HQ 0222984 - Protest #4501-0-000021 concerning drawback on voluntarily tendered payments made more than 90 days after liquidation. - 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 0222808 - HQ 0223194 > HQ 0222984

HQ 222984

May 26, 1992

DRA-1-06-CO:R:C:E 222984 TLS

CATEGORY: ENTRY DRAWBACK

District Director
U.S. Customs Service
7911 Forsythe Boulevard Suite 625
St. Louis, Missouri 63105

RE: Protest #4501-0-000021 concerning drawback on voluntarily tendered payments made more than 90 days after liquidation.

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:

A series of 10 separate entries were made by protestant from March 2, 1988, to July 13, 1988 at the Memphis Customs port. These entries were liquidated and duty-paid between June 3, 1988 and April 14, 1989. The entries were rate advanced at the New Orleans Customs district on August 30, 1988, because the entered value of the merchandise increased through proper classification. Pursuant to this rate advance, the importer made additional payments on each of the entries for various amounts. Customs had made a request to the importer that it make voluntary tenders of additional payments on these entries after finding that the entries had been undervalued at liquidation. The importer then made drawback entries at St. Louis Customs on February 24, 1989. The drawback entries were liquidated on February 9, 1990, with the exception of one that was made on February 16, 1990.

The importer made the voluntary tenders after liquidation of the original entries had occurred and subsequently sought drawback on those payments. The importer contends that the additional payments are a part of the duties to which drawback is applicable even though they were voluntary tenders. Customs disagreed, finding that the additional payments constitute withheld duties under Customs regulations which are excluded from drawback eligibility.

ISSUE:

Whether the additional payments made as a voluntary tenders more than 90 days after liquidation are eligible for drawback as ordinary duties or excluded from drawback as withheld duties.

LAW AND ANALYSIS:

Customs refers to HQ 215896 (Sept. 26, 1983), which defined "withheld duties" as amounts which are voluntarily tendered after the time allowed for reliquidation has expired, as the reason for denying drawback on the additional payments made in this case. The ruling finds that withheld duties do not constitute 'ordinary Customs duties' under 19 CFR 22.41 (the predecessor to 19 CFR 191.3) and are not eligible for drawback under 19 U.S.C. 1313. The additional payments made in the present case meet the definition of withheld duties as ruled in 215896. They were voluntarily tendered upon request from Customs officials.

The protestant contends that 215896 was overturned by the Court of International Trade. In General Motors Corp. v. United States, 643 F. Supp. 1139 (CIT 1986), the importer had paid diversion duties as required under the Tariff Schedules of the United States (TSUS). Consequently, the court held that Customs could not treat the payment of the diversion duties as voluntary, stating that such constituted an exaction within the meaning of 19 U.S.C. 1514(a)(3). In the present case, the payments made were not made pursuant to any requirement under law or otherwise. As noted above, the payments are properly considered voluntary payments under Customs laws. Thus, we find the additional payments in this case to be withheld duties as has previously been defined by Customs.

The protestant also claims that payments were made as a requirement under 19 U.S.C. 1592(d) and should be considered eligible for drawback. Contrary to the protestant's claims, Customs did not initiate a 592 action against it for the additional payments, however. The protestant has submitted no evidence that it made the payments pursuant to a penalty matter under section 592. In fact, the only connection this case appears to have with section 592(d) is the importer's assertion that it made the payments because of it. Consequently, there is no evidence to show that C.S.D. 85-50 applies to this situation. The protestant submits a copies of Notices of Action sent to it by Customs which alerted the importer to the fact that Customs wanted additional payments to be made. No mention of any penalty claim or action was made by Customs on the documents, however. To the contrary, Customs "requested" payment of "voluntary tenders." Therefore, the additional payments were tendered as withheld duties.

The importer stated in a February 14, 1992 letter to this office that we agreed that these entries are subject to drawback under 19 U.S.C. 1313(j) upon verifying documentation submitted as proof that the payments were made. This office did not make such an agreement with the importer, however, either orally or in writing. The correct statement of our position is that the additional payments made pursuant to the subject entries were eligible for drawback only if they were made within 90 days after liquidation to allow for reliquidation.

In this case, the voluntary payments were made on each of the 10 entries after they had been liquidated. With respect to two of the entries (those liquidated on June 3, 1988), the payments were applied beyond 90 days after liquidation. The other eight entries had the additional payments applied to them and included in the drawback refund. The drawback paid on those eight entries did not amount to 99 percent of the total paid on each of the entries, including the additional payments. As a result, the importer is also requesting a refund on each of the eight entries to make up the difference between 99 percent and the actual totals refunded.

Under normal circumstances, the decision of a Customs officer as to the liquidation or reliquidation of an entry is final and conclusive on all persons unless a protest is filed within 90 days after the date of liquidation. See 19 U.S.C. 1514; 19 CFR 174. The alternative to timely filing a protest is voluntary reliquidation of the entries within 90 days after the date of liquidation. See 19 U.S.C. 1501; 19 CFR 173.3. This action was not filed with Customs within 90 days after liquidation of any of the subject entries, however. Customs is also time-barred from voluntarily reliquidating the entries. We regret that we are unable to grant relief under any of the above- cited Customs laws as a result. Therefore, we must deny this protest as being untimely with respect to additional payments made on the entries after they were liquidated.

HOLDING:

The additional payments made after liquidation of the consumption entries are voluntary tenders and consequently are not eligible for drawback. Those four entries that had payments applied to them within 90 days after liquidation cannot be reliquidated because Customs is time-barred from doing so. There is no evidence to show that any money was collected under 19 U.S.C. 1592(d). This protest should be denied in full. A Form 19, Notice of Action should be attached to this ruling.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling