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HQ 230095

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February 5, 2004

PRO-2-01 RR:CR:DR
HQ 230095

CATEGORY: PROTEST

Robert C. Miller
Manager, Consulting & Technical Services
Cortez Customhouse Brokerage Company
4950 West Dickman Road
Battle Creek, MI 49015

RE: Revocation of HQ 963372, issued March 22, 2000

Dear Mr. Miller:

This is in regard to HRL 963372, issued March 22, 2000, to you on behalf of your client Bermo Enterprises. Per the requirements of 19 U.S.C. § 1625(c), this is to inform you of Customs revocation of HRL 963372 which held that protest number 3801-97-105194, filed by Bermo Enterprises, was “not timely filed at the proper Customs office.” We have reconsidered HRL 963372 and determined that that decision is incorrect. This ruling sets forth the correct decision. However, per 19 C.F.R. § 177.12(e)(2) this ruling has no effect on the entry which was the subject of protest number 3801-97-105194.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of the above identified ruling was published on December 24, 2003, in Volume 37, Number 52, of the Customs Bulletin. Customs received no comments in response to that notice.

FACTS:

In HRL 963372, the Protestant, Bermo Enterprises, (“Bermo”), entered goods at the Customs port of entry in Battle Creek, Michigan, port code 3805, on October 2, 1996. According to HRL 963372 “because Customs officials at the port of Battle Creek [did] not have the authority to either classify merchandise or liquidate entries, the entry was liquidated September 26, 1997, by the Port Director” at the Customs service port in Detroit, Michigan, port code 3801. Subsequently, Bermo protested the classification of these goods by filing a protest at the Battle Creek port on December 24, 1997.

According to HRL 963372, “the protest was forwarded to Customs officials in Detroit where it did not arrive until December 30, 1997.” This protest was denied on April 16, 1999, by the Port Director, Detroit, because it was not timely filed. In response to Bermo’s request to set aside the Port Director’s denial, this office affirmed that Port Director’s denial of the protest and denial of the Application for Further Review because the protest “was not timely filed at the proper Customs office.” This conclusion was reached because “it was the Port Director, Detroit, [who] made the decision on the liquidation” at issue, and therefore the protest should have been filed within 90 days of liquidation at the Detroit port. (We note that on November 19, 2003, a supervisory Customs officer at the Detroit port informed a staff attorney from this office that it is the operational policy at Detroit to consider protests that have been timely filed at the Battle Creek location as timely filed regardless of when such protests arrive at the Detroit port from Battle Creek. The Customs officer agreed that the denial of the instant protest was an anomaly in this regard.)

According to the CBP office responsible for printing and mailing the “courtesy notices of liquidation,” which advise importers of the liquidation of their entries, such a notice pertaining to an entry filed at Battle Creek will reference only the Battle Creek port’s address and give no indication that the entry was liquidated at Detroit. Further, during an inquiry of the data related to the protested entry in Customs automated data collection system (“ACS”), we could find no reference to any port code other than 3805, i.e., we could find no indication that an entry entered at Battle Creek was liquidated at Detroit. Also, a representative of the Battle Creek port supplied a copy of a portion of the “bulletin notice of entries liquidated” for September 26, 1997. The Battle Creek representative stated that a hard copy of this bulletin notice is available in the public lobby of the Battle Creek port offices and is thus available for examination by importers and others. The page we received did not make reference to the specific protested entry but did include the “Region/District/Port code “33805” which we take to indicate Battle Creek’s port code of 3805, though, as has been stated, no entries are actually liquidated by the Battle Creek Port Director.

ISSUE:

Whether the protest was timely when filed within 90 days of liquidation at the port of entry through which the protested entry was entered but not liquidated?

LAW AND ANALYSIS:

Bermo’s protested entry was filed at Battle Creek and the protest was filed at Battle Creek. The Customs port at Battle Creek, Michigan, is designated as a “port of entry.” 19 C.F.R. § 101.1(4) defines “port of entry:”

The terms "port" and "port of entry" refer to any place designated by Executive Order of the President, by order of the Secretary of the Treasury, or by Act of Congress, at which a Customs officer is authorized to accept entries of merchandise to collect duties, and to enforce the various provisions of the Customs and navigation laws. The terms "port" and "port of entry" incorporate the geographical area under the jurisdiction of a port director. . . . .

