DRA-1-06-CO:R:C:E 222984 TLS
District Director
U.S. Customs Service
7911 Forsythe Boulevard Suite 625
St. Louis, Missouri 63105
RE: Protest #4501-0-000021 concerning drawback on voluntarily
tendered payments made more than 90 days after liquidation.
Dear Sir:
The above-referenced protest has been forwarded to this
office for further review. We have considered the points raised
by the protestant and your office. Our decision follows.
FACTS:
A series of 10 separate entries were made by protestant from
March 2, 1988, to July 13, 1988 at the Memphis Customs port.
These entries were liquidated and duty-paid between June 3, 1988
and April 14, 1989. The entries were rate advanced at the New
Orleans Customs district on August 30, 1988, because the entered
value of the merchandise increased through proper classification.
Pursuant to this rate advance, the importer made additional
payments on each of the entries for various amounts. Customs had
made a request to the importer that it make voluntary tenders of
additional payments on these entries after finding that the
entries had been undervalued at liquidation. The importer then
made drawback entries at St. Louis Customs on February 24, 1989.
The drawback entries were liquidated on February 9, 1990, with
the exception of one that was made on February 16, 1990.
The importer made the voluntary tenders after liquidation of the
original entries had occurred and subsequently sought drawback on
those payments. The importer contends that the additional
payments are a part of the duties to which drawback is applicable
even though they were voluntary tenders. Customs disagreed,
finding that the additional payments constitute withheld duties
under Customs regulations which are excluded from drawback
eligibility.
ISSUE:
Whether the additional payments made as a voluntary tenders
more than 90 days after liquidation are eligible for drawback as
ordinary duties or excluded from drawback as withheld duties.
LAW AND ANALYSIS:
Customs refers to HQ 215896 (Sept. 26, 1983), which defined
"withheld duties" as amounts which are voluntarily tendered after
the time allowed for reliquidation has expired, as the reason for
denying drawback on the additional payments made in this case.
The ruling finds that withheld duties do not constitute 'ordinary
Customs duties' under 19 CFR 22.41 (the predecessor to 19 CFR
191.3) and are not eligible for drawback under 19 U.S.C. 1313.
The additional payments made in the present case meet the
definition of withheld duties as ruled in 215896. They were
voluntarily tendered upon request from Customs officials.
The protestant contends that 215896 was overturned by the
Court of International Trade. In General Motors Corp. v. United
States, 643 F. Supp. 1139 (CIT 1986), the importer had paid
diversion duties as required under the Tariff Schedules of the
United States (TSUS). Consequently, the court held that Customs
could not treat the payment of the diversion duties as voluntary,
stating that such constituted an exaction within the meaning of
19 U.S.C. 1514(a)(3). In the present case, the payments made
were not made pursuant to any requirement under law or otherwise.
As noted above, the payments are properly considered voluntary
payments under Customs laws. Thus, we find the additional
payments in this case to be withheld duties as has previously
been defined by Customs.
The protestant also claims that payments were made as a
requirement under 19 U.S.C. 1592(d) and should be considered
eligible for drawback. Contrary to the protestant's claims,
Customs did not initiate a 592 action against it for the
additional payments, however. The protestant has submitted no
evidence that it made the payments pursuant to a penalty matter
under section 592. In fact, the only connection this case
appears to have with section 592(d) is the importer's assertion
that it made the payments because of it. Consequently, there is
no evidence to show that C.S.D. 85-50 applies to this situation.
The protestant submits a copies of Notices of Action sent to it
by Customs which alerted the importer to the fact that Customs
wanted additional payments to be made. No mention of any penalty
claim or action was made by Customs on the documents, however.
To the contrary, Customs "requested" payment of "voluntary
tenders." Therefore, the additional payments were tendered as
withheld duties.
The importer stated in a February 14, 1992 letter to this
office that we agreed that these entries are subject to drawback
under 19 U.S.C. 1313(j) upon verifying documentation submitted as
proof that the payments were made. This office did not make such
an agreement with the importer, however, either orally or in
writing. The correct statement of our position is that the
additional payments made pursuant to the subject entries were
eligible for drawback only if they were made within 90 days after
liquidation to allow for reliquidation.
In this case, the voluntary payments were made on each of
the 10 entries after they had been liquidated. With respect to
two of the entries (those liquidated on June 3, 1988), the
payments were applied beyond 90 days after liquidation. The
other eight entries had the additional payments applied to them
and included in the drawback refund. The drawback paid on those
eight entries did not amount to 99 percent of the total paid on
each of the entries, including the additional payments. As a
result, the importer is also requesting a refund on each of the
eight entries to make up the difference between 99 percent and
the actual totals refunded.
Under normal circumstances, the decision of a Customs
officer as to the liquidation or reliquidation of an entry is
final and conclusive on all persons unless a protest is filed
within 90 days after the date of liquidation. See 19
U.S.C. 1514; 19 CFR 174. The alternative to timely filing a
protest is voluntary reliquidation of the entries within 90 days
after the date of liquidation. See 19 U.S.C. 1501; 19 CFR 173.3.
This action was not filed with Customs within 90 days after
liquidation of any of the subject entries, however. Customs is
also time-barred from voluntarily reliquidating the entries. We
regret that we are unable to grant relief under any of the above-
cited Customs laws as a result. Therefore, we must deny this
protest as being untimely with respect to additional payments
made on the entries after they were liquidated.
HOLDING:
The additional payments made after liquidation of the
consumption entries are voluntary tenders and consequently are
not eligible for drawback. Those four entries that had payments
applied to them within 90 days after liquidation cannot be
reliquidated because Customs is time-barred from doing so. There
is no evidence to show that any money was collected under 19
U.S.C. 1592(d). This protest should be denied in full. A Form
19, Notice of Action should be attached to this ruling.
Sincerely,
John Durant, Director