HQ 221692: Application for Further Review of Protest No. 2704-8-004309; Interest on Overpaid Duties; 19 U.S.C. 1520(d) and 1505(c)

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 221692

                           December 3, 1990

   LIQ-1-CO:R:C:E 221692 PH

   CATEGORY:  Liquidation

   Regional Commissioner of Customs
   1 World Trade Center, Suite 705
   Long Beach, California 90831-0700

   RE: Application for Further Review of Protest No. 2704-8-004309;
       Interest on Overpaid Duties; 19 U.S.C. 1520(d) and 1505(c)

   Dear Sir:

       The above-referenced protest was forwarded to this office for
   further review.  We have considered the points raised by your
   office and the protestant.  Our decision follows.

   FACTS:

       According to the file, on July 3, 1986, the protestant
   imported 209,225 barrels (8,787,450 gallons) of unleaded gasoline
   stated by the protestant to be subject to duty of $109,843.13
   which the protestant paid.  The entry date for this importation
   was July 16, 1986, and the entry summary is dated August 1,
   1986.  Duty in the amount of $219,686.25 was ascertained to be
   due (based on a quantity of 209,225 barrels plus 8,787,450 gal-
   lons of gasoline, instead of the actual quantity (i.e., 209,225
   barrels or 8,787,450 gallons)).  The entry was liquidated on
   February 6, 1987, with duty in the amount of $219,686.25 and the
   protestant was billed for $122,784.58 (i.e., $109,843.12 in addi-
   tional duties ($219,686.25 minus the $109,843.13 already paid)
   plus $12,941.46 in interest).  There is a notation in the file to
   the effect that this amount was paid to Customs on April 4, 1988.
   The entry was reliquidated on August 19, 1988, with duty in the
   amount of $109,843.13 and the $109,843.12 was refunded to the
   protestant.

       The protestant on November 16, 1988, protested the
   reliquidation of the entry.  The protestant protests "the
   nonaccrual of interest during the period of time in which refunds
   are processed by the Customs Service", claiming "that interest
   should accrue and be paid on such funds which the Customs Service
   maintains in its accounts from the date of liquidation to the
   date of refund."  The position of the District Director of
   Customs is that "[i]nterest is calculated from the date increased
   duty bill is paid to date of reliquidation."
   ISSUE:

       In an entry liquidated with increased or additional duties
   and reliquidated with a refund of the increased or additional
   duties, is a protestant entitled to interest on the refunded
   duties and, if so, over what time period is the protestant
   entitled to interest?

   LAW AND ANALYSIS:

       Section 520(d), Tariff Act of 1930, as amended (19 U.S.C.
   1520(d)), the statute upon which the protestant bases the
   protest, provides, in part, that:

           If a determination is made to reliquidate an
           entry as a result of a protest filed under [19
           U.S.C. 1514], or an application for relief made
           under [19 U.S.C. 1520(c)(1)], or if reliquidation
           is ordered by an appropriate court, interest
           shall be allowed on any amount paid as increased
           or additional duties under [19 U.S.C. 1505(c)] at
           the annual rate established pursuant to that
           section and determined as of the 15th day after
           the date of liquidation or reliquidation.  The
           interest shall be calculated from the date of
           payment to the date of (1) the refund, or (2) the
           filing of a summons under [28 U.S.C. 2632],
           whichever occurs first.

       Thus, in order for interest to be allowed under this
   provision, there must be a determination to reliquidate for one
   of the cited reasons and an amount must have been paid as
   increased or additional duties under 19 U.S.C. 1505(c).  The
   first condition is met in this case (it is unclear from the file
   what the basis was for the determination to reliquidate; given
   that the reliquidation occurred more than 90 days after the
   liquidation (see 19 U.S.C. 1501) we assume for purposes of this
   ruling that the determination to reliquidate was made as a result
   of a protest filed under 19 U.S.C. 1514 or an application for
   relief made under 19 U.S.C. 1520(c)(1)).  Under 19 U.S.C.
   1505(c):

           Duties determined to be due upon liquidation or
           reliquidation shall be due after the date of that
           liquidation or reliquidation, and unless payment
           of the duties is received by [Customs] within 30
           days after that date, shall be considered delin-
           quent and bear interest from the 15th day after
           the date of liquidation or reliquidation at a
           rate determined by the Secretary of the Treasury.

       In this case increased or additional duties were paid under
   19 U.S.C. 1505(c).  Accordingly, the protestant is entitled to
   interest on the increased or additional duties calculated accord-
   ing to 19 U.S.C. 1520(d).  That section provides that such inter-
   est shall be calculated from the date of payment of the increased
   or additional duties to the date of refund of such duties.

       Our decision with regard to this protest is as follows.
   Interest on the increased or additional duties (i.e., the
   $109,843.12, not including the $12,941.46 in interest) shall be
   paid to the protestant.  The interest shall be for the period
   beginning with the date of payment of the increased or additional
   duties (i.e., the date that the $122,784.58 was paid, indicated
   in the file to be April 4, 1988) to the date of the refund of the
   $109,843.12 (not apparent from the file; as stated above, reli-
   quidation was on August 19, 1988).  The annual rate of interest
   to be used for calculating refunds during this time period was 9
   percent (see Notice of Calculation of Interest published in the
   Federal Register on March 21, 1988 (53 FR 9110)).

   HOLDING:

       In an entry liquidated with increased or additional duties
   and reliquidated with a refund of the increased or additional
   duties, a protestant is entitled to interest on the refunded
   duties.  Interest is calculated from the date of payment of the
   increased or additional duties to the date of refund of those
   duties.

                                 Sincerely,




                                 John Durant, Director
                                 Commercial Rulings Division