HQ 0222116 - Application for further review of Protest No. 3801-8-001416; assessment of marking duties; 19 U.S.C. 1514(a)(4); 19 U.S.C. 1304; T.D. 89-48. - United States International Trade Commision Rulings

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HQ 222116

May 16, 1991

PRO-2-05/LIQ-1/MAR-2-01-CO:R:C:E 222116 JR

CATEGORY: ENTRY LIQUIDATION

Deputy Assistant Regional Commissioner
Commercial Operations
55 East Monroe Street, Suite 1501
Chicago, Illinois 60603-5790

RE: Application for further review of Protest No. 3801-8-001416; assessment of marking duties; 19 U.S.C. 1514(a)(4); 19 U.S.C. 1304; T.D. 89-48.

Dear Sir:

The above-referenced protest was forwarded to our office for further review. We have considered the arguments raised. Our decision follows.

FACTS:

Two mink coats were imported from Canada on June 22, 1987, and the entry summary was filed on July 6, 1987, by the customhouse broker, who was the importer of record. Thereafter, Customs issued a "Notice of Redelivery--Marking" Customs Form (CF) 4647, dated July 16, 1987, to the actual owner of the fur coats, citing that the imported merchandise needed to be brought in compliance with the requirements of the marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304) and the Textile Fiber Products Identification Act (15 U.S.C. 70).

The actual owner complied by properly marking the coats before liquidation, but failed to return the certified copy of CF 4647 to Customs within 30 days. The broker submitted the owner's certified CF 4647 to Customs on September 3, 1987. On September 4, 1987, a Customs Import Specialist signed the CF 4647 on the back with the following statement: "Coats examined by I.S.E.T., 9/4/87. Correctly marked but completed beyond the thirty days."

When the certified copy of the CF 4647 was not returned within thirty days, marking duties of $790.00 and liquidated damages were assessed. The entry was liquidated on October 16, 1987. The liquidated damages were cancelled, but marking duties of 10% were still assessed.

The broker, on January 14, 1988, timely filed a protest within 90 days of the date of liquidation under 19 U.S.C. 1514(a)(4), asserting that the marking duties assessed should be refunded and the protest allowed because, despite the defective notice (the improper demand on the actual owner), the goods, in fact, have been legally marked and the U.S. Customs Service has certified that they have been marked by their statement on the reverse of CF 4647. The broker does not contest the CF 4647's untimely filing.

It is the position of the district director's office that all actions in connection with this importation were according to statute. The district office recommends denial of the protest stating that the CF 4647 was issued in accordance with 19 CFR 141.113(e), and the importer did not comply with the terms of the redelivery, see 19 CFR 113.62(d).

We note in passing that the broker filed a section 1520(c) request on November 17, 1987, claiming that there was an improper demand for liquidated damages (defective notice) because the notice for redelivery was sent to the actual owner, the wrong party, rather than the broker, the importer of record in accordance with 19 CFR 141.113(d). The section 1520(c) request was properly denied on February 16, 1989, because the error was clearly an error in the interpretation of law (19 CFR 141.113(d) and 113.62(d)) instead of a mistake of fact. Since it appears from the file record that the broker did not protest the denial of the 1520(c)(1) request under 19 U.S.C. 1514(a)(7), the issue of who is the proper party to receive the demand notice for redelivery (CF 4647) for failure to mark the imported merchandise under 19 CFR 141.113(d) cannot now be raised. See 19 U.S.C. 1514(a).

ISSUE:

Did Customs properly assess marking duties when the merchandise was marked with the country of origin outside the 30- day marking period, but before liquidation of the entry?

LAW AND ANALYSIS:

The assessment of marking duties is governed by section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304). 19 U.S.C. 1304(f), "Additional duties for failure to mark," states, in pertinent part:

If at the time of importation any article ... is not marked in accordance with the requirements of this section, and if such article is not exported or destroyed or the article ... marked after importation in accordance with the requirements of this section (such exportation, destruction, or marking to be accomplished under customs supervision prior to the liquidation of the entry covering the article, and to be allowed whether or not the article has remained in continuous customs custody), there shall be levied, collected, and paid upon the such article a duty of 10 per centum ad valorem, which shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause...

Treasury Decision (T.D.) 89-48 provides that "if merchandise is properly marked with the country of origin outside the 30-day period but before liquidation of the entry, liquidated damages are appropriate, but marking duties are not due." (Emphasis in the text of the T.D.)

Based upon 19 U.S.C. 1304(f) and the guidelines of T.D. 89- 48, the marking duties were improperly assessed in this case since (1) Customs approved the marking, which we broadly construe as being done under customs' supervision, on September 4, 1987 before the coats reached the ultimate consumer and (2) the CF 4647 was filed with Customs prior to the October 16, 1987 liquidation. The marking duties, accordingly, must be refunded to the protestant/broker.

We note that liquidated damages were properly assessed since the bond condition was technically breached, see 19 CFR 113.62(d)(1), (3); however, this is no longer at issue since liquidated damages were cancelled upon payment. See T.D. 89-48. [Protestant also appears to have petitioned for relief from liquidated damages under Part 172, Customs Regulations. It appears that relief was not granted in accordance with the cancellation guidelines. That failure might be the subject of a supplemental petition but not a protest.]

HOLDING:

In this case, marking duties of 10% were improperly assessed, see T.D. 89-48, since the goods had been brought into compliance with the marking statute (19 U.S.C. 1304) before liquidation of the entry.

You are instructed to allow the protest and refund the assessment of $790.00 in marking duties to the protestant in accordance with T.D. 89-48. You may provide a copy of this decision to the protestant.
Sincerely,

John Durant, Director

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