HQ 220105: Application for further review of Protest Nos. 5201-4- 000144; 5201-4-000167; 5201-4-000168; 5201-4-000169; and 5201-4-000303; injunction of CIT restraining liquidation; voidable liquidation.

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 220105

                         April 26, 1991 

PRO-2-05/LIQ-4-02-CO:R:C:E 220105 JR

CATEGORY:  Entry/Liquidation

Deputy Assistant Regional Commissioner of Customs (C&V)
Southeast Region
909 S.E. First Avenue
Miami, Florida 33131

RE:  Application for further review of Protest Nos. 5201-4-
     000144; 5201-4-000167; 5201-4-000168; 5201-4-000169; and
     5201-4-000303; injunction of CIT restraining liquidation;
     voidable liquidation.

Dear Sir:

     The above-referenced protest was forwarded to our office for
further review.  We have considered the facts at issue.  Our
decision follows.

FACTS:

     In Protest No. 5201-4-000168, footwear consisting of one
container of 432 cartons of men's shoes, leather, 4371 pairs
(classified under TSUS item numbers 700.3550; 700.2980; 700.2960;
700.5836), was imported at Port Everglades, Florida, from
Alicante, Spain.  The date of the entry was October 22, 1980, and
estimated duties of $6,854.55 were paid on November 5, 1980.  On
December 9, 1980, the importer/protestant was notified that
liquidation was suspended.  See 19 U.S.C. 1504(b)(2), (c).  The
importer/protestant received a second extension on August 18,
1982 and a third on September 12, 1983.  

     On October 12, 1983, Customs sent the importer a Notice of
Action (CF 29) stating that the entry was in the liquidation
process per the Commerce Department's notice of final results of
administrative review of a countervailing duty order, published
in the Federal Register on September 8, 1983 (see 48 FR 40536),
finding that non-rubber footwear from Spain was subject to a
countervailing duty of 4.91% of the f.o.b. invoice price on all
shipments entered, or withdrawn from warehouse for consumption,
on or after January 1, 1980 and exported on or before December
31, 1980.   The Court of International Trade (CIT) issued a
temporary restraining order on October 20, 1983, against the
liquidation of non-rubber Spanish footwear entries made between
January 1, 1980 through December 31, 1980.  A preliminary
injunction was later ordered by the CIT on November 9, 1983,
restraining the Customs Service from liquidating the above-
specified entries.  See Volume Footwear Retailers of America v.
United States, 10 CIT 12 (1986).  Notwithstanding the outstanding
court order, Customs liquidated on February 3, 1984, the footwear
entries with an assessment of a countervailing duty of 4.91% and
an interest rate of 11%, in accordance with Headquarters' Telexed
Instructions #83/214 of September 30, 1983.   

     The protestant timely filed a protest on March 21, 1984. 
See 19 U.S.C. 1514(a).  The protestant contends that the since
Customs liquidated the entries in contravention of a court order
restraining such liquidation, the liquidation was invalid.  He
further contends that regardless of the restraining order, there
is no basis under law for an assessment of countervailing duties
or interest on these entries.

     The other four protests involve the same merchandise and the
same importer/protestant; however, although the entry and
liquidation dates differ in each protest, they all fall within
the enjoined time period: 
(i.e., Protest #144: entry 10-15-80; liquidation 12-16-83
          "    #167:   "   10-20-80;     "       02-03-84
          "    #169:   "   08-04-80;     "       02-03-84
          "    #303:   "   07-29-80;     "       02-24-84).
Our file lacks the background documents on these four protests. 
We assume that the field office has access to the necessary
information.  Despite the fact that we will limit our discussion
to Protest #168, the same principles are equally applicable to
the other protests.

ISSUE:

     Is the liquidation of an entry by Customs valid when there
is an outstanding court injunction restraining the liquidation of
particular entries?

