CLA-2 RR:CR:GC 961466 gah
Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island, CA 90731
RE: Protest 2704-98-100032
Dear Sir:
This is a decision on protest 2704-98-100032 filed by counsel on behalf of Fujitsu General America, Inc. on January 21, 1998, against your decision regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of plasma display monitors.
FACTS:
CLASSIFICATION
The merchandise has been described as 42 inch Color Plasma Display Monitors (model PDS4201U-H), capable of displaying computer images through connection to a personal computer (PC). As a PC monitor, the plasma display monitors can be used to display automatic data processing (ADP) information in presentations to groups of people. As video monitors, the units accept signals from video equipment such as video cassette recorders (VCRs), laser disc players and camcorders.
The monitor has a screen size of 42 inches or 105.6 cm wide on the diagonal, with a 852 x 480 pixel configuration, with a Video Graphics Array (VGA) connector which is compatible with VGA, SVGA and MAC PC’s standards. Its pixel resolution is 852 x 480 pixels. No dot pitch is given. The monitors have a depth of 15 cm and a weight of 87 pounds, or 39.5 kg. The audio input is through L &R RCA type connectors for built-in stereo speakers, 2W each. It has a composite BNC connector or S-video and is compatible with NTSC, PAL and SECAM standards for television viewing. It has a control panel on the monitor as well as on a remote. The technology allows viewing images on the screen in a breadth of 160 degrees without seeing any image distortion. It can display images delivered from other apparatus as well, in particular, liquid displays and digital video discs. It can disseminate information as an indoor advertising and bulletin board device. It is useable in multimedia conferencing and presentations.
TIMELINESS OF RELIQUIDATION AND PROTEST
As to entry 110-xxxx8703, it is undisputed that the reliquidation and protest were timely. Entry 110-xxxx2789 was made on March 25, 1997, and liquidated on July 11, 1997, with no change. According to Customs Automated Commercial System (ACS), the create date was March 24, 1997. According to a Notice of Action, CF 29, dated October 8, 1997 (including a date stamp), on October 8, 1997 a manual Bulletin of Entries Liquidated (CF 4333) was posted at Terminal Island (hereinafter referred to as the “reliquidation CF 29"). The reliquidation CF 29 indicates that the date of entry and importation was March 24, 1997, and specifically identifies the subject entry number. The file includes a copy of a CF 4333, dated by hand and date stamped October 8, 1997. The CF 4333 identifies the subject entry, the importer and in the remarks column states “Manual; Liq Rate Advance.” The date of entry is listed as March 24, 1997.
A second CF 29, dated October 8, 1997 identifies the entries and entry dates as “various,” and gives notice of a rate advance having been made to re-classify the merchandise from subheading 8471.60.4580, HTSUS, to subheading 8528.21.7000 HTSUS (hereinafter referred to as the “classification CF 29"). The explanation section of the classification CF 29 identifies the subject entry among others, to which the notice applies. The explanation section also states that the protestant had been previously sent a proposed Notice of Action dated July 11, 1997, to which no response was received.
The file includes a copy of the July 11, 1997 CF 29 which refers to an entry which is not the subject of this protest, and which gives notice of a proposed rate advance of the entered merchandise from subheading 8471.60.4580, HTSUS, to subheading 8528.21.7000, HTSUS. The notice has a handwritten note indicating that the importer’s response date is extended to September 9, 1997, as according to a cover fax sheet sent to the importer, the initial July 11, 1997 CF29 was “apparently” never received by the importer. The cover fax sheet states that the CF 29 of July 11, 1997 is being sent pursuant to a conversation with the fax addressee. The file also contains a September 22, 1997 CF 29, and an amended September 22, 1997 CF 29, which state that rate advance action has been taken by Customs with respect to four different entries, not including the subject entry.
The ACS indicates that the date of reliquidation of the subject entry was October 24, 1997. In a telephone conversation of February 23, 1999 with the entry specialist that prepared the reliquidation CF 29, a manual liquidation is done when there is less than two weeks time between the date the entry must be liquidated or reliquidated and the date the liquidation or reliquidation information is submitted to the entry specialist. In those cases, the date on ACS reflects the date on which the entry would have automatically liquidated or reliquidated based on the date the information is submitted to the entry specialist, had the liquidation or reliquidation not been performed manually. The entry specialist stated that the reliquidation CF 29 is a document that is routinely prepared when an entry is manually liquidated or reliquidated.
