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HQ 225206




November 27, 1995

CON-5-04/LIQ-11-R:IT:EC 225206 TLS/PH

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
1717 East Loop
Houston, Texas 77029

RE: Protest 5301-93-100434; Protest 5301-94-100044; Failure to Give Notice of Extension or Suspension of Liquidation; Deemed Liquidation; Permanent Exhibition under Bond; Subheading 9812.00.20, HTSUS; 19 CFR 10.49; 19 CFR 159.12; 19 U.S.C. 1504; 19 U.S.C. 1514

Dear Sir or Madame:

The above-referenced protests were forwarded to this office for further review. Our decision follows.

Please note that this protest decision addresses only protest/liquidation issues under 19 U.S.C. 1514 and does not address the possible applicability of penalties (e.g., under 19 U.S.C. 1592).

FACTS:

According to the file and Customs records, between January 10, 1992, and March 4, 1992, the importer entered (under 11 consumption entries) certain merchandise under subheading 9812.00.20, Harmonized Tariff Schedule of the United States (HTSUS) ("[a]rticles imported for exhibition by any institution or society established for the encouragement of agriculture, arts, education or science, or for such exhibition by any State or for a municipal corporation ... Free, under bond ..."). All of the entries except one (.../.....36-5, February 28, 1992) were liquidated on September 10, 1993. The excepted entry (referred to in the parenthetical reference in the preceding sentence) was liquidated on December 10, 1993. Liquidations were with duty (under subheading 4911.91.40, HTSUS). There is no evidence in the file of any notice of extension of liquidation or suspension of liquidation and, according to Customs records, no such notice was given.

On December 9, 1993, the importer filed a protest of the liquidation of all of the entries except entry .../.....36-5, February 28, 1992, and on January 26, 1994, the importer filed a protest of the excepted entry. The protestant protested the tariff classification and value used in liquidation, arguing that the merchandise was properly classified as entered or, if not properly classified as entered, it was classifiable under any of several other duty-free provisions. In addition, the protestant argued that in the case of one entry (.../.....17-5), the value as entered was too high.

Further review for the protests was requested and granted.

ISSUE:

May the protests in this case be granted?

LAW AND ANALYSIS:

Initially, we note that both protests were timely filed (i.e., within 90 days of notice of liquidation; see 19 U.S.C. 1514(c)(3)) and that the matters protested are protestable (see 19 U.S.C. 1514(a)(1), 1514(a)(2), 1514(a)(5); in specific regard to the protestability of merchandise entered under the subheading involved, see United States v. Toledo Museum of Art, 25 CCPA 373, T.D. 49455 (1938)).

Under 19 U.S.C. 1504 (at the time under consideration), unless the period in which to liquidate an entry is extended or suspended by giving notice of such extension or suspension to the importer of record (and any authorized agent and surety of the importer of record, in the case of suspension) in such form and manner as prescribed in regulations, 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."

The Customs Regulations issued under this statute are found in 19 CFR 159.12. Under section 159.12(b), if the district director (now port director, see T.D. 95-77) extends the time for liquidation, "... he promptly shall notify the importer or the consignee and his agent and surety ...." Under section 159.12(c), "[i]f the liquidation of an entry is suspended as required by statute or court order ... the district director [now port director, see T.D. 95-77] promptly shall notify the importer or the consignee and his agent and surety ...."

It is Customs position that liquidation should be suspended for merchandise entered under subheading 9812.00.20. HTSUS (see 19 CFR 159.53; see also letter 220518, copy enclosed (May 24, 1988)). This position was confirmed in memorandum 222565, copy enclosed (July 26, 1990). In memorandum 222565, we noted that "[n]otice of the extension [for merchandise entered under subheading 9812.00.20, HTSUS] must be provided as required by 19 U.S.C. 1504(b) and (c) and 19 CFR 159.12(b) and (c)."

In this case there is no evidence in the file of any notice of extension or suspension to the importer, consignee, agent, or surety. According to Customs records, no notice of extension or suspension was given in regard to any of the protested entries. Also according to Customs records, the protested entries had not been liquidated within one year from the date of entry. Accordingly, under 19 U.S.C. 1504, the entries "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." We have no choice but to grant the protests (as to the classification issue) and to deny the protests (as to the value issue). That is, the protested entries were deemed liquidated as entered, both as to classification (under subheading 9812.00.20, HTSUS), and as to value (entry .../.....17-5, valued as entered, ($207,161), not as claimed in the protests ($119,739)). In regard to the value issue, of course, since the effect of granting the protests as to the classification issue results in liquidation of the entries under a duty-free provision, the deemed liquidation of the entries as to value will have no affect on duties for the entries.

HOLDING:

The protests in this case may be GRANTED IN PART (as to classification of the merchandise, which is required by statute to be deemed liquidated as entered, under subheading 9812.00.20, HTSUS) and DENIED IN PART (as to the value issue in entry .../.....17-5, which is required by statute to be deemed liquidated as entered, with a value of $207,161 (as noted in the LAW AND ANALYSIS portion of this ruling, the deemed liquidation of the entries as to the value issue is moot, as to duties)).

The protests are GRANTED in part and DENIED in part. 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,

Acting Director

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