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HQ 559171

September 22, 1998

PRO-2-01: PRO-2-02: PRO-2-03
RR:CR:DR 559171 CK


Port Director of Customs
U.S. Customs Service
ATTN: Jane Mary Greco
Entry Division
1624 East 7th Avenue, Ste. 101
Tampa, Florida 33605-3706

RE: Protest number 1801-95-1000021; Application for further review; Timeliness of protest; Standing to protest; Refund of excessive duties; Claims/set-off of duties; 19 U.S.C. 1514(C); 19 C.F.R. 174.11; 19 C.F.R. 24.32; 19 C.F.R. 24.72.

Dear Ms. Greco:

The above referenced protest has been forwarded to this office for consideration. We have considered the points raised by the Protestor and our decision follows.


C.J. Langenfelder & Son (Protestant) was a subcontractor, performing site grading under an U.S. Navy contract at Guantanamo Bay Naval Station. Langenfelder transported a contingent of its equipment from Florida to Guantanamo Bay in April, 1992 for the purpose of performing the six-month grading project. The equipment was either owned or leased by C.J. Langenfelder & Son, Inc. After completion of the work, the bulk of the equipment was returned in November to the United States via Port Canaveral, Florida.

The subject of this protest is the entry made on November 20, 1992, as entry number 922-xxxx738-1, from Cuba into the Tampa Port, listing as the Importer of Record , Watkins Customs Brokers, Inc. (Watkins) and listing as the Ultimate Consignee, C.J. Langenfelder. The CF 7501 lists 11 lines of merchandise, with a total, including duty and fees of $25052.86, however, only the first line of merchandise is in dispute in this protest, and that is TRANSPT VEH, REARDUMP, HTSUS 9903.87.00 with a total duty amount of $15,500.00.

Protestant first submitted a "protest" regarding the assessed duties on March 2, 1993. Protestant then sent a letter dated April 26, 1993 amending the protest to include certification from the Chief Engineer and Resident Officer in Charge of Construction for the U.S. Naval Facilities Engineering Command Contracts at the Guantanamo Bay Naval Base. The attached letter certified that Protestant had in April 1992 transported by barge its earthmoving equipment to Guantanamo and that from August 1992 to November 1992 returned had the equipment to the U.S.; and during that period he had observed the arrival and departure of the equipment, which was used in Guantanamo for the sole purpose of the execution of the construction contract.

The entry was liquidated on January 13, 1995. The entry summary was liquidated as a "change" by the Tampa port and a refund in the amount of $15,499.98 was authorized on January 13, 1995. This "change" was the result of the Import Specialist agreeing with the Protestant, and changing the classification of the dump trucks. The refund was issued in the name of the importer of record, Watkins Customs Brokers, Inc. However, at the time of the refund, Watkins was in debt to the U.S. Customs Service, and the check was stopped and used to pay the arrears.

This protest and application for further review was filed on April 12, 1995. Protestant claims the classification of the Dump truck should be HTSUS 9801.00.1010, entering duty free, and should therefore result in a refund to them. Protestant states that the Customs Service should rightfully reimburse Langenfelder for the duty improperly assessed its construction equipment re-entry.

Attached is a Watkins Customs Brokers, Inc. invoice, number 138642 JAX, dated November 23, 1994, to C.J. Langenfelder, seeking a remittance of $33,062.61, for Customs entry fee, Premium on bond, and Duty, est. subject to liquidation. Protestant also submitted an inventory of all equipment used at Guantanamo Bay and the estimated value of the machinery used and re-entered into the U.S. Watkins Customs Brokers, Inc. was listed as the importer of record and the entry was made under its importer number.

Additionally, Protestant on April 13, 1995, submitted a letter to the Tampa port to amend their protest, since they had not completed section II. Protestant wished to attach to the protest, the letter of certification dated April 21, 1993, from the Chief Engineer and Resident Officer in Charge of Construction for the U.S. Naval Facilities Engineering Command Contracts at the Guantanamo Bay Naval Station; and a letter from Protestant, dated June 9, 1994, to the
U.S. Customs Service, Tampa. In that letter, Protestant sought the status of the 1993 "protest", and reiterated its stand that the assessment of duty on the trucks was improper.

Protestant filed a protest and sought further review, simultaneously. The Import Specialist at the Tampa port recommended denying the protest on the grounds that the issue is not a matter subject to protest under 19 C.F.R. ? 174.11. When the entry was liquidated the dump trucks in question were classified as Protestant argued, and a refund was authorized. The refund, as explained earlier, was used to clear the arrears owed on Watkins Customs Brokers, Inc.'s account, as it was listed as the importer of record. This protest is essentially seeking the refund already granted.


May a protest be granted when the relief sought is a refund of duties already granted to the Importer of Record, based on the re-classification of an entry?


Under 19 U.S.C. ?1514, (with certain exceptions not applicable in this matter) certain listed decisions (including the legality of all orders and findings entering into the same) of the Customs Service are final and conclusive on all persons unless a protest is filed in accordance with section 1514, or unless a civil action contesting the denial of a protest, in whole or in part, is commenced in the United States Court of International Trade in accordance with chapter 169 of Title 28, United States Code. The decisions (listed in section 1514(a); also listed in 19 C.F.R. ?174.11 as "[m]atters subject to protest") are:

(1) the appraised value of merchandise;

(2) the classification and rate and amount of duties chargeable;

(3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury;

(4) 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 [19 U.S.C. ?1337];

(5) the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof;

(6) the refusal to pay a claim for drawback; or

(7) the refusal to reliquidate an entry under [19 U.S.C.

19 U.S.C. ? 1514 (c) (2) states:

Except as provided in sections 1485(d) and 1557(b) of this title, protests may be filed with respect to merchandise which is the subject of a decision specified in subsection (a) of this section by -
(A) the importers or consignees shown on the entry papers, or their sureties;

(B) any person paying any charge or exaction;

(C) any person seeking entry or delivery;

(D) any person filing a claim for drawback;

(E) with respect to a determination of origin under section 3332 of this title, any exporter or producer of the merchandise subject to that determination, if the exporter or producer completed and signed a NAFTA Certificate of Origin covering the merchandise; or

(F) any authorized agent of any of the persons described in clauses (A) through (E).

The procedures for filing a protest of one of the above decisions are provided in
19 U.S.C. ?1514(c). Section 1514(c)(1) provides that only one protest may be filed for each entry of merchandise (with certain exceptions inapplicable in this matter). Section 1514(c)(3) provides that a protest of a decision, order, or finding described in section 1514(a) shall be filed with Customs within 90 days after but not before the notice of liquidation or reliquidation or the date of the decision as to which protest is made (if the requirement for filing within 90 days before the notice of liquidation or reliquidation is inapplicable).

Additionally, HQ 223745, states that a "protest" letter received before notice of liquidation cannot be considered a protest because it is premature. This ruling cites to the explicit wording of 19 U.S.C. 1514 (c)(2) and United States v. Reliable Chemical Co., 66 CCPA 123,
605 F.2d 1179 (1979). Furthermore, the issue of the invalidity of a "protest" received before notice of liquidation was decided in HQ 224846, where we stated that a protest is considered untimely filed under 19 U.S.C. 1514 (c)(2) when it is filed anytime before the posting of the bulletin of notice of liquidation or reliquidation at the customhouse. It also stated that, 19 U.S.C. 1514, fixes a definite time within which a protest may be filed. 19 U.S.C. 1514(c)(2) requires that a protest be filed with Customs within 90 days after, but not before, notice of liquidation or reliquidation. This requirement is strictly construed. Atari Caribe v. United States, 16 CIT _ , 799 F. Supp. 99, 102 (1992); see also Peg Bandage, Inc. v. United States, 17 CIT _ , Slip Op. 93-236 (December 15, 1993), as printed in Vol. 28 Cust. B. & Dec., No. 1, January 5, 1994, pages 268-269. Untimely filed protests are invalid. United States v. Wyman, 156 F. Supp. 97, 84 C.C.A. 123 (Mo. 1907); see also Gallagher & Ascher v. United States, 21 CCPA 313 (1933); Spiegel Bros. v. United States, 21 CCPA 310 (1933). Therefore, the 1993 "protest" is invalid, and untimely because it was premature. It was premature since liquidation had not yet occurred.

Under 19 U.S.C. ?1515, "[u]pon the request of the protesting party ... a protest may be subject to further review by another appropriate customs officer, under the circumstances and in the form and manner that may be prescribed ... in regulations".

The Customs Regulations pertaining to protests, issued under the above statutes, are found in 19 C.F.R. Part 174. Under 19 C.F.R. ?174.24, further review (as provided for in 19 U.S.C. the protest was filed, among other things, is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Under 19 C.F.R. ?174.26(b), a protest with an application for further review shall be reviewed (as pertinent to the grounds under which further review was requested in this matter) by the Commissioner of Customs or his designee if the protest and application for further review raise an issue involving questions which have not been the subject of a Customs ruling or court decision.

