HQ 559246 - Application for Further Review of Protest No. 2704-95-101104 concerning country of origin marking of imported ladies trousers; Marking duties; - United States International Trade Commision Rulings

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HQ 559246

October 6, 1995

MAR-2-05 R:C:S 559246 DEC

CATEGORY: MARKING

Port Director - Los Angeles / Long Beach Seaport United States Customs Service
300 South Ferry Street
Room 1001
Terminal Island, California 90731

RE: Application for Further Review of Protest No. 2704-95-101104 concerning country of origin marking of imported ladies trousers; Marking duties;
19 U.S.C. 1304(f); 19 CFR 134.51; 19 CFR 134.52; HRL 731775; HRL 734894; HRL 734585; HRL 734078; C.S.D. 92-32 (HRL 734151)

Dear Madam:

This is in reference to Protest No. 2704-95-101104 and the Application for Further Review dated March 30, 1995, timely submitted by Sharrets, Paley, Carter & Blauvelt, P.C. on behalf of Cayset Fashions, against your decision to assess marking duties in connection with an entry of imported ladies trousers.

FACTS:

Cayset Fashions imported 7191 dozen ladies' trousers made in Taiwan on September 19, 1994. The trousers were correctly labeled indicating Taiwan as the country of origin. However, a hangtag was affixed to the trousers indicating the trade name, "White Stag", and the origin statement "Made in Sri Lanka". On October 5, 1994, Customs issued Cayset Fashions a Notice to Mark and/or Redeliver. The redelivery notice stated "Correct by either removing the White Stag label which states made in Sri Lanka or blacking out made in Sri Lanka." Cayset Fashions imported a second shipment containing 2250 dozen ladies' trousers with the same country of origin marking as the first shipment on September 29, 1994. On October 13, 1994, Customs again issued a Notice to Mark and/or Redeliver with the same instructions as the first Notice that was issued on October 5, 1994. Customs received the importer-signed notices for redelivery on November 1, 1994, for the first shipment and on October 26, 1994, for the second shipment. Subsequently, a Customs official contacted the warehouse holding the merchandise and arranged to visit the premises on November 3, 1994, to inspect the country of origin marking of the merchandise. When the Customs officials arrived, the general manager at the warehouse facility informed the Customs officials that most of the merchandise was not there and he had received instructions to ship the merchandise approximately three weeks earlier to meet the buyer's deadline. He also stated that the tags with the incorrect statement of origin were removed before the merchandise was shipped. Counsel asserts in their submission filed with their protest that the customer for the trousers threatened to cancel their order because of the delay in receiving their ordered merchandise.

During this visit, the Customs officials did have the opportunity to examine some of the cartons of the trousers that were subject to the redelivery notices. More specifically, 736 dozen of the 7191 dozen with respect to the first shipment were found to be marked appropriately. The ten percent marking duties were assessed on the balance of 6455 dozen trousers. Similarly, 726 dozen of the 2250 dozen with respect to the second shipment were found to be marked appropriately. Marking duties were assessed on the balance of 1524 dozen trousers.

ISSUE:

Whether the assessment of marking duties is proper in this case.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Section 1304(f) provides that 10 percent marking duties shall be levied, collected and paid if an imported article is not properly marked with the country of origin at the time of importation and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.51, Customs Regulations (19 CFR 134.51), provides that when articles or containers are found upon examination not to be legally marked, the port director shall notify the importer on Customs Form (CF) 4647 to arrange with the port director's office to properly mark the article or container or to return all released articles to Customs custody for marking, exportation or destruction. This section further provides that the identity of the imported article shall be established to the satisfaction of the port director. Section 134.52, Customs Regulations (19 CFR 134.52), allows a port director to accept a certification of marking supported by samples from the importer or actual owner in lieu of marking under Customs supervision if specified conditions are satisfied. See Treasury Decision 95-78, Vol. 29 Cus. Bull. No. 40 (October 4, 1995)
(Technical Corrections Regarding Customs Organization; Summary Format (effective October 1, 1995)). The Customs Service has eliminated the districts and regions from its field operations to place more emphasis at the ports of entry. Accordingly, regulatory references to "district directors", "regional commissioners", etc., are replaced with "port directors", "Assistant Commissioner", etc., to reflect the new field and Headquarters structure of Customs and where decisional authority will now lie.

Section 1304(f) states that marking duties "shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause." See C.S.D. 92-32 (HRL 734151, dated April 6, 1992). As noted by the United States Customs Court in A.N. Deringer, Inc. v. United States, 51 Cust. Ct. 21, C.D. 2408 (1963),
those who import goods into the United States accept certain responsibilities that have been laid on them by Congress. One such responsibility, and an important one, is to see that imported merchandise of foreign origin is properly marked to show the country of origin, before it enters into the commerce of the
United States.

In Headquarters Ruling Letter (HRL) 731775, dated November 3, 1988, Customs ruled that two prerequisites must be present in order for marking duties to be properly assessed under 19 U.S.C. 1304(f). These two prerequisites are:

1. the merchandise was not legally marked at the time of importation, and

2. the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.

In this case, marking duties on the trousers that were verified by Customs as properly marked with the country of origin were not assessed. However, the assessment of marking duties on the remaining trousers that were distributed was proper due to the fact that both prerequisites cited above are present. The record indicates that both importations (shipments of September 19, 1994, and September 29, 1994) of the subject merchandise were not legally marked at the time of importation. There is no satisfactory evidence that this merchandise was subsequently exported, destroyed or properly marked with the country of origin prior to liquidation of the entry.

Although the protestant claims that it timely certified that the merchandise was properly marked and that it sent the CF 4647 to Customs with the importer's signature, Customs did not sign the CF 4647, signifying acceptance of the certification and authorizing release of the merchandise. Notwithstanding the protestant's submission including affidavits of individuals from the company responsible for performing the re-marking of the merchandise, the importer failed to have Customs sign off on the release of the merchandise before the merchandise was released. Thus, there is no satisfactory evidence to support the protestant's contention that the merchandise under the entries was properly marked prior to liquidation of the entry as required under 19 U.S.C. 1304(f). See generally HRL 734894, dated July 18, 1994; HRL 734585, dated October 31, 1992; HRL 734078, dated September 30, 1991.

Therefore, the evidence that the protestant has submitted concerning the reason for the subsequent shipment of the merchandise has no relevance to the determination of the propriety of marking duties assessed on the products in this case. Since Customs did not receive the certification within the required 30 days, and the importer did not allow Customs to inspect the goods prior to their being released for consumption as required, we find that the assessment of marking duties was proper.

HOLDING:

The assessment of marking duties in this case was proper due to the fact that this merchandise was not legally marked at the time of importation nor is there satisfactory evidence that it was subsequently marked under Customs supervision prior to liquidation of the entry. Accordingly, the protest should be denied.

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, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification and Appeals

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