LIQ-9/FIS-4-08-CO:R:C:E 223593 PH
District Director of Customs
(Seattle Area/Port of Blaine)
Seattle, Washington 98104-1049
RE: Protest 30041 000165, Harbor Maintenance Fee; Exempt Ports;
26 U.S.C. 4462; 19 CFR 24.24; Treasury Decision 92-7
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised by your
office and the protestant. Our decision follows.
FACTS:
According to the file, the protestant entered a quantity of
aluminum oxide (alumina) on April 22, 1987, at Bellingham,
Washington. The merchandise was unloaded at a company-owned dock
located at Cherry Point, Washington. Harbor maintenance fees
were assessed against the merchandise at the rate of .04 percent.
The described entry and 19 other similar entries were liquidated
on April 12, 1991. On July 8, 1991, the protestant filed a
protest of the liquidations, contending that the dock where the
merchandise was unloaded was exempt from the harbor maintenance
fee. The protestant also contended that Customs was required to
pay interest on the harbor maintenance fees deposited at the time
of entry.
The protestant asked for further review in the protest and
you forwarded the protest to this office for such review.
ISSUES:
(1) May the protest against the assessment of harbor
maintenance fees on the unloading of merchandise at a company-
owned dock at Cherry Point, Washington, be granted in this case?
(2) If the protest under consideration may be granted, is
interest payable on the harbor maintenance fees paid from the
date of deposit of the fees or, alternatively, from the date of
liquidation of the entries protested?
LAW AND ANALYSIS:
Initially, we note that the protest, with application for
further review, was timely filed under the statutory and
regulatory provisions for protests (see 19 U.S.C. 1514 and 19 CFR
Part 174) and that the decision protested, assessment of harbor
maintenance fees, is a protestable decision (see 19 U.S.C.
1514(a)(5) and 26 U.S.C. 4462(f)).
The statutory authority for the harbor maintenance fee is
found in the Water Resources Development Act of 1986 (Public Law
99-662; 100 Stat. 4082, 4266; 26 U.S.C. 4461 et seq.) Under this
statute, a fee is imposed for the use of a port, defined as any
channel or harbor or component thereof in the United States which
is not an inland waterway, is open to public navigation, and at
which Federal funds have been used since 1977 for construction,
maintenance, or operation.
The Customs Regulations promulgated under the authority of
this statute (19 CFR 24.24) list the ports subject to the harbor
maintenance fee. When initially promulgated (see Treasury
Decision (T.D.) 87-44), the ports in the Puget Sound listed as
being subject to the harbor maintenance fee included Bellingham,
with a note "Includes only the ports listed." In T.D. 92-7,
section 24.24 was amended and the following was added to the
notes regarding Puget Sound ports: "Bellingham includes all of
Bellingham Bay and tributary waters north of Chuchanut Bay on the
east, and Portage Island on the west."
The dock where the merchandise under consideration was
unloaded is not within the geographical boundaries defined in the
note quoted above with regard to Bellingham. Customs has issued
a letter (File MAN-1-IC:W PAB, dated April 21, 1992) confirming
that this is so and that merchandise unloaded at this location is
not subject to the harbor maintenance fee. With regard to the
question of refunds, Customs has taken the position that a refund
will be granted for entries of merchandise unloaded at this
location which have been liquidated and for which a protest was
timely filed. Therefore, the protest is GRANTED with regard to
the issue of the applicability of the harbor maintenance fee.
The protestant also seeks interest on the harbor maintenance
fees paid, "from the date of the deposit of the estimated duties,
or alternatively, from the date of liquidation of the entries
identified by this protest." The Court of Appeals for the
Federal Circuit recently addressed the issue of interest payable
on excessive duties (see Kalan, Inc. v. United States, 944 F. 2d
847, Vol. 26 Cust. Bull. & Dec., No. 10, March 4, 1992, page 25
(1991). In this case, the Court held that excessive duties paid
are not "increased or additional duties" within the meaning of 19
U.S.C. 1520(d) and, when such excessive duties are refunded
pursuant to a granted protest, no interest is payable thereon.
We note that under 26 U.S.C. 4462(f) (cited above), except
as otherwise provided in regulations, all administrative and
enforcement provisions of the Customs laws and regulations apply
in respect to the harbor maintenance fee as if it were a duty.
(Note: We emphasize that although this provision makes all
administrative and enforcement provisions of the Customs laws and
regulations applicable to the harbor maintenance fee as if it
were a duty, it does not transform the harbor maintenance fee
into a Customs duty (see, in this regard, S. Rept. 99-126 (August
1, 1985) page 7, reprinted at U.S.C.C.A.N. 6644 (1986), and H.
Rept. 99-228 (January 8, 1986), pp. 3 and 10, reprinted at
U.S.C.C.A.N. 6707 and 6714-6715) (1986)).) Even if the harbor
maintenance fee is treated as if it were a duty for purposes of
the statute authorizing the payment of interest on increased or
additional duties (19 U.S.C. 1520(d)), pursuant to the Kalan
decision no interest would be payable because the harbor
maintenance fees paid in this case are not analogous to increased
or additional duties. The protest is DENIED with regard to the
issue of the granting of interest on the harbor maintenance fees
paid with these entries.
HOLDING:
(1) The protest against the assessment of harbor
maintenance fees on the unloading of merchandise at a company-
owned dock at Cherry Point, Washington, is granted.
(2) Interest is not payable on the harbor maintenance fees
paid, either from the date of deposit of the fees or from the
date of liquidation of the entries protested.
The protest is GRANTED in part and DENIED in part. A copy
of this decision should be attached to the Form 19, Notice of
Action, to be sent to the protestant.
Sincerely,
John Durant, Director
Commercial Rulings Division