LAW AND ANALYSIS:

     19 U.S.C. 1514(a) provides that all administrative decisions
as to value, classification, duty, exclusion, liquidation or
reliquidation, etc., including the legality of all orders and
findings entering into such decisions, are "final and conclusive
upon all persons (including the United States and any officer
thereof)" unless the decision is timely protested.  Although
Customs may not "unliquidate" a liquidation, see United States v.
UTEX International, Inc., 6 Fed. Cir. (T) 166 (1988), when a
liquidation has been timely protested, the liquidation does not
become final and the correctness or legality of the liquidation
remains in issue.  See Headquarter Ruling Letters, HQ 221591,
dated February 13, 1990, and HQ 222364, dated August 21, 1990. 
In this case, the protestant timely-filed a protest under 19
U.S.C. 1514 against the validity of Customs' liquidation and the
exaction of countervailing duties and interest.

     No entries between January 1, 1980 and December 31, 1980,
could be legally liquidated while there was an outstanding
injunction against the liquidation of these entries of non-
rubber footwear from Spain.  A preliminary injunction dissolves
either when the case is dismissed or a final judgment is entered. 
Volume Footwear Retailers, supra.  We therefore find the
liquidation on February 3, 1984, to be erroneous and thus
voidable.  See 19 CFR 159.51 and 19 CFR 159.58; see generally
Omni USA, Inc. v. U.S., 840 F.2d 912, 915 (Fed. Cir.), cert.
denied, 109 S.Ct. 56 (1988); United States v. A.N. Deringer,
Inc., 66 CCPA 50, CAD 1220, 593 F.2d 1015, 1020 (1979).  

     As the original liquidation is not considered final due to
the importer's timely protest, Customs may reliquidate based upon
the final results of the Administrative Review of the
Countervailing Duty Order [C-469-022] issued by the Commerce
Department (48 FR 40536).  The injunction against liquidation of
non-rubber footwear dissolved on May 15, 1985, when the Volume
Footwear Retailers case was dismissed.  A reliquidation by
Customs in this case is now proper since the validity of the
assessment of countervailing duties and interest was upheld by
the Court of International Trade and the U.S. Court of Appeals
for the Federal Circuit in Canadian Fur Trappers Corp. et. al. v.
United States, 22 Cust. B. & Dec. No. 33, 12 CIT 612, 691 F.
Supp. 364 (July 8, 1988), aff'd, 23 Cust. B. & Dec. No. 39, 884
F.2d 563 (C.A. Fed. Cir. August 29, 1989).  See Headquarters
Ruling Letter, HQ 222364, dated August 21, 1990.  We find that
the issues have been finally settled and that Customs may now
properly reliquidate the footwear entries.

     With regard to the amount of interest, all interest either
due or payable on overpayment or underpayment of Customs duties
determined at liquidation shall be in accordance with the
Internal Revenue Code rates established by 26 U.S.C. 6621 (simple
rate of interest) or 26 U.S.C. 6622 (compounding interest). 
Enclosed are copies of Headquarters' Telexed Instructions #85-
415 of December 16, 1985 and Headquarters' Telexed Instructions
#86-1 of January 7, 1986, which were issued after these protests
were referred for further review.  Please follow these Telexs in
determining the interest payable on reliquidation of the entries. 

HOLDING:

     A liquidation by Customs of certain entries, while there is
an outstanding court order enjoining liquidation is an unlawful
liquidation and, accordingly, is considered voidable.  In this
case, since the importer timely protested against the erroneous
liquidation on the basis that the Customs Service liquidated
contrary to a court order, Customs can allow the protest and
reliquidate in accordance with the Commerce Department's final
CVD order and the applicable interest laws.  

     You are hereby instructed to allow the protest due to the
erroneous liquidation, and to reliquidate with an assessment of
countervailing duties (4.91%) and interest as per this decision.

                               Sincerely,




                               John Durant, Director
                               Commercial Rulings Division