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HQ 222005


April 26, 1991

PRO-2-01 CO:R:C:E 222005 GG

CATEGORY: ENTRY LIQUIDATION

District Director
U.S. Customs Service
701 San Jacinto
P.O. Box 52790
Houston, Texas 77052

RE: Protest No. 5301-9-000025; Timeliness of Protest; Rescission of Protest Approval

Dear Madam:

This is in response to your memorandum dated December 11, 1989, in which you request advice on several issues raised by the protest that is referenced above.

FACTS:

Protestant entered merchandise under item 678.50, TSUS with an entered value of $739,995. The entry was automatically liquidated by ACS on July 1, 1988. Customs voluntarily reliquidated the entry within 90 days of the automatic liquidation, which resulted in both a reclassification under an item number with a higher duty rate and a higher appraisal of the merchandise.

A bulletin notice of liquidation was posted on September 27, 1988. For the limited purposes of generating a bill through ACS and causing a courtesy notice to be mailed, the entry was liquidated through the automated system on October 14, 1988. To prevent the appearance of a second reliquidation of the entry in question, that entry was deleted from the October 14, 1988 bulletin notice.

The protestant's broker was an ABI broker with access to ACS. Protest No. 5301-9-000025, which cited the October 14, 1988 liquidation date contained in ACS, was filed on January 10, 1989.

A newly-assigned import specialist was directed to review the protest. This import specialist, who was unfamiliar with all the circumstances of the case, was provided with only a reconstructed entry since the original was unavailable. The reconstructed entry reflected the October 14, 1988 liquidation date as the date of liquidation. The import specialist agreed with the protestant's position and approved the protest on October 27, 1989. Notice of the approval was sent to the protestant.

When the reconstructed entry was in the process of being reliquidated in the protestant's favor pursuant to the import specialist's approval, the liquidator discovered the original entry. The discrepancy in the liquidation date was noted, and, because it called into question the timeliness of the protest, the reliquidation was put on hold pending a resolution of that issue. It also raised the question of whether Customs can rescind the approval of a protest. Customs agrees with the importer's position as stated in its protest, and would uphold the allowance of the protest if possible.

ISSUE:

1) Whether a protest filed within 90 days of an entry liquidated through ACS was timely, when the purpose of that liquidation was solely to generate a bill and to precipitate the mailing of a courtesy notice, and there had been an earlier reliquidation, notice of which was posted more than 90 days before the protest was filed?; and

2) Whether Customs may rescind the approval of a protest?

LAW AND ANALYSIS:

Section 514 of the Tariff Act of 1930, as amended (19 U.S.C. 1514) provides, in pertinent part, that decisions of customs officers as to the liquidation or reliquidation of an entry are final and conclusive upon all persons, including the United States and its officers, unless a timely protest is filed, or unless a civil action contesting the denial of a protest is commenced in the appropriate forum. The first issue here is whether protestant's protest, which sought to overturn Customs' reliquidation of its entry, was timely filed.

The statute fixes definitely the time within which a protest may be filed: 19 U.S.C. 1514(c)(2) requires the protest to be filed with Customs within 90 days after, but not before, notice of liquidation or reliquidation. The question therefore turns on what was the legal notice of liquidation or reliquidation, and, once that has been determined, whether the protestant filed its protest within 90 days after, but not before, that notice.

The only notice of liquidation or reliquidation that is statutorily mandated is bulletin notice. See Goldhofer Fahrzeugwerk GmbH & Co. v. United States, 13 CIT , 706 F.Supp. 892, 895 (1989), aff'd, 885 F.2d 858 (Fed.Cir. 1989); Tropicana Products, Inc. v. United States, 713 F.Supp 415, 419 (1989). This form and manner for giving notice of liquidation of formal entries is set down in sections 159.9(b) and (c) of the Customs Regulations (19 CFR 159.9). Applied here, the reliquidation that was posted at the customhouse on September 27, 1988 was the only legal notice of reliquidation. The follow-up notice that appeared on October 14, 1988 in ACS did not amount to notice of a subsequent reliquidation, because it was never posted.

The protest was filed on January 10, 1989, more than 90 days after the posting of the bulletin notice. Consequently, the protest was untimely. Untimely protests are invalid. United States v. Wyman, 156 F. 97, 84 C.C.A. 123 (Mo. 1907); see also Gallagher & Ascher v. United States, 21 CCPA 313 (1933); Spiegel Bros. v. United States, 21 CCPA 310 (1933). Therefore the protest at issue is invalid.

The import specialist, who was basing his decision on the reconstructed entry and therefore did not know of the protest's invalidity, approved the protest on October 27, 1989. The approval was noted on Customs Form 19, the protest form, and a copy was sent to the protestant. The subsequent discovery of the original entry by the liquidator led to the curtailment of the reliquidation process and raised the question as to whether Customs may rescind the approval of an invalid protest.

This issue was recently answered in the affirmative with respect to timely protests which had not yet been reliquidated, in Headquarters ruling letter 221723 TG, dated March 26, 1991. The rationale behind allowing rescission of an approval of a timely protest was that, unlike the situation involving a protest denial, no statutorily prescribed rights of the protestant would be prejudiced by the rescission. Rescinding an approval would result in the denial of the protest, which the protestant could contest by commencing an action in court within 180 days of the mailing of the notice of denial. In contrast, the rescission of a denial of a protest would amount to an unlawful interference with that 180-day period, which is set down by statute and is triggered by the mailing of the notice of the denial. See San Francisco Newspaper Printing v. United States, 620 F.Supp. 738, 9 CIT 517 (1985).

The case for rescinding an approval of a protest that is invalid because it was untimely filed, and has not yet been reliquidated, is particularly compelling. This is because a decision as to the liquidation of an entry is binding upon all parties, including the government, unless that decision is timely protested. 19 U.S.C. 1514; see also T.D. 46955. The significance of this is that Customs does not have the authority to reliquidate an entry under 19 U.S.C. 1514 after it has discovered that the contested liquidation has become final by reason of the protestant's failure to file a timely protest. Therefore, Customs must rescind a protest approval which was based on an untimely protest, if the untimeliness of the protest has been discovered by Customs prior to reliquidation.

You are directed to rescind the protest approval and to DENY the protest.

HOLDING:

1) The only legal notice of liquidation is the notice posted on the bulletin at the customhouse at the port of entry; therefore, a protest is untimely when it was filed more than 90 days after the bulletin notice was posted, but within 90 days of a subsequent liquidation that appeared only in ACS for the limited purposes of generating a bill and courtesy notice.

2) A decision to allow a protest can be rescinded before reliquidation, and must be rescinded if the protest was untimely and its untimeliness was discovered by Customs prior to reliquidation.

Sincerely,

John Durant
Director, Commercial

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