HQ 0224294 - Protest for further review 3801-2-102516; extension of liquidation; American Permac, Inc. v. U.S.; 19 U.S.C. 1504(a); 19 U.S.C. 1504(b); Detroit Zoological Soc'y v. U.S.; "information"; International Cargo & Surety Ins. Co. v. U.S.; St. Paul Fire & Marine Insurance Co., Inc. v. U.S.; 19 CFR 159.12(a)(1)(i); 19 CFR 159.12(b); Star Sales & Distributing Corp. v. U.S.; 19 CFR 159.12(d); 19 CFR 159.12(e); 19 U.S.C. 1504(d). - United States International Trade Commision Rulings

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HQ 224294

January 10, 1994

LIQ-11 CO:R:C:E 224294

CATEGORY: LIQUIDATION

Assistant District Director
Commercial Operations Division
477 Michigan Avenue
Detroit, MI 48226-2568

RE: Protest for further review 3801-2-102516; extension of liquidation; American Permac, Inc. v. U.S.; 19 U.S.C. 1504(a); 19 U.S.C. 1504(b); Detroit Zoological Soc'y v. U.S.; "information"; International Cargo & Surety Ins. Co. v. U.S.; St. Paul Fire & Marine Insurance Co., Inc. v. U.S.; 19 CFR 159.12(a)(1)(i); 19 CFR 159.12(b); Star Sales & Distributing Corp. v. U.S.; 19 CFR 159.12(d); 19 CFR 159.12(e); 19 U.S.C. 1504(d).

Dear Sir:

This is our decision in protest for further review 3801-2- 102516, dated 8/06/92, concerning the extension of liquidation dates for certain entries.

FACTS:

The subject merchandise consists of components for a heater core assembly system. The components were entered on 7/19/88 and 7/21/88, and are part of contract job 2413. Customs had previously issued to the protestant two Requests for Information, Customs Form (CF) 28, on four entries also covering components for a heater core assembly system from the same shipper but relating to another contract job. The CF 28s sought information necessary to appraise and classify the subject assembly system (i.e., whether there were any assists, descriptive literature, affidavits of manufacture supporting the item 807 claim, and a copy of the contract with all amendments). Merchandise shipped pursuant to a contract job is unique in that final cost information is not normally compiled until well after the last entry of the contract is filed. Responses to CF 28s are not normally forwarded until all requested information has been acquired. Therefore, Customs withheld liquidation of the subject entries pending a response to the issued CF 28s.

On 2/21/90, Customs contacted the protestant concerning their failure to respond to the CF 28s. The protestant requested that Customs continue to withhold liquidation of the entries inasmuch as the shipper intended to respond. Based on this request, Customs extended the liquidation date for the entries.

The protestant does not dispute whether liquidation extensions were issued, but whether proper grounds existed for these extensions. A search of Customs computer records indicates that the date of liquidation for the subject entries was extended three times, and that the entries were liquidated approximately 2 months (i.e., 5/08/92) before the expiration of four years from the respective entry dates.

ISSUE:

Whether proper grounds existed for extending the time period for liquidation of the subject entries.

LAW AND ANALYSIS:

Liquidation of an entry of merchandise constitutes the final computation by Customs of all duties accruing on that entry. American Permac, Inc. v. United States, 10 CIT 535, 537, 642 F. Supp. 1187, 1190 (1986). 19 U.S.C. 1504(a) states that an entry of merchandise not liquidated within one year from the date of entry or final withdrawal from warehouse shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer of record. 19 U.S.C. 1504(b)(1) provides an exception to subsection (a) in that the Secretary of the Treasury may extend the period in which to liquidate an entry by giving notice of such extension to the importer of record in such form and manner as the Secretary shall prescribe in regulation, if information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officer. The protestant asserts that Customs did not have proper grounds to extend the liquidation date of the subject entries.

The issue of whether an extension of an entry for insufficient information is justified under 19 U.S.C. 1504 (b)(1) was addressed by the Court of International Trade (CIT) in Detroit Zoological Soc'y v. United States, 10 CIT 133, 630 F. Supp. 1350 (1986). The CIT held that the term "information" as used in 19 U.S.C. 1504(b)(1), "should be construed to include whatever is reasonably necessary for proper appraisement or classification of the merchandise involved." 10 CIT 138, 630 F. Supp. at 1356. Specifically,
the CIT held "information" to include internal Customs advice requested by the importer. Subsequently, in International Cargo & Surety Ins. Co. v. United States, 15 CIT __, 779 F. Supp. 174, 178 (1991), the CIT interpreted the term to include internal information sought by Customs. The CIT further stated that these interpretations are sufficiently broad to cover information such as cost data and country of origin information to support a claim under item 807.00, Tariff Schedules of the United States (TSUS). St. Paul Fire & Marine Insurance Co. (insurer for Carreon, Inc. v. United States, Slip Op. 92-125, Vol. 26, Cust. Bull. & Dec., No. 35, p. 39 (August 26, 1992).

