LIQ-2-01/LIQ-2-02/LIQ-9/LIQ-10/PRO-2-02-RR:IT:EC 227245 PH
Port Director of Customs
819 Water Street, Building 6
Laredo, Texas 78040
ATTN: Protest Section
RE: Protest 2304-96-100159; Claim for Preferential Tariff
Treatment under NAFTA; 19 U.S.C. 1514; 19 U.S.C. 1520(d); 19
CFR 181.31
Dear Sir or Madam:
The above-referenced protest was forwarded to this office for
further review. We have considered the evidence provided and the
arguments made on behalf of the importer, as well as Customs
records relating to this matter. Our decision follows.
FACTS:
According to the file and Customs records, on February 22 and 28,
1995, the protestant imported certain paint products, described
on the Entry Summaries (Customs Form (CF) 7501) for the
merchandise as "paints/varnish, aqueous, other." The dates of
entry for the merchandise were the same as the dates of
importation, February 22 and 28, 1995. The classification of the
merchandise stated on the Entry Summary was subheading
3209.90.0000, Harmonized Tariff Schedule of the United States
(HTSUS), with duty in the amount of $5,527.83 for the first
importation and $7,356.06 for the second. The entries were
liquidated as entered, with the first entry being liquidated on
June 9, 1995, and the second entry being liquidated on July 7,
1995.
By letter to Customs of February 15, 1996 (received by Customs on
the same date), the broker for the protestant requested "... a
refund of duties as provided for under the provisions of [19] CFR
181.31." According to this letter:
This correspondence constitutes a Post-Importation Claim and
request for refund of duties as provided for in Article
502(3) of the North American Free Trade Agreement and 19 CFR
[Part] 181 Subpart D. This claim ... involves the following
entries [the February 22 and 28, 1995, entries described
above are listed] covering goods for which no claim for
preferential tariff treatment was made at the time of
importation.
Our client hereby states that the goods qualified as
originating goods at the time of importation and provides
copies of the Certificates of Origin pertaining to the goods
in question.
It is further stated by our client that: 1) no copy of the
entry summary documentation for the involved entries was
provided to any other party; 2) they are not aware of any
claim for refund, waiver or reduction of duties relating to
these goods; and 3) neither a protest nor a petition or
request for reliquidation relating to these goods has been
filed.
Included with the above letter was a February 14, 1996, NAFTA
Certificate of Origin, for the period January 1 through December
31, 1995, listing the merchandise described (by number) in the
entry documentation (the numbers in the invoice for the February
22, 1995, entry are not legible enough to be certain that they
are the numbers on the Certificate of Origin). The tariff
classification listed on the Certificate of Origin for the
merchandise under consideration is "320910."
According to the file, upon receipt of the above-described
February 15, 1996, letter, Customs advised the broker that the
Certificate of Origin was not considered valid because the
classification on the Certificate was different than that on the
Entry Summary. When, after several weeks, the problem was not
rectified, the post-importation duty refund claim, in the
February 15, 1996, letter was denied by letter from Customs of
June 10, 1996, in which the reason for denial was stated as
"[y]ou provided a certificate of origin with the wrong
classification which cannot be accepted for a NAFTA claim."
By letter of May 8, 1996 (received by Customs on the same date),
the broker for the importer requested "... under the provisions
of 19 CFR 173.4, the correction of a clerical error' pursuant to
[19 U.S.C. 1520(c)(1)] on [the entries involved in this matter].
According to this letter:
At the time of submission of the entry, and the entry
summary (CF 7501), one of our clerks, through a
typographical error, put the wrong fifth (5th) digit on the
HTSUS number, using HTSUS 3209.90.0000 instead of
3209.10.0000, and duties were paid according to the wrong
classification.
With this letter, the broker enclosed copies of "Chemical,
Product, and Company Information" stated to show that "the
product is indeed acrylic." In this letter, the broker referred
to the February 15, 1996, post-importation duty refund claim,
noting that the NAFTA Certificate of Origin submitted with that
claim shows "HTSUS 3209.10." The request for reliquidation under
19 U.S.C. 1520(c)(1) was also denied on June 10, 1996, with the
stated basis for denial being "[a]n error in the classification
of merchandise is correctable by the filing of a 19 U.S.C. 1514
protest within 90 days of liquidation; relief is not available
under 19 U.S.C. 1520(c)(1)."
On June 26, 1996, the protest under consideration was filed,
against "disallowance of a Post-Importation NAFTA refund claim
for the entries covered ...." According to the protest:
[The February 15, 1996, post-importation NAFTA duty refund
claim] was denied ... because the classification on the
Certificate of Origin (HTSUS 3209.10) in block # 6, and the
entry (HTSUS 3209.90) was different. The Certificate of
Origin classification was correct. An error was made on the
C.F. 7501. Regardless of the classification, HTSUS 3209.10
or HTSUS 3209.90, the importer states that the goods
qualified as originating goods and both of these
classifications are "free" under the preferential NAFTA duty
rate for goods that qualify as originating goods.
Further review was requested and granted.
ISSUE:
May the protest under consideration be granted.
LAW AND ANALYSIS:
Initially, we note that denial of a post-importation duty refund
claim under 19 U.S.C. 1520(d) is protestable under 19 U.S.C. 1514
(see Treasury Decision (T.D.) 95-68 (Customs Bulletin & Decisions
of September 20, 1995, vol. 29, no. 38, pages 12-13). We note
also that the protest under consideration was filed within 90
days of the date of the June 10, 1996, denial of the post-importation duty refund claim and, therefore, was timely (see 19
U.S.C. 1514(c)(3)(B) and 19 CFR 174.12(e)(2)). We note that the
February 15, 1996, post-importation duty refund claim under
section 1520(d) was timely (filed within 1 year of importation)
(although the May 8, 1996, request for reliquidation under
section 1520(c)(1) was also timely (within 1 year of
liquidation), the denial of the section 1520(c)(1) request was
not protested).
