CLA-2 RR:TC:MM 959301 PH
Port Director
U.S. Customs Service
200 St. Paul Place
Baltimore, MD 21202
RE: Protest 1303-96-100003; stone articles; serpentine;
fireplace surrounds; slabs; semi-precious; other stone;
6802.91.05; 6802.99.00; 7116.20.40; Note 1(d), Chapter 68; Note
2, Chapter 68; Note 1(a), Chapter 71; EN 25.16; EN 68.02; EN
Annex to Section XIV; EN 71.16; HRLs 085266; 960193; 959493;
952679; protest, what is; void or voidable reliquidation; 19
U.S.C. 1501; 19 U.S.C. 1514; HRL 222875
Dear Port Director:
This is in response to Protest 1303-96-100003, which
pertains to the tariff classification of certain articles of
stone under the Harmonized Tariff Schedule of the United States
(HTSUS). According to the file and Customs records, the date of
entry of the merchandise is January 26, 1995.
FACTS:
The stone articles are described on the invoice as "SETS
MARBLE FACING FOR FIREPLACE AND GRANITE SLABS" and, within that
description, "FIREPLACE (GREEN)" and "SLAB" (the bill of lading,
packing/weight list, and Certificate of Origin describe the
merchandise similarly). There are a total of 120 sets, under the
"FIREPLACE (GREEN)" description, each with four pieces of stone.
The sets come in two sizes (i.e., 88 sets with one piece 1397 X
178 X 19 m/m, two pieces 914 X 178 X 19 m/m, and one piece 1524 X
508 X 19 m/m, and 32 sets with one piece 1524 X 216 X 19 m/m, two
pieces 914 X 216 X 19 m/m, and one piece 1829 X 508 X 19 m/m).
There are 24 "SLAB[s]", either 20 or 30 m/m thick and between
2380 and 2760 by between 1520 and 1640 m/m.
The merchandise was entered as "STONE, MRBLE SLABS, WRK, NOT
FLAT" under subheading 6802.91.05, HTSUS, with duty in the amount
of $531.41. The entry was initially liquidated, as entered, on
May 19, 1995. In a Notice of Action (Customs Form 29) dated July
21, 1995, Customs advised that the entry was being subject to a
rate advance, with the explanation that the "[c]orrect
classification for serpentine slabs for fireplace sets is
[subheading] 7116.20.4000 [HTSUS] @ 18.9%." On August 18, 1995,
the entry was reliquidated under 19 U.S.C. 1501 and 19 CFR 173.2
and 173.3, with duty in the amount of $3,719.90, under subheading
7116.20.40, HTSUS.
In a letter to your office dated August 25, 1995, the
protestant stated that it had just received the bill for the
protested entry and that the protestant "... would appreciate
[Customs] reviewing the enclosed documents and sending us a
corrected invoice." Attached to the letter is a bill dated
August 18, 1995, for $3,188.49 (principal) and $161.25
(interest). The enclosed documents are stated to include a
photocopy of the entry summary, and the above-described invoice,
packing/weight list, Certificate of Origin, and bill of lading.
As noted above, the classification stated on the entry summary
was subheading 6802.91.05, HTSUS, and each of the listed
documents described the merchandise as "SETS MARBLE FACING FOR
FIREPLACE AND GRANITE SLABS."
On October 20, 1995, the entry was reliquidated a second
time, purportedly under the same authority as the August 18,
1995, reliquidation, with duty in the amount of $2,151.25 (in
this reliquidation, the 120 sets described above were classified
under subheading 7116.20.40, HTSUS, and the slabs were classified
under subheading 6802.91.05, HTSUS).
The protest under consideration was filed on January 2,
1996. The protestant contends that the merchandise should be
classified under chapter 68, HTSUS, and that if not properly
classified under subheading 6802.91.05, then the merchandise
should be classified under subheading 6802.99.00. According to
the protest:
The merchandise at issue consists of flat, rectangular slabs
of serpentine stone finished on one side. After
importation, the merchandise is cut and the edges finished
(beveled and polished), as required by the incorporation of
the merchandise into specific construction applications. A
typical application by the [i]mporter is in the fabrication
of fireplace veneers.
