LIQ-11 CO:R:C:E 224294
Assistant District Director
Commercial Operations Division
477 Michigan Avenue
Detroit, MI 48226-2568
RE: Protest for further review 3801-2-102516; extension of
liquidation; American Permac, Inc. v. U.S.; 19 U.S.C. 1504(a); 19
U.S.C. 1504(b); Detroit Zoological Soc'y v. U.S.; "information";
International Cargo & Surety Ins. Co. v. U.S.; St. Paul Fire &
Marine Insurance Co., Inc. v. U.S.; 19 CFR 159.12(a)(1)(i); 19
CFR 159.12(b); Star Sales & Distributing Corp. v. U.S.; 19 CFR
159.12(d); 19 CFR 159.12(e); 19 U.S.C. 1504(d).
Dear Sir:
This is our decision in protest for further review 3801-2-
102516, dated 8/06/92, concerning the extension of liquidation
dates for certain entries.
FACTS:
The subject merchandise consists of components for a heater
core assembly system. The components were entered on 7/19/88 and
7/21/88, and are part of contract job 2413. Customs had
previously issued to the protestant two Requests for Information,
Customs Form (CF) 28, on four entries also covering components
for a heater core assembly system from the same shipper but
relating to another contract job. The CF 28s sought information
necessary to appraise and classify the subject assembly system
(i.e., whether there were any assists, descriptive literature,
affidavits of manufacture supporting the item 807 claim, and a
copy of the contract with all amendments). Merchandise shipped
pursuant to a contract job is unique in that final cost
information is not normally compiled until well after the last
entry of the contract is filed. Responses to CF 28s are not
normally forwarded until all requested information has been
acquired. Therefore, Customs withheld liquidation of the subject
entries pending a response to the issued CF 28s.
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On 2/21/90, Customs contacted the protestant concerning
their failure to respond to the CF 28s. The protestant requested
that Customs continue to withhold liquidation of the entries
inasmuch as the shipper intended to respond. Based on this
request, Customs extended the liquidation date for the entries.
The protestant does not dispute whether liquidation
extensions were issued, but whether proper grounds existed for
these extensions. A search of Customs computer records indicates
that the date of liquidation for the subject entries was extended
three times, and that the entries were liquidated approximately 2
months (i.e., 5/08/92) before the expiration of four years from
the respective entry dates.
ISSUE:
Whether proper grounds existed for extending the time period
for liquidation of the subject entries.
LAW AND ANALYSIS:
Liquidation of an entry of merchandise constitutes the final
computation by Customs of all duties accruing on that entry.
American Permac, Inc. v. United States, 10 CIT 535, 537, 642 F.
Supp. 1187, 1190 (1986). 19 U.S.C. 1504(a) states that an entry
of merchandise not liquidated within one year from the date of
entry or final withdrawal from warehouse shall be deemed
liquidated at the rate of duty, value, quantity, and amount of
duties asserted at the time of entry by the importer of record.
19 U.S.C. 1504(b)(1) provides an exception to subsection (a) in
that the Secretary of the Treasury may extend the period in which
to liquidate an entry by giving notice of such extension to the
importer of record in such form and manner as the Secretary shall
prescribe in regulation, if information needed for the proper
appraisement or classification of the merchandise is not
available to the appropriate customs officer. The protestant
asserts that Customs did not have proper grounds to extend the
liquidation date of the subject entries.
The issue of whether an extension of an entry for
insufficient information is justified under 19 U.S.C. 1504 (b)(1)
was addressed by the Court of International Trade (CIT) in
Detroit Zoological Soc'y v. United States, 10 CIT 133, 630 F.
Supp. 1350 (1986). The CIT held that the term "information" as
used in 19 U.S.C. 1504(b)(1), "should be construed to include
whatever is reasonably necessary for proper appraisement or
classification of the merchandise
involved." 10 CIT 138, 630 F. Supp. at 1356. Specifically,
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the CIT held "information" to include internal Customs advice
requested by the importer. Subsequently, in International Cargo
& Surety Ins. Co. v. United States, 15 CIT __, 779 F. Supp. 174,
178 (1991), the CIT interpreted the term to include internal
information sought by Customs. The CIT further stated that these
interpretations are sufficiently broad to cover information such
as cost data and country of origin information to support a claim
under item 807.00, Tariff Schedules of the United States (TSUS).
St. Paul Fire & Marine Insurance Co. (insurer for Carreon, Inc.
v. United States, Slip Op. 92-125, Vol. 26, Cust. Bull. & Dec.,
No. 35, p. 39 (August 26, 1992).
