CLA-2 RR:CR:TE RH
TARIFF NOS.: 6103.30.2010; 6103.42.1520; 6103..43.2020
Artis Morgan
Port Director
U.S. Customs Service
1000 Second Avenue
Suite 2100
Seattle, WA 98104
RE: Protest and Application for Further Review 3001-97-100172; Validity of Liquidation of
an Entry; Detrimental Reliance;
Dear Mr. Morgan:
This is in reply to your memorandum dated July 2, 1997, forwarding the Application for Further Review of Protest 3001-97-100172 (AFR) to our office for review.
The law firm of Sharretts, Paley, Carter & Blauvelt, P.C., timely filed the AFR on behalf of Whitewater Outdoors, Inc., against the liquidation of an entry covering various garments under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).
Further review is warranted pursuant to 19 CFR §174.24.
FACTS:
This protest covers entry number EH5 XXXX775 8, which was entered on June 13, 1996, by Whitewater Outdoors, Inc. Our records show that the entry was to be liquidated as a “no change” on October 4, 1996, but instead was red lined and un set on October 1, 1996. Attached to the protest file is page 4 of the Bulletin Notice of Entries Liquidated for October 4, 1996. The subject protest is line number 18 on the page, and is crossed out. Additionally next to the crossed out entry it says, “Red lined per CST request”, and the initials “MFU” are written over the line. Additionally, there is a date stamp next to the line with Oct. 1, 1996. Attached to the Bulletin Notice of Liquidations is a Fax cover sheet, with the attestation, “I fully attest to the fact that CE# EH5 XXXX775 8 was red lined on October 1, 1996" signed by Daniel Pitt, Entry Specialist.
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Furthermore, our records show the entry was liquidated on January 24, 1997, which is within one year of the date of entry, June 13, 1996.
The protestant alleges that the entry was liquidated on October 4, 1996, and the attempted reliquidation on January 24, 1997, 112 days later, was invalid. The protestant states that because they received a courtesy notice of the October 4, 1996, liquidation that this is circumstantial evidence that the cancellation occurred after liquidation, and that the liquidation was final before the “reliquidation” on January 24, 1997. The courtesy notice states the entry number, liquidation amount, importer number, the statement “Entries Scheduled to Liquidate,” and the date October 4, 1996.
The protestant further alleges that, even if the “reliquidation” was proper, the merchandise must be classified in accordance with the manner in which it was entered because the protestant detrimentally relied on advice from Customs regarding its classification. The merchandise under protest consists of various garments used for hunting with an outer shell composed of a knit pile fabric laminated to a Goretex membrane. Customs classified the parkas and jackets under subheading 6103.30.2010, HTSUSA, the pants under subheading 6103.42.1520, HTSUSA, and the bib pants under subheading 6103.43.2020, HTSUSA.
ISSUE:
Was the January 24, 1997 liquidation of the entry invalid?
Were the garments in question correctly classified upon liquidation and, if so, has the protestant proven that it relied to its detriment on advise by Customs to classify the garments as entered?
LAW AND ANALYSIS:
Section 159.9(b), Customs Regulations, 19 CFR 159.9(b), provides that the legal notice of liquidation (including reliquidations) for entries is the posting by Customs of the “Bulletin Notice of Entries Liquidated” (bulletin notice) in a conspicuous place in the customhouse at the port of entry. The bulletin notice of liquidation on Customs Form (CF) 4333 is the only required notice. See 19 CFR 159.9(a). The courts have stated that “[n]otice of liquidation is intended to apprise importers of any action which may affect their interests, and to afford them opportunity to secure administrative and judicial review.” Goldhofer Fahzeugwerk GmbH. v. United States, 13 CIT 54, 706 F. Supp. 892, aff’d 885 F.2d 858, reh’g denied, suggestion for reh’g declined, cert. denied 110 S. Ct 1946 (1989). See also, Tropicana Products, Inc. v. United States, 713 F. Supp. 415, 419 (1989).
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As applied here, the liquidation that was posted at the customhouse was the only legal notice of liquidation. The notice sent to Protestant by ACS was simply notice that the liquidation was scheduled to occur, and the date from which Protestant was to be billed. 19 CFR 159.9(d) states that “courtesy notices” shall serve as an informal, courtesy notice and not as a direct, formal and decisive notice of liquidation.
