ENT-5-01/1-03-1-07-RR:IT:EC 114071 CC
Port Director of Customs
U.S. Customs Service
Commercial Operations
198 West Service Road
Champlain, NY 12919
RE: Revocation of HQ 226322; Tariff-rate quota; Release under
immediate delivery; 19 CFR 142.23; 19 CFR 142.21(e); Entry
summary must be filed prior to 10 working days from release or
end of quota period, whichever expires first
Dear Sir:
Protest 0712-95-100534 was filed with you, contesting the
date of entry for merchandise subject to a tariff-rate quota.
The protest was forwarded to our office and we issued
Headquarters Ruling (HQ) 266322 on August 7, 1996. In that
decision we granted the protest, finding that the date of entry
for quota-class merchandise released under the immediate delivery
procedure is the date the entry summary is filed, permitting the
protestant to pay duty at the rate of the tariff-rate quota under
the new quota period when entry summary was filed, rather than
the rate due at the time of release. We have reviewed HQ 226322
and believe that it is incorrect.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C.
1625(c)(1)), as amended by section 623 of Title VI (Customs
Modernization) of the North American Free Trade Agreement
Implementation Act (Pub.L. 103-182, 107 Stat. 2057), notice of
the proposed revocation of
HQ 226322 was published on December 10, 1997, in the CUSTOMS
BULLETIN, Volume 31, Number 50.
FACTS:
According to the facts presented in HQ 226322, protest was
made against the assessment of duty charged at the 1994 North
American Free Trade Agreement (NAFTA) tariff-rate quota. The
protestant asserted that Customs erred in demanding payment of
duties at the 1994 rate of duty on a tariff-rate quota entry of
apparel goods from Canada to the United States. The protestant
also asserted that the 1995 NAFTA tariff-rate quota rate of duty
was applicable, and the status of quota should have been
determined based on the date entry summary was filed.
The entry summary was filed on January 13, 1995. The
subject merchandise was exported from Canada under a Certificate
of Eligibility for a Tariff Preference Level (TPL) on December
30, 1994. Customs computer records indicated that the
merchandise from the subject entry was also released under a
special permit for immediate delivery on December 30, 1994. The
subject merchandise was classified under one of the following
subheadings under the Harmonized Tariff Schedule of the United
States (HTSUS): 6204.39.30, 6206.40.30, 6204.69.25, 6204.59.30,
6211.43.00, or 6211.49.00. Also, the merchandise was subject to
a special statistical reporting number, either 9999.00.51 or
9999.00.50, HTSUS, for apparel goods imported from Canada under
the terms of Additional U.S. note 3 to section XI of the HTSUS.
ISSUE:
May an importer have merchandise subject to a tariff-rate
quota released under a special permit for immediate delivery near
the end of a quota period and file entry summary after the close
of that quota period, in order to have the date of entry and
presentation established in the new quota period at a more
favorable duty rate.
LAW AND ANALYSIS:
The effective rates of duty for merchandise imported into
the United States are provided for in 19 U.S.C. 1315. That
statute, as amended, provides, in pertinent part, the following:
(a) Except as otherwise specially provided for, the
rate or rates of duty imposed by or pursuant to this
chapter or any other law on any article entered for
consumption or withdrawn from warehouse for consumption
shall be the rate or rates in effect when the documents
comprising the entry for consumption or withdrawal from
warehouse for consumption and any estimated or
liquidated duties then required to be paid have been
deposited with the Customs Service by written,
electronic or such other means as the Secretary by
regulation shall prescribe, except that--
(1) ...
(2) ...
(3) any article for which duties may, under
section 1505 of this title, be paid at a time later
than the time of making entry shall be subject to the
rate or rates in effect at the time of entry.
19 U.S.C. 1505(a) provides, in pertinent part, "[u]nless
merchandise is entered for warehouse or transportation, or under
bond, the importer of record shall deposit with the Customs
Service at the time of making entry or at such later time as the
Secretary may prescribe by regulation, the amount of duties and
fees estimated to be payable thereon....
Customs Regulations issued pursuant to, or that are relevant
to, the above statutes, are set forth, in part, below. 19 CFR
141.69 provides, "[t]he rates of duty applicable to merchandise
shall be the rates in effect at the time of entry, as specified
in 141.68, except [in cases not pertinent in this case]..."
19 CFR 141.68 provides the time of entry for merchandise
imported into the United States. Subsection (a) of section
141.68 provides the general rule for establishing the time of
entry when entry documentation is filed without an entry summary,
and subsection (b) of section 141.68 provides the rule for
establishing the time of entry when an entry summary serves as
both the entry documentation and entry summary. Subsection (c)
specifically provides for merchandise released under the
immediate delivery procedure (the time of entry is the time the
entry summary is filed in proper form, with estimated duties
attached). Subsection (d) specifically provides for the time of
entry for quota-class merchandise (i.e., "[t]he time of entry for
quota-class merchandise shall be the time of presentation of the
entry summary or withdrawal for consumption in proper form, with
estimated duties attached or, if the entry/entry summary
information and a valid scheduled statement date... have been
successfully received by Customs via [ABI], without estimated
duties attached, as provided in [19 CFR 132.11a]").
19 CFR 132.1(e) defines quota-class merchandise as "any
imported merchandise subject to limitations under an absolute or
a tariff-rate quota." 19 CFR 132.1(d) defines presentation as
the delivery in proper form to the appropriate Customs officer of
essentially the required information and documentation listed
above in 19 CFR 141.68(d). 19 CFR 132.11(a) provides that
the time of presentation is the time of delivery in proper form
of the above-described information and documentation.
