the quantity
and value of waste from each lot of merchandise. The value of the waste
reduces the amount of drawback when claims are based on the ``Used Less
Valuable Waste'' basis. When valuable waste is incurred, the drawback
allowance on the exported article is based on the duty paid on the
quantity of merchandise used in the manufacture, reduced by the quantity
of such merchandise which the value of the waste would replace. Thus in
this case, drawback is claimed on the quantity of eligible material
actually used to produce the exported product, less the amount of such
material which the value of the waste would replace. Note section
191.26(c) of the Customs Regulations.)
(Based on the previous examples, if the 10 pounds of waste had a value
of $.50 per pound, then the 10 pounds of waste, having a total value of
$5.00, would be equivalent in value to 5 pounds of the designated
material. Thus the value of the waste would replace 5 pounds of the
merchandise used, and drawback is payable on 99 percent of the duty paid
on the 95 pounds of imported material designated as the basis for the
allowance of drawback on the exported article rather than on the 100
pounds ``Used In'' or the 90 pounds ``Appearing In'' as set forth in the
above examples.)
(Two methods exist for the manufacturer to show the quantity of material
used or appearing in the exported article: (1) Schedule or (2)
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each
unit of product. The schedule method is usually employed when a standard
line of merchandise is being produced according to fixed formulas. Some
schedules will show the quantity of merchandise used to manufacture or
produce each article and others will show the quantity appearing in each
finished article. Schedules may be prepared to show the quantity of
merchandise either on the basis of percentages or by actual weights and
measurements. A schedule determines the amount that will be needed to
produce a unit of product before the material is actually used in
production;)
(An ``abstract'' is the summary of the records (which may be set forth
on Customs Form 7551) which shows the total quantity used in producing
all products during the period covered by the abstract. The abstract
looks at a duration of time, for instance 3 months, in which the
quantity of material has been used. An abstract looks back on how much
material was actually used after a production period has been
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base
his claims on the ``abstract'' method. State which Basis and Method you
will use. An example of Used In by Schedule follows:)
We shall claim drawback on the quantity of (specify material) used
in manufacturing (exported article) according to the schedule set forth
below.
(Section 191.8(f) of the Customs Regulations requires submission of the
schedule with the application for a specific manufacturing drawback
ruling. An applicant who desires to file supplemental schedules with the
drawback office whenever there is a change in the quantity or material
used should state:)
We request permission to file supplemental schedules with the
drawback office covering changes in the quantities of material used to
produce the exported articles, or different styles or capacities of
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for
claiming drawback may be used where the relative value procedure is
required.)

PROCEDURES UNDER SECTION 1313(a)

IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS USED UNDER 1313(a)

(List the imported merchandise or drawback products)

EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

(Name each article to be exported. When the identity of the product is
not clearly evident by its name state what the product is, e.g., a
herbicide. There must be a match between each article described under
the PROCESS OF MANUFACTURE AND PRODUCTION section below and each article
listed here.)
(If the merchandise used under Sec. 1313(a) is not also used under
Sec. 1313(b), the sections entitled PROCESS OF MANUFACTURE OR
PRODUCTION, BY-PRODUCTS, LOSS OR GAIN, and STOCK IN PROCESS should be
included here to cover merchandise used under Sec. 1313(a). However, if
the merchandise used under Sec. 1313(a) is also used under Sec. 1313(b)
these sections need not be repeated unless they differ in some way from
the Sec. 1313(b) descriptions.)

PROCEDURES AND RECORDS MAINTAINED

We will maintain records to establish:

[[Page 619]]

1. That the exported articles on which drawback is claimed were
produced with the use of the imported merchandise, and
2. The quantity of imported merchandise \4\ we used in producing the
exported articles
---------------------------------------------------------------------------

\4\ If claims are to be made on an ``appearing In'' basis, the
remainder of the sentence should read ``appearing in the exported
articles we produce.''
---------------------------------------------------------------------------

We realize that to obtain drawback the claimant must establish that
the completed articles were exported within 5 years after importation of
the imported merchandise. We understand that drawback is not payable
without proof of compliance.

INVENTORY PROCEDURES

(This section must be completed separately from that set forth under the
Sec. 1313(b) portion of your application. The legal requirements under
Sec. 1313(a) differ from those under Sec. 1313(b).) (Describe your
inventory procedures and state how you will identify the imported
merchandise from the time it is received at your factory until it is
incorporated in the articles to be exported. Also describe how you will
identify the finished articles from the time of manufacture until
shipment.)

BASIS OF CLAIM FOR DRAWBACK

(See section with this title for procedures under Sec. 1313(b). Either
repeat the same basis of claim or use a different basis of claim, as
described above, specifically for drawback claimed under Sec. 1313(a).)

AGREEMENTS

The Applicant specifically agrees that it will:
1. Operate in full conformance with the terms of this application
for a specific manufacturing drawback ruling when claiming drawback;
2. Open its factory and records for examination at all reasonable
hours by authorized Government officers;
3. Keep its drawback related records and supporting data for at
least 3 years from the date of payment of any drawback claim predicated
in whole or in part upon this application;
4. Keep this application current by reporting promptly to the
drawback office which liquidates its claims any changes in the number or
locations of its offices or factories, the corporate name, the persons
who will sign drawback documents, the basis of claim used for
calculating drawback, the decision to use or not to use an agent under
Sec. 191.9 or the identity of an agent under that section, the drawback
office where claims will be filed under the ruling, or the corporate
organization by succession or reincorporation;
5. Keep this application current by reporting promptly to the
Headquarters, U.S. Customs Service all other changes affecting
information contained in this application;
6. Keep a copy of this application and the letter of approval by
Customs Headquarters on file for ready reference by employees and
require all officials and employees concerned to familiarize themselves
with the provisions of this application and that letter of approval; and
7. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this application and letter of approval.

