QUO-1-RR:IT:EC 114135 CC
Port Director
U.S. Customs Service
7097 S. Saragosa Rd.
El Paso, TX 79907
RE: Application for further review of Protest No. 2402-96-100054; Chili peppers; Tariff-rate quota; Release under immediate delivery; 19 CFR § 142.23; 19 CFR § 142.21(e);
HQ 114071
Dear Madam:
The above-referenced protest was forwarded to this office for further review. We have considered the facts and issues raised, and our decision follows.
FACTS:
The merchandise the subject of this protest consists of chili peppers imported from Mexico. This protest consists of two entries, one which was made on July 30, 1996, and the other was made on July 31, 1996. Both of the subject entries were made using the immediate delivery procedure.
Mexican chili peppers entered between October 1, 1995 and July 31, 1996, were subject to a tariff-rate quota provision pursuant to the North American Free Trade Agreement (NAFTA). The applicable subheading for the subject chili peppers entered during that period was 0709.60.20/9906.07.43, of the Harmonized Tariff Schedule of the United States (HTSUS), providing a duty rate of 5.1¢/kg. Mexican chili peppers entered between August 1 and September 30, 1996 were not subject to a tariff-rate quota and were eligible for duty-free treatment under subheading 0709.60.20/9906.07.41, HTSUS.
All of the entry summaries were filed after July 31, 1996, but within 10 working days of the date of release. The subject entries were liquidated under the tariff-rate quota provision subheading 0709.60.20/9906.07.43, HTSUS, at a duty rate of 5.1¢/kg. The reason for such liquidation was that the chili peppers were subject to quota because pursuant to 19 CFR § 142.23 and 19 CFR § 142.21(e), entry summaries were required to be filed before the end of the quota period, which was July 31, 1996. The protestant argues that under the immediate delivery procedure, the date of entry is when the entry summaries are filed, which in this case was when the chili peppers were not subject to the tariff-rate quota and were duty-free.
The subject entries were liquidated on November 22, 1996. The protest was filed on December 3, 1996.
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 established in a period in which the merchandise is not subject to quota and receives duty-free treatment.
LAW AND ANALYSIS:
In Headquarters Ruling (HQ) 226322, dated August 7, 1996, which was a protest decision, we found that an importer may 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 at the beginning of a new quota period, in order to have the date of entry and presentation established in the new quota period at a more favorable duty rate. Therefore, that protest was granted.
In HQ 114071, dated January 15, 1998, copy enclosed, which revoked the legal principles of HQ 226322, we stated that in HQ 226322 we failed to cite and apply 19 CFR §142.23 and 19 CFR § 142.21(e), which provide that when merchandise subject to a tariff-rate quota is released under a special permit for immediate delivery, entry summary will be properly presented within 10 working days of release, or within the quota period, whichever expires first. Consequently, an importer 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 the period in order to circumvent the tariff-rate quota in effect at the time of release.
We note that 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 in the Customs Bulletin, with the opportunity for interested parties to comment. HQ 114071 was published on February 4, 1998, in the Customs Bulletin, Vol. 32, No.5.
The factual situation and issue raised in this protest are similar to that of HQ 114071. In this protest the goods were released under the immediate delivery procedure at a time they were subject to a tariff-rate quota. The entry summaries were filed at a time when the goods were subject to a more favorable rate of duty, which in this case was duty-free since the chili peppers were no longer subject to quota. Based on HQ 114071, the chili peppers should be subject to the quota rate, since the entry summaries should have been filed before the end of the quota period in accordance with 19 CFR §142.23 and 19 CFR § 142.21(e).
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 established in a period in which the merchandise is not subject to quota and receives duty-free treatment. Accordingly, the protest is denied.
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 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, Freedom of Information Act and other public access channels.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers Branch
Enclosure