PRO-2-01: PRO-2-02: PRO-2-03
RR:CR:DR 559171 CK
Category: Liquidation
Port Director of Customs
U.S. Customs Service
ATTN: Jane Mary Greco
Entry Division
1624 East 7th Avenue, Ste. 101
Tampa, Florida 33605-3706
RE: Protest number 1801-95-1000021; Application for further
review; Timeliness of protest; Standing to protest; Refund of
excessive duties; Claims/set-off of duties; 19 U.S.C. 1514(C);
19 C.F.R. 174.11; 19 C.F.R. 24.32; 19 C.F.R. 24.72.
Dear Ms. Greco:
The above referenced protest has been forwarded to this
office for consideration. We have considered the points raised
by the Protestor and our decision follows.
FACTS:
C.J. Langenfelder & Son (Protestant) was a subcontractor,
performing site grading under an U.S. Navy contract at
Guantanamo Bay Naval Station. Langenfelder transported a
contingent of its equipment from Florida to Guantanamo Bay in
April, 1992 for the purpose of performing the six-month grading
project. The equipment was either owned or leased by C.J.
Langenfelder & Son, Inc. After completion of the work, the bulk
of the equipment was returned in November to the United States
via Port Canaveral, Florida.
The subject of this protest is the entry made on November
20, 1992, as entry number 922-xxxx738-1, from Cuba into the Tampa
Port, listing as the Importer of Record , Watkins Customs
Brokers, Inc. (Watkins) and listing as the Ultimate Consignee,
C.J. Langenfelder. The CF 7501 lists 11 lines of merchandise,
with a total, including duty and fees of $25052.86, however, only
the first line of merchandise is in dispute in this protest, and
that is TRANSPT VEH, REARDUMP, HTSUS 9903.87.00 with a total duty
amount of $15,500.00.
Protestant first submitted a "protest" regarding the
assessed duties on March 2, 1993. Protestant then sent a letter
dated April 26, 1993 amending the protest to include
certification from the Chief Engineer and Resident Officer in
Charge of Construction for the U.S. Naval Facilities Engineering
Command Contracts at the Guantanamo Bay Naval Base. The attached
letter certified that Protestant had in April 1992 transported by
barge its earthmoving equipment to Guantanamo and that from
August 1992 to November 1992 returned had the equipment to the
U.S.; and during that period he had observed the arrival and
departure of the equipment, which was used in Guantanamo for the
sole purpose of the execution of the construction contract.
The entry was liquidated on January 13, 1995. The entry
summary was liquidated as a "change" by the Tampa port and a
refund in the amount of $15,499.98 was authorized on January 13,
1995. This "change" was the result of the Import Specialist
agreeing with the Protestant, and changing the classification of
the dump trucks. The refund was issued in the name of the
importer of record, Watkins Customs Brokers, Inc. However, at
the time of the refund, Watkins was in debt to the U.S. Customs
Service, and the check was stopped and used to pay the arrears.
This protest and application for further review was filed on
April 12, 1995. Protestant claims the classification of the Dump
truck should be HTSUS 9801.00.1010, entering duty free, and
should therefore result in a refund to them. Protestant states
that the Customs Service should rightfully reimburse Langenfelder
for the duty improperly assessed its construction equipment re-entry.
Attached is a Watkins Customs Brokers, Inc. invoice, number
138642 JAX, dated November 23, 1994, to C.J. Langenfelder,
seeking a remittance of $33,062.61, for Customs entry fee,
Premium on bond, and Duty, est. subject to liquidation.
Protestant also submitted an inventory of all equipment used at
Guantanamo Bay and the estimated value of the machinery used and
re-entered into the U.S. Watkins Customs Brokers, Inc. was
listed as the importer of record and the entry was made under its
importer number.