The protestant submitted pictures of the merchandise under
consideration, including pictures of large blocks of serpentine,
a large block of serpentine being cut with a diamond wire saw,
use of serpentine slabs as floor veneer, serpentine slabs being
used as a non-combustible construction veneer surrounding a
fireplace, crates of fireplace veneer (each crate stated to hold
enough for eight fireplaces), fireplace veneer slabs ready for
cutting to exact sizes, and the beveled and polished edge of a
slab of fireplace veneer. In each case, the photographed
material is described as "serpentine."
The competing subheadings, as of the time under
consideration, are as follows:
6802.91.05 Worked monumental or building stone (except slate)
and articles thereof, other than goods of heading
6801; mosaic cubes and the like, of natural stone
(including slate), whether or not on a backing;
artificially colored granules, chippings and
powder, of natural stone (including slate) ...:
Other: Marble, travertine and alabaster: Marble:
Slabs.
The 1995 general column one rate of duty for goods classifiable
under this provision is 2.7% ad valorem.
6802.99.00 Worked monumental or building stone (except slate)
and articles thereof, other than goods of heading
6801; mosaic cubes and the like, of natural stone
(including slate), whether or not on a backing;
artificially colored granules, chippings and
powder, of natural stone (including slate) ...:
Other: ... Other stone.
The 1995 general column one rate of duty for goods classifiable
under this provision is 6.5% ad valorem.
7116.20.40 Articles of natural or cultured pearls, precious
or semiprecious stones (natural, synthetic or
reconstructed): ... Of precious or semiprecious
stones (natural, synthetic or reconstructed): ...
Other: ... Other.
The 1995 general column one rate of duty for goods classifiable
under this provision is 18.9% ad valorem.
ISSUES:
(1) Are the reliquidations of the protested entry, the first
reliquidation 91 days after initial liquidation and the second
154 days after the initial liquidation, valid?
(2) Are the serpentine stone fireplace surrounds and
individual slabs classified as marble slabs under subheading
6802.91.05, HTSUS, other stone under subheading 6802.99.00,
HTSUS, or other articles of semi-precious stones under subheading
7116.20.40, HTSUS?
LAW AND ANALYSIS:
There are serious deficiencies in the liquidation and
protest procedures followed in this case. The entry was timely
liquidated (within 1 year of the date of entry when liquidation
is not extended or suspended - 19 U.S.C. 1504(a)). The August
18, 1995, reliquidation, purported to be a reliquidation under 19
CFR 173.2 and 173.3, was without authority of law. The
reliquidation was 91 days after the date of notice of the initial
liquidation; the statute (19 U.S.C. 1501) and regulations
promulgated thereunder (19 CFR 173.3(a)) require such
reliquidations to be within 90 days from the date on which notice
of the original liquidation is given. The second reliquidation,
on October 20, 1995, also purported to be a reliquidation under
19 CFR 173.2 and 173.3, was also without authority of law (it was
154 days after the date of notice of the initial liquidation).
In this regard, we emphasize that the time for so-called
"voluntary" reliquidations under 19 U.S.C. 1501 and 19 CFR 173.2
and 173.3 is 90 days from the date on which notice of the
original liquidation is given; that is, there may be more than
one voluntary reliquidation of an entry under 19 U.S.C. 1501 but
all such reliquidations must be within 90 days from the date of
notice for the original liquidation.
The effect of these procedural deficiencies is as follows.