In applying the above law and regulations, in HQ 226322 we
stated the following:
In interpreting these provisions, we are guided by
the rule of interpretation that a general rule will not
be held to apply to a matter specifically dealt with in
another part of the same provision (Ginsberg & Sons,
Inc. v. Popkin, 285 U.S. 204, 208 (1932); Green v. Bock
Laundry Machine Co., 490 U.S. 504, 524 (1989). In this
case, in 19 CFR 141.68(d), there is a specific rule
pertaining to quota-class merchandise (we note that
such merchandise includes merchandise subject to
limitations under a tariff-rate quota as well as an
absolute quota (19 CFR 132.1(e)). Under section
141.68(d), the date of entry for quota-class
merchandise is the time of presentation of the entry
summary or withdrawal for consumption in proper form
with estimated duties attached (unless ABI procedures
are used, in which case estimated duties need not be
attached). As the more specific provision, this
provision prevails over the more general provisions in
paragraph (b) (i.e., when entry summary serves as entry
and entry summary at the time of release) and (c)
(i.e., when merchandise is released under the immediate
delivery procedure) of section 141.68 when the
merchandise entered is quota-class merchandise.
Although the rule of interpretation stated above in applying
a more specific provision over a general one is sound, after
further analysis of HQ 226322 we believe the application of that
rule of interpretation in that case was incorrect. Concerning
the regulations provided for in 19 CFR 141.68, subsection (b)
would not be applicable when goods are released under the
immediate delivery procedure. Subsection (c) provides that the
date of entry for merchandise released under the immediate
delivery procedure is when entry summary is filed with estimated
duties attached. As subsection (d) was interpreted in HQ 226322,
presentation and the date of entry occurred when entry summary
with estimated duties attached was filed, even for merchandise
released under the immediate delivery procedure. Therefore, the
result in HQ 226322 is the same in applying 19 CFR 141.68(c) as
in applying 141.68(d), and there would be no need to resort to
the rule of interpretation of applying a more specific provision.
There do exist regulations that are specific to the factual
situation of HQ 226322, in other words, that apply to quota-class
merchandise that has been released under the immediate delivery
procedure. Those applicable regulations are 19 CFR 142.23 and
19 CFR 142.21(e).
19 CFR 142.23 provides the time limit for filing
documentation after release under a special permit for immediate
delivery, stating the following:
The applicable documentation described in
142.22(b) shall be filed, and estimated duties, if any,
shall be deposited, within 10 working days after the
merchandise or any part of the merchandise is
authorized for release under a special permit for
immediate delivery or, for quota class merchandise
within the quota, whichever expires first (emphasis
added).
19 CFR 142.21(e) provides that merchandise subject to a
tariff-rate quota may be released under a special permit for
immediate delivery, and states "[a]n entry summary shall be
properly presented pursuant to 19 CFR 132.1 of this chapter
within the time specified in 19 CFR 142.23, or within the quota
period, whichever expires first."
Clearly the regulations provide that for merchandise subject
to a tariff-rate quota and released by immediate delivery near
the end of a quota period, entry summary must be filed by the end
of that quota period if it occurs prior to 10 working days of the
date of release. In such a scenario, if the regulations are
followed, entry summary would be filed and presentation would
occur before the end of the quota period in which release
occurred. Consequently, the purpose of the applicable
regulations, 19 CFR 142.23 and 19 CFR 142.21(e), is clear:
to ensure that importers may not gain release of merchandise
subject to a tariff-rate quota at the end of a quota period and
file entry summary after the close of that period in order to
circumvent the tariff-rate quota in effect at the time of
release.
In HQ 226322 the merchandise subject to a tariff-rate quota
was released under a special permit for immediate delivery on
December 30, 1994, near the end of a quota period. (The end of
the quota period was December 31, 1994; the beginning of the new
quota period was January 1, 1995.) Entry summary was filed on
January 13, 1995. Thus, the importer violated the applicable
regulations, 19 CFR 142.23 and 19 CFR 142.21(e), by not
filing entry summary before the end of the quota period (which
expired on December 31, 1994) in which the goods were released,
since the end of the quota expired prior to 10 working days from
the date of release. Therefore, it was proper for the port to
demand duties due at the time of release for merchandise subject
to a tariff-rate quota.
We note that in most cases it may not only be impractical,
but impossible, to change the date of entry, and thus the date of
presentation, from the date entry summary is filed in the new
quota period to a date it was required to be filed under the old
quota period. Thus it is Customs position, in order to
effectuate the requirements and intent of 19 CFR 142.23 and 19
CFR 142.21(e), that importers who fail to file entry summary by
the close of the quota period in which the goods are released are
subject to liquidated damages equal to the difference between the
tariff-rate quota in effect at the time of filing of the entry
summary and the rate in effect at the time of release under the
immediate delivery permit, plus late-file liquidated damages.
HOLDING:
An importer may not have merchandise subject to a tariff-rate quota released under a special permit for immediate delivery
near the end of a quota period and file entry summary after the
close of that quota period, in order to have the date of entry
and presentation established in the new quota period at a more
favorable duty rate.
HQ 226322 reflects the final determination with respect to a
particular protest. As such, Customs recognizes that it cannot
be modified or revoked with respect to the disposition of the
entry in that protest. For the reasons stated above, however,
the legal principles set forth in HQ 226322 are hereby revoked
and no longer represent the position of the Customs Service
concerning the release of merchandise under a special permit for
immediate delivery that is subject to a tariff-rate quota.
In accordance with 19 U.S.C. 1625(c)(1), this ruling will
become effective 60 days after its publication in the CUSTOMS
BULLETIN. Publication of rulings or decisions pursuant to 19
U.S.C. 1625(c)(1) does not constitute a change of practice or
position in accordance with section 177.10(c)(1) of the Customs
Regulations (19 CFR 177.10(c)(1)).
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch