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HQ 227245




May 6, 1997

LIQ-2-01/LIQ-2-02/LIQ-9/LIQ-10/PRO-2-02-RR:IT:EC 227245 PH

CATEGORY: LIQUIDATION

Port Director of Customs
819 Water Street, Building 6
Laredo, Texas 78040
ATTN: Protest Section

RE: Protest 2304-96-100159; Claim for Preferential Tariff Treatment under NAFTA; 19 U.S.C. 1514; 19 U.S.C. 1520(d); 19 CFR 181.31

Dear Sir or Madam:

The above-referenced protest was forwarded to this office for further review. We have considered the evidence provided and the arguments made on behalf of the importer, as well as Customs records relating to this matter. Our decision follows.

FACTS:

According to the file and Customs records, on February 22 and 28, 1995, the protestant imported certain paint products, described on the Entry Summaries (Customs Form (CF) 7501) for the merchandise as "paints/varnish, aqueous, other." The dates of entry for the merchandise were the same as the dates of importation, February 22 and 28, 1995. The classification of the merchandise stated on the Entry Summary was subheading 3209.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), with duty in the amount of $5,527.83 for the first importation and $7,356.06 for the second. The entries were liquidated as entered, with the first entry being liquidated on June 9, 1995, and the second entry being liquidated on July 7, 1995.

By letter to Customs of February 15, 1996 (received by Customs on the same date), the broker for the protestant requested "... a refund of duties as provided for under the provisions of [19] CFR 181.31." According to this letter:

This correspondence constitutes a Post-Importation Claim and request for refund of duties as provided for in Article 502(3) of the North American Free Trade Agreement and 19 CFR [Part] 181 Subpart D. This claim ... involves the following entries [the February 22 and 28, 1995, entries described above are listed] covering goods for which no claim for preferential tariff treatment was made at the time of importation.

Our client hereby states that the goods qualified as originating goods at the time of importation and provides copies of the Certificates of Origin pertaining to the goods in question.

It is further stated by our client that: 1) no copy of the entry summary documentation for the involved entries was provided to any other party; 2) they are not aware of any claim for refund, waiver or reduction of duties relating to these goods; and 3) neither a protest nor a petition or request for reliquidation relating to these goods has been filed.

Included with the above letter was a February 14, 1996, NAFTA Certificate of Origin, for the period January 1 through December 31, 1995, listing the merchandise described (by number) in the entry documentation (the numbers in the invoice for the February 22, 1995, entry are not legible enough to be certain that they are the numbers on the Certificate of Origin). The tariff classification listed on the Certificate of Origin for the merchandise under consideration is "320910."

According to the file, upon receipt of the above-described February 15, 1996, letter, Customs advised the broker that the Certificate of Origin was not considered valid because the classification on the Certificate was different than that on the Entry Summary. When, after several weeks, the problem was not rectified, the post-importation duty refund claim, in the February 15, 1996, letter was denied by letter from Customs of June 10, 1996, in which the reason for denial was stated as "[y]ou provided a certificate of origin with the wrong classification which cannot be accepted for a NAFTA claim."

By letter of May 8, 1996 (received by Customs on the same date), the broker for the importer requested "... under the provisions of 19 CFR 173.4, the correction of a clerical error' pursuant to [19 U.S.C. 1520(c)(1)] on [the entries involved in this matter]. According to this letter:

At the time of submission of the entry, and the entry summary (CF 7501), one of our clerks, through a typographical error, put the wrong fifth (5th) digit on the HTSUS number, using HTSUS 3209.90.0000 instead of 3209.10.0000, and duties were paid according to the wrong classification.

With this letter, the broker enclosed copies of "Chemical, Product, and Company Information" stated to show that "the product is indeed acrylic." In this letter, the broker referred to the February 15, 1996, post-importation duty refund claim, noting that the NAFTA Certificate of Origin submitted with that claim shows "HTSUS 3209.10." The request for reliquidation under 19 U.S.C. 1520(c)(1) was also denied on June 10, 1996, with the stated basis for denial being "[a]n error in the classification of merchandise is correctable by the filing of a 19 U.S.C. 1514 protest within 90 days of liquidation; relief is not available under 19 U.S.C. 1520(c)(1)."

On June 26, 1996, the protest under consideration was filed, against "disallowance of a Post-Importation NAFTA refund claim for the entries covered ...." According to the protest:

[The February 15, 1996, post-importation NAFTA duty refund claim] was denied ... because the classification on the Certificate of Origin (HTSUS 3209.10) in block # 6, and the entry (HTSUS 3209.90) was different. The Certificate of Origin classification was correct. An error was made on the C.F. 7501. Regardless of the classification, HTSUS 3209.10 or HTSUS 3209.90, the importer states that the goods qualified as originating goods and both of these classifications are "free" under the preferential NAFTA duty rate for goods that qualify as originating goods.

Further review was requested and granted.

ISSUE:

May the protest under consideration be granted.

LAW AND ANALYSIS:

Initially, we note that denial of a post-importation duty refund claim under 19 U.S.C. 1520(d) is protestable under 19 U.S.C. 1514 (see Treasury Decision (T.D.) 95-68 (Customs Bulletin & Decisions of September 20, 1995, vol. 29, no. 38, pages 12-13). We note also that the protest under consideration was filed within 90 days of the date of the June 10, 1996, denial of the post-importation duty refund claim and, therefore, was timely (see 19 U.S.C. 1514(c)(3)(B) and 19 CFR 174.12(e)(2)). We note that the February 15, 1996, post-importation duty refund claim under section 1520(d) was timely (filed within 1 year of importation) (although the May 8, 1996, request for reliquidation under section 1520(c)(1) was also timely (within 1 year of liquidation), the denial of the section 1520(c)(1) request was not protested).

Under 19 U.S.C. 1520(d):

Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties paid on a good qualifying under the [NAFTA] rules of origin ... for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files, in accordance with those regulations, a claim that includes--

(1) a written declaration that the good qualified under those rules at the time of importation;

(2) copies of all applicable NAFTA Certificates of Origin ...; and

(3) such other documentation relating to the importation of the goods as the Customs Service may require.

The Customs Regulations promulgated under this provision are found in 19 CFR 181.31 through 181.33. Section 181.32(b) provides what must be contained in a post-importation duty refund claim. The February 15, 1996, post-importation duty refund claim in this case meets the regulatory requirements for the content of such claims.

In a General Notice in the January 29, 1997, Customs Bulletin and Decisions (vol. 31, no. 5, page 1), Customs published its position on certain issues regarding NAFTA post-importation duty refund claims under 19 U.S.C. 1520(d). In this notice, Customs stated:

[A] post-importation duty refund claim may be granted where the claim involves classification, valuation or other issues that bear directly on the issue of whether the good would have qualified as an originating good.

Customs went on to state that:

[T]he statute and regulation [section 1520(d) and 19 CFR 181.31] do not authorize Customs, upon receipt of a post-importation duty refund claim, to reliquidate an entry for purposes other than to refund excess duties paid on qualifying goods under the NAFTA for which no claim for preferential treatment was made at the time of importation. [Emphasis added.]

On the basis of the above, Customs concluded that "MPF's [merchandise processing fees] may not be refunded pursuant to 19 U.S.C. 1520(d) and 19 CFR 181.31."

In this case, no claim for preferential tariff treatment under NAFTA was made at the time of filing of the entry summary (see 19 CFR 181.21). The 19 U.S.C. 1520(d) post-importation duty refund claim was filed within 1 year of importation and contained all that is required to be contained in such claims (19 CFR 181.32(b). Duty-free treatment is and was (at the time under consideration) provided for NAFTA originating goods for both the tariff classification stated on the Entry Summary and that stated on the NAFTA Certificate of Origin (we note that the protestant states that the classification on the Certificate of origin is the correct classification). In the February 28, 1995, entry, the invoice lists under products ("producto") two numbers which are the same as two of the numbers listed under the heading "Description of Good(s)" in the NAFTA Certificate of Origin. Thus, the requirements for a section 1520(d) post-importation duty refund claim are met in the case of this entry and the protest may be GRANTED as to this entry, as to duties only. As stated in the Customs Bulletin & Decisions General Notice quoted above, "[merchandise processing fees] may not be refunded pursuant to 19 U.S.C. 1520(d) and 19 CFR 181.31."

In the case of the February 22, 1995, entry, as noted above in the FACTS portion of this ruling, the numbers listed in the invoice under "producto" are not legible enough for this office to be certain that they are numbers listed under the heading "Description of Good(s)" in the NAFTA Certificate of Origin. The requirements for a section 1520(d) post-importation duty refund are met in the case of this entry and the protest may be GRANTED as to this entry (for duties only), PROVIDED that you are satisfied that the merchandise in the entry is covered by the NAFTA Certificate of Origin submitted with the section 1520(d) claim.

Of course, if you are not satisfied that the merchandise in the February 22, 1995, entry is covered by the Certificate of Origin, the protest must be DENIED (because the requirement in 19 U.S.C. 1520(d) for a copy of an applicable NAFTA Certificate of Origin and the requirement in 19 CFR 181.32(b)(2) for a copy of a Certificate of Origin pertaining to the good would not be met). If the numbers for the merchandise in the invoice with the entry documentation in your office for the February 22, 1995, are also not legible enough to be certain that those numbers are covered by the Certificate of Origin, the protestant may be given a reasonable period (no more than 45 days from the date of notice that the invoice is illegible in this regard) to provide a clearer copy.

HOLDING:

The protest is GRANTED (as to duties only, merchandise processing fees may not be refunded under 19 U.S.C. 1520(d) post-importation duty refund claims), as to the February 28, 1995, entry. The protest is GRANTED (as to duties only) as to the February 22, 1995, entry, PROVIDED that you are satisfied that the merchandise in the February 22, 1995, entry is covered by the NAFTA Certificate of Origin submitted with the section 1520(d) post-importation duty refund claim. If you are not so satisfied (i.e., if the invoice in the entry documents is not legible enough to determine that the merchandise described in the invoice is the same merchandise covered by the Certificate of Origin, and the protestant does not provide a satisfactory copy of the invoice within the time-period stated in the LAW AND ANALYSIS portion of this ruling), the protest must 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, 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,

Director, International

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