HQ 225393 - Protest No. 1601-94-100052; Jurisdiction over Protest; Amendment of Protest; Number of Protests on Single Entry; Denial of Protest; 19 U.S.C. 1514; 19 U.S.C. 1515 - United States International Trade Commision Rulings

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HQ 225393

September 30, 1994

PRO-2-07-CO:R:C:E 225393 PH

CATEGORY: LIQUIDATION

District Director of Customs
U.S. Customs Service
200 East Bay Street, Room 121
Charleston, South Carolina 29401

RE: Protest No. 1601-94-100052; Jurisdiction over Protest; Amendment of Protest; Number of Protests on Single Entry; Denial of Protest; 19 U.S.C. 1514; 19 U.S.C. 1515

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the evidence provided, and the points raised, by your office and the protestant. Our decision follows.

FACTS:

According to the file, on December 2, 1993, the protestant imported certain merchandise (the merchandise under consideration is described in the entry summary as "wom[.] blouses, mn-mde, oth, <2 colo") from Indonesia. According to our records, on December 8, 1993, the merchandise was entered and released by Customs. According to the commercial invoice for the merchandise, the merchandise was subject to quota and a visa (for category 647/648) was provided to Customs.

On January 10, 1994, Customs issued a Notice to Redeliver (Customs Form 4647) to the protestant for the merchandise under consideration. The basis for this Notice was stated to be "Merchandise described and entered as ladies blouses, category 641. Upon examination of same style, same order#, on entry [# stated], it was revealed that merchandise was actually jackets of category 635. New visa for cat[.] 635 needed."

According to Customs records, the entry has not yet been liquidated. On February 3, 1994, the protestant filed a protest, without application for further review, of the Notice to Redeliver. In an attachment to the protest, the protestant made detailed arguments as to the classification of the merchandise under consideration (i.e., contending that the merchandise was properly classified as blouses).

On March 9, 1994, Customs made its decision on the protest, completing blocks 13, 14, and 15 of the Customs Form 19. Block 13 was completed by placing an "X" in the box for "Protest" and an "X" in the block for "Other, namely" under the block for "Denied in full or in part because". The latter block, and the block for "Approved" were not checked. After the "X-ed" block for "Other, namely" the hand written statement "original decision reviewed and found to be correct" was made. Block 14 was completed with "S/S" and block 15 was signed with a Customs official and the date of signature. The Customs Form 19 bears the usual statement giving the protestant notice of its right to contest a denial of the protest by bringing a civil action with the U.S. Court of International Trade within 180 days after the date of mailing of Notice of Denial.

Subsequently, on April 8, 1994, according to your office, the protestant filed an "Amended Protest and Application for Further Review." In this so-called "amended protest", the protestant made the same arguments as made in the February 3, 1994, protest regarding the classification of the merchandise. The protestant also asked for further review, on the basis that "the decision to demand redelivery is inconsistent with a ruling of the Commissioner of Customs or his designee" [citing a March 30, 1994, Federal Register notice (59 FR 14808) proposing the establishment of a conditional release period on entries of textiles and stating that under 19 CFR 113.62(d) "any demand for redelivery must be made no later than 30 days after the date that the merchandise was released ...."]. Thus the February 3, 1994, protest was purported to be "amended" by requesting further review and by contending that the Notice to Redeliver was unauthorized as a matter of law because it was made more than 30 days after the release date.

ISSUE:

May the protest in this case be granted?

LAW AND ANALYSIS:

Protests of Customs decisions (including demands for redelivery (19 U.S.C. 1514(a)(4))) are authorized by 19 U.S.C. 1514. Subsection (c) of section 1514 concerns the form, number, and amendment of protests. Under that provision, "[o]nly one protest may be filed for each entry of merchandise, except that where the entry covers merchandise of different categories, a separate protest may be filed for each category [there are also exceptions for separate protests filed by different authorized persons and with respect to certain determinations under the NAFTA Implementation Act]." Under section 1514(c)(1), "[a] protest may be amended, under regulations prescribed by the Secretary, to set forth objections as to a decision or decisions described in subsection (a) of this section which were not the subject of the original protest, in the form and manner prescribed for a protest, any time prior to the expiration of the time in which such protest could have been filed under this section." Also under section 1514(c)(1), "[n]ew grounds in support of objections raised by a valid protest or amendment thereto may be presented for consideration in connection with the review of such protest pursuant to [19 U.S.C. 1515] at any time prior to the disposition of the protest in accordance with that section."

Under 19 U.S.C. 1515(a), in pertinent part:

... the appropriate customs officer ... shall review the protest and shall allow or deny such protest in whole or in part. ... Notice of the denial of any protest shall be mailed in the form and manner prescribed by the Secretary. Such notice shall include a statement of the reasons for the denial, as well as a statement informing the protesting party of his right to file a civil action contesting the denial of a protest under [19 U.S.C. 1514].