Additionally, Protestant on April 13, 1995, submitted a
letter to the Tampa port to amend their protest, since they had
not completed section II. Protestant wished to attach to the
protest, the letter of certification dated April 21, 1993, from
the Chief Engineer and Resident Officer in Charge of Construction
for the U.S. Naval Facilities Engineering Command Contracts at
the Guantanamo Bay Naval Station; and a letter from Protestant,
dated June 9, 1994, to the
U.S. Customs Service, Tampa. In that letter, Protestant sought
the status of the 1993 "protest", and reiterated its stand that
the assessment of duty on the trucks was improper.
Protestant filed a protest and sought further review,
simultaneously. The Import Specialist at the Tampa port
recommended denying the protest on the grounds that the issue is
not a matter subject to protest under 19 C.F.R. 174.11. When
the entry was liquidated the dump trucks in question were
classified as Protestant argued, and a refund was authorized.
The refund, as explained earlier, was used to clear the arrears
owed on Watkins Customs Brokers, Inc.'s account, as it was listed
as the importer of record. This protest is essentially seeking
the refund already granted.
ISSUE:
May a protest be granted when the relief sought is a refund
of duties already granted to the Importer of Record, based on the
re-classification of an entry?
LAW/ANALYSIS:
Under 19 U.S.C. 1514, (with certain exceptions not
applicable in this matter) certain listed decisions (including
the legality of all orders and findings entering into the same)
of the Customs Service are final and conclusive on all persons
unless a protest is filed in accordance with section 1514, 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 28,
United States Code. The decisions (listed in section 1514(a);
also listed in 19 C.F.R. 174.11 as "[m]atters subject to
protest") are:
(1) the appraised value of merchandise;
(2) the classification and rate and amount of duties
chargeable;
(3) all charges or exactions of whatever character within
the jurisdiction of the Secretary of the Treasury;
(4) the exclusion of merchandise from entry or delivery or a
demand for redelivery to customs custody under any provision of
the customs laws, except a determination appealable under [19
U.S.C. 1337];
(5) the liquidation or reliquidation of an entry, or
reconciliation as to the issues contained therein, or any
modification thereof;
(6) the refusal to pay a claim for drawback; or
(7) the refusal to reliquidate an entry under [19 U.S.C.
1520(c)].
19 U.S.C. 1514 (c) (2) states:
Except as provided in sections 1485(d) and 1557(b) of this
title, protests may be filed with respect to merchandise which is
the subject of a decision specified in subsection (a) of this
section by -
(A) the importers or consignees shown on the entry papers,
or their sureties;
(B) any person paying any charge or exaction;
(C) any person seeking entry or delivery;
(D) any person filing a claim for drawback;
(E) with respect to a determination of origin under section
3332 of this title, any exporter or producer of the merchandise
subject to that determination, if the exporter or producer
completed and signed a NAFTA Certificate of Origin covering the
merchandise; or
(F) any authorized agent of any of the persons described in
clauses (A) through (E).
The procedures for filing a protest of one of the above
decisions are provided in
19 U.S.C. 1514(c). Section 1514(c)(1) provides that only one
protest may be filed for each entry of merchandise (with certain
exceptions inapplicable in this matter). Section 1514(c)(3)
provides that a protest of a decision, order, or finding
described in section 1514(a) shall be filed with Customs within
90 days after but not before the notice of liquidation or
reliquidation or the date of the decision as to which protest is
made (if the requirement for filing within 90 days before the
notice of liquidation or reliquidation is inapplicable).
Additionally, HQ 223745, states that a "protest" letter
received before notice of liquidation cannot be considered a
protest because it is premature. This ruling cites to the
explicit wording of 19 U.S.C. 1514 (c)(2) and United States v.
