HQ 966507 - Request to set aside denial of Application for Further Review, Protest 2720-03-100036; 19 U.S.C. 1515(c) - United States International Trade Commision Rulings

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HQ 966507

June 24, 2003

CLA-2 RR:CR:TE 966507 CMR

CATEGORY: CLASSIFICATION

Brian J. Murphy, Esq.
S. Richard Shostak, Esq.
515 South Figueroa Street
Suite 1200
Los Angeles, CA 90071

RE: Request to set aside denial of Application for Further Review, Protest 2720-03-100036; 19 U.S.C. 1515(c)

Dear MM. Murphy and Shostak:

This in response to your request of May 27, 2003 that the Bureau of Customs and Border Protection (CBP) set aside the denial of the Application for Further Review (AFR) for Protest 2720-03-100036 pursuant to 19 U.S.C. 1515(c). The protest and application for further review (AFR) were denied on March 25, 2003.

Section 515 of the Tariff Act of 1930, Title 19, United States Code, Section 1515 (19 U.S.C. 1515(c)) as amended, provides, in part, as follows:

If a protesting party believes that an application for further review was erroneously or improperly denied or was denied without authority for such action, it may file with the Commissioner of Customs a written request that the denial of the application for further review be set aside. Such request must be filed within 60 days after the date of the notice of the denial. The Commissioner of Customs may review such request and, based solely on the information before the Customs Service at the time the application for further review was denied, may set aside the denial of the application for further review and void the denial of protest, if appropriate. . . .

The protest at issue involves a claim for preferential treatment for certain apparel under the Caribbean Basin Trade Partnership Act (CBTPA) and an assertion that the values reflected in the entry for the apparel, fabric, and other items were incorrect.

As noted above, the denial of the protest and AFR occurred on March 25, 2003. Sixty days from the date of the notice of denial was May 24, 2003. However, as that day was a Saturday and the following Monday was a holiday, "Memorial Day," filing by close of business May 27, 2003 was timely. See HQ 227879 of October 30, 1998 (discussion of time computation with relevant cases cited).

The criteria required for the granting of a request for further review are set forth in 19 CFR 174.24 of the Customs Regulations. This section states, in pertinent part, that further review will be accorded to:

. . . a party filing an application for further review which meets the requirements of §174.25 when the decision against which the protest was filed:

(a) Is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise;

(b) 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;

(c) Involves matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling; or

(d) Is alleged to involve questions which the Headquarters Office, United States Customs Service, refused to consider in the form of a request for internal advice pursuant to §177.11(b)(5) of this chapter.

In your request, you state that the AFR should have been granted under 19 CFR 174.24(a), (b) and (c) and sections 174.26(b)(1)(i) and (1)(iv). Our review of your request is limited to the information presented to the port in support of your request for the AFR. In filing the protest, the justification given for further review was: "The protested decision involves questions of law and fact which have not been ruled upon by the Commissioner of Customs, namely whether the subject goods qualify for CBTPA duty-free treatment." In reviewing the information presented to the port, the only justification presented to the port in support of the request for further review was this single statement in box 15 of the protest form (Customs Form 19). The justification for granting the AFR given on the protest form mirrors the language of 19 CFR 174.24(b). Therefore, we will not consider the arguments you have submitted regarding the reasons the AFR should have been granted under 19 CFR 174.24(a) and (c) as no arguments were presented to the port relevant to those sections. We will not look beyond what was presented to the port.

With regard to the claim that the AFR should have been granted under 19 CFR 174.24(b), no arguments were presented to the port to substantiate the allegation that the protest involved questions of law and fact that have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. The only support offered for the assertion is that the question of "whether the subject goods qualify for CBTPA duty-free treatment" had not been the subject of a ruling. CBP has issued numerous ruling letters on the interpretation of the tariff provisions implementing the preferential treatment afforded to apparel under the CBTPA. The absence of a ruling letter on the eligibility of the specific goods at issue is not sufficient justification by itself for the granting of an AFR. A ruling letter is an option for importers of merchandise. Choosing not to avail oneself of that option does not automatically entitle one to a grant of an AFR request in the filing of a protest.

