HQ 228844 - Protest 2604-00-100005; 19 U.S.C. §1514(a); demand for liquidated damages not protestable under 19 U.S.C. §1514; 19 CFR §172.1; 19 C.F.R. 174.12; 19 U.S.C. § 1623(c). - United States International Trade Commision Rulings

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HQ 228844

September 18, 2000

PRO-2-02 RR:CR:DR
228844 RND

CATEGORY: PROTEST

Port Director of Customs
Attn: Gloria Moraila
200 North Mariposa Road
Room 110
Nogales, AZ 85621

RE: Protest 2604-00-100005; 19 U.S.C. §1514(a); demand for liquidated damages not protestable under 19 U.S.C. §1514; 19 CFR §172.1; 19 C.F.R. 174.12; 19 U.S.C. § 1623(c).

Dear Ms. Moraila:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

On July 2, 1999, and August 10, 1999 I.B.I. Textile Corporation, (“I.B.I.”) was the importer of record for entry numbers 363-5, and 215-5, respectively. These entries consisted of women’s wearing apparel, both complete and incomplete and fabric. On August 30, 1999 Customs Form (CF) 28 was sent to the protestant requesting it to “furnish indicated items” as listed on an attached letter and referring to entry numbers 363-5 and 215-5. Another attachment to the CF 28 included the following explanation:

In order to substantiate the eligibility of merchandise entered as conditionally duty free under HTSUS classification 9802.00.9000, U.S. Customs requires specific supporting documentation for the merchandise identified above.

This attachment also advised the protestant that “failure to respond to this request within 30 days from the date indicated on the CF 28 will result in the denial of conditionally duty free eligibility under HTSUS classification 9802.00.9000.” I.B.I. did not respond to this request nor furnish the information requested, specific supporting documentation necessary to classify the entered goods.

On October 12, 1999, two Notices to Redeliver (CF 4647) referencing entry numbers 215-5 and 363-5 were sent to the protestant. These Notices advised the protestant that its merchandise was entered in violation of 19 U.S.C. §1304. It further advised that this merchandise was subject to quota/visa restraints and that the goods described therein had to be redelivered within 30 days from the date of the notice or liquidated damages would be assessed against the protestant’s bond. I.B.I. did not redeliver any of the goods to Customs' custody.

On February 3, 2000 two Notices of Penalty or Liquidated Damages Incurred and Demands for Payment were sent to I.B.I. informing it that the merchandise entered under entry numbers 363-5 and 215-5 was not redelivered to Customs’ custody, and had been entered in violation of quota restrictions. Entry number 363-5 was assessed $165,000 and entry number 215-5 was assessed $154,000 in liquidated damages for failure to redeliver.

The protestant, I.B.I., protests “the penalty and liquidated damages” assessed against entry numbers 215-5 and 363-5. There is a letter dated March 7, 2000 attached to the CF 19. In the letter, the protestant states “we strongly feel, after reviewing our attached documents supporting these valid entries” that Customs will reduce the liquidated damages. Further, the protestant’s position is that “the penalty charge is over and beyond what we feel is fair considering” it results, ultimately from I.B.I.’s failure to respond to a request for additional documents from the port of Nogales. Finally, the protestant makes clear that it is not requesting relief from all liquidated damages, but considers the amount assessed beyond what it can pay.

ISSUE:

Is the protestant entitled to relief, under 19 U.S.C. §1514, from liquidated damages assessed for failure to redeliver goods?

LAW AND ANALYSIS:

I.B.I. protests the amount of liquidated damages assessed against entry numbers 363-5 and 215-5 in the total amount of $319,000.00. Initially, we note that under 19 U.S.C. §1514 the protest was timely filed, i.e. 90 days after the act being protested (19 C.F.R. § 174.12(e)(2)). Here, the Notice of Liquidated Damages and Demand for Payment was dated February 3, 2000 and the protest was filed March 7, 2000.

Under 19 U.S.C. §1514(a) decisions of the Customs Service, are final unless specifically named as subject to protest (19 U.S.C. §1514(a)). The following Customs decisions are protestable under 19 U.S.C. §1514(a):
the appraised value of merchandise; the classification and rate and amount of duties chargeable; all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury; the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 1337 of this title; the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof; the refusal to pay a claim for drawback; or the refusal to reliquidate an entry under section 1520(c) of this title.

A demand for liquidated damages is not listed in the statute as protestable. Indeed, the United States Court of International Trade (Halperin Shipping Co., Inc. v. United States, 14 C.I.T. 438; (1990 CIT); Pope Products v. United States, 15 C.I.T. 279, (1991 CIT); Playhouse Import & Export v. United States 18 C.I.T. 41, (1994 CIT)), and the United States Court of Appeals for the Federal Circuit (United States v. Toshoku America, Inc., 879 F. 2d 815, 818 (Fed. Cir. 1989)); have acknowledged that a demand for liquidated damages is not a Customs decision that is protestable under 19 U.S.C. §1514. Therefore I.B.I. cannot seek relief from assessment of liquidated damages under 19 U.S.C. §1514. However, the protestant may be able to seek relief from a demand for liquidated damages under 19 U.S.C. §1623(c).

HOLDING:

The protestant cannot seek relief from assessment of liquidated damages under 19 U.S.C. §1514. The protest is therefore DENIED.

In accordance with Section 3A (11)(b) of Customs Directive 099 3550-065, 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 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 this decision available to Customs personnel, and to the public via the Customs Home Page on the World Wide Web, the Freedom of Information Act, and other public distribution channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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See also:

Tariff No.: 9802.00.90 - Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, etc.