HQ 0222523 - Protest #1601-8-000014; Customs' authority to rescind a denial of protest - United States International Trade Commision Rulings

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HQ 222523

July 31, 1991

LIQ-1 CO:R:C:E 222523 TLS

CATEGORY: ENTRY LIQUIDATION

District Director
U.S. Customs Service
200 East Bay Street
P.O. Box 20876
Charleston, South Carolina 29413-0876

RE: Protest #1601-8-000014; Customs' authority to rescind a denial of protest

Dear Sir:

The above-referenced protest has been forwarded to this office for further review. We have considered the points raised by the protestant and your office. Our decision follows.

FACTS:

This case involves a protest that was originally denied in a Customs decision dated April 22, 1989 (HQ 220431). The decision held that the protestant, a surety, was still liable by the terms of the properly executed bond even after the principal had been discharged from obligation through bankruptcy proceedings. It also held that Customs properly appraised the imported merchandise for reliquidation purposes and the subject entries were timely reliquidated under 19 U.S.C. 1521. You submit this protest for further review of the question of whether or not Customs may rescind a protest after it has been denied and the denial has been issued to the protestant. You also seek an answer to whether or not Customs may reliquidate an entry after it has been deemed liquidated.

You have cancelled the denial of the original protest and have notified the protestant of such through a letter dated June 27, 1990. Customs has been faced with the issue of whether or not it may rescind a protest decision after denial has been made before the present case and we find the question to exist here.

ISSUE:

Whether or not Customs may rescind a decision to deny a protest for further review after such denial has been issued.

LAW AND ANALYSIS:

The Court of International Trade has addressed the issue of whether or not Customs may rescind the denial of a protest after it has been issued to the protestant. In San Francisco Newspaper Printing Co. v. United States, 9 CIT 517, 620 F. Supp. 738 (1985), an importer filed a protest for further review subsequent to the denial of a first protest. The second protest was denied as well and Customs determined, without action, that the first protest should have only been denied in part. The protestant brought action against Customs contesting the denial of both protests pursuant to 19 U.S.C. 1515. Customs sought to dismiss part of the action for lack of timeliness, contending that the protestant did not file the action within 180 days of mailing of notice of denial as required under 28 U.S.C. 2636(a)(1). The protestant claimed that timeliness was not at issue because the denial of the first protest was rescinded pursuant its request to do so under to 19 U.S.C. 1520(c). Customs had not formally responded to the request, however. The pivotal question became whether or not Customs has the authority to rescind the denial of a protest after it has been mailed.

The court held that Customs does not have the authority under 19 U.S.C. 1515 to exercise jurisdiction over a protest after it has been denied. San Francisco Newspaper Printing Co. v. United States, 9 CIT 517, 518-19 (1985). It reasoned that section 515 does not give Customs the right to rescind the denial despite the fact that the statute allows Customs two years to review the protest and make a decision. The protestant had argued that the rescission would be proper since it would be done within the two-year limitation. Id. at 518. The protestant also argued that the rescission would be proper under 19 U.S.C. 1520, which allows for the correction of certain errors in customs transactions. The court rejected this argument as well, holding that section 520 authorizes Customs to reliquidate an entry as a remedy, but the rescission of a denial of protest is neither contemplated nor authorized by the statute. Id. at 519.

In the present case, Customs wishes to reverse a denial of protest after it has been published. The agency in fact sent a letter to the protestant dated June 27, 1990, notifying it that the denial had been cancelled and the protest was being reconsidered. This action was taken without a request from the protestant to do so. Inasmuch as Customs has initiated this action rather than the protestant, it can be distinguished from the San Francisco Newspaper Printing case. Rather than a case of the protestant wishing to have an adverse decision reversed, Customs wishes to modify a ruling that it now believes is not correct. We find such a distinction to be of no effect on the applicability of the court decision to present case, however.

The court unequivocally stated that a protest is beyond the jurisdiction of Customs after it has been denied. The language is clear and explicit in its meaning. The ruling has not been qualified by any exceptions or exclusions. Consequently, we cannot ignore the applicability of the San Francisco Newspaper ruling in this instance. The critical fact in this case, as it was in the previous one, is that the denial has already been mailed and thus the importer has constructive notice of the decision. Customs' jurisdiction over the case ended once the protest was denied. The protestant's recourse at that point was to either initiate action in the Court of International Trade or abandon the protest. San Francisco Newspaper Printing, 9 CIT at 519. Therefore, we must find that Customs' decision to cancel the denial of protest #1601-8-000014 was done without authority and is hereby considered null and void.

HOLDING:

Customs may not rescind a decision to deny a protest for further review once the decision has been issued to the party in interest.

The cancellation of the denial of protest #1601-8-000014 is hereby rescinded and the decision to deny the subject protest in full is reinstated.

In view of our decision that Customs lacks authority to rescind protest denials, we cannot consider any issue arising from a protest that has already been denied. Therefore, the reliquidation issue is considered moot.

Sincerely,

John Durant, Director

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