LIQ-1-CO:R:C:E 221692 PH
Regional Commissioner of Customs
1 World Trade Center, Suite 705
Long Beach, California 90831-0700
RE: Application for Further Review of Protest No. 2704-8-004309;
Interest on Overpaid Duties; 19 U.S.C. 1520(d) and 1505(c)
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, on July 3, 1986, the protestant
imported 209,225 barrels (8,787,450 gallons) of unleaded gasoline
stated by the protestant to be subject to duty of $109,843.13
which the protestant paid. The entry date for this importation
was July 16, 1986, and the entry summary is dated August 1,
1986. Duty in the amount of $219,686.25 was ascertained to be
due (based on a quantity of 209,225 barrels plus 8,787,450 gal-
lons of gasoline, instead of the actual quantity (i.e., 209,225
barrels or 8,787,450 gallons)). The entry was liquidated on
February 6, 1987, with duty in the amount of $219,686.25 and the
protestant was billed for $122,784.58 (i.e., $109,843.12 in addi-
tional duties ($219,686.25 minus the $109,843.13 already paid)
plus $12,941.46 in interest). There is a notation in the file to
the effect that this amount was paid to Customs on April 4, 1988.
The entry was reliquidated on August 19, 1988, with duty in the
amount of $109,843.13 and the $109,843.12 was refunded to the
protestant.
The protestant on November 16, 1988, protested the
reliquidation of the entry. The protestant protests "the
nonaccrual of interest during the period of time in which refunds
are processed by the Customs Service", claiming "that interest
should accrue and be paid on such funds which the Customs Service
maintains in its accounts from the date of liquidation to the
date of refund." The position of the District Director of
Customs is that "[i]nterest is calculated from the date increased
duty bill is paid to date of reliquidation."
ISSUE:
In an entry liquidated with increased or additional duties
and reliquidated with a refund of the increased or additional
duties, is a protestant entitled to interest on the refunded
duties and, if so, over what time period is the protestant
entitled to interest?
LAW AND ANALYSIS:
Section 520(d), Tariff Act of 1930, as amended (19 U.S.C.
1520(d)), the statute upon which the protestant bases the
protest, provides, in part, that:
If a determination is made to reliquidate an
entry as a result of a protest filed under [19
U.S.C. 1514], or an application for relief made
under [19 U.S.C. 1520(c)(1)], or if reliquidation
is ordered by an appropriate court, interest
shall be allowed on any amount paid as increased
or additional duties under [19 U.S.C. 1505(c)] at
the annual rate established pursuant to that
section and determined as of the 15th day after
the date of liquidation or reliquidation. The
interest shall be calculated from the date of
payment to the date of (1) the refund, or (2) the
filing of a summons under [28 U.S.C. 2632],
whichever occurs first.
Thus, in order for interest to be allowed under this
provision, there must be a determination to reliquidate for one
of the cited reasons and an amount must have been paid as
increased or additional duties under 19 U.S.C. 1505(c). The
first condition is met in this case (it is unclear from the file
what the basis was for the determination to reliquidate; given
that the reliquidation occurred more than 90 days after the
liquidation (see 19 U.S.C. 1501) we assume for purposes of this
ruling that the determination to reliquidate was made as a result
of a protest filed under 19 U.S.C. 1514 or an application for
relief made under 19 U.S.C. 1520(c)(1)). Under 19 U.S.C.
1505(c):
Duties determined to be due upon liquidation or
reliquidation shall be due after the date of that
liquidation or reliquidation, and unless payment
of the duties is received by [Customs] within 30
days after that date, shall be considered delin-
quent and bear interest from the 15th day after
the date of liquidation or reliquidation at a
rate determined by the Secretary of the Treasury.
In this case increased or additional duties were paid under
19 U.S.C. 1505(c). Accordingly, the protestant is entitled to
interest on the increased or additional duties calculated accord-
ing to 19 U.S.C. 1520(d). That section provides that such inter-
est shall be calculated from the date of payment of the increased
or additional duties to the date of refund of such duties.
Our decision with regard to this protest is as follows.
Interest on the increased or additional duties (i.e., the
$109,843.12, not including the $12,941.46 in interest) shall be
paid to the protestant. The interest shall be for the period
beginning with the date of payment of the increased or additional
duties (i.e., the date that the $122,784.58 was paid, indicated
in the file to be April 4, 1988) to the date of the refund of the
$109,843.12 (not apparent from the file; as stated above, reli-
quidation was on August 19, 1988). The annual rate of interest
to be used for calculating refunds during this time period was 9
percent (see Notice of Calculation of Interest published in the
Federal Register on March 21, 1988 (53 FR 9110)).
HOLDING:
In an entry liquidated with increased or additional duties
and reliquidated with a refund of the increased or additional
duties, a protestant is entitled to interest on the refunded
duties. Interest is calculated from the date of payment of the
increased or additional duties to the date of refund of those
duties.
Sincerely,
John Durant, Director
Commercial Rulings Division