The protestant takes the position that the reliquidation of the entry occurred on October 24, 1997 and was untimely under 19 U.S.C. §1501, as it occurred more than 90 days after the prior, original, liquidation. The protest of the reliquidation and the classification was filed on January 21, 1998.
ISSUE:
As to the classification issue, is the plasma display monitor properly classified in heading 8471 as an ADP monitor, in heading 8528 as a video monitor, or in heading 8543 as electrical machines and apparatus, having individual functions, not specified or included elsewhere in chapter 85?
As to the timeliness issues, was the reliquidation of entry 110-xxxx2789 timely, in accordance with 19 U.S.C. 1501 and was the protest itself timely filed under 19 U.S.C. 1514?
LAW AND ANALYSIS:
CLASSIFICATION
Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI.
Section XVI, legal note 3, HTSUS, requires in pertinent part that composite machines and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. The plasma monitors are such machines, as they perform ADP and video monitor functions. For the principal function of the monitors, we turn to the headings under consideration.
Heading 8471, HTSUS, covers in pertinent part units of automatic data processing machines. Chapter 84, note 5 (B)(a-c) sets forth the technical requirements that a unit must meet in order to fall within the scope of heading 8471. The Fujitsu Plasmavision specifications indicate that it can be used in an ADP system, but no evidence is given that it is solely or principally used as such. Counsel has submitted advertising literature indicating that the monitors have two uses, as monitors for ADP and monitors for video. Factors tending to support a principal use are well established and include channels of trade, environment of sale such as advertisements, and recognition of use in the trade. See, e.g., HQ 960354, dated October 22, 1998. However, counsel provides no evidence of a principal use. Thus, the gas plasma monitor fails to meet the terms of note 5(B), and classification in heading 8471 is precluded. Further, section XVI, legal note 3 fails to resolve classification, because there is no defined principal function.
Chapter 84, note 5 (E) states that machines performing a specific function other than data processing and incorporating or working in conjunction with an ADP machine are classified in a heading appropriate to their respective functions or failing that, in residual headings. This note contemplates that there are machines that have dual functions but have no principal function and can be used in both ADP and another setting.
Heading 8528, HTSUS, covers in pertinent part video monitors. As noted above, the subject monitor is capable of displaying signals from any video source in any video standard. It allows for the viewing of images on the screen in a breadth of 160 degrees without seeing any image distortion. Counsel claims that the monitor is used but not principally used as a video monitor. Principal use as a video monitor is not required for classification as such in heading 8528.
Counsel argues that given their dual functions classification of these goods in heading 8543 must be considered, and cites rulings on flat panel displays. Customs has classified certain flat panel displays in heading 8543, which provides for electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter. HQ 960634, dated June 27, 1997. In that ruling, the goods could not function as video monitors, and hence were not included within heading 8528. The rulings cited by counsel in support of heading 8543 are not relevant to how the merchandise at issue functions, nor the legal analysis that applies.
The goods meet the terms of heading 8528, are specified and included therein, and at GRI 1, are therefore properly classifiable in heading 8528 as video monitors. Given that heading 8543 is discarded for not describing the merchandise, consideration of subdivisions within that heading cannot be reached.
We note that counsel claims that the Information Technology Agreement (ITA) supports consideration of heading 8543. Presidential Proclamation No. 7011, 62 FR 35909 (1997). In pertinent part, the Harmonized Tariff Schedule was amended to implement the ITA with subheading 8543.89.9200. That provision covers, inter alia, flat panel displays other than for articles of heading 8528. The language of this provision recognizes that flat panel displays which can display video signals, such as the instant monitors, are included in heading 8528. The very provision in which counsel would have us classify its goods was drafted in recognition of the multiple functions of flat panel displays, and that their classification depends on their technical capabilities.
We find that the subject merchandise is specifically provided for in heading 8528 as a color video monitor with a flat panel screen, not incorporating video recording or reproducing apparatus, and with a video display diagonal exceeding 33.02 cm.
