HQ 0221130 - 19 U.S.C. 1501; reliquidation not valid when made prior to liquidation; protest 1001-4-000562 - 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 > 1993 HQ Rulings > HQ 0112665 - HQ 0221377 > HQ 0221130

HQ 221130

January 5, 1993

LIQ-1-CO:R:C:E 221130 C

CATEGORY: ENTRY LIQUIDATION

Area Director of Customs
6 World Trade Center
Room 423
New York, NY 10048

RE: 19 U.S.C. 1501; reliquidation not valid when made prior to liquidation; protest 1001-4-000562

Dear Sir/Madam:

This responds to the referenced protest and application for further review.

This case involves the unusual situation where reliquidation precedes liquidation. The reliquidation was at a higher duty rate than the liquidation. PROTESTANT therefore urges that the reliquidation be held invalid and the liquidation be deemed valid.

The instant protest asks which will represent the final, legal liquidated duty assessment, the reliquidation or the liquidation. In the ordinary case, the reliquidation supercedes the liquidation. To determine which supercedes which in the instant case, a look at 19 U.S.C. 1501 is illuminating:

A liquidation made in accordance with section 1500 of this title or any reliquidation thereof made in accordance with this section may be reliquidated in any respect by the appropriate customs officer on his own initiative, notwithstanding the filing of a protest, within ninety days from the date on which notice of the original liquidation is given to the importer, his consignee or agent . . .

The foregoing language authorizes Customs to reliquidate either a (1) liquidation or a (2) reliquidation. Since a reliquidation, by definition, cannot occur until there has been a liquidation, Customs authority to reliquidate under section 1501 is absolutely dependent upon the occurrence, or performance, of an initial liquidation. This is eminently clear in the highlighted language above. Therefore, no action by Customs under the authority of section 1501 is legally possible until there has been a liquidation.

In the instant case, at the time of reliquidation, there had not yet been a liquidation. Logically, there was nothing to reliquidate. Legally, Customs was without authority to act under section 1501. Customs action, taken purportedly under the authority of section 1501, was not a valid exercise of that authority.

On the other hand, the liquidation, which occurred two days after the reliquidation, was apparently made in accordance with the law and regulations, notwithstanding the unusual fact that it was preceded by a reliquidation. Since the reliquidation was invalid, the liquidation represents the only legally valid assessment of duties. If Customs had wanted to apply a different duty rate or classification to the merchandise, it could have done so after the liquidation under the authority of section 1501. Customs failed to avail itself of this option.

In summary, the reliquidation under 19 U.S.C. 1501 was invalid because it occurred before liquidation. The liquidation was proper and valid. Customs could have rectified the situation by reliquidating within 90 days after liquidation but failed to do so.

Based on the foregoing, you are instructed to grant the protest and refund appropriate duties.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling