HQ 560284 - Application for Further Review of Protest No. 5201-96-100728; marking duties; 19 U.S.C. 1304(f); liquidation; HRL 733907 - 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 560129 - HQ 560322 > HQ 560284

HQ
560284

April 7, 1997

MAR-O5 RR:TC:SM 560284 BLS

CATEGORY: MARKING

Port Director
Miami International Airport

RE: Application for Further Review of Protest No. 5201-96-100728; marking duties; 19 U.S.C. 1304(f); liquidation; HRL 733907

Dear Sir/Madame:

This is in reference to your memorandum dated January 9, 1997, forwarding an Application for Further Review of Protest No. 5201-96-100728 timely filed on behalf of JMJ of Paris Inc. Protestant contends that marking duties were improperly assessed in this matter.

FACTS:

The record reveals the following sequence of events:

April 22, 1996 - The merchandise was entered.

April 23, 1996 - a Notice of Marking/Redelivery (CF 4647) was issued for the reason that the goods (women's garments) were not marked with the country of origin, and that a Lycra trademark hangtag was improperly attached. (Protestant had not received permission from the registered trademark owner to so mark the merchandise.) On that same date, the broker and importer certified on the returned copy of the CF 4647 that the merchandise had been properly marked and the offending hangtags removed.

May 8, 1996 - Upon a verification visit to the importer's retail establishment, the concerned Customs officer found that the merchandise was on display for sale, but had not been properly marked, nor had the hangtags been removed, as certified. Many of the garments had been sold. The importer was again advised to mark the garments and that the merchandise was not to be sold until authorized to do so by Customs.

May 16, 1996 - Upon a second verification visit to the importer's premises, Customs found that the merchandise was on display for sale, and that more of the shipment had been sold. The importer had taken no action to mark the merchandise or remove the hangtags.
As a result, Customs deemed this a failure to redeliver, and issued a claim for liquidated damages in the total value of the entry, for the reason that the goods were sold, or otherwise commingled with other merchandise so that they could not be segregated.

June 28, 1996 - The entry was liquidated with the assessment of marking duties.

Protestant states that the merchandise was properly marked as it understood the marking laws; that the garments are sheer and cannot be marked as it would damage them or make them unsalable; and that the importer had difficulty in understanding the marking requirements due to a language problem. Furthermore, Protestant claims that the marking as purportedly done in this instance has been a basis for canceling a liquidated damages claim (see Headquarters Ruling Letter (HRL) 733907 dated October 15, 1991), and that the assessment of marking duties creates a double penalty where Customs has already assessed liquidated damages for the same entry.

ISSUE:

Whether marking duties were properly assessed against the subject merchandise.

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 a way that indicates to the ultimate purchaser in the United States the English name of the country of origin of the article. Merchandise which is not legally marked is subject to a 10 percent ad valorem marking duty.

Specifically, 19 U.S.C. 1304(f) provides that if at the time of importation any article is not properly marked, and if such article is not exported, destroyed or marked after importation (such exportation, destruction or marking to be accomplished under Customs supervision prior to the liquidation of the entry covering the article, and to
be allowed whether or not the article has remained in continuous Customs custody), there is to be assessed upon the article a duty of 10 per centum ad valorem, which is deemed to have accrued at the time of importation. The statute further provides that such duty is not subject to remission for any reason. See also section 134.2, Customs Regulations (19 CFR 134.2).

In lieu of direct Customs supervision, a certificate of marking may be submitted by the importer, together with a properly marked sample. See 19 CFR 134.51(c). Customs officials are authorized to conduct spot checks (such as the two verifications conducted in this case), and may require that the identity of the imported article be established to their satisfaction. See 19 CFR 134.52(c), 134.51(b). The importer is instructed on the CF 4647 that the article "...must be held until marking is verified or notification received that marking is acceptable".

In the instant case, the importer's certification on the CF 4647 that the goods had been marked reflected a choice pursuant to 19 U.S.C. 1304(f) to mark (rather than export or destroy) the goods pursuant to the requirements of 19 U.S.C. 1304 and 19 CFR Part 134. However, Customs was unable to verify such marking because upon two verification visits it was determined that the goods from the subject shipment had either been sold or commingled with other merchandise and thus could not be identified. Accordingly, the goods were treated as not having been marked. Failure to mark the merchandise as certified, prior to liquidation, triggered 19 U.S.C. 1304(f) and the imposition of marking duties. (See, e.g., HRL 731775 dated November 3, 1988, where Customs ruled that in order for it to properly assess marking duties under 19 U.S.C. 1304(f), two prerequisites must be present, i.e., 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.)

While Protestant claims that the goods have now been marked, it has not provided any proof that the merchandise was properly marked under Customs supervision prior to liquidation, as required. In this regard, as noted above, the record reflects that Customs officers were unable to identify the merchandise upon verification since it had either been sold or commingled with merchandise from other shipments. In HRL 733907 dated October 15, 1991, we indicated that an importer's failure to hold articles on his premises for verification and/or acceptance and the failure to identify the re-marked merchandise to the satisfaction of Customs officials
established a strong presumption that the merchandise was not properly marked at the time of liquidation, such that marking duties accrued in accordance with 19 U.S.C. 1304(f). In that case, the importer was able to overcome the presumption by submitting letters from the importer's customers, which enumerated the invoice numbers and styles of the merchandise, and described the manner in which the goods were marked as delivered to them. Here, there is no such evidence to establish that the goods were properly marked before they were sold and before the entry was liquidated.

Further, Protestant has not established, as claimed, that the articles in question qualified for one of the exceptions from marking. No details were provided either at the time the CF 4647 was filed or thereafter regarding its claimed exception. In addition, as provided in 19 CFR 134.54, upon deposit of the mandatory marking duties, an importer may petition for relief from liquidated damages. No such relief is available for marking duties.

In summary, we find that since the goods were not properly marked, destroyed or exported, as required by statute prior to liquidation, pursuant to 19 U.S.C. 1304(f) marking duties were properly assessed, such duties having accrued when the importer made entry and secured their release from Customs custody.

HOLDING:

The assessment of marking duties was proper due to the fact that the goods were not legally marked at the time of importation nor were they subsequently exported, destroyed or marked under Customs supervision prior to liquidation. 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 attached to the Form 19, Notice of Action, no later than 60 days from the date of this letter. Any reliquidation of the entries 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 Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant,

Previous Ruling Next Ruling