HQ 0734299 - Further Review Protest No. 1001-90-009550; Country of Origin Marking; Polyester Fabric Imported in Marked Containers; Marking Duties; 19 CFR 134.35; Ultimate Purchaser; 19 CFR 134.32(d). - United States International Trade Commision Rulings

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HQ 734299

January 27, 1992

MAR-2-05 CO:R:C:V 734299 NL

CATEGORY: MARKING

Area Director, U.S. Customs
JFK Airport
Building 178
Jamaica, NY 11430

RE: Further Review Protest No. 1001-90-009550; Country of Origin Marking; Polyester Fabric Imported in Marked Containers; Marking Duties; 19 CFR 134.35; Ultimate Purchaser; 19 CFR 134.32(d).

Dear Sir:

This is in response to the above-referenced protest and application for further review filed by counsel on behalf of Universal Fabrics, Inc., against the assessment of marking duties upon the entry of 12 cartons of polyester fabric imported from Korea.

FACTS:

Entry was made at JFK Airport on May 17, 1990. On May 21, 1990, Customs officials issued a CF 4647 Notice of Marking/Redelivery which specified that under both section 304 of the Tariff Act, as amended (19 U.S.C. 1304) and the Textile Fiber Products Identification Act (15 U.S.C. 70), each roll of fabric was required to be marked with its country of origin and fiber content.

At the written request of the importer the merchandise was released with the representation that each piece of fabric would be marked with a tag indicating country of origin and fiber content. The importer stated that merchandise would not be released for consumption until completion of marking and appropriate approval and release from Customs.

The record indicates that marking duties were assessed after marking was not performed as represented by the importer. Implicitly, with the submission of its protest dated December 17, 1990, against the assessment of marking duties, the importer now acknowledges that the goods were released without the marking specified in the CF 4647. Instead, counsel for the importer claims in the protest that the fabric was destined for delivery to a customer in the U.S. who would use the fabric in manufacture, thus qualifying him as the ultimate purchaser of the imported article within the meaning of 19 U.S.C. 1304(a) and 19 CFR 134.35. Accordingly, it is argued, the fabric was not required to be marked on each piece because the marking of the container was sufficient to advise the ultimate purchaser of its country of origin. This claim was not presented to Customs at the time of importation or during the period when the merchandise was represented as being held at the importer's premises for re-marking.

ISSUE:

Were marking duties properly assessed?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. As provided at 19 U.S.C. 1304(f), an article not properly marked at importation which is not marked under Customs supervision prior to liquidation in accordance with the requirements of section 304 (or exported or destroyed) is subject to additional duties of ten percent ad valorem.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. The exception cited by the importer, 19 CFR 134.35, provides that a manufacturer or processor of an imported article who converts or combines it into an article having a new name, character, or use is considered the ultimate purchaser of the imported article. Such an article is excepted from marking and is only subject to marking of its outermost container. The exception which authorizes marking of the container but not the article is set forth at 19 CFR 134.32(d). Customs has applied this exception to require that the importer satisfy Customs officials that in all foreseeable circumstances the imported article will reach the ultimate purchaser in its original, unopened, properly marked container.

It is our opinion that the importer has not demonstrated that an exception from marking was warranted, i.e., that marking of the fabric's containers was sufficient to satisfy the requirements of section 304 of the Tariff Act and Part 134, Customs Regulations. Although it is claimed that the imported fabric was to be substantially transformed by the protestant's customer, no evidence substantiating the claim was submitted. No documentary proof of the identity of the ultimate purchaser or demonstration that this ultimate purchaser would use the imported fabric to make a new and different article has been offered. None of the entry papers or invoices recite the name of this purchaser; the only reference to this entity is in counsel's submission. Inasmuch as the importer has not afforded Customs any basis for finding that the claimed purchaser of the fabric was the ultimate purchaser within the meaning of 19 CFR 134.35, each piece of fabric was required to be marked individually. Marking of the container alone pursuant to 19 CFR 134.32(d) could not suffice, as Customs could not be satisfied that in all foreseeable circumstances the article would reach the ultimate purchaser in its unopened, properly marked container. Marking duties were assessed when the marking was not corrected prior to liquidation as specified in the Marking/Redelivery Notice.

We also note that the importer did not raise this claim after receipt of the marking notice. Instead, he advised Customs at that time in writing that each piece of fabric would be marked with a tag indicating the country of origin and fiber content. As a general matter, an importer prejudices his case by presenting post facto claims of exception which are at best difficult for Customs to verify. We think it proper and reasonable for Customs to require generally that a claim of exception from marking be made, at the latest, in connection with the importer's response to a marking notice. If the claim is raised in a protest for the first time, especially after representations have been made that the marking will be corrected as specified in the Marking/Redelivery Notice, it is incumbent on the importer to provide the necessary proof. In this protest the importer presented insufficient support for his claim of exception from marking. Under the circumstances the assessment of marking duties on the entry was proper.

HOLDING:

The protestant's claim of exception from marking may not be allowed. The merchandise was not legally marked prior to liquidation and marking duties were properly assessed. You are directed to deny the protest. A copy of this decision should be attached to Form 19, Notice of Action, to be sent to the protestant.

Sincerely,

John Durant
Director, Commercial

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