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HQ 115393

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November 13, 2001

ENT-1-RR:IT:EC 115393 jsj

CATEGORY: ENTRY

Port Director

U.S. Customs Service
Port of New York
C/O Chief, Residual Liquidation and Protest Branch
Kennedy Airport, Building 77
Jamaica, New York 11430

Attn.: Ramos; CST Team 257

RE: Protest: 1001-01-100777; Notice to Redeliver; Timeliness; Conditional Release; 19 C.F.R. 113.62 (d), 141.113, 151.11.

Dear Sir:

This ruling addresses the Application for Further Review of Protest Number: 1001-01-100777, dated February 23, 2001. The Importer of Record and Protesting Party is Check Group, LLC. The importer is represented by counsel.

The Customs Service issued a series of Notices to Redeliver to the Check Group based on the conclusions of the Customs Service Import Specialist that the importer had not promptly complied with a Request for Information seeking a sample and had not properly classified its merchandise. The importer, subsequent to receipt of the third Notice to Redeliver, filed a Protest challenging the timeliness of Customs’ issuance of the Notice.

A review of the Protest (Customs Form 19) and the Customs Protest and Summons Information Report (Customs Form 6445A) indicates that the protest was timely filed pursuant to 19 U.S.C. 1514 (c) (3) (West 1999) and 19 C.F.R. 174.12 (e) (2). The protest was filed within ninety days of Customs decision to demand redelivery.

This Protest decision is being issued subsequent to the following: (1) A review of the Customs Protest and Summons Information Report; (2) A review of the Memorandum in Support of Protest and Application for Further Review, filed on the behalf of the Check Group; (3) A meeting between a representative of the Customs Service and counsel representing the Check Group conducted on September 26, 2001; (4) A review of the supplemental submission of counsel dated October 1, 2001; and (5) A review of the relevant law and regulations.

FACTS

The merchandise in issue, textile wearing apparel, was imported and entered on November 6, 2000. The importer classified the merchandise in subheading 6207.91.3010, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), with a rate of duty of 6.3 percent ad valorem, and requiring a quota category 351 visa. It is the conclusion of the Customs Import Specialist that the merchandise is properly classified in subheading 6203.42.4015, HTSUSA, with a rate of duty of 17 percent ad valorem and requiring a quota category 347 visa.

The Customs Service, on November 22, 2000, issued a Request for Information (CF 28). The Request for Information sought samples of the merchandise.

The Customs Service, on December 27, 2000, issued a Notice to Redeliver (CF 4647). The Notice to Redeliver was issued because the importer failed to provide samples as requested in the CF 28 issued on November 22, 2000. Customs, it is noted, was never contacted by the importer or the importer’s customs broker to request an informal extension to respond to the CF 28.

The importer, according to Customs Sample Room Tracking Sheet, Sample Ticket Number: 39768, delivered samples to Customs on January 4, 2001. The samples were accompanied by a copy of the CF 28 executed by Mr. Bob Bhasin, Vice President of the Check Group, on November 29, 2000, and correspondence from the Check Group signed by Mr. Bhasin and dated December 29, 2000. The correspondence, in its entirety, stated “Sorry we missed the Dec 22nd deadline you requested. Due to the holiday rush this request was left sitting on my secretary’s desk.” The sample, executed CF 28 and the correspondence were retrieved by Customs from its sample room on January 5, 2001.

The Customs Service issued a second CF 4647, Notice to Redeliver, on January 16, 2001, twelve days after receiving the samples requested on November 22, 2000. Item 14 of the CF 4647 advised the importer that the “[m]erchandise must be redelivered to Customs within 30 days from the date of this Notice or other time specified.” Item 15 advised the importer that the samples were being sent to the Customs National Import Specialist (NIS) to address the classification and textile quota category questions. Item 15 stated, in its entirety:

Style # 6022 and style # 6930 are sent to the national import specialist to determine the correct classification. This CF 4647 is pending the decision from the national import specialist. A new visa or visa waiver may be required. If a new visa or visa waiver is required, a revised of this CF 4647 will be sent, requesting a visa.

The NIS responded to the inquiry of the port on January 18, 2001, and the Import Specialist issued a third CF 4647 on February 14, 2001, twenty-nine days after the issuance of the second Notice to Redeliver issued on January 16, 2001. The revised Notice to Redeliver advised the importer that the merchandise as entered by the importer was misclassified, that it should have been classified in subheading 6203.42.4015, HTSUSA, and that the entry required a visa for textile quota category 347 or a visa waiver for the year 2000

Customs, subsequent to the issuance of the third Notice to Redeliver took a rate advance on the merchandise and issued a Notice of Action (CF 29) on March 16, 2001, advising the importer that a rate advance had been taken. The Customs Service also issued a Notice of Penalty or Liquidated Damages Incurred and Demand for Payment on March 19, 2001, assessing liquidated damages based on the failure of the importer to redeliver the merchandise into Customs custody and the failure to provide Customs with the appropriate visa.