Reliable Chemical Co., 66 CCPA 123,
605 F.2d 1179 (1979). Furthermore, the issue of the invalidity
of a "protest" received before notice of liquidation was decided
in HQ 224846, where we stated that a protest is considered
untimely filed under 19 U.S.C. 1514 (c)(2) when it is filed
anytime before the posting of the bulletin of notice of
liquidation or reliquidation at the customhouse. It also stated
that, 19 U.S.C. 1514, fixes a definite time within which a
protest may be filed. 19 U.S.C. 1514(c)(2) requires that a
protest be filed with Customs within 90 days after, but not
before, notice of liquidation or reliquidation. This requirement
is strictly construed. Atari Caribe v. United States, 16 CIT _ ,
799 F. Supp. 99, 102 (1992); see also Peg Bandage, Inc. v. United
States, 17 CIT _ , Slip Op. 93-236 (December 15, 1993), as
printed in Vol. 28 Cust. B. & Dec., No. 1, January 5, 1994, pages
268-269. Untimely filed protests are invalid. United States v.
Wyman, 156 F. Supp. 97, 84 C.C.A. 123 (Mo. 1907); see also
Gallagher & Ascher v. United States, 21 CCPA 313 (1933); Spiegel
Bros. v. United States, 21 CCPA 310 (1933). Therefore, the 1993
"protest" is invalid, and untimely because it was premature. It
was premature since liquidation had not yet occurred.
Under 19 U.S.C. 1515, "[u]pon the request of the protesting
party ... a protest may be subject to further review by another
appropriate customs officer, under the circumstances and in the
form and manner that may be prescribed ... in regulations".
The Customs Regulations pertaining to protests, issued under
the above statutes, are found in 19 C.F.R. Part 174. Under 19
C.F.R. 174.24, further review (as provided for in 19 U.S.C.
1515) shall be accorded a party when the decision against which
the protest was filed, among other things, is alleged to involve
questions of law or fact which have not been ruled upon by the
Commissioner of Customs or his designee or by the Customs courts.
Under 19 C.F.R. 174.26(b), a protest with an application for
further review shall be reviewed (as pertinent to the grounds
under which further review was requested in this matter) by the
Commissioner of Customs or his designee if the protest and
application for further review raise an issue involving questions
which have not been the subject of a Customs ruling or court
decision.
As an initial issue, Protestant has standing to bring this
protest, under
19 U.S.C. 1514(c)(2)(A), as the consignee shown on the entry
papers. See, Sturm, A Manual of Customs Law, 6 (1974 ed.) In
this case, the entry was liquidated on January 13, 1995, the dump
trucks at issue were re-classified, and a refund of the estimated
duties paid in 1993, totaling $15,499.98 was authorized.
Therefore, the April 12, 1995 protest is timely filed on the 89th
day of the protest period as required by 19 U.S.C. 1514(a).
However, Protestant attempted to send an amendment to the protest
dated, April 13, 1995, which was received by the Customs Service
on April 17, 1995. This amendment was received after the 90-day
protest period ended, and cannot be considered in deciding the
present appeal. 19 U.S.C. 1514 (c)(1)(D) states, "A protest may
be amended, under regulations prescribed by the Secretary, to set
forth objections as to a decision or decisions described in
subsection (a) of this section which were not the subject of the
original protest, in the form and manner prescribed for a
protest, any time prior to the expiration of the time in which
such protest could have been filed under this section." (Emphasis
added)
Since the entry form listed Watkins's Customs Brokers, Inc.
as the Importer of Record and used its importer number the refund
was issued to the importer, however, Watkins was indebted to the
Customs Service at that time, and the refund was stopped and the
money used on the arrears. Protestant is therefore seeking the
refund that has already been issued. Who received or who should
have received a refund is not listed as a protestable issue under
19 U.S.C. 1514(c) or 19 C.F.R. 174.12.
19 U.S.C. 1624 states, "In addition to the specific powers
conferred by this chapter the Secretary of the Treasury is
authorized to make such rules and regulations as may be necessary
to carry out the provisions of this chapter." The authority for
the collection of fees, and the form such collection may take, is
found in 19 U.S.C. 66 which states, "The Secretary of the
Treasury shall prescribe forms of entries, oaths, bonds, and
other papers, and rules and regulations not inconsistent with
law, to be used in carrying out the provisions of law relating to
raising revenue from imports, or to duties on imports, or to
warehousing, and shall give such directions to customs officers
and prescribe such rules and forms to be observed by them as may
be necessary for the proper execution of the law."