Under 19 U.S.C. 1499(c)(5)(B), as amended by section 613, title VI, Public Law 103-182 (the Customs Modernization Act) (107 Stat. 2057, 2174):

For purposes of [28 U.S.C. 1581], a protest against the decision to exclude the merchandise which has not been allowed or denied in whole or in part before the 30th day after the day on which the protest was filed shall be treated as having been denied on such 30th day.

Section 1581 of title 28, United States Code, referred to in the above-quoted provision, provides for the jurisdiction of the Court of International Trade. We note that the effective date of title VI of the Customs Modernization Act is the date of enactment of Public Law 103-182 (i.e., December 8, 1993, the date of entry and release of the merchandise under consideration). Thus, this provision is clearly applicable to the protest under consideration.

The Customs Regulations pertaining to protests and issued under the authority of these provisions are found in 19 CFR part 174. Section 174.14 of the Customs Regulations authorizes the amendment of protests within the 90-day period for filing a protest as is done by the statute (see above) and section 174.28 provides for the consideration of additional arguments submitted prior to the disposition of the protest, also as is done by the statute (see above). Section 174.30 provides for the notice of denial of a protest. Under this provision, in pertinent part:

Notice of denial of a protest shall be mailed to any person filing a protest or his agent .... The notice shall include a statement of the reasons for the denial, as well as a statement informing the protesting party of the right to file a civil action contesting the denial of the protest .... For purposes of [19 U.S.C. 1515(a)], the date appearing on such notice shall be deemed the date on which such notice was mailed.

In regard to the applicability of 19 U.S.C. 1499(c)(5)(B) to the case under consideration, we note that in United States v. Toshoku America, Inc., 11 CIT 641, 670 F. Supp. 1006 (1987), reversed, on grounds not applicable to the quotation below, 7 Fed. Cir. (T) 104, 879 F. 2d 815 (1989), the Court quoted Congress as stating that:

... a demand for redelivery (or a "constructive seizure"[)] to Customs custody is in reality no different than a decision to exclude merchandise from entry or delivery--a decision which the Customs Court may now review. The only difference * * * is the time when the decision is made by the Customs Service. The decision to exclude is made at the time an entry is attempted. A demand for redelivery is made after the goods have already entered but the Customs Service subsequently decides that the goods should not have been allowed into the commerce of the United States in the first instance. [(] S. Rep. No. 466, 96th Cong., 1st Sess. 7

As noted above, the effective date of title VI of Public Law 103- 182, including the amendment adding the provision in section 1499(c)(5)(B) was December 8, 1993, the date of entry of the merchandise under consideration. The protest under consideration was not allowed or denied in whole or in part before the 30th day after the day on which the protest was filed (i.e., the date of filing of the protest was February 3, 1994, and the date of denial of the protest was March 9, 1994). Therefore, under section 1499(c)(5)(B), the February 3, 1994, protest was required to have been treated as denied on the 30th day after the date of filing (March 5, 1994).

In this case, Customs on March 9, 1994 (i.e., after the date of "deemed" denial of the February 3, 1994, protest), mailed the Customs Form 19, completed as described in the FACTS portion of this ruling. The statutory and regulatory requirements required to be met for a notice of denial of a protest are mailing of the notice with a statement of the reasons for denial (in this case, the statement "original decision reviewed and found to be correct") and a statement informing the protestant of its right to file a civil action contesting the denial of the protest (included on the Customs Form 19). See, in this regard, Labay International, Inc., v. United States, 83 Cust. Ct. 152, C.D. 4834 (1979), in which the Court stated "Customs unequivocally conveyed to plaintiff notice that the request in its December 4, 1974 letter for duty-free entry as American goods returned was denied" when the denial consisted of a hand-written notation written directly on the document treated as the protest that "Allen [Labay][:] Steve and I have looked over these documents and there is not anything we can do about reliquidating". See also, Wally Packaging, Inc., v. United States, 7 CIT 19, 578 F. Supp. 1408 (1984); Sea-Land Service, Inc., v. United States, 14 CIT 253, 735 F. Supp. 1059 (1990), affirmed, 923 F. 2d 838 (CAFC 1991). On the basis of the foregoing, we conclude that the March 9, 1994, mailing of the Customs Form 19 for the February 3, 1994, protest did meet the statutory and regulatory requirements for a notice of denial of a protest.

