PRO-2-05/LIQ-1/MAR-2-01-CO:R:C:E 222116 JR
Deputy Assistant Regional Commissioner
Commercial Operations
55 East Monroe Street, Suite 1501
Chicago, Illinois 60603-5790
RE: Application for further review of Protest No. 3801-8-001416;
assessment of marking duties; 19 U.S.C. 1514(a)(4); 19
U.S.C. 1304; T.D. 89-48.
Dear Sir:
The above-referenced protest was forwarded to our office for
further review. We have considered the arguments raised. Our
decision follows.
FACTS:
Two mink coats were imported from Canada on June 22, 1987,
and the entry summary was filed on July 6, 1987, by the
customhouse broker, who was the importer of record. Thereafter,
Customs issued a "Notice of Redelivery--Marking" Customs Form
(CF) 4647, dated July 16, 1987, to the actual owner of the fur
coats, citing that the imported merchandise needed to be brought
in compliance with the requirements of the marking statute,
Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304) and
the Textile Fiber Products Identification Act (15 U.S.C. 70).
The actual owner complied by properly marking the coats
before liquidation, but failed to return the certified copy of CF
4647 to Customs within 30 days. The broker submitted the owner's
certified CF 4647 to Customs on September 3, 1987. On September
4, 1987, a Customs Import Specialist signed the CF 4647 on the
back with the following statement: "Coats examined by I.S.E.T.,
9/4/87. Correctly marked but completed beyond the thirty days."
When the certified copy of the CF 4647 was not returned
within thirty days, marking duties of $790.00 and liquidated
damages were assessed. The entry was liquidated on October 16,
1987. The liquidated damages were cancelled, but marking duties
of 10% were still assessed.
The broker, on January 14, 1988, timely filed a protest
within 90 days of the date of liquidation under 19 U.S.C.
1514(a)(4), asserting that the marking duties assessed should be
refunded and the protest allowed because, despite the defective
notice (the improper demand on the actual owner), the goods, in
fact, have been legally marked and the U.S. Customs Service has
certified that they have been marked by their statement on the
reverse of CF 4647. The broker does not contest the CF 4647's
untimely filing.
It is the position of the district director's office that
all actions in connection with this importation were according to
statute. The district office recommends denial of the protest
stating that the CF 4647 was issued in accordance with 19 CFR
141.113(e), and the importer did not comply with the terms of the
redelivery, see 19 CFR 113.62(d).
We note in passing that the broker filed a section 1520(c)
request on November 17, 1987, claiming that there was an improper
demand for liquidated damages (defective notice) because the
notice for redelivery was sent to the actual owner, the wrong
party, rather than the broker, the importer of record in
accordance with 19 CFR 141.113(d). The section 1520(c) request
was properly denied on February 16, 1989, because the error was
clearly an error in the interpretation of law (19 CFR 141.113(d)
and 113.62(d)) instead of a mistake of fact. Since it appears
from the file record that the broker did not protest the denial
of the 1520(c)(1) request under 19 U.S.C. 1514(a)(7), the issue
of who is the proper party to receive the demand notice for
redelivery (CF 4647) for failure to mark the imported merchandise
under 19 CFR 141.113(d) cannot now be raised. See 19 U.S.C.
1514(a).
ISSUE:
Did Customs properly assess marking duties when the
merchandise was marked with the country of origin outside the 30-
day marking period, but before liquidation of the entry?
LAW AND ANALYSIS:
The assessment of marking duties is governed by section 304,
Tariff Act of 1930, as amended (19 U.S.C. 1304). 19 U.S.C.
1304(f), "Additional duties for failure to mark," states, in
pertinent part:
If at the time of importation any article ... is not
marked in accordance with the requirements of this
section, and if such article is not exported or
destroyed or the article ... marked after importation
in accordance with the requirements of this section
(such exportation, destruction, or marking to be
accomplished under customs supervision prior to the
liquidation of the entry covering the article, and to
be allowed whether or not the article has remained in
continuous customs custody), there shall be levied,
collected, and paid upon the such article a duty of 10
per centum ad valorem, which shall be deemed to have
accrued at the time of importation, shall not be
construed to be penal, and shall not be remitted wholly
or in part nor shall payment thereof be avoidable for
any cause...
Treasury Decision (T.D.) 89-48 provides that "if merchandise
is properly marked with the country of origin outside the 30-day
period but before liquidation of the entry, liquidated damages
are appropriate, but marking duties are not due." (Emphasis in
the text of the T.D.)
Based upon 19 U.S.C. 1304(f) and the guidelines of T.D. 89-
48, the marking duties were improperly assessed in this case
since (1) Customs approved the marking, which we broadly construe
as being done under customs' supervision, on September 4, 1987
before the coats reached the ultimate consumer and (2) the CF
4647 was filed with Customs prior to the October 16, 1987
liquidation. The marking duties, accordingly, must be refunded
to the protestant/broker.
We note that liquidated damages were properly assessed since
the bond condition was technically breached, see 19 CFR
113.62(d)(1), (3); however, this is no longer at issue since
liquidated damages were cancelled upon payment. See T.D. 89-48.
[Protestant also appears to have petitioned for relief from
liquidated damages under Part 172, Customs Regulations. It
appears that relief was not granted in accordance with the
cancellation guidelines. That failure might be the subject of a
supplemental petition but not a protest.]
HOLDING:
In this case, marking duties of 10% were improperly
assessed, see T.D. 89-48, since the goods had been brought into
compliance with the marking statute (19 U.S.C. 1304) before
liquidation of the entry.
You are instructed to allow the protest and refund the
assessment of $790.00 in marking duties to the protestant in
accordance with T.D. 89-48. You may provide a copy of this
decision to the protestant.
Sincerely,
John Durant, Director