DECLARATION OF OFFICIAL

I declare that I have read this application for a specific
manufacturing drawback ruling; that I know the averments and agreements
contained herein are true and correct; and that my signature on this --
------ day of -------------- 19--------, makes this application binding
on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By \5\__________________________________________________________________
---------------------------------------------------------------------------

\5\ Section 191.6(a) requires that applications for specific
manufacturing drawback rulings be signed by any individual legally
authorized to bind the person (or entity) for whom the application is
signed or the owner of a sole proprietorship, a full partner in a
partnership, or, if a corporation, the president, a vice president,
secretary, treasurer or employee legally authorized to bind the
corporation. In addition, any employee of a business entity with a
customs power of attorney filed with the Customs port for the drawback
office which will liquidate your drawback claims may sign such an
application, as may a licensed Customs broker with a Customs power of
attorney. You should state in which Customs port your Customs power(s)
of attorney is/are filed.
---------------------------------------------------------------------------

(Signature and Title)
________________________________________________________________________
(Print Name)

III. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(b)

COMPANY LETTERHEAD (Optional)

[[Page 620]]

section 1313(b), and part 191 of the Customs Regulations. We request
that the Customs Service authorize drawback on the basis of this
application.

NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

LOCATION OF FACTORY

(Give the address of the factory(ies) where the process of manufacture
or production will take place. If the factory is a different legal
entity from the applicant, so state and indicate if operating under an
Agent's general manufacturing drawback ruling.)

PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

(List persons legally authorized to bind the corporation who will sign
drawback documents. Section 191.6 of the Customs Regulations permits
only the president, vice-president, secretary, treasurer, or any
employee legally authorized to bind the corporation to sign for a
corporation. In addition, a person within a business entity with a
Customs power of attorney for the company may sign. A Customs power of
attorney may also be given to a licensed Customs broker. This heading
should be changed to NAMES OF PARTNERS or PROPRIETOR in the case of a
partnership or sole proprietorship, respectively (see footnote at end of
this sample format for persons who may sign applications for specific
manufacturing drawback rulings).)

CUSTOMS OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

GENERAL STATEMENT

(The following questions must be answered:
1. Who will be the importer of the designated merchandise?
(If the applicant will not always be the importer of the designated
merchandise, does the applicant understand its obligations to obtain the
appropriate certificates of delivery (19 CFR 191.10), certificates of
manufacture and delivery (19 CFR 191.24), or both?)
2. Will an agent be used to process the designated or the
substituted merchandise into articles?
(If an agent is to be used, the applicant must state it will comply with
T.D.'s 55027(2) and 55207(1), and Sec. 191.9, as applicable, and that
its agent will submit a letter of notification of intent to operate
under the general manufacturing drawback ruling for agents (see
Sec. 191.7 and Appendix A), or an application for a specific
manufacturing drawback ruling (see Sec. 191.8 and this Appendix B).)
3. Will the applicant be the exporter?
(If the applicant will not be the exporter in every case but will be the
claimant, the manufacturer must state that it will reserve the right to
claim drawback with the knowledge and written consent of the exporter
(19 CFR 191.82).)
(Since the permission to grant use of the accelerated payment procedure
rests with the Drawback office with which claims will be filed, do not
include any reference to that procedure in this application.)

(Parallel Columns--``Same Kind and Quality'')
Imported Merchandise or Drawback Duty-paid, Duty-free or Domestic
Products \1\ to be Designated as Merchandise of the Same Kind and
the Basis for Drawback on the Quality as That Designated Which
Exported Products. Will be Used in the Production of
the Exported Products.
1. 1.
2. 2.
3. 3.

\1\ Drawback products are those produced in the United States in
accordance with the drawback law and regulations. Such products have
``dual status'' under Sec. 1313(b). They may be designated as the
basis for drawback and also may be deemed to be domestic merchandise.

[[Page 621]]

