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HQ 228786




March 30, 2000

PRO-2-01-PRO-2-02
RR:CR:DR 228786 CK

US Customs Service
Port Director of Customs
44845 Falcon Place, Suite 101A
Sterling, VA 20166
ATTN: Angela Ryan

RE: Protest No. 5401-00-100001; Creative Ware, Inc.; Washington International Insurance Co, surety; set aside denial of protest; 19 U.S.C. 1515(d)

Dear Sir:

Please find enclosed a copy of our letter to Susan L. Renton, Esq., GRANTING, her request, on behalf of Washington International Insurance Co., that, pursuant to 19 U.S.C. 1515(d), we void your denial of the above-referenced protest.

Customs Directive 099 3550-065, dated August 4, 1993, sets out national policies and procedures for processing protests pursuant to 19 U.S.C. 1514, and petitions pursuant to 19 U.S.C. 1520(c). That directive states in section 3(A)(4)(a), in regards to untimely and protests and petitions filed by sureties, that “timeliness is determined not by liquidation date, but by 90 calendar days from the first formal demand on the surety notice, admission refusal, or a section 1520(c) [petition] denial.”

The subject protest was filed on December 28, 1999, which is within the 90-day time frame for a surety to submit a protest, since the demand for payment was made on September 30, 1999. Therefore, the protest is timely filed, and should not have been denied as untimely.

Additionally, pursuant to section 1514(c)(2)(B), any person paying any charge or exaction may file a protest with respect to merchandise which is the subject of a decision specified in subsection (a) of this section; subsection (a) includes the classification of merchandise. Therefore, Washington International Insurance Co., upon whom demand for payment was made, as surety for Creative Wear, has the right to file a protest under section 1514.

Hence, as Washington International Insurance Co., had the right to make protest, and did so in a timely manner, your denial of the protest is set aside pursuant to 19 U.S.C. 1515(d).

As to the merits of the protest, based on the facts presented in the protest, the following is our analysis and determination of the merits of this protest.

Additionally, the issue whether the certifications were consistent with the provisions of 10 U.S.C. 2241 and 2304(g) is not addressed since the tariff provision, subheading 9808.00.30, HTSUS, provides for a ministerial role by the Customs Service.

FACTS:

In this case Creative Wear, the importer of record, entered in two consumption entries, numbers 755-XXXX807-8 and 755-XXXX820-1, certain track suits under subheading 9808.00.3000, HTSUS. Subheading 9808.00.3000, HTSUS, allows for the duty-free treatment of certain articles for military departments certified by the authorizing agencies as emergency war materials purchased abroad, to the Commissioner of Customs. According to section 10.102 of the Customs Regulations this certification must be executed by a duly authorized officer or official of the appropriate government agency, and be provided to Customs on entry.

In this case Protestant states that no certificates were issued in time to be filed with the subject entries. Protestant states that the certificates were not available because the authorizing official at the Department of Defense needed more information from an administrative contracting officer on whether the underlying contracts included terms on duty-free entry. Protestant also states that in February of this year, the authorizing official at the Department of Defense received the information it needed, and as a consequence issued the certificates that certify the duty-free eligibility under subheading 9808.00.3000, HTSUS, for the two above-numbered entries.

Attached to the file are copies of certificates of duty-free entry, dated February 9, 2000, from the Defense Logistics Agency. The certificates are for entry numbers 755-XXXX807-8 and 755-XXXX820-1, certifying the merchandise in those shipments qualifies for entry under subheading 9808.00.3000, HTSUS.

ISSUE:

Should the protest be granted, where qualifying certificates for duty-free treatment of entered merchandise is not submitted at the time of entry, but instead is later submitted?

LAW AND ANALYSIS:

Section 10.112 of the Customs Regulations (19 CFR § 10.112) states, in pertinent part, the following:

Whenever a free entry or a reduced duty document, form, or statement required to be filed in connection with the entry is not filed at the time of the entry or within the period for which a bond was filed for its production, but failure to file it was not due to willful negligence or fraudulent intent, such document, form, or statement may be filed at any time prior to liquidation of the entry or, if the entry was liquidated, before the liquidation becomes final.

In Headquarters Ruling (HQ) 559609, dated October 3, 1996, and HQ 114293, dated September 29, 1998, we ruled on essentially the same factual situation and the same issue that are present in this case. We found that in application of 19 CFR § 10.112 and in the absence of a specific showing of willful negligence or fraudulent intent, certifications necessary to support a claim for duty-free treatment may be submitted where a timely protest was filed and the submission of the certificates under subheading 9808.00.30, HTSUS, occurs before the liquidation of the underlying entries becomes final. In HQ 559609 the certificates were filed after the protest was filed.

In this protest, as in the above-cited decisions, we find no specific showing of willful negligence or fraudulent intent concerning submission of the certificates. Since a liquidation cannot become final while a timely and properly filed protest of the liquidation is pending, the certificates were filed before liquidation became final. See HQ 559609. Consequently, in application of 19 CFR § 10.112, and based on HQ’s 559609 and 114293, we find that the certificates filed with the protest are sufficient to support a claim for duty-free treatment under subheading 9808.00.30, HTSUS.

HOLDING:

The protest should be granted since, absent a showing of willful negligence or fraudulent intent, the certificates were submitted before the liquidation of the two entries became final. The certificates filed with the protest are sufficient to support a claim for duty-free treatment under subheading 9808.00.30, HTSUS.

The protest should be GRANTED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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