In this case, after the date that the February 3, 1994, protest was denied either under 19 U.S.C. 1499(c)(5)(B) or pursuant to the March 9, 1994, mailing of the Customs Form 19, as described above, the protestant filed a so-called "amended protest", on April 8, 1994. Since the February 3, 1994, protest was already denied, rather than being an "amended protest", this April 8, 1994, protest was a second protest (i.e., because, with regard to the first protest, Customs may not rescind the denial of a protest after it has been mailed; San Francisco Newspaper Printing Co. v. United States, 9 CIT 517, 620 F. Supp. 738 (1985); see also Webcor Electronics v. United States, 79 Cust. Ct. 137, 142, C.D. 4725 (1977), in which the Court stated that "even if the second protest were treated as an amendment of the first, the [C]ourt would still be required to sever entry No. K198198 and dismiss this action as to the merchandise covered by that entry" (because of the one protest per entry rule and because the same category of merchandise was involved, as is true in this case, see discussion below)).

Under 19 U.S.C. 1514(c)(1), as quoted above "[o]nly one protest may be filed for each entry of merchandise, except that where the entry covers merchandise of different categories, a separate protest may be filed for each category ...." In the protested entry, there was only one category of merchandise. The February 3, 1994, protest of the Notice to Redeliver made detailed arguments as to the classification of the merchandise entered and the April 8, 1994, "amended protest", also of the Notice to Redeliver, made the same arguments as to the classification of the merchandise and also contended that the Notice to Redeliver was untimely. The Courts have frequently interpreted the requirement that only one protest is permitted for each entry of merchandise (see, e.g., F. W. Myers & Co., Inc. v. United States, 6 CIT 299 (1983); Russ Togs, Inc. v. United States, 79 Cust. Ct. 119, C.D. 4722 (1977); Webcor Electronics v. United States, supra).

In the last two cited cases (Russ Togs and Webcor Electronics), the Court reviewed the legislative background to this provision. In the former case (for a similar discussion and conclusion in the latter case, see 79 Cust. Ct. at 139-141), the Court quoted from Senate Report No. 91-576, 91st Cong., 1st Sess. (Sen. Comm. on the Judiciary, 1969) as follows (in part):

There will be a single judicial proceeding in which all issues, including both appraisement and classification, will be considered. * * *

There should be a single, continuous procedure for deciding all issues in any entry of merchandise, including appraisement and classification issues. [Emphasis added by Court.] [79 Cust. Ct. at 122]

The Court in Russ Togs concluded that:

In view of the legislative background cited supra, it is apparent that one of the principal concerns of Congress ... was to avoid piecemeal administrative processing and subsequent litigation of different issues pertaining to the same entry of merchandise ....

To effectuate the Congressional intent in the one protest per entry rule ... I am clear that only the first protest received by [C]ustoms for filing may practicably be treated as valid. The filing of multiple protests challenging different administrative decisions in a liquidation (viz., classification, appraisement, etc.) regarding the same category of merchandise in a single entry is plainly inimical to the objective of the statute seeking to streamline the administrative and judicial review of [C]ustoms decisions. [79 Cust. Ct. at 122, emphasis in original.]

In this case, there was only one category of merchandise in the entry protested. The first protest of the Notice of Redelivery for that merchandise was denied, either on March 5, 1994, as a result of the "deemed" denial provision in 19 U.S.C. 1499(c)(5)(B), or on March 9, 1994, as a result of the mailing on that date of the Customs Form 19 giving the protestant notice of denial. After denial of the first protest, the protestant attempted to amend the initial protest, and the "amendment" was filed within the 90-day period for filing the initial protest. However, under the above authorities, the "amendment" to the initial protest must be treated as a second protest and may not be allowed, for the reasons given above. As the Court stated in San Francisco Newspaper and as is stated in the notice of denial of the protest (Customs Form 19), the protestant's proper course of action was to bring an action contesting the denial of the protest before the Court of International Trade (or to abandon the protest; note that the Court in San Francisco Newspaper stated that these were the only courses of action available to the plaintiff in that case). The protest is DENIED.

For your information, we are enclosing a copy of our decision in protest 1001-93-100413 (our file 224712, January 11, 1994), illustrating our general position on the timeliness of Notices to Redeliver (i.e., if a Notice to Redeliver is not issued until more than 30 days after entry and release of the merchandise and there is no action taken to establish a different conditional release period, a timely protest against the Notice to Redeliver should be granted). As the protestant noted in its April 8, 1994, protest, the position taken in the January 11, 1994, protest is under reconsideration and may be changed, pursuant to the March 30, 1994, Federal Register notice cited above.

HOLDING:

The protest is DENIED. The initial protest was denied on March 5, 1994, as a result of the "deemed" denial provision in 19 U.S.C. 1499(c)(5)(B), or on March 9, 1994, as a result of the mailing on that date of the Customs Form 19 giving the protestant notice of denial. Therefore April 8, 1994, "amended" protest is actually a second protest which must be denied because only one protest is permitted for each entry of merchandise, unless one of the exceptions provided is applicable.

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, with the Customs Form 19, 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, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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