The port at Detroit, Michigan, where the entry was liquidated is designated as a “service port.”

The term "service port" refers to a Customs location having a full range of cargo processing functions, including inspections, entry, collections, and verification.

The Headquarters file 963372 contains a memo to the file from the staff attorney who authored the protest decision. That memo states that a representative from the port of Detroit advised that, at the time Bermo’s protest was decided in this office, there was no import specialist assigned to the port of Battle Creek and that “while entries may be filed at that port, the determination of classification and liquidation are done by the Port Director in Detroit.”

The relevant statute is 19 U.S.C. § 1514, which provides in pertinent part:
decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the classification and rate and amount of duties chargeable; shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section, . . . .

(19 U.S.C. § 1514(a)(2)). Further, § 1514(c)(3) provides:

A protest of a decision, order, or finding described in subsection (a) shall be filed with the Customs Service within ninety days after but not before notice of liquidation or reliquidation, . . .

(19 U.S.C. § 1514(c)(3)). Finally, § 1514(c)(1) states:

A protest of a decision made under subsection (a) shall be filed in writing, or transmitted electronically pursuant to an electronic data interchange system, in accordance with regulations prescribed by the Secretary.

Among the regulations implementing § 1514 is 19 C.F.R. § 174.12(e)(1), which provides, in pertinent part, that protests shall be filed within 90 days after the date of notice of liquidation. Also, 19 C.F.R. § 174.12(d) provides that “protests shall be filed with the port director whose decision is protested.” Prior to September 30, 1995, § 174.12(d) of the Customs Regulations provided:

Protests shall be filed with the district director whose decision is protested except that, when the entry underlying the decision protested is filed at a port other than the district headquarters, the protest may be filed with the port director at that port.

On September 27, 1995, the Customs Service published T.D. 95-78 (60 Fed. Reg. 50020) which promulgated the interim rule making technical corrections to the Customs Regulations regarding Customs’ re-organization including the change to § 174.12(d). The purpose of this interim rule was described in T.D. 95-78:

This document amends the Customs Regulations to reflect Customs new organizational structure. The changes are nonsubstantive or merely procedural in nature.

(60 Fed. Reg. 50020.) The basis for these technical changes was also explained:

Customs is now eliminating districts and regions from its field organization to place more emphasis on field operations, especially at the Customs ports of entry, and restructuring to provide better support services for those ports of entry. The current regulations contain a significant number of references (over 2,000) to organizational entities which will no longer exist or which will have a different functional context at 11:59 p.m., EST on September 30, 1995. Accordingly, regulatory references to "district directors", "regional commissioners", etc., are replaced with "port directors", "Assistant Commissioner", etc., to reflect the new field and Headquarters structure of Customs and where decisional authority will now lie.

(60 Fed. Reg. 50020.)

The statement that the changes to the regulations were nonsubstantive in nature does not indicate that the elimination from § 174.12(d) of the words, “except that, when the entry underlying the decision protested is filed at a port other than the district headquarters, the protest may be filed with the port director at that port” and the adoption of the new text in § 174.12(d) (1996), requiring that protests “shall be filed with the port director whose decision is protested,” was intended to change the protest procedure and to require importers to file protests only at a service ports even if the protested entry was made at a port of entry other than the relevant service port.

As support for the conclusion that Bermo’s protest was not timely filed, HRL 963372 relied on United China & Glass Co. v. United States, 53 Cust. Ct. 68 (Cust. Ct. 1964). That case applied section 514, Tariff Act of 1930, which, as described by the United China Court, then provided:
that all decisions of a collector shall be final and conclusive on all persons 60 days after liquidation, unless prior to the expiration of the 60-day period the importer, consignee, or his agent shall have filed a protest in writing with the collector setting forth the protest claim.

