HQ 115507 - Application for further review of Protest No. 5301-01-100195; Steel Wire Rod; Tariff-rate quota; late filing of the entry summary; 19 CFR 142.23; 19 CFR 142.21(e); 19 CFR 132.11 - United States International Trade Commision Rulings

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HQ 115507

MARCH 26, 2002

QUO-068-RR:IT:EC 115507 RSD

CATEGORY: ENTRY QUOTA

Port Director
U.S. Customs Service
2350 North Sam Houston Parkway
East Suite 1000
Houston, Texas 77032-3126

Attention: Protest Section

RE: Application for further review of Protest No. 5301-01-100195; Steel Wire Rod; Tariff-rate quota; late filing of the entry summary; 19 CFR 142.23; 19 CFR 142.21(e); 19 CFR 132.11

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the facts and issues and our decision follows.

FACTS:

The record indicates that the subject merchandise consisted of 5,235,970 Kgs of steel wire rod imported into the U.S. from Trinidad through the port of Houston. On August 23, 2000, an entry/immediate delivery (Customs Form) (CF 3461) was presented to Customs in Houston for release of the subject shipment of steel wire rod. The CF 3461 shows that the vessel carrying the imported merchandise was expected to arrive in the port of Houston on August 25, 2000. According to the Protestant, on August 24, 2000, it advised its customs broker, Inter-Commerce Enterprises, Inc., to make an entry for the imported merchandise and to ensure that the entry was presented no later than August 25, 2000. An import specialist reviewed the CF 3461, and the trade team inspector released the merchandise in the Automated Commercial System (ACS).

The vessel arrived within the port limits of Houston on August 25, 2000. At the written request of the broker to reflect the actual arrival of the vessel into the port of Houston, the entry date was subsequently changed in the ACS from August 23, 2000, to August 25, 2000. The date when the entry summary, the CF 7501, was submitted to Customs is disputed. Protestant claims that the entry summary was presented to Customs on August 25, 2000. To support its contention that the CF 7501 was presented to Customs on August 25, 2000, the Protestant has presented an affidavit from Bonnie Lewis, an employee of the Customs Broker. In her affidavit, Ms. Lewis claims that after being advised via the Automated Broker Interface (ABI) that the entry was accepted and that entry documents were required, she assembled the live entry packet comprised of the CF 7501, the commercial invoice, CF 3461 and the packing list. These documents were allegedly placed with the remaining items that were to be filed with Customs. A courier supposedly delivered the packet to Customs that same day. The CF 7501 included in the live entry packet was dated August 24, 2000, and signed by Ms. Lewis. Ms. Lewis claims that she knows that Customs received the CF 7501 on August 25, 2000, because it is that copy which Customs marked up in preparing the Notice of Action. However, there is no other evidence to corroborate Ms. Lewis’ version of events.

Customs in Houston contends that contrary to what the Customs broker claims, the CF 7501 was not presented to Customs on August 25, 2000. If a formal live entry had been presented on August 23, 2000, the entry specialist or import specialist would have rejected it because the quota merchandise had not yet arrived. Furthermore, the CF 750l should have had a date/time stamp, or a “discover date” annotation by the entry specialist.

Customs in Houston has indicated on September 11, 2000, ten working days after the entry was submitted, the Customs broker submitted the entry summary to Customs together with the ACH payment statement. The entry quota specialist input the quota that same day and liquidated the entry with a “999” by-pass liquidation code indicating a future liquidation date of July 6, 2001. At the time, no one was aware that the quota was in an unaccepted status due to the second quarter entry date (August 25, 2000), and the third quarter entry summary/presentation date of September 11, 2000.

After receiving instructions in a quota message from Customs Headquarters, the subject entry was unset. The presentation date was changed from September 11, 2000, to the last day and time of the second quota period for steel wire rod, August 31, 2000, at 1630 hours, and the quota was re-input. Another Headquarters message instructed to liquidate a pro-rated amount (11.997%) at the in quota rate with the balance of the shipment to be liquidated at the higher non-quota rate. The entry was liquidated on April 6, 2001, with an increase in duty. The protest was filed on July 5, 2001.