Furthermore, "importer" is defined in 19 C.F.R. 101.1
as,``Importer'' means the person primarily liable for the payment
of any duties on the merchandise, or an authorized agent acting
on his behalf. The importer may be:
(1) The consignee, or
(2) The importer of record, or
(3) The actual owner of the merchandise, if an actual
owner's declaration and superseding bond has been filed in
accordance with 141.20 of this chapter, or
(4) The transferee of the merchandise, if the right to
withdraw merchandise in a bonded warehouse has been transferred
in accordance with subpart C of part 144 of this chapter.
Additionally, U.S. Customs Service, by regulation sends
refunds to the Importer of Record. 19 C.F.R. 24.36(a) states,
"When it is found on liquidation or reliquidation of an entry
that a refund of excessive duties or taxes, or both, is due, a
refund shall be prepared in the name of the person to whom the
refund is due, as determined by paragraphs (b) and (c) of this
section. If an authority to mail checks to someone other than
the payee, Customs Form 4811, is on file, the address of the
payee shall be shown as in care of the address of the authorized
persons."
19 C.F.R. 24.36(b) states, "Refunds of excessive duties or
taxes shall be certified for payment to the importer of record
unless a transferee of the right to withdraw merchandise from
bonded warehouse is entitled to receive the refund under section
557 (b) of the Tariff Act of 1930, as amended, or an owner's
declaration has been filed in accordance with section 485 (d),
Tariff Act of 1930, or a surety submits evidence of payment to
Customs, upon default of the principal, of amounts previously
determined to be due on the same entry or transaction." (Emphasis
added)
In this case, the importer of record, Watkins Customs
Brokers, Inc., was by regulation, the payee of the refund
authorized by the Tampa port's re-classification. Additionally,
no CF 4811, was on file, notifying the Customs Service that C.J.
Langenfelder should be the recipient of any refund. Therefore,
Watkins was the correct recipient of any refund.
As to the issue of was the Customs Service correct in using
the refund duties to pay the arrears on the Watkins account, the
regulations, allow for such set-off. Under 24.72 the
regulations provide that, "When an importer of record or other
party has a judgment or claim allowed by legal authority against
the United States, either as a principal or surety, for an amount
which is legally fixed and undisputed, the port director shall
set off so much of the judgment or other claim as will equal the
amount of the debt due the government." 19 C.F.R. 24.72.
Therefore, the Customs Service had the ability, according to the
regulations, to set-off the refund that would have been issued
to Watkins Customs Brokers, Inc, against the debt owed to Customs
by Watkins.
HOLDING:
The asserted subject of this protest was the classification
of dump trucks entered into the U.S. through Florida. Protestant
asserts the re-classification of the trucks and a refund of the
estimated duties paid. However, Customs liquidated the entry in
accordance with the sought classification, and a refund of the
estimated duties was authorized. The importer of record,
Watkins, was the person entitled to the refund. Watkins, the
importer of record, was indebted to the Customs Service and the
refund was set-off under the regulations. Therefore, the subject
of this protest is essentially who should have been, the
recipient of a refund on estimated duties, and was the Customs
Service entitled to set-off the refund, against the debt owed to
Customs by that importer, which is not protestable under 19
U.S.C. 1514(c) and 19 C.F.R. 174.11. Since, there is no
protestable issue here, the protest must be DENIED.
Consistent with the decision set forth above, you are hereby
directed to deny the subject protest. 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 date of this letter. Any reliquidation of the entry in
accordance with the decision must be accomplished prior to
mailing the decision. Sixty days from the date of the decision
of 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, Freedom of Information Act and other public
access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division