quality to the merchandise used in producing the exported articles on
which we claim drawback that the merchandise used would, if imported, be
subject to the same rate of duty as the imported designated merchandise.
Fluctuations in the market value resulting from factors other than
quality will not affect the drawback.
(In order to successfully claim drawback it is necessary to prove that
the duty-paid, duty-free or domestic merchandise which is to be
substituted for the imported merchandise is the ``same kind and
quality''. ``Same kind and quality'' does not necessarily mean that the
merchandise is identical. It does mean that the merchandise is of the
same nature or character (``same kind'') and that the merchandise to be
substituted is interchangeable with the imported merchandise with little
or no change in the manufacturing process to produce the same exported
article (``same quality''). In order to enable Customs to rule on ``same
kind and quality'', the application must include a detailed description
of the designated imported merchandise and of the substituted duty-paid,
duty-free or domestic merchandise to be used to produce the exported
articles.)
(It is essential that all the characteristics which determine the
quality of the merchandise are provided in the application in order to
substantiate that the merchandise meets the ``same kind and quality''
statutory requirement. These characteristics should clearly distinguish
merchandise of different qualities. For example, USDA standards; FDA
standards; industry standards, e.g., ASTM; concentration; specific
gravity; purity; luster; melting point, boiling point; odor; color;
grade; type; hardness; brittleness; etc. Note that these are only a few
examples of characteristics and that each kind of merchandise has its
own set of specifications that characterizes its quality. If
specifications are given with a minimum value, be sure to include a
maximum value. The converse is also true. Often characteristics are
given to Customs on attached specification sheets. These specifications
should not include Material Safety Data sheets or other descriptions of
the merchandise that do not contribute to the ``same kind and quality''
determination. When the merchandise is a chemical, state the chemical's
generic name as well as its trade name plus any generally recognized
identifying number, e.g. CAS number; Color Index Number, etc.)
(In order to expedite the specific manufacturing drawback ruling review
process, it will be helpful if you provide copies of technical
standards/specifications (particularly industry standards such as ASTM
standards) referred to in your application.)
(The descriptions of the ``same kind and quality'' merchandise should be
formatted in the parallel columns. The left-hand column will consist of
the name and specifications of the designated imported merchandise under
the heading set forth above. The right-hand column will consist of the
name and specifications for the duty-paid, duty-free or domestic
merchandise under the heading set forth above.)

EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

PROCESS OF MANUFACTURE OR PRODUCTION

MULTIPLE PRODUCTS

1. Relative Values

[[Page 622]]

flaxseed necessarily produces linseed oil and linseed husks (animal
feed), and drawback must be distributed to each product in accordance
with its relative value. However, the voluntary election of a steel
fabricator, for instance, to use part of a lot of imported steel to
produce automobile doors and part of the lot to produce automobile
fenders does not call for relative value distribution.)
(The relative value of a product is its value divided by the total value
of all products, whether or not exported. For example, 100 gallons of
drawback merchandise are used to produce 100 gallons of products,
including 60 gallons of product A, 20 gallons of product B, and 20
gallons of product C. At the time of separation, the unit values of
products A, B, and C are $5, $10, and $50 respectively. The relative
value of product A is $300 divided by $1500 or \1/5\. The relative value
of B is \2/15\ and of product C is \2/3\, calculated in the same manner.
This means that \1/5\ of the drawback product payments will be
distributed to product A, \2/15\ to product B, and \2/3\ to product C.)
(Drawback is allowable on exports of any of multiple products, but is
not allowable on exports of valuable waste. In making this distinction
between a product and valuable waste, the applicant should address the
following significant elements: (1) the nature of the material of which
the residue is composed; (2) the value of the residue as compared to the
value of the principal manufactured product and the raw material; (3)
the use to which it is put; (4) its status under the tariff laws, if
imported; (5) whether it is a commodity recognized in commerce; (6)
whether it must be subjected to some process to make it saleable.)

2. Producibility

WASTE

(Many processes result in residue materials which, for drawback
purposes, are treated as wastes. Describe any residue materials which
you believe should be so treated. If no waste results, include a
positive statement to that effect under this heading.)
(If waste occurs, state: (1) whether or not it is recovered, (2) whether
or not it is valueless, and (3) what you do with it. This information is
required whether claims are made on a ``used in'' or ``appearing in''
basis and regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost
in the process. Valueless wastes are those which may be recovered but
have no value. These irrecoverable and valueless wastes do not reduce
the drawback claim provided the claim is based on the quantity of
imported material used in manufacturing. If the claim is based upon the
quantity of imported merchandise appearing in the exported article,
irrecoverable and valueless waste will cause a reduction in the amount
of drawback.)
(Valuable wastes are those recovered wastes which have a value either
for sale or for use in a different manufacturing process. However, it
should be noted that this standard applies to the entire industry and is
not a selection on your part. An option by you not to choose to sell or
use the waste in some different operation does not make it valueless if
another manufacturer can use the waste. State what you do with the
waste. If you have to pay someone to get rid of it, or if you have
buyers for the waste, you must state so in your application regardless
of what ``Basis'' you are using.)
(If you recover valuable waste and if you choose to claim on the basis
of the quantity of imported or substituted merchandise used in producing
the exported articles less valuable waste, state that you will keep
records to establish the quantity and value of the waste recovered. See
``Basis of Claim for Drawback'' section below.)

STOCK IN PROCESS

[[Page 623]]

or ``used in less valuable waste'' methods are used (if the ``appearing
in'' method is used, there will be no effect on the amount of drawback),
and the quantity of merchandise or drawback products used to produce the
stock in process is added to the merchandise or drawback products used
in the subsequent manufacturing or production period (or the
subsequently produced article)).
(If stock in process occurs and claims are to be based on stock in
process, the application must include a statement to that effect. The
application must also include a statement that merchandise is considered
to be used in manufacture at the time it was originally processed so
that the stock in process will not be included twice in the computation
of the merchandise used to manufacture the finished articles on which
drawback is claimed.)

TRADEOFF

(If an applicant proposes to use tradeoff (19 CFR 191.11), the applicant
should so state and the applicant should describe the contractual
arrangement between the applicant and its partner for tradeoff. The
person claiming drawback under the tradeoff provisions has the burden of
establishing compliance with the law and regulations. In this regard,
the terms of a written contract are always easier to establish than
those of an oral contract.)

