LIQ-9-01-CO:R:C:E 225027 AJS
Assistant District Director
Commercial Operations Division
Office of the District Director
P.O. Box 3130
Laredo TX 78044-3130
RE: Protest 2304-93-100358; 19 U.S.C. 1504; notice of extension;
Enron Oil Trading and Transportation Co. v. U.S.; International
Cargo & Surety Insurance Co. (Data Memory Corp.) v. U.S.; 19 U.S.C.
1514(c)(2)(B); 19 U.S.C. 1514(a)(7); untimely filing of protest;
Star Sales & Distributing Corp. v U.S.
Dear Sir or Madame:
This is our decision in protest number 2304-93-100358, dated
August 19, 1993, concerning the applicability of 19 U.S.C.
1520(c)(1).
FACTS:
The entry date for the subject merchandise was July 9, 1991.
Customs issued a notice to extend the liquidation date on June 13,
1992. Both of these dates are supported by the protestant's
Automated Broker Interface (ABI) query. A search of Customs
computer records also indicates that an extension notice was issued
on June 13, 1992. A conversation with officials from Customs
Automated Commercial System (ACS) indicates that this is the date
that a notice is both generated and mailed. The protestant claims
in an unsworn statement that it did not receive notice of this
extension. No documentation was presented with this statement nor
was any procedure described within this statement which indicates
the basis of the protestant's knowledge concerning the receipt of
notice. In a subsequent meeting with protestant's counsel, it was
claimed that the protestant ascertained it did not receive notice
of extension by reviewing its relevant files. In addition, counsel
offered to submit a sworn affidavit in place of the protestant's
unsworn statement.
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A Customs Form (CF) 29, Notice of Action, was issued to the
protestant on June 17, 1992. This notice requested a
Manufacturer's Affidavit to substantiate the protestant's
origin claim. Another CF 29 was issued to the protestant on August
3, 1992. This notice informed the protestant that its entry was in
the liquidation process and that it would be rate advanced. The
protestant also claims that it did not receive either of these
notices.
The subject entry was liquidated on August 21, 1992. In a
letter dated January 22, 1993, the protestant filed a claim under
19 U.S.C. 1520(c) requesting reliquidation of this entry based on
clerical error and other inadvertence. On May 20, 1993, Customs
issued a decision denying the request for reliquidation under
section 1520(c)(1) stating that a clerical error, inadvertence or
mistake of fact did not occur. A search of Customs computer
records indicates that this decision was issued on May 20, 1993.
In addition, a conversation with Customs personnel indicates that
decisions are mailed on the date they are stamped. We note that
this decision states that the denial is protestable within 90 days
of the date of the letter. The protestant asserts that no official
notification of denial was actually received. No evidence was
provided by the protestant to support this assertion. In a
subsequent meeting with protestant's counsel, it was asserted that
the protestant ascertained it did not receive the May 20 decision
by reviewing its relevant files.
ISSUE:
Whether the subject protest was timely filed pursuant to 19
U.S.C. 1514(c)(2)(B).
Whether liquidation of the subject entry was extended pursuant
to 19 U.S.C. 1504(b), or was the entry deemed liquidated pursuant
to section 1504(a).
LAW AND ANALYSIS:
19 U.S.C. 1514(a) states that decisions of the
Customs Service, including the legality of all orders and findings
entering into the same, as to (7) the refusal to reliquidate an
entry under section 1520(c) of this title shall be final and
conclusive upon all persons (including the United States and any
officer thereof) unless a protest is filed in accordance with this
section, or unless a civil action contesting the denial of a
protest, in whole or in part, is commenced in the United States
Court of
International Trade in accordance with chapter 169 of Title
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28 within the time prescribed by section 2636 of that title.
The subject protest concerns a refusal to reliquidate an entry
under section 1520(c). Therefore, this protest involves a
protestable matter.
19 U.S.C. 1514(c)(2)(B), however, states that a protest of a
decision, order, or finding described in subsection (a) of this
section shall be filed with the Customs Service
within 90 days after but not before the date of the decision as to
which protest is made. Customs issued its refusal to reliquidate
the protestant's entry on May 20, 1993. The subject protest was
filed on August 19, 1993. This date is 91 days after the date of
decision which is being protested. Government officials are
entitled to a presumption that their duties are performed in the
manner required by law. Star Sales & Distributing Corp. v. United
States, 10 CIT 709, 710, 663 F. Supp. 1127, 1129 (1986). This
presumption may be rebutted by indicating that the decision was not
received. In the instant protest, the protestant asserts that no
notice of the May 20 decision was received. The only evidence that
the protestant provided to support its assertion is the statement
that it searched the relevant files and did not find the May 20
decision. This evidence is similar to that submitted in the Enron
case discussed infra. However, this protest differs from Enron in
that Customs computer records and administrative procedure support
the presumption that notice of the decision was given. Therefore,
we conclude that notice of the May 20 decision was issued to the
protestant. Consequently, the subject protest was not timely
filed, and thus Customs refusal to reliquidate the entry at issue
under section 1520(c)(1) is final and conclusive on all persons
pursuant to section 1514(a)(1).
