HQ 0223273 - Application for further review of Protest No. 4909-91- 1000063; payment of interest on refund after liquidation; P.L. 100-647 - United States International Trade Commision Rulings

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HQ 223273

September 25, 1991

LIQ-10-CO:R:C:E 223273 CB

CATEGORY: ENTRY PROTEST

District Director
U.S. Customs Service
La Puntilla #1
Old San Juan, PR 00903

RE: Application for further review of Protest No. 4909-91- 1000063; payment of interest on refund after liquidation; P.L. 100-647

Dear Sir/Madam:

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

FACTS:

The file seems to indicate that the subject merchandise was entered sometime between February 9, 1988 and September 19, 1988 and liquidated "as entered" "no change". Thereafter, the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100- 647, 102 Stat. 3809 (1988), extended the effective period for the reduced duty rate applicable to the subject merchandise. Consequently, the protested entries were reliquidated on April 5, 1991, and a refund was issued to protestant. Interest was not paid on the refund. Protestant now claims that the refund should have included interest.

ISSUE:

Whether interest is due on a refund of duties when an entry is reliquidated pursuant to a change in the tariff treatment of merchandise?

LAW AND ANALYSIS:

Protestant contends that it is entitled to payment of interest on the refunds based on the Court of International Trade decisions in Kalan, Inc. v. United States, 24 Cust. B. & Dec. No. 51, p. 17, Slip Op. No. 90-119 (CIT November 21, 1990) and Hospital Corp. of America v. United States, 24 Cust. B. & Dec.

No. 51, p. 22, Slip Op. No. 90-120 (CIT November 23, 1990) which held that an importer is entitled to the payment of interest on a refund based on a 19 U.S.C. 1520(c)(1) reliquidation.

We disagree with protestant for the following reasons. Although it is true that the courts have held that an importer is entitled to interest on the refund paid by Customs as a result of the reliquidation of merchandise at a lower rate of duty, these decisions were based on 19 U.S.C. 1520(d) which provides:

If a determination is made to reliquidate an entry as a result of a protest filed under section 1514 of this title or an application for relief made under subsection (c)(1) of this section, or if reliquidation is ordered by an appropriate court, interest shall be allowed on any amount paid as increased or additional duties under section 1505(c) of this title....

In the instant case, reliquidation was not based on sections 1514 and 1520, nor was it by court order. Reliquidations were made pursuant to the Technical and Miscellaneous Revenue Act of 1988. It is recognized that "the starting point for interpreting a statute is the language of the statute itself." Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). Section 1520(d) does not provide for the payment of interest on reliquidations made pursuant to an Act. The Customs Service cannot apply a statute beyond its scope.

Additionally, it should be noted that subsequent to the filing of the subject protest, the Court of Appeals for the Federal Circuit reversed the holding of the Court of International Trade in Kalan. The Court held that Section 1520(d) expressly allows an importer to recover interest only on amounts paid as increased or additional duties. Kalan Inc. v. United States, No. 91-1117,-1163 (Fed. Cir. Sept. 11, 1991). The Court did not find any basis on which to allow interest on refunds of excess estimated duties.

HOLDING:

An importer is not entitled to interest under 19 U.S.C. 1520 (d) when reliquidation is based on something other than a court order or 19 U.S.C. 1514 and 1520(c). Therefore, this protest should be denied.

A copy of this decision should be attached to the CF 19, Notice of Action, and sent to protestant to satisfy the notice requirement of section 174.30(a), Customs Regulations.

Sincerely,

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