ISSUE

Did the actions of the Customs Service establish a “conditional release” resulting in the timely issuance of the February 14, 2001, demand for redelivery of the Check Group’s merchandise ?

LAW AND ANALYSIS

Customs Service regulations provide that if a port director requires samples of merchandise released from Customs custody a written request shall be made on the importer. See 19 C.F.R. 151.11. Section 151.11 further provides that “[i]f the request is not promptly complied with, the port director may make a demand under the bond for the return of the necessary merchandise to Customs custody in accordance with § 141.113 of this chapter.” Id. Section 141.113 addressing the recall of merchandise released from Customs custody, particularly subparagraph (d), mandates that requests to importers for samples must be “promptly complied with,” the failure of which authorizes the port director to demand the return of the merchandise in question. 19 C.F.R. 141.113 (d).

Redelivery of merchandise conditionally released from Customs custody is one of the obligations of an importer enforced through the assessment of liquidated damages against the importer’s bond. Section 113.62 (d) of Customs regulations provides:

If merchandise is released conditionally from Customs custody to the principal before all required evidence is produced, before its quanity and value are determined, or before its right to admission into the United States is determined, the principal agrees to redeliver timely, on demand by Customs, the merchandise released if it:

Fails to comply with the laws or regulations governing
admission into the United States;

Must be examined, inspected, or appraised as required by

19 U.S.C. 1499;
or

(3) Must be marked with the country of origin as required by law or regulation.

It is understood that any demand for redelivery will be made no later than 30 days after the date that the merchandise was released or 30 days after the end of the conditional release period (whichever is later). (Emphasis added) 19 C.F.R. 113.62 (d).

Merchandise is deemed to be “released conditionally” from Customs custody when it is released prior to liquidation. 19 C.F.R. 141.0a (i). Redelivery notices are only timely, in accordance with the last paragraph of subparagraph (d) of section 113.62, if: (1) The demand for redelivery is made no later than 30 days after the merchandise is released; or (2) The demand for redelivery is made no later than 30 days after the end of a conditional release period. The longer time period is controlling. See id.

The Check Group’s merchandise was entered and released from Customs custody on November 6, 2000. Since the initial Notice to Redeliver was not issued until December 27, 2000, more than thirty days after the release of the merchandise, the demand for redelivery is not timely pursuant to subparagraph (1) of section 113.62 (d). The issue under consideration for the purpose of this protest is whether Customs established a “conditional release” of the merchandise thereby extending the period during which redelivery could be legally demanded by the Customs Service.

A “conditional release period” is established when the Customs Service, in written format, provides notice to the importer that Customs is taking action which is conditioning the release of the merchandise of the relevant entry. See United States v. So’s USA Company, Inc., 1999 Ct. Intl. Trade LEXIS 85, Slip Op. 99-90 (emphasizing that there must be a clear indication the release of the entry is conditional and of notice addressing the event that will end the conditional release period). The Customs Service in C.S.D. 90-99 advised that “a request for a sample on Customs Form (CF) 28, Request for Information, or other appropriate form issued by Customs no later than 30 days after the date the merchandise is released” was considered reasonable notice of the establishment of a conditional release period. See C.S.D. 90-99, 24 Cust. B. & Dec. 574, 577 (1990). Customs has also taken the position that the issuance of a Notice to Redeliver provides notice to the importer that Customs is conditioning the release of the merchandise. See generally HQ 114819 (Oct. 8, 1999), HQ 114511 (Oct. 30, 1998), HQ 224712 (Jan. 11, 1994) and HQ 951300 (Aug. 3, 1993) (discussing Requests for Information, Notices to Redeliver and the establishment of conditional release periods).

Customs issued the initial notice in this matter, a CF 28 Request for Information, to the Check Group on November 22, 2000, less than thirty days after the release of the merchandise. This notice initially established the conditional release of the merchandise.

Customs subsequent to issuing the Request for Information issued a CF 4647 Notice to Redeliver on December 27, 2000. Customs issued the CF 4647 because the importer failed to promptly comply with the Request for Information.

The Check Group, which received the Request for Information on or before November 29, 2000, ultimately provided the requested samples on January 4, 2001. The Customs Service, within thirty days of receipt of the samples issued a second Notice to Redeliver. See generally HQ 951300 supra (indicating that “Customs must examine the goods or request samples in the first 30 days after the release; thereafter, Customs must complete its exam and order redelivery in the next 30 days.”).