Although our decision on the timeliness of the protest makes
the deemed liquidation issue moot, we are addressing protestant's
arguments in this regard for your information. 19 U.S.C.
1504(a)(1) provides that except as provided in subsection (b) of
this section, an entry of merchandise not liquidated within one
year from the date of entry of such merchandise shall be deemed
liquidated at the rate of duty, value, quantity, and amount of
duties asserted at the time of entry by the importer of record.
This provision was recently amended by section 641, Title VI, of
the North American Free Trade Agreement (NAFTA) Implementation Act,
Public Law 103-182, to partially provide that unless an entry is
extended under subsection (b) it shall be deemed liquidated in the
same manner as described above. The subject entry was liquidated
more than one year after the date of entry. Thus, the protestant
alternatively claims that the subject entry was deemed liquidated
pursuant to section 1504(a).
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19 U.S.C. 1504(b) provides that the Secretary of the Treasury
may extend the period in which to liquidate an entry by giving
notice of such extension to the importer of record in such form and
manner as the Secretary shall prescribe in regulations, if (1)
information needed for the proper appraisement or classification of
the merchandise is not available to the appropriate customs
officer. 19 CFR 159.12(a)(1) provides that the district director
may extend the 1-year statutory period for liquidation for an
additional period not to exceed 1 year if information needed by
Customs for the proper classification of the merchandise is not
available. Section 1504(b) was also amended by section 641 of the
NAFTA Implementation Act to provide that the Secretary may also
extend the period in which to liquidate an entry if the information
for insuring compliance with applicable law is not available to the
Customs Service. Customs extended liquidation of the subject entry
on June 13, 1992, because information was required for the proper
classification of the merchandise. The protestant claims that it
did not receive notice of this extension.
The two recent Court decisions addressing the issue of notice
of extension or suspension of liquidation are Enron Oil Trading and
Transportation Co. v. United States, 15 CIT 511 (1991), vacated
988 F.2d 130 (1993), and International Cargo & Surety Insurance Co.
(Data Memory Corp.) v. United States, 15 CIT 541, 779 F. Supp 174
(1991). See also HQ 224397 (March 8, 1994). We note that the
Enron case has been vacated on appeal. Nevertheless, an analysis
of the evidence in that case is helpful in reaching a decision in
the subject protest.
The evidence on behalf of the plaintiff in the Enron case
consisted of affidavits by an employee of Enron and its predecessor
and by Enron's attorney in the case. The employee stated that he
had worked for Enron and its predecessor for the preceding nine
years and that during the time relevant to the case, it was the
regular business practice of Enron and its predecessor to forward
any documents received from Customs to the employee (i.e., the
employee of the plaintiff). The employee maintained a file for
each product contract in the case, and it was his regular practice
to lodge all of the documents he received pertaining to a
particular importation in the appropriate contract file. The
employee had searched these files and found no trace of any notice
of liquidation (probably should be notice of extension) of the four
entries at issue. The employee stated that he had no recollection
of ever receiving or viewing any notice of extension, and that he
believed that neither Enron
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nor its predecessor had ever received such notices. In this case,
the protetsant is also claiming that it reviewed the relevant files
and did not find a notice of extension.
The attorney for Enron in the case stated that he had
personally ascertained that diligent searches of the relevant files
in the offices of the surety for the entries had been undertaken
and that no notices of extension or liquidation nor any records of
receipt of such notices had been found. In this case, the
protestant claims to have learned of the increased duty assessment
through its surety. Therefore, presumably the surety received some
type of notice or correspondence from Customs in this instance.
The evidence on behalf of Customs in the Enron case consisted,
in pertinent part, of affidavits of two Customs employees with
expertise in the operation of Customs ACS and a computer printout.
According to the affidavits, at the time in question, Customs
extended the time for liquidation by recording the extension
information onto ACS which then automatically printed the notices.
The notices were printed and processed on weekends, and separated
and stacked in trays for pickup by the Postal Service. Customs did
not maintain paper copies of extension notices, but stored
information relating to notices in a computerized history file.
The computer printout in the Enron case listed the name and
address for the addressee of each notice and had columns labeled
"EXT/SUSP CODE", "MAIL CYCLE", and "RUN DATE", in addition to
columns listing the entry number and other information. According
to the affidavits, the MAIL CYCLE column contained a code which
identified the year and weekly mail cycle in which the
corresponding notice was printed. The RUN DATE column contained
the actual date that the notice was printed. In the first notices
for the entry involved in the Enron case (these would have been
issued in 1985), the RUN DATE was shown as "00/00/00" because at
that time Customs did not record the actual dates that notices were
printed, although the second notices did show dates less than two
years after the date of entry in the RUN DATE column.
In this case, the computer printout for the subject entry
indicates that notice of extension was issued on June 13, 1992. A
conversation with officials from ACS, indicates that this date
reflects the date a notice was generated and mailed by Customs.
