HQ 221385: Request for further review of protest #3001-6-000170concerning the extension of liquidation of several entries under19 U.S.C. 1504(b)(1).

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 221385

                        September 23, 1994


LIQ-11 CO:R:C:E 221385  

CATEGORY: Entry; Liquidation

District Director
U.S. Customs Service
1000 Second Avenue  Room 2200
Seattle, Washington  98104

RE: Request for further review of protest #3001-6-000170
concerning the extension of liquidation of several entries under
19 U.S.C. 1504(b)(1).


Dear Sir:

     We have received your memorandum of August 25, 1986,
forwarded to us from the Pacific regional office requesting
further review of the above-referenced protest.  Upon review of
your position and the protestant's arguments, we have reached a
decision that is discussed in detail below.

FACTS:

     The four subject entries were made between October 12 and
October 30, 1984.  The merchandise entered was clip-on dolls from
Korea.  On November 6, 1984, Customs issued a redelivery notice
to Bill Monson Trading Co. [hereafter "importer" or "Monson"]
based on a belief that the dolls' entry constituted a copyright
infringement under 17 U.S.C. 602   and 603 and 19 CFR 141.113. 
The importer filed a protest to this action on December 5, 1984,
which was denied in full in a Customs decision dated April 26,
1985.  Customs soon after initiated a penalty claim on the
importer because of the continued non-redelivery of the entry
requested in the 11-6-84 notice.  Customs and the importer
reached a settlement of the penalty issue on November 25, 1985,
in which the importer agreed to pay liquidated damages of
$644.00.

     Customs shortly thereafter issued a CF 29 to the importer,
dated December 12, 1985, informing it that liquidation on the
entries had been extended but they now were being forwarded to be
liquidated.  The importer responded to the CF 29 by writing a
letter to Seattle Customs which questioned why the entries had
not been liquidated 12 months after the date of entry.  Monson
specifically cited Pagoda Trading Corp. v. United States, 804
F.2d 665 (1986), to support its claim that the entries should
have been liquidated by operation of law.  Customs wrote back to
the importer on February 7, 1986, notifying it that the entries
had indeed been forwarded and stated that Monson could file a
protest if it believed the liquidations were incorrect.  The
entries were liquidated on February 21 and March 21, 1986.  The
importer subsequently filed this timely protest with Seattle
Customs on May 13, 1986.

     Customs records show that each of the four entries was
extended and that the notices of extension were issued on August
24, 1985.  The entries had been made on October 12, 22, 29, and
30, 1984.  Customs records show that the extensions were made
because Customs believed that it needed more information in order
to correctly appraise and classify the merchandise.

ISSUE:

     Whether the protestant has shown that the extensions were
the result of an abuse of discretion by Customs.

LAW AND ANALYSIS:

     The protestant does not contest the demand for redelivery or
the copyright infringement findings that led to the demand.  The
sole issue of this protest is whether or not the extensions of
the subject liquidations were valid.  The relevant law is found
under 19 U.S.C. 1504(b), which reads in part as follows:

     (b) Extension-- The Secretary may extend the period in
     which to liquidate an entry by giving notice of such
     extension to the importer, his consignee, or agent in
     such form and manner as the Secretary shall prescribe
     in regulations, if--

          (1) information needed for the proper
          appraisement or classification of the
          merchandise is not available to the
          appropriate customs officer;...
     
Under 19 U.S.C. 1504(a), it is provided that entries not
liquidated within one year from either the date of entry, the
date of final withdrawal of all such merchandise covered by
warehouse entry, or the date of withdrawal of merchandise from
warehouse for consumption, shall be deemed liquidated at the rate
of duty, value, quantity, and amount of duties asserted by the
importer at the time of entry.

     The protestant asserts that the subject entries were deemed
liquidated one year from the dates of entry, because it received
no notice of the extensions and Customs had no valid reason to
extend the liquidations.