An untimely reliquidation by Customs under 19 U.S.C. 1501 is not
void, but rather merely voidable (see Philip Morris v. United
States, 13 CIT 556, 716 F. Supp. 1479 (1989) (affirmed in part
and reversed in part in an unpublished decision of the Court of
Appeals for the Federal Circuit, 8 Fed. Cir. (T) 187, 907 Fed. 2d
158 (1990)), and cases cited therein, including Omni U.S.A., Inc.
v. United States, 6 Fed. Cir. (T) 99, 840 F. 2d 912 (1988), cert.
den., 488 U.S. 817 (1988), rehearing den., 488 U.S. 961 (1988);
see also HQ 222875, dated May 15, 1991). "Neither the legality
nor the correctness of a reliquidation by Customs may be
disturbed unless a timely protest is filed according to the
procedures in 19 U.S.C. 1514 ... and failure to do so within the
stated period leaves the reliquidation final" (Philip Morris,
supra, 13 CIT at 558). In the case under consideration, the
protestant timely protested the October 20, 1995, reliquidation
and, therefore, that reliquidation is voided and the protest is
granted in this regard.
The August 18, 1995, reliquidation was also untimely under
the statute and regulations (see above). However, unless that
reliquidation was timely protested, neither its legality nor its
correctness may be disturbed (see Philip Morris, supra).
In its August 25, 1995, letter, the protestant stated that
it had just received the bill for the protested entry and it
would appreciate Customs review of the documents enclosed by the
protestant (a photocopy of the entry summary, invoice,
packing/weight list, Certificate of Origin, and bill of lading).
The protestant asked for a corrected invoice. This is the only
communication in the file that could possibly be considered a
protest of the August 18, 1995, reliquidation.
The Courts have frequently addressed the question of what
sort of communication may be treated as a protest. In the U.S.
Supreme Court case of Arthur v. Morgan, 112 U.S. 495 (1884), that
Court stated:
A protest is not required to be made with technical
precision, but is sufficient if it shows fairly that the
objection afterwards made at the trial was in the mind of
the party and was brought to the knowledge of the collector,
so as to secure to the government the practical advantage
which the statute was designed to secure. [112 U.S. at
501.]
Similarly, in Eaton Manufacturing Co. v. United States, 60
CCPA 23, C.A.D. 1076, 469 F. 2d 1098 (1972), the Court stated:
This statutory provision [i.e., 19 U.S.C. 1514] and its
predecessors have been construed to mean that a protest must
be sufficiently precise to insure that the collector will
know what it is in the mind of the protestant ... and to
indicate that the objection taken at trial was fairly in the
mind of the protestant when the protest was made. [60 CCPA
at 29.]
In Mattel, Inc. v. United States, 72 Cust. Ct. 257, C.D.
4547, 377 F. Supp. 955 (1974), the Court concluded, after
reviewing the treatment by the Courts of the issue of the
sufficiency of a protest:
In short, the court, taking a liberal posture, has held
that, however cryptic, inartistic, or poorly drawn a
communication may be, it is sufficient as a protest for
purposes of section 514 if it conveys enough information to
apprise knowledgeable officials of the importer's intent and
the relief sought. [72 Cust. Ct. at 262.]
See also, Grover Piston Ring Co., Inc. v. United States, 3
Fed. Cir. (T) 57, 58, 752 F. 2d 626 (1985), "The statute
specifies that the protest must set forth each decision
(liquidation) protested, each category of merchandise affected by
each such decision, and the nature of each objection and reasons
therefor" (emphasis in original), affirming 7 CIT 286 (1984), in
which the Court stated: "The entry number, dates of entry and
dates of liquidation are among other information required [in 19
CFR 174.13] to be set forth in a protest" (7 CIT at 287). Also,
see Koike Aronson, Inc. v. United States, CIT LEXIS 134, CIT Slip
Op. 97-130, September 16, 1997, in which a purported protest was
found deficient because "[i]t did nothing more than identify the
classification to which objection was made [and] did not identify
any preferred alternative or give any details about the nature of
the objection or the reasons for it." In this case, the Court
reviewed cases in which a purported protest had been found
sufficient and distinguished those cases on the basis that "[i]n
all the aforementioned cases there was some information within
the protest, either touching directly on the desired tariff
treatment or linked to the fate of another claim that was
reasonably calculated to direct the mind of Customs to the full
nature of a specific claim."