Thus, the subject computer printout, unlike the printout in Enron,
indicates the date notice of extension was actually mailed.
Therefore, this protest is substantially different factually from
Enron.
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The lower Court in the Enron case concluded that "an issue of
material fact remain[ed]: whether notice was mailed to [Enron's
predecessor]." CIT at 515. The Court then stated: "Plaintiff's
affidavit from [the employee of Enron
and its predecessor] is sufficient to rebut the presumption that
notice was given" (i.e., the Court recognized the existence of this
presumption). In view of the evidence of the employee of Enron and
its predecessor (stated to be sufficient to rebut the presumption),
the Court stated that "[t]he [G]overnment [then] had the burden of
establishing that notice was given to plaintiffs [and] [t]he
affidavits and admissions . . . do not establish the fact." The
Court noted that (in the absence of a date in the RUN DATE column)
since the MAIL CYCLE code for the first extensions apparently was
generated before printing, no date of actual printing is included
in the records (i.e., "Thus it is not clear if the 'MAIL CYCLE'
code verifies that the notices of the first extension were actually
printed during that mail cycle, or were simply scheduled for
printing). CIT at 516.
In regard to the plaintiff's affidavits, the Court stated:
Plaintiff's evidence of non-receipt by [Enron's predecessor]
is simple and clear, although circumstantial. The evidence of
non-receipt by the
surety is less firm, coming as it does from an affiant
who gives no indication of his competence except that he
"personally ascertained" that no record of notice
existed in the surety's files. However, plaintiff need
only establish that no notice was given the "importer,
his consignee, or agent". 19 U.S.C. 1504. Evidence of
non-receipt by the surety merely adds some support to that
inference. [15 CIT at 516.]
As stated above, the Enron CIT decision was vacated and
remanded in an unpublished decision "not [to] be cited by counsel,
except in support of a claim of res judicata, collateral estoppel,
or law of the case."
The second recent case considering this issue is the Data
Memory Corp. case. In this case, the evidence on behalf of Customs
was similar to that in the Enron case (i.e., declarations by two
Customs employees and a computer printout), except that in this
case the ACS "extension/ suspension history file" was stated to
have been "lost" and as a substitute Customs produced the "entry
summary header file." The later printout contained encoded data
which, according to the declarations, "establishe[d] that notices
to
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[the importer and surety] were printed on [a particular date]".
CIT at 544. According to the declarations, as a routine matter
notices were printed at the Customs Data Center on a Saturday or
Sunday and mailed the following Tuesday.
As in the Enron case, the Court in the Data Memory Corp. case
recognized the presumption that proper notice was given and noted
that this presumption may be rebutted by evidence that notice was
not received. In this regard, the Court in the Data Memory Corp.
case cited the Enron case (note that the Data Memory Corp. case was
decided before the Enron case was remanded) and stated that in that
case "this court found that an affidavit from the importer's
record- keeper, stating that an extension notice had not been
received, was sufficient to rebut the presumption and defeat
summary judgement." CIT at 544. Since no such evidence was
submitted in the Data Memory Corp. case, after concluding that the
extension was permissible under the statute, the Court held for
Customs.
In this instance, the protestant submitted an unsworn
statement claiming that it did not receive an extension notice. No
documentation was provided to support this statement nor was any
procedure described within this statement which indicates the basis
of the protestant's
knowledge concerning the receipt of notice. Subsequently,
protestant's counsel indicated that this statement was based on a
search of the protestant' files. In addition, counsel offered to
submit a sworn affidavit in place of the protestant's unsworn
statement. Based on the Enron and Data Memory Corp. decisions,
this statement could arguably be sufficient to rebut the
presumption that notice was given. We note, however, that both the
ABI system and Customs computer records indicate that an extension
notice was issued. In Enron, the Customs records were not as
supportive in this matter. Therefore, we conclude that proper
notice of extension was given in this instance. Consequently, the
subject entry was not deemed liquidated by operation of law
pursuant to section 1504(a), but rather was extended and properly
liquidated by Customs on August 21, 1992.
HOLDING:
The protest is denied. This protest was not timely filed
pursuant to 19 U.S.C. 1514(c)(2)(B), and thus Customs refusal to
reliquidate the entry at issue is final on all parties. In
addition, notice of extension of the liquidation
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for the subject entry was issued on June 13, 1992. The subject
entry was properly liquidated on August 21, 1992, and thus not
deemed liquidated pursuant to 19 U.S.C. 1504(a).
In accordance with Section 3A(11)(b) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest Directive,
this decision should be mailed with the Customs Form 19, by your
office to the protestant no later than 60 days from the date of
this letter. Any reliquidation of the entry in accordance with the
decision must be accomplished prior to mailing this decision.
Sixty days from the date of the decision the Office of Regulations
and Rulings will take steps to make the decision available to
customs personnel via the Customs Rulings Module in ACS and the
public via the Diskette Subscription Service, Lexis, Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division