MAR-2-05 CO:R:C:V 735472 RSD
Area Director, JFK Airport
United States Customs Service
Building 178
Jamaica, New York 11430
RE: Further Review Protest-Protest 1001-0-001551; Country of Origin Marking Duties; Certification of Proper Marking; Customs Form 4647; Reliquidation; 19 U.S.C. 1304(f)
Dear Sir:
This is in response to the above-referenced protest, upon which the importer, Revlon International Corp., through its attorney has requested further review. The importer protests the assessment and liquidation of marking duties on an importation of credit card compacts and cosmetics. We regret the delay in responding.
FACTS:
The record indicates that the merchandise, a shipment of cosmetics such as rouges, lipstick, etc. arrived at the Customs port of JFK Airport on October 2, 1988. Upon review of the merchandise, the Customs inspectors determined that the merchandise was not properly marked with its country of origin. A Notice of Redelivery-Markings, Customs Form 4647 (CF 4647) was issued to the importer on October 6, 1988. The record contains a Customs Form 7501, which indicates that the merchandise was entered on October 18, 1988. The entry summary was filed on November 2, 1988.
According to a Customs Form 5955A in the record, redelivery of the merchandise was demanded on November 7, 1988. In a letter dated November 21, 1988, addressed to the Customs Service at JFK International Airport, the importer stated that they have jet sprayed the country of origin on each piece of merchandise. Samples of the merchandise supposedly accompanied this letter. However, there is no indication in the record when Custom received this letter and samples. Similarly, there is no indication that Customs authorized the importer to release the merchandise from its premises into the commerce of the United States. On December 7, 1988, Customs made a demand for payment of liquidated damages for the failure to redeliver the merchandise. The importer responded by preparing a letter to Customs dated February 3, 1989, claiming that the merchandise was marked on their premises. The letter explained that procedures were put in place to have the merchandise marked with the country of origin. The letter also stated that the importer had made available a completed item as sold to their clients. Again, there is no indication when the letter was received by Customs.
The entry was liquidated on October 6, 1989 with a duty amount of $6,350.60. On November 24, 1989, the entry was reliquidated with the addition of a 10 percent marking duty. The importer filed a protest of the liquidation with the assessment of marking duties. The importer has made two basic claims in support of its protest. The importer's first claim is that it certified to Customs that the goods were marked by sending the November 21, 1988, and February 3, 1989, letters. The second claim is that the entry liquidated by operation of law without the assessment of the 10 percent marking duty one year from the entry date. Therefore, liquidation of the entry with marking duties was in error.
ISSUES:
Do the letters allegedly sent to Customs, in which the importer claims that the merchandise was marked, establish that goods were marked under Customs supervision prior to liquidation?
Did the entry liquidate by operation of law one year after the entry date without the assessment of marking duties?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. 19 U.S.C. 1304(f) provides that 10 percent marking duties shall be levied, collected, and paid if an imported article is not properly marked with the country of origin at the time of importation, and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.51, Customs Regulations, (19 CFR 134.51), provides that when articles or containers are found upon examination not to be legally marked, the district director shall notify the importer on Customs Form 4647 to arrange with the district director's office to properly mark the articles or containers, or to return all released articles to Customs custody for marking, exportation, or destruction. This section further provides that the identity of the imported article shall be established to the satisfaction of the district director. Section 134.52, Customs Regulations (19 CFR 134.52), allows a district director to accept a certification of marking supported by samples from the importer or actual owner in lieu of marking under Customs supervision if specified conditions are satisfied. In HQ 731775 (November 3, 1988), Customs ruled that two prerequisites must be present in order for it to be proper to assess marking duties under 19 U.S.C. 1304(f). These two prerequisites are:
1. the merchandise was not legally marked at the time of importation
2. the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.
In this case, the importer claims that the merchandise was properly marked prior to liquidation, so that marking duties should not have been assessed. To establish that the merchandise was marked, the importer points to the two letters that were addressed to Customs at JFK Airport. The importer further asserts that the only reason why marking duties were assessed was that they informed Customs that goods were marked by letter instead of using the C.F. 4647 to certify that the goods were properly marked. It is the importer's position that there is no requirement that the certification of marking must be done on the CF 4647 and that the letters sent to Customs consider should be the equivalent of a CF 4647.