Under 19 U.S.C. 1520(d):
Notwithstanding the fact that a valid protest was not filed,
the Customs Service may, in accordance with regulations
prescribed by the Secretary, reliquidate an entry to refund
any excess duties paid on a good qualifying under the
[NAFTA] rules of origin ... for which no claim for
preferential tariff treatment was made at the time of
importation if the importer, within 1 year after the date of
importation, files, in accordance with those regulations, a
claim that includes--
(1) a written declaration that the good qualified under
those rules at the time of importation;
(2) copies of all applicable NAFTA Certificates of Origin
...; and
(3) such other documentation relating to the importation
of the goods as the Customs Service may require.
The Customs Regulations promulgated under this provision are
found in 19 CFR 181.31 through 181.33. Section 181.32(b)
provides what must be contained in a post-importation duty refund
claim. The February 15, 1996, post-importation duty refund claim
in this case meets the regulatory requirements for the content of
such claims.
In a General Notice in the January 29, 1997, Customs Bulletin and
Decisions (vol. 31, no. 5, page 1), Customs published its
position on certain issues regarding NAFTA post-importation duty
refund claims under 19 U.S.C. 1520(d). In this notice, Customs
stated:
[A] post-importation duty refund claim may be granted where
the claim involves classification, valuation or other issues
that bear directly on the issue of whether the good would
have qualified as an originating good.
Customs went on to state that:
[T]he statute and regulation [section 1520(d) and 19 CFR
181.31] do not authorize Customs, upon receipt of a post-importation duty refund claim, to reliquidate an entry for
purposes other than to refund excess duties paid on
qualifying goods under the NAFTA for which no claim for
preferential treatment was made at the time of importation.
[Emphasis added.]
On the basis of the above, Customs concluded that "MPF's
[merchandise processing fees] may not be refunded pursuant to 19
U.S.C. 1520(d) and 19 CFR 181.31."
In this case, no claim for preferential tariff treatment under
NAFTA was made at the time of filing of the entry summary (see 19
CFR 181.21). The 19 U.S.C. 1520(d) post-importation duty refund
claim was filed within 1 year of importation and contained all
that is required to be contained in such claims (19 CFR
181.32(b). Duty-free treatment is and was (at the time under
consideration) provided for NAFTA originating goods for both the
tariff classification stated on the Entry Summary and that stated
on the NAFTA Certificate of Origin (we note that the protestant
states that the classification on the Certificate of origin is
the correct classification). In the February 28, 1995, entry,
the invoice lists under products ("producto") two numbers which
are the same as two of the numbers listed under the heading
"Description of Good(s)" in the NAFTA Certificate of Origin.
Thus, the requirements for a section 1520(d) post-importation
duty refund claim are met in the case of this entry and the
protest may be GRANTED as to this entry, as to duties only. As
stated in the Customs Bulletin & Decisions General Notice quoted
above, "[merchandise processing fees] may not be refunded
pursuant to 19 U.S.C. 1520(d) and 19 CFR 181.31."
In the case of the February 22, 1995, entry, as noted above in
the FACTS portion of this ruling, the numbers listed in the
invoice under "producto" are not legible enough for this office
to be certain that they are numbers listed under the heading
"Description of Good(s)" in the NAFTA Certificate of Origin. The
requirements for a section 1520(d) post-importation duty refund
are met in the case of this entry and the protest may be GRANTED
as to this entry (for duties only), PROVIDED that you are
satisfied that the merchandise in the entry is covered by the
NAFTA Certificate of Origin submitted with the section 1520(d)
claim.
Of course, if you are not satisfied that the merchandise in the
February 22, 1995, entry is covered by the Certificate of Origin,
the protest must be DENIED (because the requirement in 19 U.S.C.
1520(d) for a copy of an applicable NAFTA Certificate of Origin
and the requirement in 19 CFR 181.32(b)(2) for a copy of a
Certificate of Origin pertaining to the good would not be met).
If the numbers for the merchandise in the invoice with the entry
documentation in your office for the February 22, 1995, are also
not legible enough to be certain that those numbers are covered
by the Certificate of Origin, the protestant may be given a
reasonable period (no more than 45 days from the date of notice
that the invoice is illegible in this regard) to provide a
clearer copy.
HOLDING:
The protest is GRANTED (as to duties only, merchandise processing
fees may not be refunded under 19 U.S.C. 1520(d) post-importation
duty refund claims), as to the February 28, 1995, entry. The
protest is GRANTED (as to duties only) as to the February 22,
1995, entry, PROVIDED that you are satisfied that the merchandise
in the February 22, 1995, entry is covered by the NAFTA
Certificate of Origin submitted with the section 1520(d) post-importation duty refund claim. If you are not so satisfied
(i.e., if the invoice in the entry documents is not legible
enough to determine that the merchandise described in the invoice
is the same merchandise covered by the Certificate of Origin, and
the protestant does not provide a satisfactory copy of the
invoice within the time-period stated in the LAW AND ANALYSIS
portion of this ruling), the protest must be 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, with
the Customs Form 19, 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,
Director, International
Trade Compliance Division