RELIQUIDATION AND PROTEST
The reliquidation of an entry is a protestable matter under 19 U.S.C. §1514(a)(5). Under 19 U.S.C. §1514(c)(3), a protest must be filed within 90 days after a notice of liquidation or reliquidation. Under 19 U.S.C. §1501, Customs may reliquidate a liquidation made under 19 U.S.C. §1500, or any reliquidation made under section 1501, in any respect, “within ninety days from the date on which notice of the original liquidation is given or transmitted to the importer, his consignee or agent.” (Emphasis added). The statute provides that notice of such reliquidation shall be given or transmitted in the manner prescribed for original liquidations under 19 U.S.C. §1500(e). The provision for notice of original liquidation requires Customs to “give or transmit, pursuant to an electronic data interchange system, notice of ... liquidation to the importer, his consignee, or agent in such form and manner as the Secretary shall by regulation prescribe.”
Therefore we must determine both for purposes of timeliness of the protest, and timeliness of the reliquidation, the date of notice of the reliquidation.
It is well settled that the only notice of liquidation that is statutorily mandated is bulletin notice. See Goldhofer Fahrzeugwerk GmbH & Co. v. United States, 13 CIT 54, 706 F. Supp. 892 (1989), aff’d, 885 F.2d 858 (Fed. Cir. 1989); Tropicana Products, Inc. v. United States, 13 CIT 390, 395, 713 F.Supp. 415 (1989). The bulletin notice is the only effective notice of liquidation and the courtesy notice is predictive only. SSR v. Robles, 18 C.I.T. 475, 476, 853 F. Supp. 451 (1994). The Court of International Trade has held that the importer has the burden to check for posted notices of liquidation and to protest in a timely manner. See, Juice Farms, Inc. v. United States, 18 CIT 1037, 1040 (1994) (stating that although Customs erroneously liquidated entries, protestant had no relief to protest after the running of 90 day periods after the posting of the bulletin notices of liquidation); Penrod Drilling Co., v. United States, 13 CIT 1005, 1009, 727 F.Supp. 1463 (1989), reh’g denied, 14 C.I.T. 281, 740 F.Supp. 858 (1990), aff’d. 925 F.2d 406 (Fed. Cir. 1991). In addition, a presumption of regularity attaches to the acts of government officials. See, e.g., International Cargo & Surety Ins. Co., v. United States, 15 CIT, 544, 779 F. Supp. 174, 177 (1991).
The requirements for bulletin notices of liquidation are set forth in Customs Regulations 159.9 (19 CFR 159.9):
(a) Bulletin notice of liquidation. Notice of liquidation of formal entries shall be made on a bulletin notice of liquidation, Customs Form 4333.
(b) Posting of bulletin notice. The bulletin notice of liquidation shall be posted for the information of importers in a conspicuous place in the customhouse at the port of entry (or Customs station, when the entries listed were filed at a Customs station outside the limits of a port of entry), or shall be lodged at some other suitable place in the customhouse in such a manner that it can readily be located and consulted by all interested persons, who shall be directed to that place by a notice maintained in a conspicuous place in the customhouse stating where notices of liquidation of entries are to be found.
(c) Date of liquidation—(1) Generally. The bulletin notice of liquidation shall be dated with the date it is posted or lodged in the customhouse for the information of importers. This posting or lodging shall be deemed the legal evidence of liquidation. For electronic entry summaries, the date of liquidation will be the date of posting of the bulletin notice of liquidation. Customs will endeavor to provide the filer with electronic notification of this date as an informal, courtesy notice of liquidation.
The regulations do not require an electronic notice. The statute on liquidation procedure, 19 U.S.C. §1500, was amended by section 638, title VI Customs Modernization, Pub. L. No. 103 182, the North American Free Trade Agreement Implementation (NAFTA) Act (107 Stat. 2057), enacted December 8, 1993, to allow Customs to give notice of liquidation pursuant to an electronic data interchange system. House Report 103 361, 103d Cong., 1st Sess., 137 (1993), describes that the amended provision “authorizes Customs to give or electronically transmit notice of liquidation in such form and manner as is prescribed by regulation.” The House Report, at page 137, explains that the amendment would allow Customs to utilize electronic means to transmit notices of liquidation. Similarly, the Senate Report for the NAFTA Act (S. Rep. 103 189, 103d Cong., 1st Sess., 88 89 (1993)), states that the amendment updates the law to acknowledge that information and data “may” be electronically transmitted, and “authorizes” Customs to give or transmit notice of liquidation electronically. The legislative history expresses the same intention with respect to notice of reliquidation, for the amendment of 19 U.S.C. §1501, which was amended by section 639 of the NAFTA. See House Report, at 138; Senate Report at 89. Nothing in the legislative history indicates that notice of the liquidation must be given by electronic data. The statute provides that notice of liquidation will be provided as prescribed by regulation.
