HQ 0224296 - Protest and Application for Further Review No. 3126-92- 100017; Interest Due on Vessel Repair Entry; 19 U.S.C. 1466; 19 U.S.C. 1505; Notice of Liquidation - United States International Trade Commision Rulings

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HQ 224296

February 26, 1993

ENT-1-03-CO:R:C:E 224296 CB

CATEGORY: ENTRY

Deputy Regional Commissioner
Commercial Operations
Pacific Region
U.S. Customs Service
One World Trade Center
Suite 705
Long Beach, CA 90831-0700

RE: Protest and Application for Further Review No. 3126-92- 100017; Interest Due on Vessel Repair Entry; 19 U.S.C. 1466; 19 U.S.C. 1505; Notice of Liquidation

Dear Sir/Madam:

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

FACTS:

The subject protest covers the assessment of interest on duties owed. The protestant filed a vessel repair entry on September 19, 1988 and liquidated on June 19, 1992. Customs records show that the bill date was the same date, June 19, 1992.

Protestant claims that after checking with U.S. Customs because no bill had been received, it discovered that the entry had been liquidated and that interest in the amount of $2,147.40 was owed. Protestant alleges that while the bill was received by protestant, it was not routed to a knowledgeable person within the corporation until September, 1992. Therefore, interest charges are not warranted.

ISSUE:

Whether the assessment of interest was proper?

LAW AND ANALYSIS:

Initially, it must be determined whether a delinquent vessel repair entry is subject to the assessment of interest. Section 466 of the Tariff Act of 1930, as amended (19 U.S.C. 1466) imposes an ad valorem duty of 50 per centum on equipment and repairs of vessels performed in a foreign country. The legislative history to this section was considered in United States v. Gissel, 353 F. Supp. 768, 772 (S.D. Tex. 1973), aff'd, 493 F.2d 27 (5th Cir. 1974), wherein the district court stated:

The Tariff Act of 1930 included within its formal title the following purpose: "An Act to provide revenue, to regulate commerce with foreign countries, ...." 46 Stat. 590 (1930). This statute provides for the imposition and collection of customs duties upon entry of various foreign merchandise into the United States. Since foreign repair parts on vessels were generally thought of and classified as dutiable merchandise . . ., such repairs were expressly included as dutiable merchandise within a provision of the Tariff Act. The tariff law has contained such a provision in substantially the same form since the enactment of section 23 of the Tariff Act of 1866, 14 Stat. 183 (1866).

Therefore, in view of the above, it can only be concluded that the ad valorem duty imposed under 19 U.S.C. 1466 is a customs duty subject to the assessment of interest as provided for under 19 U.S.C. 1505(c).

Protestant contends that it should not have to pay the assessed interest because the pertinent area within its company did not receive the bill for the duties owed until several months later. The Customs Regulations implementing and administering the vessel repair statute are found in 19 CFR Part 4. Section 4.14(c) states that, after a vessel repair entry has been liquidated, the bulletin notice of liquidation will be posted. The Court of International Trade has stated that "proper notice of liquidation refers to the bulletin notice of liquidation." See Penrod Drilling Co. v. United States, 13 CIT 1005, 1009, 727 F. Supp. 1463, 1467 (1989), aff'd, 925 F.2d 406 (1991); see also, Goldhofer Fahrzeugwerk GmbH v. United States, 13 CIT 54, 706 F. Supp. 892, aff'd 885 F.2d 858 (Fed. Cir. 1989). It is the importer who has the obligation to check all notices posted to determine whether its goods have been liquidated. Penrod Drilling, 13 CIT at 1009, 727 F. Supp. at 1467; Goldhofer, 13 CIT at 58, 706 F. Supp. at 895; Omni U.S.A., Inc. v. United States, 11 CIT 480, 483, 663 F. Supp. 1130, 1133 (1987), aff'd, 840 F.2d 912 (Fed. Cir. 1988), cert. denied, 488 U.S. 817 (1988).

The Customs Service obligation was met once it posted the bulletin notice of liquidation as required. The fact that once the bill was received at protestant's corporate offices it took several months to route it to the correct office is not Customs concern or responsibility. Every person who deals with the Customs Service has the ability to have bills directed to the proper individual within its organization by using the optional additional identification procedure set forth in 19 CFR 24.5(d). By use of that procedure, bills can be directed to the location desired by the filer. Protestant does not allege that it employed the additional information procedure of 19 CFR 24.5(d). Instead, protestant insists that Customs somehow locate the proper person within the company who can process the bill. Protestant's failure to employ the procedure set in 19 CFR 24.5(d) is fatal to its argument. The date which triggers the assessment of duty is the liquidation date. The statute provides that a delinquent entry will bear interest from the 15th day after the date of liquidation. 19 U.S.C. 1505(c). As stated by the Court of International Trade in Goldhofer, "[a] reasonably prudent importer is amply apprised of any action taken with respect to his merchandise through the bulletin process and must merely monitor the bulletin to be aware of liquidation." 13 CIT at 60.

Finally, protestant also alleges that once the bill is received it is incomprehensible because it does not indicate what the bill is for. This complaint is unfounded. The bill sent out by the Customs Service clearly indicates: a) it is a Customs Service bill; b) references the entry number; c) the type of charge; and d) the amount owed. Therefore, there is no reason why an importer would not be able to match a bill with an entry.

HOLDING:

Vessel repair duties are subject to the interest provisions of 19 U.S.C. 1505. The bulletin notice of liquidation is the only required notice. Therefore, you should DENY this protest in full.

A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director

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