LOSS OR GAIN (Separate and distinct from WASTE)

(Some manufacturing processes result in an intangible loss or gain of
the net weight or measurement of the merchandise used. This loss or gain
is caused by atmospheric conditions, chemical reactions, or other
factors. State the approximate usual percentage or quantity of such loss
or gain. Note that percentage values will be considered to be measured
``by weight'' unless otherwise specified. Loss or gain does not occur
during all manufacturing processes. If loss or gain does not apply to
your manufacturing process, state ``Not Applicable.'')

PROCEDURES AND RECORDS MAINTAINED

3. That, within 3 years after receiving it at our factory, we used
the designated merchandise to produce articles. During the same 3-year
period, we produced \3\ the exported articles;
---------------------------------------------------------------------------

\3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b)
and part 191 of the Customs Regulations as discussed under the heading
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following
areas, as applicable, should be included in your discussion:)
RECEIPT AND STORAGE OF DESIGNATED MERCHANDISE
RECORDS OF USE OF DESIGNATED MERCHANDISE
BILLS OF MATERIALS
MANUFACTURING RECORDS
WASTE RECORDS
RECORDS OF USE OF DUTY-PAID, DUTY-FREE OR DOMESTIC
MERCHANDISE OF THE REQUIRED SAME KIND AND QUALITY
WITHIN 3 YEARS AFTER THE RECEIPT OF THE DESIGNATED MERCHANDISE
FINISHED STOCK STORAGE RECORDS
SHIPPING RECORDS
(Proof of time frames may be specific or inclusive, e.g. within 120
days, but specific proof is preferable. Separate storage and
identification of each article or lot of merchandise usually will permit
specific proof of exact dates. Proof of inclusive dates of use,
production or export may be acceptable, but in such cases it is well to
describe very specifically the data you intend to use to establish each
legal requirement, thereby avoiding misunderstandings at the time of
audit.)
(If you do not describe the inventory records that you will use, a
statement that the legal requirements will be met by your inventory
procedures is acceptable. However, it should be noted that without a
detailed description of the inventory procedures set forth in the
application a judgement as to the adequacy of such a statement cannot be
made until a drawback claim is verified. Approval of this application
for a specific manufacturing drawback ruling merely constitutes approval
of the ruling application as submitted; it

[[Page 624]]

does not constitute approval of the applicant's record keeping
procedures if, for example, those procedures are merely described as
meeting the legal requirements, without specifically stating how the
requirements will be met. Drawback is not payable without proof of
compliance.)

BASIS OF CLAIM FOR DRAWBACK

(There are three different bases that may be used to claim drawback: (1)
Used in; (2) Appearing In; and (3) Used less Valuable Waste.)
(The ``Used In'' basis may be employed only if there is either no waste
or valueless or unrecovered waste in the operation. Irrecoverable or
valueless waste does not reduce the amount of drawback when claims are
based on the ``Used In'' basis. Drawback is payable in the amount of 99
percent of the duty paid on the quantity of imported material designated
as the basis for the allowance of drawback on the exported articles. The
designated quantity may not exceed the quantity of material actually
used in the manufacture of the exported articles.)
(For example, if 100 pounds of material, valued at $1.00 per pound, were
used in manufacture resulting in 10 pounds of irrecoverable or valueless
waste, the 10 pounds of irrecoverable or valueless waste would not
reduce the drawback. In this case drawback would be payable on 99% of
the duty paid on the 100 pounds of designated material used to produce
the exported articles.)
(The ``Appearing In'' basis may be used regardless of whether there is
waste. If the ``Appearing In'' basis is used, the claimant does not need
to keep records of waste and its value. However, the manufacturer must
establish the identity and quantity of the merchandise appearing in the
exported product and provide this information. Waste reduces the amount
of drawback when claims are made on the ``Appearing In'' basis. Drawback
is payable on 99 percent of the duty paid on the quantity of material
designated, which may not exceed the quantity of eligible material that
appears in the exported articles. ``Appearing In'' may not be used if
multiple products are involved.)
(Based on the previous example, drawback would be payable on the 90
pounds of merchandise which actually went into the exported product
(appearing in) rather than the 100 pounds used in as set forth
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the
manufacturer recovers valuable waste, and keeps records of the quantity
and value of waste from each lot of merchandise. The value of the waste
reduces the amount of drawback when claims are based on the ``Used Less
Valuable Waste'' basis. When valuable waste is incurred, the drawback
allowance on the exported article is based on the duty paid on the
quantity of merchandise used in the manufacture, reduced by the quantity
of such merchandise which the value of the waste would replace. Thus in
this case, drawback is claimed on the quantity of eligible material
actually used to produce the exported product, less the amount of such
material which the value of the waste would replace. Note section
191.26(c) of the Customs Regulations.)
(Based on the previous examples, if the 10 pounds of waste had a value
of $.50 per pound, then the 10 pounds of waste, having a total value of
$5.00, would be equivalent in value to 5 pounds of the designated
material. Thus the value of the waste would replace 5 pounds of the
merchandise used, and drawback is payable on 99 percent of the duty paid
on the 95 pounds of imported material designated as the basis for the
allowance of drawback on the exported article rather than on the 100
pounds ``Used In'' or the 90 pounds ``Appearing In'' as set forth in the
above examples.)
(Two methods exist for the manufacturer to show the quantity of material
used or appearing in the exported article: (1) Schedule or (2)
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each
unit of product. The schedule method is usually employed when a standard
line of merchandise is being produced according to fixed formulas. Some
schedules will show the quantity of merchandise used to manufacture or
produce each article and others will show the quantity appearing in each
finished article. Schedules may be prepared to show the quantity of
merchandise either on the basis of percentages or by actual weights and
measurements. A schedule determines the amount that will be needed to
produce a unit of product before the material is actually used in
production;)
(An ``abstract'' is the summary of the records (which may be set forth
on Customs Form 7551) which shows the total quantity used in producing
all products during the period covered by the abstract. The abstract
looks at a duration of time, for instance 3 months, in which the
quantity of material has been used. An abstract looks back on how much
material was actually used after a production period has been
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base
his claims on the ``abstract'' method. State which Basis and Method you
will use. An example of Used In by Schedule would read:)
We shall claim drawback on the quantity of (specify material) used
in manufacturing (exported article) according to the schedule set forth
below.
(Section 191.8(f) of the Customs Regulations requires submission of the
schedule with the application for a specific manufacturing drawback
ruling. An applicant who desires to file supplemental schedules with the
drawback office whenever there is a change in the quantity or material
used should state:)