The applicable regulations have not been revised since the amendment of the statute. We find that the existing regulation is not inconsistent with the amended statute, as it implements the statute by specifying how notice of liquidation is to be given. There is no requirement that an agency must re-promulgate a pre-existing regulation that is not inconsistent with a subsequent statute, in order for the regulation to remain effective. The relationship between regulations and statutes, and annulment of regulations upon enactment of statutes is stated as follows:
Administrative rules must conform to the laws enacted by the legislature.
....
A regulation, valid when promulgated, becomes invalid upon the enactment of a statute in conflict with the regulation. However, an administrative regulation will not be considered as having been impliedly annulled by a subsequent act of the legislature unless the two are irreconcilable, clearly repugnant, and so inconsistent that they cannot have concurrent operation. Moreover, implied repeal of a regulation by a statute is disfavored, especially where the regulation has been approved by the legislative regulation review committee.
....
If a regulation has been in existence for a substantial period of time and the legislature has not sought to override the regulation, this fact, although not determinative, provides persuasive evidence of the continued validity of the regulation.
2 Am. Jur. 2d Administrative Law §227 (1994) (emphasis added). We do not find that the statute is in conflict with the regulation, irreconcilable with the regulation, clearly repugnant or so inconsistent that the statute and regulation cannot have concurrent operation.
In this case, according to the reliquidation CF 29, and the date of the bulletin notice, notice of the reliquidation was given on October 8, 1997. The fact that the date of reliquidation in ACS is October 24, 1997, does not mean that the bulletin notice was not posted on October 8, 1997. According to a Customs official, ACS is not automatically updated with the date of a manual bulletin notice, and the date of the notice is not verifiable by ACS.
In Tropicana Products, Inc. v. United States, supra, the plaintiff claimed that the date of liquidation it had been given in a telephone conversation, should be considered the date of liquidation. Customs asserted that the bulletin notice had been posted in accordance with 19 CFR 159.9(b), and the court cited the presumption of regularity to the acts of government officials and stated that the plaintiff had not met its burden of proof to rebut the presumption by competent evidence. 13 CIT at 393. The court stated that:
Plaintiff has not shown that any of its agents or representatives went to the customhouse in Tampa, and were unable to find the bulletin notice of liquidation for the entries in question. Plaintiff has not offered any evidence to show that bulletin notice was not posted in the manner prescribed by the Customs Regulations.
Id. Similarly, in this case, Customs has evidence, in the form of the October 8, 1997 CF 4333, that the liquidation occurred on October 8, 1997. The protestant has failed to offer any evidence that the bulletin notice was not posted as required. Although the date of entry on the CF 4333, is actually the create date in the ACS entry record, as opposed to the ACS date of entry, the entry number is correct, as is the identity of the importer. Evidence relied upon by the court in Tropicana made reference to the entry numbers and identity of the importer included in the posted notice, and did not refer to the date of the entry. It was stressed in Goldhofer, supra, 13 CIT at 58, that it is the plain duty of a prudent importer to monitor the customhouse bulletin in order to determine whether or not liquidation has been made. See also, Juice Farms, Inc. v. United States, supra. In addition, although it is not relevant to the issue of whether the bulletin notice served as notice to protestant, the protestant had been on notice that a rate advance was contemplated for the subject merchandise, by the CF 29's of July 11, and September 22, 1997, and the conversation with the importer on or before August 20, 1997.
We conclude that the reliquidation took place on October 8, 1997 and that notice was properly given in accordance with 19 CFR 159.9. Therefore, the reliquidation was timely made within 90 days from the date of notice of the original liquidation. Furthermore, the protest as to the entry at issue is untimely as it was filed more than 90 days after notice of reliquidation. Without a timely protest the liquidation of the entry is final and conclusive. Juice Farms, supra, 18 CIT at 1040. Based on the foregoing the protest should be denied as untimely, and on the merits on the issue of the timeliness of the reliquidation.
HOLDING:
The reliquidation was timely, within 90 days from the date of notice of the original liquidation, and proper notice was provided to the importer. The protest as to entry 110-xxxx2789 is untimely as it was filed more than 90 days after notice of reliquidation.
The gas plasma display monitors are classifiable in subheading 8528.21.7000, which provides for video monitors, color, with a flat panel screen, other, other, and carries a 5 percent ad valorem duty rate.
The protest should be denied. In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division