HQ 0087978 - Protest No. 3004-90-00181, concerning duty-free entry for audio equipment. - United States International Trade Commision Rulings

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HQ 087978
September 16, 1991

CLA-2 CO:R:C:E 087978 SR

CATEGORY: ENTRY

District Director of Customs
U.S. Customs Service
111 West Huron Street
Buffalo, New York 14202

RE: Protest No. 3004-90-00181, concerning duty-free entry for audio equipment.

Dear Sir:

The above-referenced protest concerns your denial of duty- free entry for articles entered under the Educational, Scientific, and Cultural Materials Importation Act of 1982. The issue of this protest involves the suspension of duty for one year.

FACTS:

The merchandise at issue consists of audio equipment that is properly classifiable in Schedule 7 of the Tariff Schedules of the United States (TSUS). The importer claimed classification under items 960.50 through 960.70, TSUS, for duty-free treatment under the Educational, Scientific, and Cultural Materials Importation Act of 1982 (Public Law 97-446). This act was enacted by Congress in order to give effect to the Nairobi Protocol to the Florence Agreement on the Importation of Educational, Scientific, and Cultural Materials. It established temporary duty reductions for merchandise in the following categories: (1) books, publications, and documents; (2) works of art and collector's pieces; (3) visual and auditory materials; (4) scientific instruments and apparatus; and (5) articles for the blind. Merchandise may be entered duty-free under this legislation provided the following conditions are met:
a) a Federal agency (or agencies) designated by the President determines that such an article is visual or auditory material of an educational, scientific or cultural character within the meaning of the [Act], or
b) [articles] are imported by, or certified by the importer to be for the use of, any public or private institution or association approved as educational, scientific, or cultural by a Federal agency or agencies designated by the President
for the purpose of duty-free treatment admission pursuant to the Nairobi Protocol to the Florence Agreement.

The effective period of this Act initially expired on August 11, 1985. The merchandise was entered in the time period between August 12, 1985, through December 31, 1986. After the expiration of the duty-free provision, Customs issued Telex 07575, dated August 1985, which provided the following: "We have been advised by Congress that bills have been introduced that will retroactively extend the duty-free period. Therefore, duty-free entry may still be accepted, with bond, following the expiration of the duty-free provisions . . . Liquidations will be extended pending the passage of appropriate legislation." Customs Telex 016679, dated December 1986, stated as follows: "liquidation of such entries, and all entries previously accepted under an expired Schedule 9 provision, should be withheld until further notice from Customs headquarters. Based on these telexes, Customs suspended liquidation for another year beyond the one year statutory period.

ISSUE:

Whether the merchandise at issue is allowed duty-free treatment because of improper suspension of the date of liquidation.

LAW AND ANALYSIS:

19 USC 1504(b) provides that liquidation may be extended by giving notice of the extension to the importer for the following reasons:

(1) information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officer;

(2) liquidation is suspended as required by statute or court order; or

(3) the importer, consignee, or his agent requests such extension and shows good cause therefor.

A notice was sent to the importer of the merchandise at issue which stated that liquidation of the entry was suspended by statute or court order. Suspending a liquidation to wait until pending legislation becomes law is not the same as a suspension by statute. Therefore, the liquidation date of the merchandise at issue was not lawfully extended. (Pagoda Trading Corp. v. U.S., 617 F. Supp. 96, 9 CIT 407 (1985); aff'd 804 F. 2d. 665, 5 Fed. Cir. (T) 10 (1986)).

19 CFR Section 159.11 provides as follows:

Except as provided in section 159.12, an entry not liquidated within 1 year from the date of entry of the merchandise, or the date of final withdrawal of all merchandise covered by a warehouse entry, shall be deemed liquidated by operation of law at the rate of duty, value, quantity, and amount of duties asserted by the importer at the time of filing an entry summary for consumption in proper form, with estimated duties attached, or a withdrawal for consumption in proper form, with estimated duties attached.

Under this provision, the entries were deemed liquidated by operation of law one year from the date of the entry of the merchandise. The merchandise should be duty-free under items 960.60 and 960.65, TSUS, as claimed by the importer on the entry summary.

HOLDING:

The merchandise at issue shall be deemed liquidated by operation of law at the rate of duty, value, quantity, and amount of duties asserted by the importer at the time filing the entry summary for consumption. Therefore, the audio equipment is entered duty-free under items 960.60 and 960.65, TSUS. This protest is granted in full. A copy of this decision should be attached to Form 19 to be returned to the protestant.

Sincerely,

John Durant, Director

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