HQ 0224837 - Protest 4101-93-100064; merchandise processing fee; warehouse entry; warehouse withdrawal for consumption; informal entry; 19 CFR 143.21(a); 19 CFR 143.22; 19 U.S.C. 58c; 19 CFR Part 144. - United States International Trade Commision Rulings

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HQ 224837

November 16, 1993

ENT-1-03/ENT-4/ENT-7-01-CO:R:C:E 224837 AJS

CATEGORY: ENTRY

District Director of Customs
U.S. Customs Service
Plaza Nine Bldg., 6th Floor
55 Erieview Plaza
Cleveland, OH 44114

RE: Protest 4101-93-100064; merchandise processing fee; warehouse entry; warehouse withdrawal for consumption; informal entry; 19 CFR 143.21(a); 19 CFR 143.22; 19 U.S.C. 58c; 19 CFR Part 144.

Dear Sir or Madame:

This is our decision on protest 4101-93-100064, dated June 25, 1993, regarding the merchandise processing fee (MPF) and warehouse entries.

FACTS:

Merchandise with a value exceeding $1250 was entered for warehouse. A portion of this merchandise with a value of less than $1250 was subsequently withdrawn for consumption. A MPF of 0.17 per cent was assessed on the value of the merchandise in each withdrawal. The protestant asserts that each withdrawal should be treated as if it is an informal entry, thus requiring a payment of only a $2.00 MPF.

ISSUE:

Whether a warehouse withdrawal for consumption of less than $1250 may be treated as an informal entry. More specifically, what is the proper amount of MPF which should be collected.

LAW AND ANALYSIS:

19 CFR 143.21(a) provides that shipments of merchandise not exceeding $1250 in value, with certain exceptions, may be entered under informal entry. We note that this provision
merely states that these shipments may be entered informally, it does not provide for an absolute right to make an informal entry. Furthermore, 19 CFR 143.22 provides that the district director may require a formal consumption or appraisement entry for any merchandise if deemed necessary for: (a) import admissibility enforcement purposes, (b) revenue protection, or (c) the efficient conduct of Customs business. Therefore, the district director may require formal entry for merchandise even if it satisfies the description in 19 CFR 143.21.

19 U.S.C. 58c(a)(9)(A) provides that the Secretary of the Treasury shall charge and collect a fee for the processing of merchandise that is formally entered or released. This fee, with certain exceptions, shall be based on the value of the merchandise as determined under section 1401a of this title. 19 U.S.C. 58c(b)(8)(D)(ii). For the purposes of section 58c(a)(9), merchandise is entered or released if the merchandise is withdrawn from warehouse for consumption. 19 U.S.C. 58c(b)(8)(E)(iii). Accordingly, the MPF shall be charged and collected at the time merchandise is withdrawn from warehouse for consumption. In this case, the subject MPF was assessed at this time.

19 CFR 144.1 provides that any merchandise subject to duty may be entered for warehousing except for perishable merchandise and explosive substances (other than fire- crackers). Section 144.11 provides that the documentation required by section 142.3 of this chapter shall be filed at the time of warehouse entry. If the entry summary, Customs Form (CF) 7501, is filed at the time of entry for merchandise to be entered for warehouse, it shall serve as both the entry and the entry summary. Section 144.12 states that the entry summary shall show the value, classification, and rate of duty as approved by the district director at the time the entry summary is filed. Thus, merchandise which is entered for warehouse is already entered and no longer eligible for informal entry.

19 CFR 144.12 provides, however, that no deposit of estimated duties shall be required until the merchandise is withdrawn for consumption. The MPF is due and payable at the time of deposit of estimated duties. Bonded Warehouse Manual, section 2.10(b) (1990). Section 144.13 provides that a bond on CF 301 shall be filed in the amount required by the district director to support the entry documentation. Section 144.14 provides that when the entry summary and bond have been filed, with certain exceptions, the merchandise shall be sent to the bonded warehouse. Accordingly, the MPF is not due upon the entry of merchandise into warehouse but rather at the time of deposit of estimated duties.

19 CFR 144.38(a) provides that withdrawals for consumption of merchandise in bonded warehouses shall be filed on CF 7505. We note that at this time the merchandise is being withdrawn from warehouse and not entered. Paragraph (c) provides that each withdrawal shall show the separate value of each package and the total dutiable value of the merchandise being withdrawn. Paragraph (d) provides that estimated duties on the merchandise being withdrawn shall be deposited in accordance with subpart G of part 141 of this chapter. Therefore, the MPF is due and payable at this time. The district director may increase or decrease the amount of estimated duties to be deposited on the final withdrawal to bring the aggregate amount of duties deposited into balance with the amount which he estimates will be finally due upon liquidation. Paragraph (e) provides that when the duties and other charges have been paid, and all other requirements of law and regulations have been met, a permit on CF 7505-A shall be issued and delivered to the person making the warehouse withdrawal.

In this instance, the protestant asserts that a withdrawal for consumption should be treated as an informal entry or withdrawal. Section 144.38 does not provide for any type of informal withdrawal for consumption. Warehouse importers and transferees are responsible for paying the MPF of 0.17 per cent of the value of the merchandise covered by a withdrawal for consumption at the time of deposit of estimated duties. Bonded Warehouse Manual, section 2.10(b). In this case, the protestant was charged a MPF of 0.17 percent. We can find no support nor was any provided which would permit the protestant to pay only the $2.00 fee charged for informal entries in 19 U.S.C. 58c(a)(10)(C)(i). As stated previously, merchandise which is withdrawn for consumption has already been entered and thus is not subject to the provisions regarding informal entry. Therefore, the protestant was charged the correct MPF.

HOLDING:

The protest is denied. A warehouse withdrawal for consumption may not be treated as an informal entry. A MPF of 0.17 per cent is to be assessed on a warehouse withdrawal for consumption and not the $2.00 fee required for certain types of informal entries.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the
date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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