The August 25, 1995, letter requests that Customs review the
documents enclosed with the letter and send the importer a
corrected invoice. The letter states that the imported
merchandise was composed of "Green marble for fireplace $9,999.44
[and] Granite slabs $9,682.64 [for a total of] $19,682.08. The
bill referred to in this letter is for $3,188.49 (principal) and
$161.25 (interest), as stated in the August 18, 1995,
reliquidation, and the bill date is August 18, 1995. The Notice
of Action dated July 21, 1995, states that the "[c]orrect
classification for serpentine slabs for fireplace sets is
7116.20.4000 @ 18.9%." Since the amounts stated in the August
25, 1995, letter are the same as the amounts stated in the
invoice and entry, the letter could only be contesting the
classification (i.e., contending that rather than being
"serpentine slabs for fireplace sets", the imported merchandise
consists of "[g]reen marble for fireplace [and] granite slabs").
In the documents enclosed with the letter, the importer stated
the classification which it contended was correct. Customs
understood the importer to be contesting the classification, in
that the entry was again reliquidated (improperly; see above),
with the fireplace surrounds classified under subheading
7116.20.40, HTSUS (consistent with Customs position at the time;
see below), and the individual slabs under subheading 6802.91.05,
HTSUS (if the slabs were actually of granite, the classification
should have been under subheading 6802.93.00, HTSUS; if of
serpentine, the classification should have been under subheading
6802.99.00; see below).
We conclude that the August 25, 1995, letter, with its
enclosures, met the above criteria and is sufficient as a protest
of the August 18, 1995, reliquidation. As stated above, based on
the context and the documents submitted, the letter could only
have been intended to contest the classification in the
reliquidation (see Koike Aronson, supra, discussing CR Industries
v. United States, 10 CIT 561 (1986), and recognizing the validity
of reference to a previously communicated position to find that a
protest was sufficient to fairly apprize Customs of the issue
protested; to paraphrase from Koike Aronson, supra,"[i]n [this
case] there was some information within the protest, either
touching directly on the desired tariff treatment or linked to
the fate of another claim that was reasonably calculated to
direct the mind of Customs to the full nature of a specific
claim"). Also as stated above, Customs appears to have
understood the importer to have been contesting the
classification. In this latter regard, we note that the Courts
have stated that "... the fact that [Customs] under[stands] the
protest would seem to be relevant" (Lothrop v. United States, 164
F. 99 (C.C. Mass. 1908)). To paraphrase the Court's statement in
Mattel, supra, "however cryptic, inartistic, or poorly drawn[,]"
the August 25, 1995, letter "convey[ed] enough information to
apprise knowledgeable officials of the importer's intent and the
relief sought" and, further, it contained each element of the
information listed in 19 CFR 174.13 and Grover Piston (supra).
As in the case of the October 20, 1995, liquidation, the
protestant timely protested the August 18, 1995, reliquidation
and, therefore, that reliquidation is voided and the protest is
granted in this regard. Therefore, the May 19, 1995, liquidation
stands as Customs final action on this entry and, since both
purported reliquidations under 19 U.S.C. 1501 are void, the
protest must be granted in full.
However, because of the confusion in this case (i.e., the
untimely reliquidations and the different classifications of the
merchandise), we will comment briefly on the classification
issues in this case.
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part
that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized System. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes
the ENs should always be consulted. See T.D. 89-80, published in
the Federal Register August 23, 1989 (54 FR 35127, 35128).