ISSUE:

Whether Customs was correct in liquidating the protested entry so that a portion of the shipment was subject to the above quota rate for steel wire rod.

LAW AND ANALYSIS:

Initially, we note that the subject protest was timely filed pursuant to 19 U.S.C. §1514(c)(3)(A). The notice of liquidation as to which protest is made was April 6, 2001, and the protest was filed on July 5, 2001. The liquidation of an entry is protestable pursuant to 19 U.S.C. §1514(a)(5).

In accordance with Presidential Proclamation 7273—To Facilitate Positive Adjustment to Competition from Certain Steel Wire Rod, 65 Fed. Reg. 8621 (February 18, 2000), imported merchandise classifiable under subheading 7213.91, HTSUS (hot rolled bar and rod of non-alloy or alloy steel) was subject to a tariff-rate quota, meaning that additional duties will be assessed on amounts imported in excess of certain quantity limitations. The quantity limitations of this tariff rate quota were subdivided for the quota year into quarterly periods.

The effective rates of duty for merchandise imported into the United States are established as provided for in 19 U.S.C. §1315. That statute, amended by section 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 . . .

The Customs Regulations issued under this statute and/or pertinent to the issues under consideration are set forth, in part, below:

Under 19 C.F.R. §141.69, “[t]he rates of duty applicable to merchandise shall be the rates in effect at the time of entry, as specified in section 141.68, except [in cases not pertinent in this case] . . .”

Section 141.68, referred to above, provides the time of entry for merchandise imported into the United States. Subsection (a) of section 141.68 provides the general rule for establishing the time of entry when entry documentation is filed without an entry summary, and subsection (b) of section 141.68 provides the rule for establishing the time of entry when an entry summary serves as both the entry documentation and entry summary. Subsection (c) specifically provides for merchandise released under the immediate delivery procedure (the time of entry is the time the entry summary is filed in the proper form, with estimated duties attached). Subsection (d) specifically provides for the time of entry for quota-class merchandise (i.e., “[t]he time of entry for quota-class merchandise shall be the time of presentation of the entry summary or withdrawal for consumption in proper form, with estimated duties attached or, if the entry/entry summary information and a valid scheduled statement date . . . have been successfully received by Customs via [ABI], without estimated duties attached, as provided in [19 C.F.R. §132.11a]”).

Title 19 CFR § 132.1(e) defines quota-class merchandise as “any imported merchandise subject to limitations under an absolute or a tariff-rate quota.” Title 19 CFR § 132.1(d) defines presentation as the delivery in proper form to the appropriate Customs officer of essentially the required information and documentation listed above in 19 CFR § 141.68(d). Title 19 CFR § 132.11(a) provides that the time of presentation is the time of delivery in proper form of the above-described information and documentation.

The other applicable regulations are 19 CFR § 142.23 and 19 CFR § 142.21(e). Title 19 CFR § 142.23 provides the time limit for filing documentation after release under a special permit for immediate delivery, stating the following:

The documentation described in § 142.22(b) shall be filed, and estimated duties, if any, shall be deposited, within 10 working days after the merchandise or any part of the merchandise is authorized for release under a special permit for immediate delivery or, for quota class merchandise within the quota period, whichever expires first.

Title 19 CFR § 142.21(e) provides that merchandise subject to a tariff-rate quota may be released under a special permit for immediate delivery, and states “[a]n entry summary shall be properly presented pursuant to 19 CFR § 132.1 of this chapter within the time specified in 19 CFR § 142.23, or within the quota period, whichever expires first.”

Moreover, 19 CFR 132.14(a)(2) provides that the release of quota-class merchandise under a special permit for immediate delivery before proper presentation of an entry summary for consumption, or a withdrawal for consumption, pursuant to §132.1 shall not accord merchandise any quota priority or status or entitle it to any other quota benefit.