[[Page 625]]

We request permission to file supplemental schedules with the
drawback office covering changes in the quantities of material used to
produce the exported articles, or different styles or capacities of
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for
claiming drawback may be used where the relative value procedure is
required.)

AGREEMENTS

Declaration of Official

I declare that I have read this application for a specific
manufacturing drawback ruling; that I know the averments and agreements
contained herein are true and correct; and that my signature on this --
------ day of ------------ 19------, makes this application binding on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By\4\___________________________________________________________________
---------------------------------------------------------------------------

\4\ Section 191.6(a) requires that applications for specific
manufacturing drawback rulings be signed by any individual legally
authorized to bind the person (or entity) for whom the application is
signed or the owner of a sole proprietorship, a full partner in a
partnership, or, if a corporation, the president, a vice president,
secretary, treasurer or employee legally authorized to bind the
corporation. In addition, any employee of a business entity with a
customs power of attorney filed with the Customs port for the drawback
office which will liquidate your drawback claims may sign such an
application, as may a licensed Customs broker with a Customs power of
attorney. You should state in which Customs port your Customs power(s)
of attorney is/are filed.
---------------------------------------------------------------------------

(Signature and Title)
________________________________________________________________________
(Print Name)

IV. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(d)

COMPANY LETTERHEAD (Optional)

U.S. Customs Service, Duty and Refund Determination Branch, 1300
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
Dear Sir: We, (Applicant's Name), a (State, e.g., Delaware)
corporation (or other described entity) submit this application for a
specific manufacturing drawback ruling that our manufacturing operations
qualify for drawback under title 19, United States Code, section
1313(d), and part 191 of the Customs Regulations. We request that the
Customs Service authorize drawback on the basis of this application.

NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

LOCATION OF FACTORY

(Give the address of the factory(s) where the process of manufacture or
production will take place. If the factory is a different legal entity
from the applicant, so state and indicate if operating under an Agent's
general manufacturing drawback ruling.)

[[Page 626]]

PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

CUSTOMS OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

GENERAL STATEMENT

(The exact material placed under this heading in individual cases will
vary, but it should include such information as the type of business in
which the manufacturer is engaged, whether the manufacturer is
manufacturing for his own account or is performing the operation on a
toll basis (including commission or conversion basis) for the account of
others, whether the manufacturer is a direct exporter of his products or
sells or delivers them to others for export, and whether drawback will
be claimed by the manufacturer or by others.)
(If an agent is to be used, the applicant must state it will comply with
T.D.'s 55027(2) and 55207(1), and Sec. 191.9, as applicable, and that
its agent will submit a letter of notification of intent to operate
under the general manufacturing drawback ruling for agents (see
Sec. 191.7 and Appendix A), or an application for a specific
manufacturing drawback ruling (see Sec. 191.8 and this Appendix B).)
(Regarding drawback operations conducted under Sec. 1313(d), the data
may describe the flavoring extracts, medicinal, or toilet preparations
(including perfumery) manufactured with the use of domestic tax-paid
alcohol; and where such alcohol is obtained or purchased.)
(Since the permission to grant use of the accelerated payment procedure
rests with the Drawback office with which claims will be filed, do not
include any reference to that procedure in this application.)

TAX-PAID MATERIAL USED UNDER SECTION 1313(d)

(Describe or list the tax-paid material)

EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

(Name each article to be exported)

PROCESS OF MANUFACTURE OR PRODUCTION

(Drawback under Sec. 1313(d) is not allowable except where a manufacture
or production exists. ``Manufacture or production'' is defined, for
drawback purposes, in Sec. 191.2(q). In order to obtain drawback under
Sec. 1313(d), it is essential for the applicant to show use in
manufacture or production by giving a thorough description of the
manufacturing process. Describe how the tax-paid material is processed
into the export article.)

WASTE

(Many processes result in residue materials which, for drawback
purposes, are treated as wastes. Describe any residue materials which
you believe should be so treated. If no waste results, include a
positive statement to that effect under this heading.) (If waste occurs,
state: (1) whether or not it is recovered, (2) whether or not it is
valueless, and (3) what you do with it. This information is required
whether claims are made on a ``used in'' or ``appearing in'' basis and
regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost
in the process. Valueless wastes are those which may be recovered but
have no value. These irrecoverable and valueless wastes do not reduce
the drawback claim provided the claim is based on the quantity of
domestic tax-paid alcohol used in manufacturing. If the claim is based
upon the quantity of domestic tax-paid alcohol appearing in the exported
article, irrecoverable and valueless waste will cause a reduction in the
amount of drawback.)
(Valuable wastes are those recovered wastes which have a value either
for sale or for use in a different manufacturing process. However, it
should be noted that this standard applies to the entire industry and is
not a selection on your part. An option by you not to choose to sell or
use the waste in some different operation, does not make it valueless if
another manufacturer can use the waste. State what you do with the
waste. If you have to pay someone to get rid of it, or if you have
buyers for the waste, you must state so in your application regardless
of what ``Basis'' you are using.)