Customs has established procedures when imported goods are found upon examination not to be legally marked. These procedures are outlined in 19 CFR 134.51 and 19 CFR 134.52.
19 CFR 134.52 provides that district directors may accept certificates of marking supported by samples of the article required to be marked for which Customs Form 4647 was issued, from the importer or from actual owners to certify that the marking of the country of origin on the articles has been accomplished. Subsection (c) further states that the district director shall notify the importer or the actual owner of merchandise when the certificate of marking is accepted. The district director is authorized to spot check the marking of articles on which a certificate has been filed.
In this case, after the merchandise was found not legally marked, the importer did not follow the procedures outlined in 19 CFR 134.51 and 19 CFR 134.52 by filing the certificate of marking on the Customs Form 4647. Instead, the importer supposedly sent letters to Customs which advised that the merchandise was properly marked. However, there is no indication if or when Customs received these letters. Even if Customs received the letters timely, we do not believe that the procedure followed by the importer should result in a cancellation of the assessment of marking duties. The statute requires, if imported articles are not legally marked at the time of importation, marking duties must be collected unless the merchandise is remarked, exported, or destroyed under Customs supervision. Remarking of merchandise alone is not sufficient to cancel an assessment of marking duties; it must be done under Customs supervision.
Although the importers claim that they marked the goods after importation, there is nothing to establish that this marking was done under Customs supervision. No evidence has been presented to show that Customs accepted the marking or that it even had an opportunity to verify that the merchandise was marked correctly before it was sold. Instead, the importer removed the merchandise from its premises and put it into the commerce of the United States. Prior to removal of the merchandise from the importer's premises, no effort was made to demonstrate that the goods were legally marked or to obtain Customs approval for the marking.
In HQ 733907 (October 15, 1991), we indicated that an importer's failure to hold articles on his premises for verification and/or acceptance and the failure to identify the re-marked merchandise to the satisfaction of Customs officials established a strong presumption that the merchandise was not properly marked at the time of liquidation, such that marking duties accrued in accordance with 19 U.S.C. 1304(f). In that case, the importer was able to overcome the presumption by submitting letters from the importer's customers, which enumerated the invoice numbers and styles of the merchandise, and describe the manner in which the goods were marked as delivered to them. Here, there is no such evidence to establish that the goods were properly marked before they were sold and before the entry was liquidated. As such, the importer has not persuaded us that the assessment of marking duties should be cancelled.
We want to make clear that we are not holding that marking duties were properly assessed solely because the importer failed to file the right form with Customs (CF 4647). Rather, our finding is based on the importer's failure to establish that the goods were in fact properly marked before liquidation. In other words, even though the importer submitted letters asserting that the goods were properly marked, the submission of these letters alone is not sufficient evidence to demonstrate the goods were legally marked. In addition, Customs was not given an opportunity verify the claims made in the letters, and there is no other evidence to establish that the goods were marked before liquidation.
With respect to the importer's second claim that marking duties should not be assessed because the entry liquidated under operation of law without marking duties, one year after the date of entry, we find that the claim is also without merit. The record shows that the entry did not liquidate by operation of law, as the importer claims, one year after the date of entry, but rather that the entry was liquidated twice. The merchandise was entered on October 18, 1988, and according to the bulletin notices of liquidation, the entry was liquidated the first time within one year, on October 6, 1989, without marking duties. Subsequently, the entry was reliquidated on November 24, 1989, with an assessment of 10 percent marking duties. 19 U.S.C. 1501 permits Customs to reliquidate an entry in any respect within 90 days from the date on which notice of the original liquidation is given to the importer. Because the reliquidation on November 24, 1989, was within 90 days from the original liquidation date of October 6, 1989, the reliquidation was proper. Therefore, the entry could be reliquidated with the assessment of the marking duties.
HOLDING:
The assessment of marking duties was in accordance with provisions of 19 U.S.C. 1304 and Part 134, Customs Regulations.
You are directed to deny the protest. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the protest.
In accordance with Section 3A(11) of Customs Directive No. 099-3550-065, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. 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 to the public via the Diskette Subscription Service, Lexis, the Freedom of Information Act, and other public access Channels.
Sincerely,
John Durant, Director
Commercial Rulings Division