In this instance, Customs extended the liquidation period in
order to obtain information necessary to appraise and classify
the merchandise. Customs sent two CF 28s to the protestant
requesting information on another contract job from the same
shipper for components of the same type of system. Such
information included questions regarding assists, descriptive
literature, affidavits of manufacture supporting the item 807.00
claim, and the contract plus all amendments. This type of
information would certainly appear to be encompassed by the CIT's
broad definition of the information which Customs may properly
require in order to appraise or classify merchandise.
Accordingly, the grounds for Customs extension of the subject
entries liquidation period were proper pursuant to 19 U.S.C.
1504(b)(1).
19 CFR 159.12 was promulgated pursuant to 19 U.S.C. 1504.
Subsection (a)(1)(i) provides that the district director may
extend the 1-year statutory period for liquidation for an
additional period not to exceed 1 year if information needed by
Customs for the proper appraisement or classification of the
merchandise is not available. This additional period expires 1
year from the expiration of the 1-year statutory period for
liquidation, which itself expires 1 year from the date of entry.
As stated beforehand, Customs requested additional information
through two CF 28s because this information was needed to
determine the proper appraise-ment and classification of the
merchandise. Therefore, Customs properly extended the 1-year
statutory period for liquidation for an additional period while
awaiting a response to the CF 28s.
19 CFR 159.12(b) states that if the district director
extends the time for liquidation, as provided in paragraph (a)(1)
of this section, he promptly shall notify the importer or the
consignee and his agent and surety on CF 4333-A that the time has
been extended and the reasons for doing so.
Government officials are entitled to a presumption that their
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duties are performed in the manner required by law. Star Sales &
Distributing Corp. v. United States, 10 CIT 709, 710, 663 F.
Supp. 1127, 1129 (1986); see Enron Oil Trading, 15 CIT at __,
Slip Op. 91-91 at 4. The presumption may be rebutted by evidence
indicating that notice was not received. In this instance, the
protestant does not dispute the existence of liquidation
extensions. Customs computer records indicate that three
extension of liquidation notices were sent to the protestant.
Therefore, the protestant has failed to rebut the presumption
that proper notice was given.
19 CFR 159.12(d) states that if an extension has been
granted because Customs needs more information and the district
director thereafter determines that more time is needed, he may
extend the time for liquidation for an additional period not to
exceed 1 year provided he issues the notice required by paragraph
(b) of this section before termination of the prior extension
period. This additional period will expire 1 year from the
expiration of the initial extension, or in other words it will
expire on the third year anniversary of the entry date. 19 CFR
159.12(e) limits the total time for which extensions may be
granted by the district director to 3 years. Consequently, the
district director may also grant a third 1 year extension before
the termination of the second additional period inasmuch as this
final extension would allow for the total time of extension to
equal but not exceed three years. In this instance, the
additional information requested by Customs was not provided by
the protestant even though Customs contacted the protest- ant
further and was informed that such information would be
forthcoming. As stated previously, Customs extended the
liquidation period three times while awaiting the requested
information. In addition, the total time (i.e., 7/89 - 5/92) for
these extensions did not exceed three years. Thus, the district
director properly extended the time for liquidation for
additional periods while awaiting the protestant's promised
response.
19 U.S.C. 1504(d) provides in part that any entry of
merchandise not liquidated at the expiration of four years from
the applicable date specified in subsection (a) of this section,
shall be deemed liquidated at the rate of duty, value, quantity,
and amount of duty asserted at the time of entry by the importer
of record. The applicable dates specified in subsection (a) in
this case are the dates of entry (i.e., 7/19/88 and 7/21/88).
Customs liquidated both of the subject entries on 5/08/92, which
precedes the expiration of four years from the date of entry.
Therefore, the subject entries were not deemed liquidated by
operation of law, but by the action of Customs on 5/08/92.
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The protestant cites St. Paul in support of its contention
that the extensions of liquidation were improper. However, that
case contains substantially different factual circumstances than
the subject protest. In St. Paul, the importer made no effort to
submit the required information and Customs made no attempt to
contact the importer. In this case, Customs contacted the
importer and the importer indicated that they would provided the
necessary information. In addition, the information required in
St. Paul only concerned the importer's item 807.00 claim. While
in this
instance, the information also included descriptive literature, a
contract and all amendments, as well as questions on assists.
Furthermore, the unique situation involving merchandise shipped
pursuant to contract required Customs to wait for an extended
period to allow the importer enough time to obtain the necessary
information. Consequent-ly, we do not view the decision rendered
in St. Paul under different factual circumstances controlling in
this instance.
HOLDING:
Proper grounds existed pursuant to 19 U.S.C. 1504(b)(1) for
extending the time period for liquidation of the subject entries
until 5/08/92. The protest, therefore, should be denied. A copy
of this decision should be attached to the CF 19 and mailed to
the protestant as part of the notice of action on the protest.
Sincerely,
John Durant, Director