HQ 0221692 - Application for Further Review of Protest No. 2704-8-004309; Interest on Overpaid Duties; 19 U.S.C. 1520(d) and 1505(c) - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1991 HQ Rulings > HQ 0111398 - HQ 0222425 > HQ 0221692

HQ 221692

December 3, 1990

LIQ-1-CO:R:C:E 221692 PH

CATEGORY: LIQUIDATION

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

Previous Ruling Next Ruling