However, at the time the bulletin notice was posted at the port, entry number EH5 XXXX775 8 was red lined. By red lining the entry Customs un set the liquidation. When a liquidation is red lined, without a manual reliquidation, it is as if the liquidation had not occurred. The act of red lining the merchandise removed the entry from the bulletin notice. Because the entry was red lined and no reliquidation attempted, Customs is not limited by section 501 of the Tariff Act of 1930, as amended, 19 U.S.C. 1501, and section 173.3 of the Customs Regulations, 19 CFR 173.3, which authorizes the port director to reliquidate entries voluntarily within 90 days from the date on which notice of the original liquidation was given to the importer. Instead, 19 U.S.C. 1504 controls, stating that an entry of merchandise, if not extended, must be liquidated one year from its entry into the Customs territory of the United States. Therefore, Customs had one year from the date of entry, June 13, 1996, to liquidate the entry, and the liquidation on January 24, 1997 was within the one year period, making that liquidation a valid original liquidation.
Additionally, the port has furnished as evidence of the red lining of protestant’s entry, a copy of the bulletin notice containing the entry with the red line, the date, and the Customs employee’s initials. Also furnished is an attestation that the liquidation was red lined on October 1, 1997. Accordingly, Customs has positive evidence that the liquidation was red lined, and that the liquidation was un set with no attempt at manual liquidation. Hence, the liquidation on January 24, 1997 is a valid original liquidation.
Next, counsel argues that the merchandise must be classified in accordance with the manner it was entered because the protestant relied to its detriment on advice from Customs that such classification was correct. Counsel states on page two of her submission:
While we acknowledge, as we must, that the classifications employed in the January 24, 1997 liquidation are correct, the importer asserts, in accordance with 19 C.F.R. 177.9, that it relied, to its detriment, upon the specific advice of Customs and the method Customs previously employed in classifying outerwear composed of a Gore-tex laminated fleece shell fabric.
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The protestant’s broker sent a letter dated December 6, 1995, to an import specialist in Seattle which reads in pertinent part:
Due to the above facts, we believe that these jackets should be classified under HS# 6113.00.9025/CAT 634, duty 7.6%. Please advise if you agree. Also attached is a very similar binding ruling for knit sweaters with the Goretex laminated to the inside of the sweater.
I can always do a binding ruling, but right now we are looking for an advisory classification. Please let me know whether you agree.
Customs did not issue a formal response to the December 6, although the importer apparently had a conversation with the import specialist which is reflected by the hand-written notes on the letter. Counsel further argues that the protestant relied upon this advice and it entered a shipment of garments which were liquidated under heading 6113, HTSUSA. Thereafter, the protestant claims that it embarked upon an advertising campaign and received voluminous orders for its Goretex laminated fleece.
The oral advice given to the protestant does not represent the official position of the Customs Service and is not binding. Moreover, the protestant knew, as evidenced by their statement that they “can always do a binding ruling” that the information sought was advisory only. See HQ 956188, dated December 29, 1994 (Advisory opinions by import specialists are not a binding classification ruling upon which reliance is justified). Thus, we find that it was not reasonable for the protestant to rely of this information.
In the December 6 letter, the broker also cited a Headquarters Ruling Letter (HQ), 082056 dated January 30 1989, in which Customs classified sweaters with Goretex lining under subheading 6113.00.0090. HQ 082056 was issued to another party and the merchandise, although similar, was not identical to the merchandise imported by the protestant. Section 177.9(c), Customs Regulations (19 CFR §177.9(c )) reads:
(c) Reliance on ruling letters by others. A ruling letter is subject to modification or revocation without notice to any person, except the person to whom the letter was addressed. Accordingly, no other person should rely on the ruling letter or assume that the principles of that ruling will be applied in connection with any transaction other than the one described in the letter. . . . (Emphasis supplied).
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Finally, counsel argues that the protestant relied upon Customs classification of a competitor’s garments for the preceding four years under heading 6113, which counsel claims were identical in all material aspects to its garments. The protestant, however, has not submitted evidence that the competitors garments are identical to its garments, or that Customs has a practice of classifying garments identical to the those at issue under heading 6113. In fact, in her submission, counsel admits that “the classifications employed in the 1997 liquidation [i.e., 6103] are correct.”
Accordingly, we find that the garments in question were properly classified as liquidated.
HOLDING:
The protest should be DENIED. The liquidation scheduled to occur on October 4, 1996, was properly red lined and un set, making the liquidation on January 24, 1997 a valid original liquidation, and the garments were correctly classified upon liquidation.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs p
ersonnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division