HQ 222005: Protest No. 5301-9-000025; Timeliness of Protest; Rescissionof Protest Approval

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 222005

                         April 26, 1991

PRO-2-01 CO:R:C:E 222005 GG

CATEGORY:  Entry/Liquidation

District Director
U.S. Customs Service
701 San Jacinto
P.O. Box 52790
Houston, Texas 77052

RE:  Protest No. 5301-9-000025; Timeliness of Protest; Rescission
of Protest Approval

Dear Madam:

     This is in response to your memorandum dated December 11,
1989, in which you request advice on several issues raised by the
protest that is referenced above.

FACTS:

     Protestant entered merchandise under item 678.50, TSUS with
an entered value of $739,995.  The entry was automatically
liquidated by ACS on July 1, 1988.  Customs voluntarily
reliquidated the entry within 90 days of the automatic
liquidation, which resulted in both a reclassification under an
item number with a higher duty rate and a higher appraisal of the
merchandise.

     A bulletin notice of liquidation was posted on September 27,
1988.  For the limited purposes of generating a bill through ACS
and causing a courtesy notice to be mailed, the entry was
liquidated through the automated system on October 14, 1988.  To
prevent the appearance of a second reliquidation of the entry in
question, that entry was deleted from the October 14, 1988
bulletin notice. 
     
     The protestant's broker was an ABI broker with access to
ACS.  Protest No. 5301-9-000025, which cited the October 14, 1988
liquidation date contained in ACS, was filed on January 10, 1989. 

     
     A newly-assigned import specialist was directed to review
the protest.  This import specialist, who was unfamiliar with all
the circumstances of the case, was provided with only a
reconstructed entry since the original was unavailable.  The
reconstructed entry reflected the October 14, 1988 liquidation
date as the date of liquidation.  The import specialist agreed
with the protestant's position and approved the protest on
October 27, 1989.  Notice of the approval was sent to the
protestant.

     When the reconstructed entry was in the process of being
reliquidated in the protestant's favor pursuant to the import
specialist's approval, the liquidator discovered the original
entry.  The discrepancy in the liquidation date was noted, and,
because it called into question the timeliness of the protest,
the reliquidation was put on hold pending a resolution of that
issue.  It also raised the question of whether Customs can
rescind the approval of a protest.  Customs agrees with the
importer's position as stated in its protest, and would uphold
the allowance of the protest if possible.

ISSUE:

     1)  Whether a protest filed within 90 days of an entry
liquidated through ACS was timely, when the purpose of that
liquidation was solely to generate a bill and to precipitate the
mailing of a courtesy notice, and there had been an earlier
reliquidation, notice of which was posted more than 90 days
before the protest was filed?; and

     2)  Whether Customs may rescind the approval of a protest?

LAW AND ANALYSIS:

     Section 514 of the Tariff Act of 1930, as amended (19 U.S.C.
1514) provides, in pertinent part, that decisions of customs
officers as to the liquidation or reliquidation of an entry are
final and conclusive upon all persons, including the United
States and its officers, unless a timely protest is filed, or
unless a civil action contesting the denial of a protest is
commenced in the appropriate forum.  The first issue here is
whether protestant's protest, which sought to overturn Customs'
reliquidation of its entry, was timely filed.

     The statute fixes definitely the time within which a protest
may be filed:  19 U.S.C. 1514(c)(2) requires the protest to be
filed with Customs within 90 days after, but not before, notice
of liquidation or reliquidation.  The question therefore turns on
what was the legal notice of liquidation or reliquidation, and,
once that has been determined, whether the protestant filed its
protest within 90 days after, but not before, that notice.

     The only notice of liquidation or reliquidation that is
statutorily mandated is bulletin notice.  See Goldhofer
Fahrzeugwerk GmbH & Co. v. United States, 13 CIT  , 706 F.Supp.
892, 895 (1989), aff'd, 885 F.2d 858 (Fed.Cir. 1989); Tropicana
Products, Inc. v. United States, 713 F.Supp 415, 419 (1989). 
This form and manner for giving notice of liquidation of formal
entries is set down in sections 159.9(b) and (c) of the Customs
Regulations (19 CFR 159.9).  Applied here, the reliquidation that
was posted at the customhouse on September 27, 1988 was the only
legal notice of reliquidation.  The follow-up notice that
appeared on October 14, 1988 in ACS did not amount to notice of a
subsequent reliquidation, because it was never posted.

     The protest was filed on January 10, 1989, more than 90 days
after the posting of the bulletin notice.  Consequently, the
protest was untimely.  Untimely protests are invalid.  United
States v. Wyman, 156 F. 97, 84 C.C.A. 123 (Mo. 1907); see also
Gallagher & Ascher v. United States, 21 CCPA 313 (1933); Spiegel
Bros. v. United States, 21 CCPA 310 (1933).  Therefore the
protest at issue is invalid.

     The import specialist, who was basing his decision on the
reconstructed entry and therefore did not know of the protest's
invalidity, approved the protest on October 27, 1989.  The
approval was noted on Customs Form 19, the protest form, and a
copy was sent to the protestant.  The subsequent discovery of the
original entry by the liquidator led to the curtailment of the
reliquidation process and raised the question as to whether
Customs may rescind the approval of an invalid protest.  

     This issue was recently answered in the affirmative with
respect to timely protests which had not yet been reliquidated,
in Headquarters ruling letter 221723 TG, dated March 26, 1991. 
The rationale behind allowing rescission of an approval of a
timely protest was that, unlike the situation involving a protest
denial, no statutorily prescribed rights of the protestant would
be prejudiced by the rescission.  Rescinding an approval would
result in the denial of the protest, which the protestant could
contest by commencing an action in court within 180 days of the
mailing of the notice of denial.  In contrast, the rescission of
a denial of a protest would amount to an unlawful interference
with that 180-day period, which is set down by statute and is
triggered by the mailing of the notice of the denial.  See San
Francisco Newspaper Printing v. United States, 620 F.Supp. 738, 9
CIT 517 (1985).

     The case for rescinding an approval of a protest that is
invalid because it was untimely filed, and has not yet been
reliquidated, is particularly compelling.  This is because a
decision as to the liquidation of an entry is binding upon all
parties, including the government, unless that decision is timely
protested.  19 U.S.C. 1514; see also T.D. 46955.  The
significance of this is that Customs does not have the authority
to reliquidate an entry under 19 U.S.C. 1514 after it has
discovered that the contested liquidation has become final by
reason of the protestant's failure to file a timely protest. 
Therefore, Customs must rescind a protest approval which was
based on an untimely protest, if the untimeliness of the protest
has been discovered by Customs prior to reliquidation.

     You are directed to rescind the protest approval and to DENY
the protest.

HOLDING:

     1)  The only legal notice of liquidation is the notice
posted on the bulletin at the customhouse at the port of entry;
therefore, a protest is untimely when it was filed more than 90
days after the bulletin notice was posted, but within 90 days of
a subsequent liquidation that appeared only in ACS for the
limited purposes of generating a bill and courtesy notice.

     2)  A decision to allow a protest can be rescinded before
reliquidation, and must be rescinded if the protest was untimely
and its untimeliness was discovered by Customs prior to
reliquidation.

                               Sincerely,



                               John Durant
                               Director, Commercial