The true issue in this protest is the sufficiency of the information requested by the port to substantiate the claim for preferential treatment. As in HQ 962549, dated March 12, 1999, and HQ 963841, dated March 28, 2000, the instant protest only involves questions of fact concerning whether the submitted documentation supports the claims made. The port assessed the information provided and found it to be insufficient to satisfy the Port Director that the subject goods met the requirements for preferential treatment under the CBTPA. Here, as in the cases cited, we believe that the sufficiency of documentation to justify a claim for preferential treatment is, as in the case of documentation to substantiate origin, not the type of factual determination warranting further review by Headquarters.

You cite a number of rulings in support of your request for set aside of the denial of the AFR. However, having reviewed those rulings and files, we believe they do not provide the support you seek. We note that in HQ 962405 of May 27, 1999, it was determined that the denial of the AFR was improper because the request submitted to the port met the requirements of 19 CFR 174.24(a). The protest and attached memorandum contained information and arguments which supported a determination that the requirements for approval of the AFR had been met. The same is true in the case of HQ 547653 of February 28, 2000.

In HQ 547653, it was determined that "the information before the Port as to the classification issue provided a sufficient bases (sic) upon which to deny the Application for Further Review." The justification for seeking further review with regard to the classification issue was similar to the justification offered in the instant case, i.e., "[t]here has been no Headquarters Office decision on the classification of the subject footwear . . . ." The denial of the AFR was set aside because with regard to the value issue raised, the Protestant's "Memorandum in Support of the Protest and Request for Further Review" argued in detail the port's decision was inconsistent with Headquarters decisions and specific court cases. Protestant went beyond simply asserting inconsistency and provided arguments to support the assertion.

With regard to HQ 960448 of May 9, 1997, a review of the file reveals that indeed additional facts were presented that had not been previously considered in prior Headquarters rulings on the same or substantially similar merchandise. The same is true with regard to HQ 546198 of June 28, 1996. A review of that file reveals that specific rulings were identified and arguments presented that the port's decision was inconsistent with the cited rulings, thus meeting a requirement for approval of an AFR.

In the case of HQ 560854 of February 24, 1998, the request for the AFR alleged inconsistencies with policies set forth in HQ 734151 and HQ 559620 thus meeting the requirement of 19 CFR 174.24(a). With regard to meeting the requirement of section 174.24(b) by alleging "questions of law and fact upon which Customs had not ruled, i.e., the country of origin of the alleged transshipped merchandise," a review of this aspect of the decision reveals it is in conflict with HQ 962549 and HQ 963841 which reflect this office's view of questions of sufficiency of documentation.

As to HQ 546624 of February 6, 1997, it involved an issue as to the proper methodology for determining the value of the merchandise at issue, i.e., transaction value versus deductive value. You cite this ruling to argue that the value issue in the instant protest should be sufficient justification for an approval of an AFR. However, the value issue here is not one of methodology, but a pure question of fact and sufficiency of documentation.

We note that in requesting further review, no mention is made of the value issue. The justification states only "namely whether the subject goods qualify for CBTPA duty-free treatment." It would appear that this was the only issue for which further review was being sought. Nevertheless, taking into consideration the value claim in the protest, i.e., that the values of the imported apparel are excessive and that the values of the fabric and other materials used in the entry process were inadvertently inflated, we believe this issue, like the CBTPA eligibility issue at hand, is a question of the sufficiency of the documentation and not a question which meets the requirements of 19 CFR 174.24 or warrants Headquarters review.

Your application to set aside the denial of the Application for Further Review (AFR), Protest 2704-99-100193 is denied.

Sincerely,

Myles B. Harmon, Director

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