HQ 0225162 - Protest 0201-93-100283; Proper extension of liquidation; Parvol PRA; Paramel DBM; Airedale Black F2G; 19 U.S.C. 1504(a)(1); Section 641, NAFTA Implementation Act; 19 U.S.C. 1504(b)(1); Detroit Zoological Soc'y v. U.S.; International Cargo & Surety Ins. Co. v. U.S.; 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 225162

May 20, 1994

LIQ-11-CO:R:C:E 225162 AJS

CATEGORY: LIQUIDATION

District Director of Customs
U.S. Customs Service
P.O. Box 1490
St. Albans VT 05478

RE: Protest 0201-93-100283; Proper extension of liquidation; Parvol PRA; Paramel DBM; Airedale Black F2G; 19 U.S.C. 1504(a)(1); Section 641, NAFTA Implementation Act; 19 U.S.C. 1504(b)(1); Detroit Zoological Soc'y v. U.S.; International Cargo & Surety Ins. Co. v. U.S.; 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 or Madame:

This is our decision in Protest 0201-93-100283, dated July 15, 1993, concerning the extension of liquidation for certain entries.

FACTS:

This protest involves the chemicals "Parvol PRA", "Paramel DBM" and "Airedale Black F2G" (also referred to as "Airedale Fawn Y" in invoice number E31317). The dates of entry for the subject merchandise were February 5, 1991 (entry 1), and April 9, 1991 (entry 2).

On April 16, 1991, the protestant states that a Customs Form (CF) 29, Request for Information, was sent to the importer indicating that the classification of various commodities including "Paralene PWG", "Paramel PA", "Paralene PVC", and "Airedale Brown ER" would be rated advanced.

On May 14, 1991, another entry of Parvol PRA was made by the protestant. On July 18, 1991, an automated CF 6431 request from the field import specialists to the national import specialists for this entry indicate a similar issue concerning "Parvol PCNR" was before headquarters on a protest for further review. This decision was issued as HQ 089897 on November 18, 1991.

In March of 1992, the district contacted the protestant concerning the possibility of performing a Pre-Importation Review for the protestant's merchandise. No record of a response to this letter is indicated.

On March 18, 1992, a note to the file indicates that Counsel for the protestant would contact Boston concerning current classification ruling on four of protestant's chemicals (e.g., Parvol PRA). On March 26, 1992, Counsel indicated that liquidation was being withheld because of a CF 6431 from Boston and a pending protest for further review from another importer concerning Parvol PRA.

In April of 1992, a Customs laboratory report was requested for Paramel DBM. On June 5, 1992, this report was issued.

On August 13, 1992, a CF 29, was issued to the protestant concerning Parvol PRA from a different entry. This CF 29 indicated that this other entry was in the liquidation process and was not available for review in that office.

On October 28, 1992, a CF 28 was sent to the protestant concerning Paramel DBM. A response was received concerning this request on November 23, 1992.

A search of Customs computer records indicates that entry 1 was extended for the second time on November 3, 1992, which is within two years of the entry date of February 5, 1991. Customs computer records also indicate that entry 2 was extended for the second time on January 7, 1993, which is within two years of the entry date of April 9, 1991.

On January 15, 1993, the protestant claims a CF 29 was sent indicating that the merchandise would be liquidated at a rate advance.

On February 18, 1993, the district again contacted the protestant concerning a Pre-Importation Review. This letter is annotated to indicate that such a review was being conducted by Customs in Boston.

On April 16, 1993, both entries were liquidated.

ISSUE:

Whether the subject entries were deemed liquidated pursuant to 19 U.S.C. 1504(a)(1) or properly extended and liquidated pursuant to 19 U.S.C. 1504(b)(1)

LAW AND ANALYSIS:

Initially, we note that the subject protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(A). The entries in question were liquidated on April 16, 1993, and this protest was filed on July 15, 1993. We also note that the liquidation of an entry is a protestable matter pursuant to section 1514(a)(5).

19 U.S.C. 1504(a)(1) provides that except as provided in subsection (b) of this section, an entry of merchandise not liquidated within one year from the date of entry of such merchandise 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. This provision was amended by section 641, Title VI, of the North American Free Trade Agreement (NAFTA) Implementation Act, Public Law 103-182, to provide, in part, that unless an entry is extended under subsection (b) it shall be deemed liquidated in the same manner as described above. The subject entries were liquidated more than one year after the date of entry. Thus, the protestant claims that the subject entries were deemed liquidated pursuant to section 1504(a).

Section 1504(b) provides 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 regulations, if (1) information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officer. 19 CFR 159.12(a)(1) 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 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.

Section 1504(b)(1) was also amended by section 641 of the NAFTA Implementation Act to provide that the Secretary may also extend the period in which to liquidate an entry if the information for insuring compliance with applicable law is not available to the Customs Service. The issue of whether an extension of liquidation of an entry for insufficient information is justified under section 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 section 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. 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 541, 779 F. Supp. 174, 178 (1991), the CIT interpreted the term to include internal information sought by Customs.

In this case, liquidation of the subject entries was initially extended beyond the one year period prescribed in section 1504(a) because a similar classification issue was pending with Customs Headquarters. For entry 2, an inquiry regarding a Pre-Importation Review was also outstanding. As stated previously, the absence of internal information sought by Customs or requested by the importer are proper grounds for extending the liquidation of an entry under section 1504(b)(1). Therefore, proper grounds existed for extending liquidation of the subject entries beyond the one year period for liquidation specified in section 1504(a).

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 also Enron Oil Trading and Transportation Co. v. United States, 15 CIT 511, 512 (1991). 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. Therefore, the protestant has failed to rebut the presumption that proper notice was given. In addition, Customs computer records indicate that two extensions of liquidation notices were sent to the protestant for each entry.

Inasmuch as proper grounds existed for extension of liquidation of the subject entries and notices of extension were issued, the deemed liquidation date for the subject entries was moved forward to February 5, 1993, for entry 1 and to April 9, 1993, for entry 2.

Section 159.12(d) provides 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. In this case, the second extensions would expire on either February 5 (entry 1) or April 9 (entry 2), 1994. Section 159.12(e) limits the total time for which extensions may be granted by the district director to 3 years (i.e., up to four years from the date of entry).

In this instance, Customs extended the liquidation of the subject entries for an additional period pursuant to section 159.12(d) for numerous reasons. For instance, Customs inquired whether the protestant was interested in a Pre-Importation Review, protestant's counsel indicated to the district that a CF 6431 and application for further review were pending for one of the chemicals in question, a laboratory report was requested and issued for one of the chemicals at issue, a CF 28 concerning one of the subject chemicals was issued, and another inquiry concerning a Pre-Importation Review was sent and indicates that such a review was taking place in Boston. Therefore, ample grounds existed for Customs extension of liquidation for an additional period. As stated previously, an additional notice of extension of liquidation was also issued for the subject entries.

19 U.S.C. 1504(d) formerly provided, 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., February 5 and April 9 of 1991). Section 1504(b) was amended by section 641(2)(b) of the NAFTA Implementation Act to provide that any entry the liquidation of which is extended under this subsection shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record at the expiration of 4 years from the applicable date specified in subsection (a). Customs liquidated both of the subject entries on April 16, 1993, which precedes the expiration of four years from the date of entry. As stated previously, liquidation of the subject entries was also properly extended. Therefore, the subject entries were not deemed liquidated by operation of law, but by the action of Customs on April 16, 1993.

HOLDING:

The protest is denied. Liquidation of the subject entries was properly extended and completed by the actions of Customs on April 16, 1993.

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, with the Customs Form 19, 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 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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