HQ 226900 - Application for Further Review of Protest No. 3901-95-101664; Immediate Transportation; - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1997 HQ Rulings > HQ 226417 - HQ 227026 > HQ 226900

Previous Ruling Next Ruling
HQ 226900

August 5, 1996

ENT-1-03/ENT-1-07/ENT-5-01-RR:IT:EC 226900 GEV

CATEGORY: ENTRY

Port Director
U.S. Customs Service
610 S. Canal Street
Chicago, Illinois 60607

RE: Application for Further Review of Protest No. 3901-95-101664; Immediate Transportation;
Effective Duty Rate; GATT; 19 U.S.C. ? 1315; 19 CFR ? 141.69

Dear Sir:

This is in response to your memorandum dated April 11, 1996, forwarding the above-referenced protest for further review with accompanying documentation. Our decision in this matter is set forth below.

FACTS:

Pleasant Company, (i.e., the "protestant") imported toys covered by entry nos. 230-0006517-9 (filed December 19, 1994, liquidated April 7, 1995); 230-0006518-7 (filed December 19, 1994, liquidated April 28, 1995); 230-0006528-6 (filed December 20, 1994, liquidated April 7, 1995); and 230-0006541-9 (filed December 19, 1994, liquidated April 28, 1995). All of the subject merchandise arrived in the United States at Seattle, Washington, and was entered for immediate transportation ("IT") to Chicago, Illinois, on the respective dates of entry. The entry summary (CF 7501) for each entry showed a 1994 duty rate of 6.8% ad valorem pursuant to subheading 9503.90.6000 of the Harmonized Tariff Schedule of the United States, Annotated (HTSUSA). Subsequent to their respective liquidations, the above-referenced protest covering the aforementioned entries was timely filed on July 6, 1995.

The protestant claims that notwithstanding the January 1, 1995, effective date of the General Agreement on Tariffs and Trade ("GATT") which eliminated the duty assessed on merchandise classified under subheading 9503.90.6000, HTSUSA, the subject 1994 entries should nonetheless receive retroactive duty-free treatment. In support of this claim, the protestant cites - 2 -
the following: an unnumbered Customs administrative message issued via ABI on January 4, 1995 (a copy of which was appended to the protest); and Headquarters messages 943620201, 943490201 and 9435501.

ISSUE:

Whether the subject merchandise, entered for immediate transportation in December of 1994 and liquidated at the 1994 duty rate of 6.8% ad valorem pursuant to subheading 9503.90.6000, HTSUSA, should receive retroactive duty-free treatment pursuant to GATT which eliminated the aforementioned ad valorem duty rate effective January 1, 1995, for merchandise classified under that same tariff provision.

LAW AND ANALYSIS:

The effective rates of duty for merchandise imported into the United States are provided for in 19 U.S.C. ? 1315. That statute, as amended by ? 633 of title VI of the North American Free Trade Agreement Implementation Act (Public Law 103-182; 107 Stat. 2057, 2198), provides, in pertinent part, that:

(a) Except as otherwise specially provided for, the rate or rates of duty imposed by or pursuant to this chapter or any other law on any article entered for consumption or withdrawn from warehouse for consumption shall be the rate or rates in effect when the documents comprising the entry for consumption or withdrawal from warehouse for consumption and any estimated or liquidated duties then required to be paid have been deposited with the Customs Service by written, electronic or such other means as the Secretary by regulation shall prescribe, except that--
(2) any article which is not subject to a quantitative or tariff-rate quota and which is covered by an entry for immediate transportation made at the port of original transportation under section 1552 of this title, if entered for consumption at the port designated by the consignee, or his agent, in such transportation entry without having been taken into the custody of the appropriate customs officer under section 1490 of this title, shall be subject to the rate or rates in effect when the transportation entry was accepted at the port of original importation; and
(Emphasis Added)

Section 141.69(b), Customs Regulations (19 CFR ? 141.69(b)), promulgated pursuant to the above statute, provides as follows:

(b) Merchandise which is not subject to a quantitative or tariff-rate quota and which is covered by an entry for immediate transportation made at the port of original importation, if entered for consumption at the port designated by the
consignee or his agent in such transportation entry without having been taken into custody by the port director for general order under section 490, Tariff
Act of 1930, as amended (19 U.S.C. 1490), shall be subject to the rates in effect when the immediate transportation entry was accepted at the port of original importation. (Emphasis added)