[[Page 627]]

(If you recover valuable waste and if you choose to claim on the basis
of the quantity of domestic tax-paid alcohol used in producing the
exported articles (less valuable waste), state that you will keep
records to establish the quantity and value of the waste recovered. See
``Basis of Claim for Drawback'' section below.)

STOCK IN PROCESS

(Some processes result in another type of residual material, namely,
stock in process, which affects the allowance of drawback. Stock in
process may exist when residual material resulting from a manufacturing
or processing operation is reintroduced into a subsequent manufacturing
or processing operation; e.g., trim pieces from a cast article. The
effect of stock in process on a drawback claim is that the amount of
drawback for the period in which the stock in process was withdrawn from
the manufacturing or processing operation (or the manufactured article,
if manufacturing or processing periods are not used) is reduced by the
quantity of merchandise or drawback products used to produce the stock
in process if the ``used in'' or ``used in less valuable waste'' methods
are used (if the ``appearing in'' method is used, there will be no
effect on the amount of drawback), and the quantity of merchandise or
drawback products used to produce the stock in process is added to the
merchandise or drawback products used in the subsequent manufacturing or
production period (or the subsequently produced article)).
(If stock in process occurs and claims are to be based on stock in
process, the application must include a statement to that effect. The
application must also include a statement that the domestic tax-paid
alcohol is considered to be used in manufacture at the time it was
originally processed so that the stock in process will not be included
twice in the computation of the domestic tax-paid alcohol used to
manufacture the finished articles on which drawback is claimed.)

LOSS OR GAIN (Separate and distinct from WASTE)

PROCEDURES AND RECORDS MAINTAINED

We will maintain records to establish:
1. That the exported articles on which drawback is claimed were
produced with the use of a particular lot (or lots) of domestic tax-paid
alcohol, and
2. The quantity of domestic tax-paid alcohol \1\ we used in
producing the exported articles.
---------------------------------------------------------------------------

\1\ If claims are to be made on an ``appearing in'' basis, the
remainder of this sentence should read ``appearing in the exported
articles we produce.''
---------------------------------------------------------------------------

We realize that to obtain drawback the claimant must establish that
the completed articles were exported within 5 years after the tax has
been paid on the domestic alcohol. Our records establishing our
compliance with these requirements will be available for audit by
Customs during business hours. We understand that drawback is not
payable without proof of compliance.

INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(d)
and part 191 of the Customs Regulations as discussed under the heading
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following
areas should be included in your discussion:)
RECEIPT AND RAW STOCK STORAGE RECORDS
MANUFACTURING RECORDS
FINISHED STOCK STORAGE RECORDS

BASIS OF CLAIM FOR DRAWBACK

[[Page 628]]

``Appearing In'' basis is used, the claimant does not need to keep
records of waste and its value. However, the manufacturer must establish
the identity and quantity of the merchandise appearing in the exported
product and provide this information. Waste reduces the amount of
drawback when claims are made on the ``Appearing In'' basis. Drawback is
payable on 100% of the tax paid on the quantity of domestic alcohol
which appears in the exported articles.
(Based on the previous example, drawback would be payable on the 90
gallons of domestic alcohol which actually went into the exported
product (appearing in) rather than the 100 gallons used in as set forth
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the
manufacturer recovers valuable waste, and keeps records of the quantity
and value of waste from each lot of domestic tax-paid alcohol. The value
of the waste reduces the amount of drawback when claims are based on the
``Used Less Valuable Waste'' basis. When valuable waste is incurred, the
drawback allowance on the exported article is based on the quantity of
tax-paid alcohol used to manufacture the exported articles, reduced by
the quantity of such alcohol which the value of the waste would
replace.)
(Based on the previous examples, if the 10 gallons of waste had a value
of $.50 per gallon, then the 10 gallons of waste, having a total value
of $5.00, would be equivalent in value to 5 gallons of the tax-paid
alcohol. Thus the value of the waste would replace 5 gallons of the
alcohol used, and drawback is payable on 100% of the tax paid on 95
gallons of alcohol rather than on the 100 gallons ``Used In'' or the 90
gallons ``Appearing In'' as set forth in the above examples.)
(Two methods exist for the manufacturer to show the quantity of material
used or appearing in the exported article: (1) Schedule or (2)
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each
unit of product. The schedule method is usually employed when a standard
line of merchandise is being produced according to fixed formulas. Some
schedules will show the quantity of merchandise used to manufacture or
produce each article and others will show the quantity appearing in each
finished article. Schedules may be prepared to show the quantity of
merchandise either on the basis of percentages or by actual weights and
measurements. A schedule determines the amount that will be needed to
produce a unit of product before the material is actually used in
production;)
(An ``abstract'' is the summary of the records (which may be set forth
on Customs Form 7551) which shows the total quantity used in producing
all products during the period covered by the abstract. The abstract
looks at a duration of time, for instance 3 months, in which the
quantity of material has been used. An abstract looks back on how much
material was actually used after a production period has been
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base
his claims on the ``abstract'' method. State which Basis and Method you
will use. An example of Used In by schedule follows:)
We shall claim drawback on the quantity of (specify material) used
in manufacturing (exported article) according to the schedule set forth
below.
(Section 191.8(f) of the Customs Regulations requires submission of the
schedule with the application for a specific manufacturing drawback
ruling. An applicant who desires to file supplemental schedules with the
drawback office whenever there is a change in the quantity or material
used should state:)
We request permission to file supplemental schedules with the
drawback office covering changes in the quantities of material used to
produce the exported articles, or different styles or capacities of
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for
claiming drawback may be used where the relative value procedure is
required.)