Title 19 CFR 132.11(b) indicates that merchandise covered by an entry summary for consumption which serves as both the entry and entry summary, or by a withdrawal for consumption, shall be regarded as entered for purposes of quota priority and shall acquire quota status if:

The entry summary or withdrawal for consumption is in proper form and duties have been attached to the entry summary or withdrawal for consumption in proper form: or The entry summary for consumption is in proper form and the entry/entry summary information and a valid scheduled statement date (pursuant to §24.25 of this chapter) have been successfully received by Customs via the Automated Broker Interface.

Protestant agrees that in the case of merchandise subject to a quota restriction, the importer must present a live entry meaning that a customs broker must (1) file an entry summary for consumption in the proper form which serves as both the entry and entry summary with the estimated duties attached, or (2) if the entry summary does not have the estimated duties attached, a valid schedule statement for payment must been successfully received by Customs via Automated Broker Interface (ABI) and payment must be subsequently made by the statement processing method as set forth in 19 CFR § 24.25. Alternatively, an importer may obtain early release of quota merchandise under 19 CFR § 132.14 before the presentation of entry summary. However, if the merchandise is released early under the immediate delivery procedure, as previously mentioned, Title19 CFR § 142.21(e) requires that the entry summary must be properly presented to Customs pursuant to 19 CFR § 132.1 within the time specified in 19 CFR § 142.23, or within the quota period, whichever expires first.

In this case, the importer and the broker claim that they filed a live entry with Customs as they submitted the entry summary together with a transmittal with a valid scheduled statement date to Customs when the merchandise was released on August 25, 2000. In contrast, Customs in Houston claims that the customs broker did not present the entry summary to Customs on August 25, 2000, but on September 11, 2000, which meant that the entry summary was presented after the quota period in which the merchandise was released had expired. The date shown on the copy of the CF 7501, entry summary, contained in the record is September 11, 2000. The only evidence that the importer has presented to indicate that the September 11, 2000 date shown on CF 7501 was incorrect and that the CF 7501 was presented to Customs on August 25, 2000, is an affidavit from an employee of the protestant’s Customs broker. There is no other evidence or documentation to corroborate the claim in the affidavit that the entry was presented to Customs on August 25, 2000.

Without any additional supporting documentation, we give relatively little weight to the affidavit from the Customs broker’s employee. It must be presumed that Customs in the ordinary course of business will correctly put the proper date on official documents, such as the CF 7501, to indicate when it was filed with Customs. The burden is on the importer and/or its broker to establish that the date shown on the CF 7501 was not accurate. It is our understanding that usually the importer and/or broker will have a copy of the CF 7501 date stamped to evidence the time and date that the document was presented to Customs. It is the responsibility of the importer and/or its Customs broker to ensure the entry summary was properly date stamped and to retain a copy for their records if there is a dispute regarding the date of presentation. In this case, the Protestant has not furnished any documents or other sufficient evidence indicating that the entry summary was date stamped on August 25, 2000. Accordingly, we conclude that the weight of the evidence establishes that the entry summary was presented to Customs on September 11, 2000, which means it was presented in the next quarterly quota period after the merchandise was released. Because the weight of the evidence establishes that the entry summary was not presented to Customs before the quota period in which the merchandise was released had expired, the shipment was not entitled to any quota benefit, and it did not have any protected quota status. Thus, when the quota available for steel wire rod for the second quarterly quota period filled, the merchandise in the subject shipment was correctly reclassified under the subheading of the Harmonized Tariff Schedule of the United States (HTSUS) for the non-quota rate of duty for steel wire rod. Therefore, we find that Customs acted properly in reclassifying the imported merchandise so that a portion of the entry was pro-rated at the above quota rate for steel wire rod.

HOLDING:

As detailed in the law and analysis section of this ruling, we find that it was proper for Customs to reclassify a prorated portion of the merchandise in the subject entry so that part of imported shipment of steel wire rod was subject to the non-quota tariff rate. Accordingly, the protest should be denied in full.

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 to the protestant no later than 60 days from the date of this letter. Any new billing (the equivalent of the reliquidation of an 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,

Larry L. Burton

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