In regard to the fireplace surrounds, at the time of the
protested entry it was Customs position that unassembled
fireplace surrounds of serpentine were classified as articles of
semiprecious stone in subheading 7116.20.40, HTSUS. This
position was based on Note 1(a), Chapter 71, HTSUS, under which,
with certain exceptions, all articles consisting wholly or partly
of semiprecious stones (natural, synthetic or reconstructed) are
to be classified in Chapter 71; the Annex to the ENs for Section
XIII, which lists serpentine as a semiprecious stone; and Note
1(d) Chapter 68, HTSUS, providing that Chapter 68 does not cover
articles of Chapter 71. However, under 19 U.S.C. 1625(c)(1),
Customs gave notice of a proposed modification of the rationale
on which this position was based (see PROPOSED REVOCATION OF
RULING LETTERS RELATING TO TARIFF CLASSIFICATION OF SOAPSTONE
WOOD-BURNING STOVES published on March 19, 1997, in the Customs
Bulletin). The ruling letters were modified as proposed (see
REVOCATION OF RULING LETTERS RELATING TO TARIFF CLASSIFICATION OF
SOAPSTONE WOOD-BURNING STOVES published on May 7, 1997, in the
Customs Bulletin).
The modified ruling (HQ 960193, dated April 21, 1997; see
also HQ 959493, dated April 21, 1997) held that unassembled wood-burning fireplaces, the exterior and interior of which are of
soapstone (steatite), were classified in subheading 6802.99.00,
HTSUS. The basis for this holding is that under Note 2, Chapter
68, HTSUS, the expression "worked monumental or building stone"
for purposes of heading 6802 includes steatite, among other types
of stone, and under EN 68.02 the expression is stated to cover
stone which has been further processed than mere shaping into
blocks, sheets or slabs by splitting, roughly cutting or
squaring, or squaring by sawing (square or rectangular faces).
Thus, the ruling found the merchandise to be described by heading
6802, as "worked monumental or building stone".
In applying the above to the merchandise in the protested
entry, we note that the expression "worked monumental or building
stone" for purposes of heading 6802 applies to the varieties of
stone referred to in heading 2515 or 2516, among other types of
natural stone (see Chapter 68, Note 2, HTSUS). Serpentine is one
of the varieties of stone referred to in heading 2516 (see EN
25.16). Thus, heading 6802 provides, among other things, for
worked monumental or building stone of serpentine. As in ruling
HQ 960193, the fireplace surrounds have been further processed
than mere shaping into blocks, sheets or slabs by splitting,
roughly cutting or squaring, or squaring by sawing (see EN
68.02). Accordingly, the merchandise is described in heading
6802. The protestant contends that the merchandise, described by
the protestant as being of "serpentine," should be classified
under subheading 6802.91.05, HTSUS, as slabs of marble. Because
geological serpentine is a different stone that geological
marble, and because stones are classified based on their
geological makeup, the serpentine stone articles in this case may
not be classified under subheading 6802.91.05, HTSUS (see HRL
085266, dated September 9, 1989, and HQ 952679, dated January 26,
1993). The proper classification of the fireplace surrounds of
serpentine stone in this case is subheading 6802.99.00, HTSUS.
As for the individual slabs, although they are invoiced as
"granite" the protest describes all merchandise in the entry as
"flat, rectangular slabs of serpentine stone finished on one
side." Assuming that this is correct, the slabs are properly
classified in subheading 6802.99.00, HTSUS. They are so
classified whether consisting of individual slabs (see, e.g.,
ruling HQ 952679, dated January 26, 1993) or of unassembled
serpentine fireplace surrounds (see above).
HOLDING:
(1) The reliquidations of the protested entry, the first
reliquidation 91 days after initial liquidation and the second
154 days after the initial liquidation, are invalid and were
voided because each reliquidation was timely protested. The
initial liquidation is the "final and conclusive" decision by
Customs regarding the protested entry, and the protest must
therefore be granted.
(2) Under the authority of GRI 1, the serpentine stone
fireplace surrounds and individual slabs are provided for in
heading 6802. They are classifiable in subheading 6802.99.00,
HTSUS (although, because the reliquidations of the protested
entry are voided, the initial liquidation of the protested entry
is "final and conclusive").
The protest is GRANTED. 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, with the Customs Form 19, 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,
John Durant, Director,
Commercial Rulings Division