AGREEMENTS

[[Page 629]]

to familiarize themselves with the provisions of this application and
that letter of approval; and
7. Issue instructions to insure proper compliance with title 19,
United States Code, section 1313, part 191 of the Customs Regulations
and this application and letter of approval.

DECLARATION OF OFFICIAL

I declare that I have read this application for a specific
manufacturing drawback ruling; that I know the averments and agreements
contained herein are true and correct; and that my signature on this --
---------- day of ------------ 19--------, makes this application
binding on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By \2\__________________________________________________________________
(Signature and Title)
---------------------------------------------------------------------------

\2\ Section 191.6(a) requires that applications for specific
manufacturing drawback rulings be signed by any individual legally
authorized to bind the person (or entity) for whom the application is
signed or the owner of a sole proprietorship, a full partner in a
partnership, or, if a corporation, the president, a vice president,
secretary, treasurer or employee legally authorized to bind the
corporation. In addition, any employee of a business entity with a
customs power of attorney filed with the Customs port for the drawback
office which will liquidate your drawback claims may sign such an
application, as may a licensed Customs broker with a Customs power of
attorney. You should state in which Customs port your Customs power(s)
of attorney is/are filed.
---------------------------------------------------------------------------

________________________________________________________________________
(Print Name)

V. Format for Application for Specific Manufacturing Drawback Ruling
Under 19 U.S.C. 1313(g).

COMPANY LETTERHEAD (Optional)

U.S. Customs Service, Duty and Refund Determination Branch, 1300
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
Dear Sir: We, (Applicant's Name), a (State, e.g., Delaware)
corporation (or other described entity) submit this application for a
specific manufacturing drawback ruling that our manufacturing operations
qualify for drawback under title 19, United States Code, section
1313(g), and part 191 of the Customs Regulations. We request that the
Customs Service authorize drawback on the basis of this application.

NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

LOCATION OF FACTORY OR SHIPYARD

(Give the address of the factory(s) or shipyard(s) at which the
construction and equipment will take place. If the factory or shipyard
is a different legal entity from the applicant, so state and indicate if
operating under an Agent's general manufacturing drawback ruling.)

PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

CUSTOMS OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

GENERAL STATEMENT

(The following questions must be answered:
1. Who will be the importer of the merchandise?

[[Page 630]]

(If the applicant will not always be the importer, does the applicant
understand its obligations to obtain the appropriate certificates of
delivery (19 CFR 191.10), certificates of manufacture and delivery (19
CFR 191.24), or both?)
2. Who is the manufacturer?
(Is the applicant constructing and equipping for his own account or
merely performing the operation on a toll basis for others?)
(If an agent is to be used, the applicant must state it will comply with
T.D.s 55027(2) and 55207(1), and Sec. 191.9, as applicable, and that its
agent will submit a letter of notification of intent to operate under
the general manufacturing drawback ruling for agents (see Sec. 191.7 and
Appendix A), or an application for a specific manufacturing drawback
ruling (see Sec. 191.8 and this Appendix B).)
3. Will the applicant be the drawback claimant?
(State how the vessel will qualify for drawback under 19 U.S.C. 1313(g).
Who is the foreign person or government for whom the vessel is being
made or equipped?)
(There shall be included under this heading the following statement:
We are particularly aware of the terms of Sec. 191.76(a)(1) of and
subpart M of part 191 of the Customs Regulations, and shall comply with
these sections where appropriate.)
(Since the permission to grant use of the accelerated payment procedure
rests with the Drawback office with which claims will be filed, do not
include any reference to that procedure in this application.)

IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS USED

(Describe the imported merchandise or drawback products)

ARTICLES CONSTRUCTED AND EQUIPPED FOR EXPORT

(Name the vessel or vessels to be made with imported merchandise or
drawback products)

PROCESS OF CONSTRUCTION AND EQUIPMENT

(What is required here is a clear, concise description of the process of
construction and equipment involved. The description should also trace
the flow of materials through the manufacturing process for the purpose
of establishing physical identification of the imported merchandise or
drawback products and of the articles resulting from the processing.)

