HQ 222523: Protest #1601-8-000014; Customs' authority to rescind adenial of protest

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 222523

                          July 31, 1991


LIQ-1 CO:R:C:E 222523  TLS

CATEGORY: Entry; Liquidation

District Director
U.S. Customs Service
200 East Bay Street
P.O. Box 20876
Charleston, South Carolina  29413-0876

RE: Protest #1601-8-000014; Customs' authority to rescind a
denial of protest


Dear Sir:

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

FACTS:

     This case involves a protest that was originally denied in a
Customs decision dated April 22, 1989 (HQ 220431).  The decision
held that the protestant, a surety, was still liable by the terms
of the properly executed bond even after the principal had been
discharged from obligation through bankruptcy proceedings.  It
also held that Customs properly appraised the imported
merchandise for reliquidation purposes and the subject entries
were timely reliquidated under 19 U.S.C. 1521.  You submit this
protest for further review of the question of whether or not
Customs may rescind a protest after it has been denied and the
denial has been issued to the protestant.  You also seek an
answer to whether or not Customs may reliquidate an entry after
it has been deemed liquidated.

     You have cancelled the denial of the original protest and
have notified the protestant of such through a letter dated June
27, 1990.  Customs has been faced with the issue of whether or
not it may rescind a protest decision after denial has been made
before the present case and we find the question to exist here.

ISSUE:

     Whether or not Customs may rescind a decision to deny a
protest for further review after such denial has been issued.



LAW AND ANALYSIS:

     The Court of International Trade has addressed the issue of
whether or not Customs may rescind the denial of a protest after
it has been issued to the protestant.  In San Francisco Newspaper
Printing Co. v. United States, 9 CIT 517, 620 F. Supp. 738
(1985), an importer filed a protest for further review subsequent
to the denial of a first protest.  The second protest was denied
as well and Customs determined, without action, that the first
protest should have only been denied in part.  The protestant
brought action against Customs contesting the denial of both
protests pursuant to 19 U.S.C. 1515.  Customs sought to dismiss
part of the action for lack of timeliness, contending that the
protestant did not file the action within 180 days of mailing of
notice of denial as required under 28 U.S.C. 2636(a)(1).  The
protestant claimed that timeliness was not at issue because the
denial of the first protest was rescinded pursuant its request to
do so under to 19 U.S.C. 1520(c).  Customs had not formally
responded to the request, however.  The pivotal question became
whether or not Customs has the authority to rescind the denial of
a protest after it has been mailed.

     The court held that Customs does not have the authority
under 19 U.S.C. 1515 to exercise jurisdiction over a protest
after it has been denied.  San Francisco Newspaper Printing Co.
v. United States, 9 CIT 517, 518-19 (1985).  It reasoned that
section 515 does not give Customs the right to rescind the denial
despite the fact that the statute allows Customs two years to
review the protest and make a decision.  The protestant had
argued that the rescission would be proper since it would be done
within the two-year limitation.  Id. at 518.  The protestant also
argued that the rescission would be proper under 19 U.S.C. 1520,
which allows for the correction of certain errors in customs
transactions.  The court rejected this argument as well, holding
that section 520 authorizes Customs to reliquidate an entry as a
remedy, but the rescission of a denial of protest is neither
contemplated nor authorized by the statute.  Id. at 519.

     In the present case, Customs wishes to reverse a denial of
protest after it has been published.  The agency in fact sent a
letter to the protestant dated June 27, 1990, notifying it that
the denial had been cancelled and the protest was being
reconsidered.  This action was taken without a request from the
protestant to do so.  Inasmuch as Customs has initiated this
action rather than the protestant, it can be distinguished from
the San Francisco Newspaper Printing case.  Rather than a case of
the protestant wishing to have an adverse decision reversed,
Customs wishes to modify a ruling that it now believes is not
correct.  We find such a distinction to be of no effect on the
applicability of the court decision to present case, however.  

     The court unequivocally stated that a protest is beyond the
jurisdiction of Customs after it has been denied.  The language
is clear and explicit in its meaning.  The ruling has not been
qualified by any exceptions or exclusions.  Consequently, we
cannot ignore the applicability of the San Francisco Newspaper
ruling in this instance.  The critical fact in this case, as it
was in the previous one, is that the denial has already been
mailed and thus the importer has constructive notice of the
decision.  Customs' jurisdiction over the case ended once the
protest was denied.  The protestant's recourse at that point was
to either initiate action in the Court of International Trade or
abandon the protest.  San Francisco Newspaper Printing, 9 CIT at
519.  Therefore, we must find that Customs' decision to cancel
the denial of protest #1601-8-000014 was done without authority
and is hereby considered null and void.

HOLDING:

     Customs may not rescind a decision to deny a protest for
further review once the decision has been issued to the party in
interest.

     The cancellation of the denial of protest #1601-8-000014 is
hereby rescinded and the decision to deny the subject protest in
full is reinstated.

     In view of our decision that Customs lacks authority to
rescind protest denials, we cannot consider any issue arising
from a protest that has already been denied.  Therefore, the
reliquidation issue is considered moot.

                               Sincerely,




                               John Durant, Director