HQ 223320: Protest 1303-90-000224; Suspension of Liquidation by Law; Item 851.60, TSUS (Subheading 9810.00.60, HTSUSA); 19 U.S.C. 1504; 19 U.S.C. 1514 Dear Sir:

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 223320

                        October 15, 1991

LIQ-11-CO:R:C:E 223320 PH

CATEGORY:  Liquidation

District Director of Customs
Baltimore, Maryland 21202

RE:  Protest 1303-90-000224; Suspension of Liquidation by Law;
     Item 851.60, TSUS (Subheading 9810.00.60, HTSUSA); 19 U.S.C.
     1504; 19 U.S.C. 1514
 
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:

     On April 17, 1983, the protestant imported certain
merchandise, described in the entry as "dental research
articles".  The date of the entry was April 20, 1983.  The
merchandise was entered under the duty-free provision for certain
articles for scientific or educational purposes in item 851.60,
Tariff Schedules of the United States (TSUS) (the corresponding
tariff provision in the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA) is subheading 9810.00.60). 

     On April 4, 1983, an application for duty-free entry of the
merchandise under consideration, under item 851.60, TSUS, was
filed with Customs by the Dental School of the University of
Maryland at Baltimore.  On July 29, 1985, the Customs office with
which this application had been filed forwarded the application
to the Department of Commerce for its review.  On the same date,
Customs advised the person who had signed the application for the
University of Maryland at Baltimore of this transmittal and that,
in the opinion of Customs, only four of the 29 articles for which
duty-free entry had been sought would qualify under item 851.60,
TSUS.  On August 1, 1985, the Department of Commerce returned the
application to Customs because the appropriate Customs official
had not signed the application form to indicate that the
application had been "accepted for transmittal to the Department
of Commerce."

     On September 22, 1988, Customs wrote to the University of
Maryland to advise that the processing of the application had not
been completed and the application had been inadvertently filed. 
Customs asked the University to advise whether it was still
interested in pursuing the application and, if so, to provide
additional information about the entry.  Customs stated in this
letter that if no response was received within 30 days, no
further action would be taken on the application.  No response
was received and the file was closed by Customs on November 4,
1988.

     According to information in the file, Customs had suspended
liquidation of the entry.  On September 21, 1989, a Notice of
Rate Advance was sent to the importer.  In this Notice, Customs
stated "[i]n the absence of application number and approval from
the Dept. of Commerce for duty free entry, the merchandise will
be dutiable at column 1 rate."  The entry was so liquidated on
March 9, 1990.

     On June 7, 1990, the subject protest was filed on behalf of
the importer.  In the protest, the protestant recounts the
background to the application for duty-free treatment by the
University of Maryland at Baltimore and states that the
University is resubmitting its application for approval and
requesting an extension to obtain the approved application from
Customs.  Alternatively, if this cannot be done, the protestant
requests that the entry be reliquidated as entered as a "deemed
liquidation" under 19 CFR 159.12(f).

ISSUES:

     (1)  When entry of merchandise is made under the duty-free
provisions of item 851.60, TSUS, and a properly stamped
application form for treatment under that provision is not
provided to the appropriate Customs port; is the entry "deemed
liquidated" as entered if Customs suspends liquidation of the
entry and takes no action to liquidate the entry until more than
six years after the entry when the entry is liquidated dutiable,
without regard to item 851.60?

     (2)  In the situation described in ISSUE (1), if the entry
is not "deemed liquidated" as entered, may the protestant be
given an extension of time to obtain an approved application for
treatment of the merchandise under item 851.60, TSUS, and may the
liquidation be reliquidated accordingly, if duty-free treatment
is approved for part or all of the merchandise covered by the
application?

LAW AND ANALYSIS:

     Initially, we note that the protest, with application for
further review, was timely filed under the statutory and
regulatory provisions for protests (see 19 U.S.C. 1514 and 19 CFR
Part 174).