In United China several protests were filed timely [then the requirement was within 60 days after liquidation] at the port of San Francisco. More than 60 days after liquidation the protests were forwarded by the San Francisco port to the New Orleans port because the entries had been filed and liquidated at New Orleans. The Customs Court held that the protests were not timely filed at New Orleans and stated:

The filing of protests, by whim or negligence, with some one or another of the many collectors in the United States, seems to us not to have been intended by Congress in enacting sections 514 and 515.

(Id. at 70.) The Bermo protest is distinguishable from the protests in United China in that it was filed at the port where the protested entries were filed. In United China the protests were filed in San Francisco, a port which bore no relation to the port of New Orleans at which the protested entries had been entered and liquidated.

HRL 963372 also noted that the decision in Wolf D. Barth Co., Inc. v. United States, (81 Cust. Ct. 127 (Cust. Ct. 1978)) followed the holding in United China & Glass Co. v. United States. In Wolf D. Barth the court described the applicable statute:

19 U.S.C. 1514(b)(1)(2) requires in pertinent part that a protest be filed with the appropriate Customs officer designated in regulations prescribed by the Secretary of the Treasury within 90 days after liquidation. It is undisputed that according to section 174.12(d) of the Customs Regulations, the appropriate Customs officer for the filing of the protest in this case was the district director at Philadelphia, Pa. where the involved entry was made.

(81 Cust. Ct. 127, 128-9.) In Wolf D. Barth the protested entry was entered and liquidated at the port Philadelphia. However, plaintiff's attorneys filed a protest against the liquidation of that entry at the office of the New York regional commissioner which “returned a copy of the protest to the plaintiff showing that it was denied . . . and noting that the protest was erroneously accepted at New York.” (Id. at 128.) “Subsequently, the involved protest was received by the district director at the port of Philadelphia” after the 90-day protest period had expired. (Id.) The court held that the protest was untimely because:

[i]t is undisputed that according to section 174.12(d) of the Customs Regulations, the appropriate Customs officer for the filing of the protest in this case was the district director at Philadelphia, Pa. where the involved entry was made.

(81 Cust. Ct. 127, 129.) Like the facts in United China, the protests in Wolf D. Barth were filed at an office, the office of the New York regional commissioner, which had no conceivable connection with the port at which the protested entries were entered and liquidated. Further, the courts in both United China and Wolf D. Barth noted that the proper port at which to file the protests in issue was the port where the entry was filed.

Finally, HRL 963372 included a quote from the Court of International Trade in Po-Chien, Inc. v. United States, 3 C.I.T. 17 (Ct. Intl. Trade 1982):

By ignorance of the legal requirements or inadvertence, plaintiff addressed its communication to the wrong office, at the wrong address. Quite understandably, plaintiff's letter was never received at the Los Angeles/Long Beach District, the proper [ILLEGIBLE WORDS]. Assuming, arguendo, that the letter constituted a "protest", plaintiff failed to fulfill an essential filing requirement for jurisdiction to vest in the court.

(Id. at 18.) In that case the applicable statute was 19 U.S.C. § 1514(c)(1) (1979) which provided:

A protest of a decision under subsection (a) of this section shall be filed in writing with the appropriate customs officer designated in regulations prescribed by the Secretary, . . . .

The Customs Regulation applicable, 19 C.F.R. § 174.12(d), was the version described above as prior to Customs’ reorganization.

In Po-Chien the plaintiff argued that a letter “mailed within ninety days of liquidation to ‘U.S. Customs Service’ at an address different from that of the designated official, suffices as a protest.” (Id. at 18.) That letter “was never received by the appropriate customs officials.” Id. We find the facts in Po-Chien distinguishable from those in HRL 963372 as well. In Po-Chien the purported protest was mailed to the wrong address and never received by the proper officials. The Bermo protest however was received timely at the port through which the goods had been entered and subsequently actually received at the port where the decision to liquidate had been made.

In Bond, Schoeneck & King v. United States, (51 T.D. 766 (Cust. Ct. 1927)) the protests at issue were received by the port of Syracuse, which then was a “subport” of Rochester, within [the then required] 60 days after liquidation. The protests were forwarded by the Syracuse port to the port of Rochester but were not received at Rochester within 60 days of liquidation of the protested entries. The court held that the protests were timely and concluded:
to hold otherwise would be to make this liberal procedure into a catch procedure, and make the timeliness of a protest depend on the diligence with which a protest was forwarded . . . .

