HQ 223668: Application for Further Review of Protest No. 3901-90-100089; Liquidation Extensions; Reliquidation; 19 U.S.C. 1504; 19 CFR 159.12; 19 U.S.C. 1501

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 223668

                         March 3, 1993

LIQ-9-02-CO:R:C:E 223668 SLR

CATEGORY: Liquidation

District Director of Customs
610 South Canal Street
Chicago, IL  60607

RE:  Application for Further Review of Protest No. 
     3901-90-100089; Liquidation Extensions; Reliquidation;
     19 U.S.C. 1504; 19 CFR 159.12; 19 U.S.C. 1501

Dear Sir:

     The above-referenced protest was forward to our office for
further review.  We have examined its contents and our decision
follows.

FACTS:

     This protest involves twenty-eight entries consolidated 
for ease of review.  The entry dates range from 2-12-86 
to 5-30-86.

     The facts indicate that in January of 1986, Amdahl
Corporation (Amdahl), the protestant, began to import merchandise
from Canada through the port of Chicago.  The merchandise was
being entered in item 676.5435/Free, Tariff Schedules of the
United States Annotated (TSUSA), as data processing parts.  
In the opinion of the Chicago import specialist processing the
entry, however, the invoice merchandise description was too
exiguous to afford proper classification.  He suspected that 
the merchandise was being misclassified and believed the correct
TSUSA item number to be 684.6700/5%, a provision for
telecommunication parts.

     On February 25, 1986, a CF 28 requesting descriptive and
illustrative literature for the subject merchandise was sent to
Amdahl.  (The CF 28 concerned merchandise identical to, but not
the subject of, this protest.)  No response was received. 
Nonetheless, according to our file, MSAS America, the broker 
for Amdahl, confirmed that its client had received the request.  
 
     Subsequently, your office contacted Customs offices on the
West Coast.  It was learned that in February 1985, in response to
a CF 28 requesting the same information, Amdahl answered that it
did not have descriptive literature for the questioned individual
parts but did have descriptive literature for the products  
produced by the manufacturer of the parts.  Amdahl then indicated
that the products were used in telecommunications.
                              -2-

     On June 12, 1986, your office referred the misclassification
query to Customs Office of Enforcement for investigation and
subsequently extended the liquidations of the subject entries
pending the outcome of that investigation.  Customs computer
records indicate that the liquidation of each entry was extended
three times and that all of the entries were automatically
liquidated "no change" prior to their four-year anniversary date. 
Records further indicate that Customs reliquidated the entries at
an increased duty rate within ninety days of liquidation.

     The protestant currently challenges the reliquidation of the
subject entries at the higher duty rate.  The protestant claims
that the reliquidations under 19 U.S.C. 1501 were invalid because
they were carried out after the four-year limit set forth in 
19 U.S.C. 1504(d).  It maintains that the duty rate which applies
is that which was assessed by Customs at the time of liquidation.

     The protestant also challenges the legality of the
liquidation extensions.  It claims that the second and third
liquidation extensions were invalid because the U.S. Customs
Service showed no cause for further extension.  Moreover, it
claims that the liquidation extensions were invalid because the
extension notices did not give any reason for the extensions and
because some of the extension notices were not received.  In this
respect, the protestant maintains that the entries were deemed
liquidated as a matter of law at the duty rate asserted by the
protestant at the time of entry.

     On July 9, 1992, a representative from Amdahl, along with
counsel for the protestant, met with Customs Headquarters
officials.  A September 28, 1992, submission followed.

ISSUES:

     Whether Customs properly reliquidated the subject entries.

     Whether Customs properly extended the liquidation of the
subject entries.

LAW AND ANALYSIS:    

     Section 504 of the Tariff Act, as amended (19 U.S.C. 1504)
provides:

          (a)  Liquidation.--Except as provided in subsection (b)
     of this section, an entry of merchandise not liquidated
     within one year from:

               (1)  the date of entry of such merchandise;

                         *    *    *

                              -3-

     shall be deemed liquidated at the rate of duty, value,
     quantity, and amount of duties asserted at the time of 
     entry by the importer, his consignee, or agent.