     Item 851.60, TSUS, provided for the duty-free entry of
certain instruments and apparatus, under certain conditions
(included among these conditions are requirements that the
articles must be exclusively for use of the institution involved,
and not for distribution, sale, or other commercial use within 5
years after being entered), if entered for the use of a nonprofit
institution established for educational or scientific purposes. 
The Headnotes of Part 4, Schedule 8 of the TSUS (which contains
item 851.60), set forth comprehensive rules for the application
for, and approval of, duty-free treatment under the provision. 
Basically, applications were filed with Customs and forwarded by
Customs to the Department of Commerce for a finding.  The
Headnotes provided that the Departments of the Treasury (in which
Customs is located) and of Commerce could prescribe joint
regulations to carry out their functions under the Headnotes.

     The authorized joint regulations were, and are, found in 15
CFR Part 301.  Under 15 CFR 301.8(a)(4):

         If a claim for duty-free entry under tariff
         item 851.60 is made but is not accompanied by a
         copy of the properly stamped form, a deposit of
         the estimated duty is required.  Liquidation of
         the entry shall be suspended for a period of
         180 days from the date of entry.  On or before
         the end of this suspension period the applicant
         must file with the Customs Port a properly
         stamped copy of the form.  In the event that
         the Customs Port does not receive a copy of the
         properly stamped form within 180 days the
         instrument shall be classified and liquidated
         in the ordinary course, without regard to
         tariff item 851.60.

     Under 15 CFR 301.8(c):

         Notwithstanding the preceding provisions of
         section 301.8 any document, form, or statement
         required by regulations in this section to be
         filed in connection with the entry may be filed
         at any time before liquidation of the entry
         becomes final, provided that failure to file at
         the time of entry or within the period for
         which a bond was filed for its production was
         not due to willful negligence or fraudulent
         intent.

     The statute governing Customs liquidation of entries is
found in 19 U.S.C. 1504.  Under this provision, an entry of
merchandise not liquidated within one year of the date of entry
of the merchandise is required to be deemed liquidated as
entered, unless the period for liquidation is extended (when
requested by Customs because of the absence of required
information or when requested by the importer of record for good
cause) or suspended (when required by statute or court order) and
notice of the extension or suspension is given to the importer of
record (in the case of a suspension of liquidation, notice must
also be given to any authorized agent and surety of the importer
of record).  Also under this provision, any entry not liquidated
within four years from the date of entry is required to be deemed
liquidated as entered unless liquidation continues to be
suspended as required by statute or court order.  When such a
suspension of liquidation (i.e., a suspension continuing more
than four years after entry) is removed, the entry is required to
be liquidated within 90 days.

     The statutory provision relating to protests of Customs
decisions, including liquidations, is found in 19 U.S.C. 1514. 
Under this provision, the liquidation or reliquidation of an
entry is final and conclusive as to all persons unless a protest
is filed as provided in the provision.  Such a protest must be
filed within 90 days after but not before notice of liquidation
or reliquidation (19 U.S.C. 1514(c)(2)).

     In the case under consideration, a claim for duty-free
treatment under item 851.60, TSUS, was made at the time of the
entry of the merchandise but the entry was not accompanied by a
copy of the properly stamped form applying for such treatment. 
Pursuant to 15 CFR 301.8(a)(4), liquidation was suspended.  Under
that regulation, liquidation was supposed to be suspended for 180
days after which the entry was supposed to be liquidated, without
regard to item 851.60, if Customs did not receive a properly
stamped application form.  More than six years after the entry,
Customs sent the importer a Notice of Rate Advance and, more than
five months later, Customs liquidated the entry dutiable, without
benefit of item 851.60.