     The protestant cites to Pagoda Trading Corp. v. United
States, supra, for the proposition that entries are deemed
liquidated under section 504(a) when there exists no reason for
suspending or extending liquidation.  In Pagoda Trading, the
trial court had held that the suspensions of liquidation of the
entries in that case were to be lifted once the reason for such
suspensions ceased to exist.  The entries in Pagoda were
originally suspended pursuant to a countervailing duty order
issued by the Department of Commerce.  Commerce had revoked the
order with directions to Customs to proceed with liquidations. 
At this point Customs had several months to proceed with the
liquidations but instead sent a notice of  to the importer.  The
trial court subsequently found that there was no valid reason for
continuing  on the liquidations and therefore the entries were
deemed liquidated by operation of law.  The Federal Circuit
affirmed, holding that Customs had failed to demonstrate why the
entries should not have been deemed liquidated or why suspensions
were continued after the revocation of the order that it was
predicated upon.

     The issue is whether there was any valid basis for Customs
to issue the four notices of extensions on August 24, 1985.  The
entry documents show that Customs determined that the
classifications asserted by the protestant were not correct.  The
protestant, on this protest and in its answer to the Notice of
Action on the CF 29, did not dispute Customs determination on the
correct classification.

     The protestant asserted on the first entry that the goods
were classifiable under item 737.3500, Tariff Schedules of the
United States (TSUS), which covered toy figures of animate
objects, except dolls, not having a spring mechanism, not stuffed
and wholly or almost wholly of metal.  The protestant also
claimed the benefit of temporary legislation provided by item
912.20, TSUS.  The protestant asserted classification under item
737.3500, TSUS, for the other three entries, but did not claim
the benefit of item 912.20, TSUS, on those entries.

     Customs determined that the goods were classifiable under
item 737.2425, TSUS, as dolls not over 13 inches in height and
were not entitled to the benefit provided in item 912.20, TSUS. 
In order to reach that result, Customs had to determine that the
protestant's goods were not stuffed, were not wholly or almost
wholly of metal and were dolls rather that just a figure of an
animate object other than a doll.  It seems clear that several
factual and legal considerations had to be made by Customs in
order to properly classify the goods.  It is significant that the
protestant does not challenge Customs determination on the change
in classification.

     The case of Detroit Zoological Society v. United States, 10
CIT 133 (1980) discusses the scope to "information" within 19
U.S.C. 1504(b)(1).  There, as here, the plaintiff argued that
Customs did not need any further information in order to classify
the goods properly.  As here, there was a difference between the
classification asserted by the importer and the classification
determined by Customs.

     In order to prevail, the protestant must show that all
reasonable bases for making an extension were eliminated.  St.
Paul Fire & Marine Insurance Co. v. United States, 6 F.3d 763,
768 (Fed. Cir. 1993).  That court concluded that for statutory
purposes and with the requisite notices, Customs may employ up to
four years to liquidate so long as the extensions are not abusive
of its discretionary authority.  The protestant here has not met
that burden.

     The St. Paul Fire & Marine Insurance Co. court also made it
clear that the period of extension runs from the end of one-year
period beginning with the date of entry.  Op. Cit. at 767.  The
one-year period in 19 U.S.C. 1504(a) ended for the four entries
here on October 12, 22, 29, and 30, 1985.  The extension periods
run from those dates and would end on October 12, 22, 29, and 30,
1986, respectively.  The liquidations on February 21, 1986 and
March 21, 1986 were within those periods.

     The protestant asserts that ..."there is no evidence that
any suspension or extension was issued or received by either
importer or importer's customs broker..."  Customs records show
that extensions notices were issued on August 24, 1985 for the
four entries.  It seems clear that the protestant's assertion of
non-receipt does not even meet the test approved by the lower
court in the St. Paul Fire & Marine Insurance Co. case.  Since
the appellate court vacated the lower court's decision there, we
find that the protestant here has failed to rebut the presumption
established by the Customs records of issuance.

HOLDING:

     The protestant has failed to show that the extensions were
improper under 19 U.S.C. 1504(b) and has failed to rebut the
evidence that shows that the extension notices were issued
timely.  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, Lexis, Freedom of
Information Act and other public access channels.

                              Sincerely,




                              John Durant, Director
                              Commercial Rulings Division