(Id. at 769.) The facts in Bond, Schoeneck & King v. United States are similar to those in HRL 963372 and the Customs Court’s rationale is instructive in that the protest procedure is a “liberal procedure.”

First, it appears there is a Customs-created connection between the ports of Battle Creek and Detroit. Unlike the two ports in United China & Glass Co. v. United States, San Francisco and New Orleans, and the two ports in Wolf D. Barth, Philadelphia and New York, in Bermo’s protest the ports of Battle Creek and Detroit work together: because there are no Customs officers at Battle Creek authorized to liquidate entries, entries filed at Battle Creek must be sent on to the Detroit port for liquidation. Therefore, the facts at issue in HRL 963372 most closely resemble those in Bond, Schoeneck & King v. United States, wherein protests timely filed at Syracuse, a subport of Rochester, were held to be timely filed – even when not forwarded to Rochester with the statutory time limit. The relationship between the ports of Battle Creek and Detroit more closely resembles the relationship between the Syracuse and Rochester ports than those ports described as completely unrelated in United China and Wolf D. Barth.

Second, in both Wolf D. Barth and Po-Chien, the courts found that under 19 C.F.R. 174.12(d) the port where the protested goods were entered was the proper port for filing the protest. In Wolf D. Barth the court held:

It is undisputed that according to section 174.12(d) of the Customs Regulations, the appropriate Customs officer for the filing of the protest in this case was the district director at Philadelphia, Pa. where the involved entry was made.

(81 Cust. Ct. 127, 129.) The Po-Chien court stated:
the requisite administrative protest was not filed with the district director at Los Angeles, the port of entry, . . .

(3 C.I.T. 17.) Third, the Bermo protest was not mailed to an incorrect address – an indication of carelessness and disregard for the procedure – but filed at the port where the protested entry was filed and subsequently actually received by the proper Customs officers, as was not the case in Po-Chien.

Finally, only when read closely, side-by-side and compared, do the definitions of “port of entry” and “service port” contained in the Customs regulations, give any indication that a “port of entry” like Battle Creek, is authorized to perform only limited services as compared with a “service port” like Detroit. The definition of "port of entry" states that it is “authorized to accept entries of merchandise to collect duties, and to enforce the various provisions of the Customs and navigation laws.” These words may give the impression that a port of entry is authorized to conduct any or all of the processes associated with the entry of goods, including liquidation and protest of entries. Nor does the definition of a “service port” include any words indicating that the liquidation function is performed only there. And, it is only upon comparing the definition of a “service port” which is defined as offering “a full range of cargo processing functions . . . ” with the definition of a “port of entry” does one get the impression that a port of entry offers something less than “a full range of cargo processing functions.”

It is also pertinent that we were unable to find any evidence of notice to the importing public that entries of merchandise entered at Battle Creek are liquidated at the discretion of the Detroit Port Director. Neither the courtesy notice of liquidation, the ACS records, nor the printed bulletin notice advised importers that entries filed at Battle Creek were not liquidated there. Consequently, there is no evidence to show that an importer making entry through the port of entry at Battle Creek, would know or could be expected to know that the decision on liquidation of the entry would be that of the Port Director at Detroit rather than the Battle Creek Port Director.

As indicated above, this ruling has no effect on the entry which was the subject of protest number 3801-97-105194 because the liquidation of that entry is final on both the protestant and Customs and Border Protection (see 19 C.F.R. § 177.12(e)(2)). Consequently, Customs no longer has jurisdiction over that entry. See San Francisco Newspaper Printing Co. v. United States, 620 F. Supp. 738 (Ct. Int’l Trade 1985).

HOLDING:

Based on the above analysis, the protest was timely filed when it was filed at the port through which the protested entry was entered, though not liquidated, within 90 days of liquidation. Therefore HRL 963372 is hereby revoked.

Sincerely,

Myles Harmon, Director

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