     As stated above, Customs should have liquidated the entry
under consideration, without benefit of item 851.60, TSUS, at the
expiration of the 180 day period for which liquidation was
supposed to be suspended under 15 CFR 301.8(a)(4).  However,
Customs did not liquidate the entry at that time on that basis. 
It is the position of Customs, in the case of an entry under a
tariff item granting conditionally free entry, that liquidation
is suspended until those conditions are breached or satisfied
(see 19 CFR 159.53).  In the case of entries under item 851.60,
liquidation is suspended for the five year period after entry in
which use of the entered article must be exclusively for the
institution involved, and the article may not be distributed,
sold, or otherwise used commercially (see Headnote 1, Part 4,
Schedule 8, TSUS).

     In the absence of evidence to the contrary in the file and
any such claim by the protestant, we assume that proper notice of
suspension of liquidation was given in this case (in this regard,
note the "presumption of regularity" that public officials have
discharged their duties in accordance with the applicable laws
and regulations (see Tropicana Products, Inc. v. United States,
713 F. Supp. 413, 418 (CIT 1989); aff'd, 909 F. 2d 504 (Fed. Cir.
1990)).  Although 19 U.S.C. 1504(d) provides that when
liquidation has been suspended for more than four years after
entry the entry must be liquidated within 90 days after removal
of the suspension, this provision has been held to be directory
only (Canadian Fur Trappers Corp. v. United States 884 F. 2d 563
(Fed. Cir. 1989)).  Therefore, Customs failure to liquidate an
entry within 90 days of removal of the suspension of liquidation
when liquidation was suspended more than four years after entry
does not result in a "deemed liquidation" of the entry.  The
protest is denied, with regard to this issue.

     The protestant timely protested the liquidation in this case
(i.e., the protestant protested the liquidation before the
liquidation became final).  A liquidation cannot become final
during the pendency of a timely and properly filed protest of the
liquidation (see United States v. New Drinks, 14 Ct. Cust. App.
16, T.D. 41530 (1926); see also, discussion of the finality of
liquidation in C.S.D. 86-21).  Under the regulations governing
entries under item 851.60, TSUS, any document, form, or statement
required to be submitted in connection with such entries may be
filed at any time before liquidation of such entries becomes
final (15 CFR 301.8(c); see also, 19 CFR 10.112).

     Because the liquidation of this entry has not become final
and the regulations governing entries under item 851.60, TSUS,
permit the filing of any document, form, or statement required in
connection with such entries at any time before liquidation of
the entries become final, the application for duty-free entry
under item 851.60, TSUS, is being forwarded to the appropriate
office in Customs for appropriate handling as a late filing of a
required document under 15 CFR 301.8(c).  The protest is granted,
with regard to that part of the protest requesting resubmission
of the application for duty-free entry under item 851.60. 

HOLDINGS:

     (1)  When entry of merchandise is made under the duty-free
provisions of item 851.60, TSUS, and a properly stamped
application form for treatment under that provision is not
provided to the appropriate Customs port; the entry may not be
"deemed liquidated" as entered if Customs suspends liquidation of
the entry and takes no action to liquidate the entry until more
than six years after the entry when the entry is liquidated
dutiable, without regard to item 851.60 (see, Canadian Fur
Trappers Corp. v. United States 884 F. 2d 563 (Fed. Cir. 1989)).

     (2)  In the situation described in ISSUE (1), the protestant
may be given, and is being given, an extension of time to obtain
an approved application for treatment of the merchandise under
item 851.60, TSUS.  The file is being transferred to the
appropriate Customs office for handling as a late filing of a
required document under 15 CFR 301.8(c).  Final action on the
protest should be suspended, pending action on the application. 
If duty-free treatment is approved for part or all of the
merchandise covered by the application, the liquidation will be
reliquidated appropriately.

     The protest is GRANTED, in part, and DENIED, in part.  A
copy of this decision may be sent to the protestant, but final
action on the protest should be delayed pending action on the
application for duty-free treatment under item 851.60, TSUS. 
When action on the application is completed, notice of the
decision on the protest should be given to the protestant on the
Form 19, Notice of Action, to be sent to the protestant.

                              Sincerely,




                              John Durant, Director
                              Commercial Rulings Division