As an initial issue, Protestant has standing to bring this protest, under
19 U.S.C. ? 1514(c)(2)(A), as the consignee shown on the entry papers. See, Sturm, A Manual of Customs Law, 6 (1974 ed.) In this case, the entry was liquidated on January 13, 1995, the dump trucks at issue were re-classified, and a refund of the estimated duties paid in 1993, totaling $15,499.98 was authorized. Therefore, the April 12, 1995 protest is timely filed on the 89th day of the protest period as required by 19 U.S.C. 1514(a). However, Protestant attempted to send an amendment to the protest dated, April 13, 1995, which was received by the Customs Service on April 17, 1995. This amendment was received after the 90-day protest period ended, and cannot be considered in deciding the present appeal. 19 U.S.C. 1514 (c)(1)(D) states, "A protest may be amended, under regulations prescribed by the Secretary, to set forth objections as to a decision or decisions described in subsection (a) of this section which were not the subject of the original protest, in the form and manner prescribed for a protest, any time prior to the expiration of the time in which such protest could have been filed under this section." (Emphasis added)

Since the entry form listed Watkins's Customs Brokers, Inc. as the Importer of Record and used its importer number the refund was issued to the importer, however, Watkins was indebted to the Customs Service at that time, and the refund was stopped and the money used on the arrears. Protestant is therefore seeking the refund that has already been issued. Who received or who should have received a refund is not listed as a protestable issue under 19 U.S.C. ? 1514(c) or 19 C.F.R. ? 174.12.

19 U.S.C. ? 1624 states, "In addition to the specific powers conferred by this chapter the Secretary of the Treasury is authorized to make such rules and regulations as may be necessary to carry out the provisions of this chapter." The authority for the collection of fees, and the form such collection may take, is found in 19 U.S.C. ? 66 which states, "The Secretary of the Treasury shall prescribe forms of entries, oaths, bonds, and other papers, and rules and regulations not inconsistent with law, to be used in carrying out the provisions of law relating to raising revenue from imports, or to duties on imports, or to warehousing, and shall give such directions to customs officers and prescribe such rules and forms to be observed by them as may be necessary for the proper execution of the law."

Furthermore, "importer" is defined in 19 C.F.R. 101.1 as,``Importer'' means the person primarily liable for the payment of any duties on the merchandise, or an authorized agent acting on his behalf. The importer may be:

(1) The consignee, or

(2) The importer of record, or

(3) The actual owner of the merchandise, if an actual owner's declaration and superseding bond has been filed in accordance with ?141.20 of this chapter, or

(4) The transferee of the merchandise, if the right to withdraw merchandise in a bonded warehouse has been transferred in accordance with subpart C of part 144 of this chapter.

Additionally, U.S. Customs Service, by regulation sends refunds to the Importer of Record. 19 C.F.R. ? 24.36(a) states, "When it is found on liquidation or reliquidation of an entry that a refund of excessive duties or taxes, or both, is due, a refund shall be prepared in the name of the person to whom the refund is due, as determined by paragraphs (b) and (c) of this section. If an authority to mail checks to someone other than the payee, Customs Form 4811, is on file, the address of the payee shall be shown as in care of the address of the authorized persons."

19 C.F.R. ? 24.36(b) states, "Refunds of excessive duties or taxes shall be certified for payment to the importer of record unless a transferee of the right to withdraw merchandise from bonded warehouse is entitled to receive the refund under section 557 (b) of the Tariff Act of 1930, as amended, or an owner's declaration has been filed in accordance with section 485 (d), Tariff Act of 1930, or a surety submits evidence of payment to Customs, upon default of the principal, of amounts previously determined to be due on the same entry or transaction." (Emphasis added)

In this case, the importer of record, Watkins Customs Brokers, Inc., was by regulation, the payee of the refund authorized by the Tampa port's re-classification. Additionally, no CF 4811, was on file, notifying the Customs Service that C.J. Langenfelder should be the recipient of any refund. Therefore, Watkins was the correct recipient of any refund.

As to the issue of was the Customs Service correct in using the refund duties to pay the arrears on the Watkins account, the regulations, allow for such set-off. Under ? 24.72 the regulations provide that, "When an importer of record or other party has a judgment or claim allowed by legal authority against the United States, either as a principal or surety, for an amount which is legally fixed and undisputed, the port director shall set off so much of the judgment or other claim as will equal the amount of the debt due the government." 19 C.F.R. ? 24.72. Therefore, the Customs Service had the ability, according to the regulations, to set-off the refund that would have been issued to Watkins Customs Brokers, Inc, against the debt owed to Customs by Watkins.


The asserted subject of this protest was the classification of dump trucks entered into the U.S. through Florida. Protestant asserts the re-classification of the trucks and a refund of the estimated duties paid. However, Customs liquidated the entry in accordance with the sought classification, and a refund of the estimated duties was authorized. The importer of record, Watkins, was the person entitled to the refund. Watkins, the importer of record, was indebted to the Customs Service and the refund was set-off under the regulations. Therefore, the subject of this protest is essentially who should have been, the recipient of a refund on estimated duties, and was the Customs Service entitled to set-off the refund, against the debt owed to Customs by that importer, which is not protestable under 19 U.S.C.? 1514(c) and 19 C.F.R. ?174.11. Since, there is no protestable issue here, the protest must be DENIED.

Consistent with the decision set forth above, you are hereby directed to deny the subject protest. 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 the decision. Sixty days from the date of the decision of 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.


John Durant, Director
Commercial Rulings Division

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