In regard to the duty-free treatment accorded merchandise classified under subheading 9503.90.6000, HTSUSA, pursuant to GATT, we note that on December 8, 1994, Congress passed the Uruguay Round Agreements Act ("URAA") which reduced or eliminated duties on various products, including the merchandise classified under the aforementioned tariff provision. On December 28, 1994, President Clinton signed Proclamation 6763 which implemented the aforementioned duty eliminations making them effective with respect to goods entered on or after January 1, 1995. (See paragraph (2)(a) of the proclamation)

In regard to the entries under consideration, we note that each covers merchandise (toys) not subject to a quantitative or tariff-rate quota and entered for immediate transportation to Chicago in December of 1994 at the port of original importation (Seattle). Accordingly, pursuant to the above-discussed statutory and regulatory authority (19 U.S.C. ? 1315(a)(2) and 19 CFR duty rate of 6.8% ad valorem pursuant to subheading 9503.90.600, HTSUSA.

In support of its claim that the subject merchandise should be accorded retroactive duty-free treatment, the protestant quotes, in part, the following passage from the unnumbered Customs administrative message of January 4, 1995:

...for shipments released December 16 through December 31, 1994, Headquarters has granted blanket ID privileges to all non-quota shipments...the filer can have merchandise released on a CF 3461 and pay the duty in effect at the time of entry summary (10 working days after release). Headquarters has made this retroactive because so many filers did not understand the proper procedures for designating a CF 3461 as an immediate delivery document...Thus direct arrivals released from
December 16 through December 31 can use 1995 duty rates.

Notwithstanding the fact that administrative messages cannot supersede the legislative and regulatory authority discussed above, we note that the protestant cited only a portion of this message which further provides, in pertinent part, as follows:

IT Shipments:

The IT date determines the rate of duty on any entry that is entered on an IT.
Import specialists should be especially mindful of this when reviewing entries because many filers do not understand this point and think they should use the

1995 rates when in fact the 1994 rates apply to 1994 ITs, even if the merchandise was entered for consumption in 1995. (Emphasis added)

Consequently, rather than supporting the protestant's contention, this administrative message reflects the provisions in both 19 U.S.C. ? 1315(a)(2) and 19 CFR ? 141.69(b) specifying the rate of duty as that which is in effect on the IT date. As noted above, all four of the entries covered in the subject protest have IT dates of December 1994 which, as discussed above, pre-date the January 1, 1995, effective date for the elimination of duty on the subject merchandise.

The three remaining administrative messages cited by the protestant which address year-end duty rates also fail to support the requested relief. Headquarters message 94362021, dated December 28, 1994, provided, in pertinent part, that "...the use of the 1995 entry summary date as the entry date for those shipments released on or after December 16, 1994, until December 31, 1994, will be allowed." This instruction is inapplicable to the protestant's claim since none of the CF 7501s covering the entries in question references a 1995 entry date. Headquarters message 943490201, dated December 15, 1994, provided procedures by which entry filers could elect a date of entry in order to take advantage of tariff changes or special programs. However, the protestant has failed to provide any analysis as to how it complied with those procedures. Headquarters message 9435501, dated December 21, 1994, provided, in pertinent part, that, "The applicable rate of duty will be determined in accordance with 19 CFR 141.69." As discussed above, ? 141.69(b) specifies the rate of duty as that which is in effect on the IT date, which, in the case of each of the four entries under consideration, is in December of 1994. Consequently, none of the administrative messages cited by the protestant provides the relief requested but rather bolsters Customs position in this matter.

Parenthetically, we note that Headquarters message 9536301, dated December 29, 1995, in providing a clarification of year-end immediate delivery procedures to entry filers who want to take advantage of reduced tariff rates or special programs which start in the next calendar year, states that, "This message incorporates and supersedes all previous messages on the subject of year-end Immediate Delivery procedures." It further provides, in part, that, "...merchandise moved under IMMEDIATE TRANSPORTATION (IT), can NOT use the ID procedure." Customs liquidation of the subject entries at the 1994 duty rate is therefore consistent with this message and in accordance with the above-discussed legislative and regulatory authority.

HOLDING:

The subject merchandise, entered for immediate transportation in December of 1994 and liquidated at the 1994 duty rate of 6.8% ad valorem pursuant to subheading 9503.90.600, HTSUSA, should not receive retroactive duty-free treatment pursuant to GATT which eliminated the aforementioned ad valorem duty rate effective January 1, 1995, for merchandise classified under the same tariff provision.

Accordingly, the protest is denied.

In accordance with ? 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 no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing 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 Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

Director

Previous Ruling Next Ruling