HQ 222597: Application for further review of Protest No. 2809-88- 002589 under 19 U.S.C. 1520(d)

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 222597

                        October 11, 1990

LIQ-9-CO:R:C:E  222597 CB

CATEGORY:  Liquidation

Regional Commissioner
U.S. Customs Service
300 N. Los Angeles Street
Suite 7401
Los Angeles, CA  90012

RE:  Application for further review of Protest No. 2809-88-
     002589 under 19 U.S.C. 1520(d)

Dear Sir:

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

FACTS:

     Protestant is alleging that the Customs Service has failed
to properly calculate the interest due on the refunded
overpayment of duties.

     According to the facts statement provided by protestant, in
March of 1982 an Import Specialist in the Port of Philadelphia
issued protestant a CF29 proposing a change in the classification
of a part on a liquid chromatograph.  The proposed rate advance
resulted in a dispute over classification that was resolved five
years later in a stipulated judgment on agreed statement of facts
that was favorable to protestant.  The stipulated judgment
provided for reliquidation at a lower duty rate along with
interest from July 22, 1985, the date of filing the summons.  The
Customs Service reliquidated the entries and paid interest on the
refunds.

     Entries made prior to February 14, 1984, were entered under
item 712.49, TSUS.  The entries were liquidated at a higher rate
under item 712.05, TSUS, and additional duties were paid.
According to protestant, the entries subject to this protest were
made after February 14, 1984, and they were made at the higher
rate as instructed by the Import Specialist.  No additional
duties were paid at liquidation because the higher rate had been
paid at the time of entry.  The entries were protested and
ultimately reliquidated as instructed by the Court of
International Trade.  The Customs Service has not paid interest
on the entries from the time of entry to the time of summons.

                               -2-



     Protestant claims that it is entitled to a refund of duties
and interest.  The interest is to run from the date of payment to
the date of the filing of the summons.  Additionally, protestant
is entitled to interest on excess duties tendered from the time
of the filing of the summons to the date of the refund as
provided for in the court order.  The Customs Service has
refunded interest in those cases where protestant entered the
merchandise at a lower rate but paid a higher rate upon
liquidation.

ISSUE:

     Whether protestant is entitled to the payment of interest
under 19 U.S.C. 1520(d) on excess duties paid covering the time
between the depositing of those duties and the filing of the
summons?

LAW AND ANALYSIS:

     The payment of interest on excess duties paid to Customs is
provided for in section 520(d), Tariff Act of 1930, as amended
(19 U.S.C. 1520(d)).  The statute provides, in part, that if an
entry is reliquidated "...interest shall be allowed on any amount
paid as increased or additional duties under section 1505(c) of
this title...."  Therefore, we must look at section 505(c),
Tariff Act of 1930, as amended (19 U.S.C. 1505(c)) to determine
which duties are subject to the payment of interest.  Section
1505(c) provides that final determination of duties owed is made
at the time of liquidation or reliquidation.  These two statutes
have been interpreted as providing that interest may be paid only
on duties found to be owed at liquidation.

     The Customs Service has previously addressed the issue of
the payment of interest on duties deposited at the time of entry.
As stated in HRL 220810, issued January 11, 1989, there is no
statutory authority for the payment of interest on excess duties
deposited at the time of entry.  As previously stated by Customs,
under 19 U.S.C. 1313a, appropriations are limited to such amounts
as may be necessary for refunds authorized by law.  Customs is
not authorized by law to pay interest on excess duties deposited
under 19 U.S.C. 1505(a).  We still adhere to that conclusion.
Protestant's reliance on Syva Co. v. United States, ___ CIT ___,
Slip. Op. No. 88-29 (March 8, 1988), is unfounded.  In Syva, the
court merely acknowledges that Customs is obligated to pay
interest on overpayment of duties.  The court did not address the
issue of when that obligation arises.  In the instant case,
Customs is not denying that it must pay interest on overpayment
                               -3-


of duties paid under 19 U.S.C. 1505(c).  It is Customs position
that the deposit of estimated duties does not arise under that
provision.  Estimated duties are required under paragraph (a) of
19 U.S.C. 1505.

     Protestant argues that Customs has failed to recognize the
clear intent of Congress in enacting the 1984 amendment to 19
U.S.C. 1505.  However, Customs position with regard to the
payment of interest on liquidations for refund was made clear at
the time of the Congressional hearings.  As stated at the time,
"[T]he bill in no way affects overpayment or underpayments of
estimated duties....  Customs neither pays interest on
liquidations for refund nor requires interest to be paid on
underpayments of estimated duties which were accepted by a
customs officer."  See Miscellaneous Tariff and Trade Bills:
Hearings and Written Comments Before the Subcommittee on Trade of
the House Comm. on Ways and Means, 98th Cong., 1st and 2nd Sess.
18, 627-628 (1984)(statement of Arthur I. Rettinger, General
Attorney, U.S. Customs Service).

     It is protestant's contention that it paid the additional
duties only because it was instructed to do so by the import
specialist who was relying on an administrative ruling adverse to
protestant.  Therefore, according to protestant, the higher rate
was a taking or an exaction and interest should be paid on the
estimated duties deposited at the time of entry.  However, under
19 U.S.C. 1505(a), Customs has the authority to require estimated
duties to be deposited in an amount deemed necessary to cover the
prospective duties on the entry.  See also, 19 C.F.R. 141.103.
Protestant's monies were fully refunded at the time of
liquidation.  Hence, there was no taking of protestant's monies.

HOLDING:

     Contrary to protestant's contention, protestant is not
entitled to the payment of interest on the amount of duties
deposited at the time of entry, pursuant to 19 U.S.C. 1520(d).
This protest should be denied.


                                Sincerely,




                                John Durant, Director
                                Commercial Rulings Division