Customs second Notice to Redeliver, dated January 16, 2001, advised the importer that the “[m]erchandise must be redelivered to Customs within 30 days from the date of this Notice or other time specified.” CF 4647, Item 14 (Jan. 16, 2001). The Notice further advised that samples of the merchandise in issue were being sent to the National Import Specialist “to determine the correct classification” and that “[t]his CF 4647 is pending the decision from national import specialist.” (Emphasis added) Id. Item 15. It is specifically noted that the importer was advised that “[a] new visa or visa waiver may be required. If a new visa or visa waiver is required, a revised of this CF 4647 will be sent, requesting a visa.” (Emphasis added) Id. Item 15. The only time period specified for redelivery in the CF 4647 of January 16, 2001, was, however, the thirty day period stated in Item 14.

The Import Specialist, subsequent to consulting with the National Import Specialist regarding the proper classification of the merchandise and thereby determining the appropriate visa category, issued a third Notice to Redeliver. The third Notice to Redeliver was issued on February 14, 2001, within thirty days of the issuance of the second Notice to Redeliver.

It is the conclusion of the Customs Service, based on a review of the law and regulations, Headquarters ruling letters interpreting the regulations and the facts of this entry that the Notice to Redeliver issued on February 14, 2001, was timely issued. The release of the Check Group’s merchandise was initially timely conditioned and, thereafter, continually conditioned until Customs made its ultimate determination that the merchandise was misclassified, entered without the proper visa and redelivery was demanded. The Check Group, from the initial issuance of the Request for Information on November 22, 2000, through the issuance of the third Notice to Redeliver on February 14, 2001, was clearly and continually on notice that its merchandise had only been conditionally released and that the conditional release would conclude upon, initially, the forwarding of samples and, ultimately, the redelivery of the merchandise.

Counsel for the importer suggests that the second Notice to Redeliver, the notice issued on January 16, 2000, did not sufficiently inform the importer of a decision of the Customs Service that would have enabled the importer to avail itself of the administrative remedy of a protest. Counsel suggests that a decision to demand redelivery is a protestable decision and that a Notice to Redeliver must “contain enough information to enable the importer to protest the demand for redelivery.” See 19 U.S.C. 1514 (a)(4) (West 1999); HQ 225028 (Mar.14, 1994).

The importer’s understanding of the necessary sufficiency of a Notice to Redeliver is accurate, but fails to appreciate the fact that at no time since the issuance of the initial Customs notice, the Request for Information dated November 22, 2000, was the importer ever lead to conclude that its merchandise was not conditionally released. The second Notice to Redeliver clearly advised the importer that Customs questioned the accuracy of the classification of its entry and the correctness of the textile visa provided.

Counsel for the importer notes that the third Notice to Redeliver, dated February 14, 2001, indicates in Item 9 that redelivery is demanded as the result of a violation of 19 C.F.R. 141.113 (b). Paragraph (b) of section 141.113 concerns the redelivery of textile merchandise when the country of origin is in question.

The correct paragraph within section 141.113 that should have been noted in Item 9 of the February 14, 2001, CF 4647, is paragraph (c). It is the conclusion of this office that this error does not alter the ultimate decision in this protest. The importer was continuously and clearly on notice that the issue raised concerned the correct classification and, ultimately, the correct visa for the merchandise. Absent the proper textile visa, the merchandise in this entry is not entitled to admission into the commerce of the United States. The necessity of providing the correct visa was reiterated in Item 15 of the pertinent CF 4647.

HOLDING

The Protest should be DENIED in full.

The Notice to Redeliver issued on February 14, 2001, was issued timely.

The Check Group’s merchandise was “conditionally released” from Customs custody on November 22, 2000. The Check Group was continually on notice from November 22, 2000, that its merchandise was only “conditionally released.”

In accordance with Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, section 3 A. (11) (b), you are to mail this decision and Customs Form 19 to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with this decision must be accomplished prior to mailing this decision.

The Office of Regulations & Rulings will make this decision available to Customs Service personnel and to the public on the Customs Service Home Page of the World Wide Web, www.customs.gov, by means of the Freedom of Information Act and by other methods of public distribution sixty days from the date of this decision.

Sincerely,

Larry L. Burton
Chief

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See also:

• Tariff No.: 6203.42.40 - Men's or boys' trousers and shorts, not bibs, not knitted or crocheted, of cotton, not containing 15% or more by weight of down, etc
• Tariff No.: 6207.91.30 - Men's or boys' singlets and other undershirts, not knitted or crocheted, of cotton