ENT-1-03/ENT-4/ENT-7-01-CO:R:C:E 224837 AJS
District Director of Customs
U.S. Customs Service
Plaza Nine Bldg., 6th Floor
55 Erieview Plaza
Cleveland, OH 44114
RE: Protest 4101-93-100064; merchandise processing fee; warehouse
entry; warehouse withdrawal for consumption; informal entry; 19
CFR 143.21(a); 19 CFR 143.22; 19 U.S.C. 58c; 19 CFR Part 144.
Dear Sir or Madame:
This is our decision on protest 4101-93-100064, dated June
25, 1993, regarding the merchandise processing fee (MPF) and
warehouse entries.
FACTS:
Merchandise with a value exceeding $1250 was entered for
warehouse. A portion of this merchandise with a value of less
than $1250 was subsequently withdrawn for consumption. A MPF of
0.17 per cent was assessed on the value of the merchandise in
each withdrawal. The protestant asserts that each withdrawal
should be treated as if it is an informal entry, thus requiring a
payment of only a $2.00 MPF.
ISSUE:
Whether a warehouse withdrawal for consumption of less than
$1250 may be treated as an informal entry. More specifically,
what is the proper amount of MPF which should be collected.
LAW AND ANALYSIS:
19 CFR 143.21(a) provides that shipments of merchandise not
exceeding $1250 in value, with certain exceptions, may be entered
under informal entry. We note that this provision
-2-
merely states that these shipments may be entered informally, it
does not provide for an absolute right to make an informal entry.
Furthermore, 19 CFR 143.22 provides that the district director
may require a formal consumption or appraisement entry for any
merchandise if deemed necessary for: (a) import admissibility
enforcement purposes, (b) revenue protection, or (c) the
efficient conduct of Customs business. Therefore, the district
director may require formal entry for merchandise even if it
satisfies the description in 19 CFR 143.21.
19 U.S.C. 58c(a)(9)(A) provides that the Secretary of the
Treasury shall charge and collect a fee for the processing of
merchandise that is formally entered or released. This fee, with
certain exceptions, shall be based on the value of the
merchandise as determined under section 1401a of this title. 19
U.S.C. 58c(b)(8)(D)(ii). For the purposes of section 58c(a)(9),
merchandise is entered or released if the merchandise is
withdrawn from warehouse for consumption. 19 U.S.C.
58c(b)(8)(E)(iii). Accordingly, the MPF shall be charged and
collected at the time merchandise is withdrawn from warehouse for
consumption. In this case, the subject MPF was assessed at this
time.
19 CFR 144.1 provides that any merchandise subject to duty
may be entered for warehousing except for perishable merchandise
and explosive substances (other than fire- crackers). Section
144.11 provides that the documentation required by section 142.3
of this chapter shall be filed at the time of warehouse entry.
If the entry summary, Customs Form (CF) 7501, is filed at the
time of entry for merchandise to be entered for warehouse, it
shall serve as both the entry and the entry summary. Section
144.12 states that the entry summary shall show the value,
classification, and rate of duty as approved by the district
director at the time the entry summary is filed. Thus,
merchandise which is entered for warehouse is already entered and
no longer eligible for informal entry.
19 CFR 144.12 provides, however, that no deposit of
estimated duties shall be required until the merchandise is
withdrawn for consumption. The MPF is due and payable at the
time of deposit of estimated duties. Bonded Warehouse Manual,
section 2.10(b) (1990). Section 144.13 provides that a bond on
CF 301 shall be filed in the amount required by the district
director to support the entry documentation. Section 144.14
provides that when the entry summary and bond have been filed,
with certain exceptions, the merchandise shall be sent to the
bonded warehouse. Accordingly, the MPF is not due upon the entry
of merchandise into warehouse but rather at the time of deposit
of estimated duties.
-3-
19 CFR 144.38(a) provides that withdrawals for consumption
of merchandise in bonded warehouses shall be filed on CF 7505.
We note that at this time the merchandise is being withdrawn from
warehouse and not entered. Paragraph (c) provides that each
withdrawal shall show the separate value of each package and the
total dutiable value of the merchandise being withdrawn.
Paragraph (d) provides that estimated duties on the merchandise
being withdrawn shall be deposited in accordance with subpart G
of part 141 of this chapter. Therefore, the MPF is due and
payable at this time. The district director may increase or
decrease the amount of estimated duties to be deposited on the
final withdrawal to bring the aggregate amount of duties
deposited into balance with the amount which he estimates will be
finally due upon liquidation. Paragraph (e) provides that when
the duties and other charges have been paid, and all other
requirements of law and regulations have been met, a permit on CF
7505-A shall be issued and delivered to the person making the
warehouse withdrawal.
In this instance, the protestant asserts that a withdrawal
for consumption should be treated as an informal entry or
withdrawal. Section 144.38 does not provide for any type of
informal withdrawal for consumption. Warehouse importers and
transferees are responsible for paying the MPF of 0.17 per cent
of the value of the merchandise covered by a withdrawal for
consumption at the time of deposit of estimated duties. Bonded
Warehouse Manual, section 2.10(b). In this case, the protestant
was charged a MPF of 0.17 percent. We can find no support nor
was any provided which would permit the protestant to pay only
the $2.00 fee charged for informal entries in 19 U.S.C.
58c(a)(10)(C)(i). As stated previously, merchandise which is
withdrawn for consumption has already been entered and thus is
not subject to the provisions regarding informal entry.
Therefore, the protestant was charged the correct MPF.
HOLDING:
The protest is denied. A warehouse withdrawal for
consumption may not be treated as an informal entry. A MPF of
0.17 per cent is to be assessed on a warehouse withdrawal for
consumption and not the $2.00 fee required for certain types of
informal entries.
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 by your office to the
protestant no later than 60 days from the
-4-
date of this letter. Any reliquidation of the entry in
accordance with the decision must be accomplished prior to
mailing of the 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