WASTE

LOSS OR GAIN (Separate and distinct from WASTE)

PROCEDURES AND RECORDS MAINTAINED

We will maintain records to establish:
1. That the exported article on which drawback is claimed was
constructed and equipped with the use of a particular lot (or lots) of
imported material; and

[[Page 631]]

2. The quantity of imported merchandise \1\ we used in producing the
exported article.
---------------------------------------------------------------------------

INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313 and
part 191 of the Customs Regulations as discussed under the heading
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following
should be included in your discussion:)

RECEIPT AND RAW STOCK STORAGE RECORDS
CONSTRUCTION AND EQUIPMENT RECORDS
FINISHED STOCK STORAGE RECORDS
SHIPPING RECORDS

BASIS OF CLAIM FOR DRAWBACK

(There are three different bases that may be used to claim drawback: (1)
Used in; (2) Appearing In; and (3) Used less Valuable Waste.)
(The ``Used In'' basis may be employed only if there is either no waste
or valueless or unrecovered waste in the operation. Irrecoverable or
valueless waste does not reduce the amount of drawback when claims are
based on the ``Used In'' basis. Drawback is payable in the amount of 99
percent of the duty paid on the quantity of imported material used to
construct and equip the exported article.)
(For example, if 100 pounds of material, valued at $1.00 per pound, were
used in manufacture resulting in 10 pounds of irrecoverable or valueless
waste, the 10 pounds of irrecoverable or valueless waste would not
reduce the drawback. In this case drawback would be payable on 99% of
the duty paid on the 100 pounds of imported material used in
constructing and equipping the exported articles.)
(The ``Appearing In'' basis may be used regardless of whether there is
waste. If the ``Appearing In'' basis is used, the claimant does not need
to keep records of waste and its value. However, the manufacturer must
establish the identity and quantity of the merchandise appearing in the
exported product and provide this information. Waste reduces the amount
of drawback when claims are made on the ``Appearing In'' basis. Drawback
is payable on 99 percent of the duty paid on the quantity of imported
material which appears in the exported articles. ``Appearing In'' may
not be used if multiple products are involved.)
(Based on the previous example, drawback would be payable on the 90
pounds of imported material which actually went into the exported
product (appearing in) rather than the 100 pounds used in as set forth
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the
manufacturer recovers valuable waste, and keeps records of the quantity
and value of waste from each lot of merchandise. The value of the waste
reduces the amount of drawback when claims are based on the ``Used Less
Valuable Waste'' basis. When valuable waste is incurred, the drawback
allowance on the exported article is based on the duty paid on the
quantity of imported material used to construct and equip the exported
product, reduced by the quantity of such material which the value of the
waste would replace. Thus in this case, drawback is claimed on the
quantity of eligible material actually used to produce the exported
product, less the amount of such material which the value of the waste
would replace. Note section 191.26(c) of the Customs Regulations.)
(Based on the previous examples, if the 10 pounds of waste had a value
of $.50 per pound, then the 10 pounds of waste, having a total value of
$5.00, would be equivalent in value to 5 pounds of the imported
material. Thus the value of the waste would replace 5 pounds of the
merchandise used, and drawback is payable on 99 percent of the duty paid
on the 95 pounds of imported material rather than on the 100 pounds
``Used In'' or the 90 pounds ``Appearing In'' as set forth in the above
examples.)
(Two methods exist for the manufacturer to show the quantity of material
used or appearing in the exported article: (1) Schedule or (2)
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each
unit of product. The schedule method is usually employed when a standard
line of merchandise is being produced according to fixed formulas. Some
schedules will show the quantity of merchandise used to manufacture or
produce each article and others will show the quantity appearing in each
finished article. Schedules may be prepared to show the quantity of
merchandise either on the basis of percentages or by actual weights and
measurements. A schedule determines the amount that will be needed to
produce a unit of product before the material is actually used in
production;)
(An ``abstract'' is the summary of the records (which may be set forth
on Customs Form 7551) which shows the total quantity

[[Page 632]]

used in producing all products during the period covered by the
abstract. The abstract looks at a duration of time, for instance 3
months, in which the quantity of material has been used. An abstract
looks back on how much material was actually used after a production
period has been completed.)
(An applicant who fails to indicate the ``schedule'' choice must base
his claims on the ``abstract'' method. State which Basis and Method you
will use. An example of Used In by Schedule would read:)
We shall claim drawback on the quantity of (specify material) used
in manufacturing (exported article) according to the schedule set forth
below.
(Section 191.8(f) of the Customs Regulations requires submission of the
schedule with the application for a specific manufacturing drawback
ruling. An applicant who desires to file supplemental schedules with the
drawback office whenever there is a change in the quantity or material
used should state:)
We request permission to file supplemental schedules with the
drawback office covering changes in the quantities of material used to
produce the exported articles, or different styles or capacities of
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for
claiming drawback may be used where the relative value procedure is
required.)

AGREEMENTS

DECLARATION OF OFFICIAL

I declare that I have read this application for a specific
manufacturing drawback ruling; that I know the averments and agreements
contained herein are true and correct; and that my signature on this --
-------------- day of ---------------- 19--------, makes this
application binding on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By\2\___________________________________________________________________
(Signature and Title)
---------------------------------------------------------------------------

\2\ Section 191.6(a) requires that applications for specific
manufacturing drawback rulings be signed by any individual legally
authorized to bind the person (or entity) for whom the application is
signed or the owner of a sole proprietorship, a full partner in a
partnership, or, if a corporation, the president, a vice president,
secretary, treasurer or employee legally authorized to bind the
corporation. In addition, any employee of a business entity with a
Customs power of attorney filed with the Customs port for the drawback
office which will liquidate your drawback claims may sign such an
application, as may a licensed Customs broker with a Customs power of
attorney. You should state in which Customs port your Customs power(s)
of attorney is/are filed.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15291, Mar. 31, 1998; 63
FR 65060, Nov. 25, 1998]