In this instance, Customs extended the liquidation period in order to obtain information necessary to appraise and classify the merchandise. Customs sent two CF 28s to the protestant requesting information on another contract job from the same shipper for components of the same type of system. Such information included questions regarding assists, descriptive literature, affidavits of manufacture supporting the item 807.00 claim, and the contract plus all amendments. This type of information would certainly appear to be encompassed by the CIT's broad definition of the information which Customs may properly require in order to appraise or classify merchandise. Accordingly, the grounds for Customs extension of the subject entries liquidation period were proper pursuant to 19 U.S.C.

19 CFR 159.12 was promulgated pursuant to 19 U.S.C. 1504. Subsection (a)(1)(i) provides that the district director may extend the 1-year statutory period for liquidation for an additional period not to exceed 1 year if information needed by Customs for the proper appraisement or classification of the merchandise is not available. This additional period expires 1 year from the expiration of the 1-year statutory period for liquidation, which itself expires 1 year from the date of entry. As stated beforehand, Customs requested additional information through two CF 28s because this information was needed to determine the proper appraise-ment and classification of the merchandise. Therefore, Customs properly extended the 1-year statutory period for liquidation for an additional period while awaiting a response to the CF 28s.

19 CFR 159.12(b) states that if the district director extends the time for liquidation, as provided in paragraph (a)(1) of this section, he promptly shall notify the importer or the consignee and his agent and surety on CF 4333-A that the time has been extended and the reasons for doing so. Government officials are entitled to a presumption that their
duties are performed in the manner required by law. Star Sales & Distributing Corp. v. United States, 10 CIT 709, 710, 663 F. Supp. 1127, 1129 (1986); see Enron Oil Trading, 15 CIT at __, Slip Op. 91-91 at 4. The presumption may be rebutted by evidence indicating that notice was not received. In this instance, the protestant does not dispute the existence of liquidation extensions. Customs computer records indicate that three extension of liquidation notices were sent to the protestant. Therefore, the protestant has failed to rebut the presumption that proper notice was given.

19 CFR 159.12(d) states that if an extension has been granted because Customs needs more information and the district director thereafter determines that more time is needed, he may extend the time for liquidation for an additional period not to exceed 1 year provided he issues the notice required by paragraph (b) of this section before termination of the prior extension period. This additional period will expire 1 year from the expiration of the initial extension, or in other words it will expire on the third year anniversary of the entry date. 19 CFR 159.12(e) limits the total time for which extensions may be granted by the district director to 3 years. Consequently, the district director may also grant a third 1 year extension before the termination of the second additional period inasmuch as this final extension would allow for the total time of extension to equal but not exceed three years. In this instance, the additional information requested by Customs was not provided by the protestant even though Customs contacted the protest- ant further and was informed that such information would be forthcoming. As stated previously, Customs extended the liquidation period three times while awaiting the requested information. In addition, the total time (i.e., 7/89 - 5/92) for these extensions did not exceed three years. Thus, the district director properly extended the time for liquidation for additional periods while awaiting the protestant's promised response.

19 U.S.C. 1504(d) provides in part that any entry of merchandise not liquidated at the expiration of four years from the applicable date specified in subsection (a) of this section, shall be deemed liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record. The applicable dates specified in subsection (a) in this case are the dates of entry (i.e., 7/19/88 and 7/21/88). Customs liquidated both of the subject entries on 5/08/92, which precedes the expiration of four years from the date of entry. Therefore, the subject entries were not deemed liquidated by operation of law, but by the action of Customs on 5/08/92.

The protestant cites St. Paul in support of its contention that the extensions of liquidation were improper. However, that case contains substantially different factual circumstances than the subject protest. In St. Paul, the importer made no effort to submit the required information and Customs made no attempt to contact the importer. In this case, Customs contacted the importer and the importer indicated that they would provided the necessary information. In addition, the information required in St. Paul only concerned the importer's item 807.00 claim. While in this instance, the information also included descriptive literature, a contract and all amendments, as well as questions on assists. Furthermore, the unique situation involving merchandise shipped pursuant to contract required Customs to wait for an extended period to allow the importer enough time to obtain the necessary information. Consequent-ly, we do not view the decision rendered in St. Paul under different factual circumstances controlling in this instance.

HOLDING:

Proper grounds existed pursuant to 19 U.S.C. 1504(b)(1) for extending the time period for liquidation of the subject entries until 5/08/92. The protest, therefore, should be denied. A copy of this decision should be attached to the CF 19 and mailed to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director

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