Question
Can drawback be claimed on a portion of destroyed merchandise when another portion of the same merchandise is being sold off?
Answer
Recently a claimant inquired as to merchandise they wanted to destroy under Customs' supervision and claim drawback on. This is usually simple drawback. Take the amount of destroyed merchandise and match to like imports per one of the approved drawback methods, and make a claim. The exception in this case was that the destroyed merchandise would be sold for cash to a rendering operation that would recycle some of the raw materials. The client wanted to know how to deduct the valuable waste on an unused drawback claim. This was a very good case of stump the chump, because this was the first time this scenario had ever been brought up to our attention. We called Customs and asked. Customs stated that no drawback at all is allowed. Their take was that the merchandise was not destroyed if there was any value remaining after 'destruction'. Therefore we went from drawback less scrap to no drawback at all. Doesn't sound fair to us, but we'd like your thoughts on this because another person offered up a similar scenario another day and they had a different answer.
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