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HQ 226638

February 25, 1998

ENT-1-RR:IT:EC 226638 CC


Port Director
U.S. Customs Service
511 NW Broadway
Portland, OR 97209

RE: Application for further review of Protest No. 2904-95-100179; 9817.00.50, HTSUS; 19 CFR ? 10.138

Dear Sir:

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


The merchandise the subject of this protest is foundation pillars. The date of entry for the subject merchandise was October 18, 1991. The subject merchandise was entered duty-free under subheading 9817.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for machinery, equipment and implements to be used for agricultural or horticultural purposes.

Subheading 9817.00.50, HTSUS, is an actual use provision. In order for merchandise to receive duty-free treatment under that provision, a proper certificate in accordance with section 10.138 of the Customs Regulations (19 CFR ? 10.138) must be presented within 3 years of the date of entry, showing that the end use is in conformity with the terms of that subheading.

A certificate in accordance with 19 CFR ? 10.138 was not presented within 3 years of the date of entry. Consequently, a Notice of Action, dated December 8, 1994, was mailed to the importer, rate advancing the goods at 5.7 percent ad valorem under subheading 7308.90.90, HTSUS, which provided for, at the subheading level, columns, pillars, posts, beams, girders and similar structural units.

The Notice of Action was returned to Customs because the importer had gone out-of- business. The goods were liquidated on January 27, 1995. A demand for payment was made to the surety on May 6, 1995. The surety protested the demand for payment on July 12, 1995.

The protestant stated that it was not aware of a claim on the bond until a demand for payment was made on August 16, 1994, on a similar entry. Additionally, the protestant argues that it was not aware it had the responsibility to submit the end-use certificate since any such notice went to the importer, which had gone out-of-business. Thus, the protestant argues, it was not aware of the claim on the bond until a demand for payment was made. Since the protestant filed a timely protest and resubmitted an end-use certificate that had been submitted by the importer, the protestant argues that the end-use certificate submitted should be treated as having been submitted in a timely fashion. The protestant states that "to penalize the surety for a defunct principal's failure to respond to Customs' request for production of an actual use/end affidavit within the established 3 year period, goes against fundamental fairness."


Whether the protest may be granted.


Initially, we note that the protest was timely filed, within 90 days of the demand upon the protestant surety (see 19 U.S.C. ? 1514(c)(3)), and the matter protested is protestable (see 19 U.S.C. ? 1514(a)(5)). The certification that the protest is not being filed collusively to extend another authorized person's time to protest, as required for a protest by a surety (see 19 U.S.C. ? 1514(c)(3)), was provided.

Section 10.138 of the Customs Regulations (19 CFR ? 10.138) provides the following:

Within 3 years from the date of entry or withdrawal from warehouse for consumption, the importer shall submit in duplicate in support of his claim for free entry or for a reduced rate of duty a certificate executed by (1) the superintendent or manufacturer of the manufacturing plant, or (2) the individual end-user or other person having knowledge of the actual use of the imported article. The certificate shall include a description of the processing in sufficient detail to show that the use contemplated by the law has actually taken place. A blanket certificate covering all purchases of a given type of merchandise from a particular importer during a given period, or all such purchases with specified exceptions, may be accepted for this purpose, provided the importer shall furnish a statement showing in detail, in such manner as to be readily identified with each entry, the merchandise which he sold to such manufacturer or end-user during such period.

Essentially, the protestant surety is arguing that it was unaware that the importer went out-of-business, and that it would have to supply an end-use certificate in compliance with the terms of 19 CFR ? 10.138. That regulation requires that the end-use certificate be provided within 3 years of the date of entry. Although the documentation provided by the surety to comply with 19 CFR ? 10.138 was not submitted timely, it was submitted promptly by the surety after it learned that such documentation must be submitted. Based on these facts, the protestant claims, the protest should be granted.

In order for the protest to be granted, the documentation submitted by the surety must meet the terms of 19 CFR ? 10.138. In support of its claim, the protestant has submitted a letter from the importer stating that the subject entry meets the terms of 9817.00.5000, HTSUS, and the requirements of 19 CFR ? 10.138. Thus, the only certification of end use was made by the importer; no certification of end use was provided by the manufacturer or an individual end-user. In addition, the end-use certificate submitted by the surety in support of this protest was a copy of the same certification provided by the importer at the time of entry, which was also rejected at that time for not meeting the terms of 19 CFR ? 10.138. Consequently, we find that the terms of 19 CFR ? 10.138 have not been met.

Although the protestant has characterized the issue as one relating to timeliness of the presentation of the certification of end use, the real issue here is the sufficiency of the documentation purporting to show end use. That is because the certification of end use presented by the surety was the same as that presented by the importer at the time of entry. Consequently, the certification purporting to show end use was timely presented; the problem is that it is insufficient to show proof of end use as required by 19 CFR ? 10.138. Based on the foregoing, the protest is denied.


Sufficient proof of certification of end use, as required by 19 CFR ? 10.138, has not been submitted. The subject goods, therefore, are not classifiable under subheading 9817.00.50, HTSUS. Consequently, the protest is 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 no later than 60 days from the date of this letter. Any reliquidation of the 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.


Jerry Laderberg

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