          (b)  Extension.--The Secretary may extend the period
     in which to liquidate an entry by giving notice of such
     extension to the importer, his consignee, or agent in 
     such form and manner as the Secretary shall prescribe in
     regulations, if--

               (1) information needed for the proper appraisement
          or classification of the merchandise is not available
          to the appropriate customs officer;

               (2) liquidation is suspended as required by
          statute or court order.

               (3) the importer, consignee, or his agent requests
          such extension and shows good cause therefor.

                         *    *    *

          (d)  Limitation.--Any entry of merchandise not
     liquidated at the expiration of four years from the
     applicable date specified in subsection (a) of this    
     section shall be deemed liquidated at the rate of duty,
     value, quantity, and amount of duty asserted at the time 
     of entry by the importer, his consignee, or agent, unless
     liquidation continues to be suspended as required by 
     statute or court order.  *    *    *

     Section 501 of the Tariff Act of 1930, as amended (19 U.S.C.
1501), provides:

          A liquidation made in accordance with section
          1500 of this title or any reliquidation thereof
          made in accordance with this section may be 
          reliquidated in any respect by the appropriate
          customs officer on his own initiate, notwithstanding
          the filing of a protest, within ninety days from
          the date on which notice of the original 
          liquidation is given the importer, his consignee
          or agent.  *    *    *

     The protestant claims that the reliquidations under 
19 U.S.C. 1501 were invalid because they were carried out 
after the four-year limit set forth in 19 U.S.C. 1504(d).
                    
     Customs timely liquidated the subject entries within the 
19 U.S.C. 1504(d) four-year time period and timely reliquidated
the entries ninety days thereafter.  Consequently, Customs
properly reliquidated the entries.
                              -4-

     Customs processes the liquidation of entries by using a
computer listing to inform each appropriate Customs officer of
the liquidation status of the listed entries.  This listing or
"alert report" informs the officer that listed entries would be
scheduled for liquidation on the listed dates.  If the
appropriate officer determines that a listed entry should not be
liquidated, that officer can reset that scheduled date. 
Likewise, if the officer determines that a listed entry should be
liquidated on schedule, the bulletin notice will be so prepared
by the computer.  The computer alerts the appropriate Customs
officer and prepares the bulletin notice of liquidation.  The
computer does not liquidate entries; the determination whether to
liquidate is done by the appropriate Customs officer as required
by 19 U.S.C. 1500.  A liquidation of an entry after review by the
an appropriate Customs officer is a liquidation under 19 U.S.C.
1500 even if that officer uses a computer to generate the
bulletin notice of that liquidation.  Any liquidation done
pursuant to 19 U.S.C. 1500 is subject to a reliquidation under 
19 U.S.C. 1501.

     The protestant challenges the legality of the liquidation
extensions.    

     The regulations indicate that Customs can extend the
liquidation of an entry for consecutive one-year periods not 
to exceed three years in total for the reasons set forth in 
19 U.S.C. 1504(b) quoted above.  19 CFR 159.12.

     Customs properly extended the liquidation of the subject
entries the first time because more information was needed in
order to classify the goods.  The instant case presented
inconclusive evidence of classification; consequently, prior 
to the first-year anniversary dates of the subject entries,
Customs sought assistance in fact-finding from its Office of
Enforcement.  (See International Cargo & Surety Insurance Co.
v. United States, 15 CIT    , 779 F. Supp. 174, 178 (1991), 
where the Court of International Trade (CIT) construed the term
"information" in 19 U.S.C. 1504(b)(1) as including internal
information sought by Customs.)

     The protestant maintains that there was no justification for
extending the liquidations beyond the first one-year extension.

     In St. Paul Fire & Marine Insurance Co. v. United States,
Slip. Op. 92-125, Vol. 26 Cust. B. & Dec. No. 35, p. 40
(August 26, 1992), the CIT addressed the reasonableness of the
length of an extension under 19 U.S.C. 1504.  In St. Paul Fire,  
Customs extended the liquidations of certain entries three 
times (in the case of some of the entries, two times) because 
it was awaiting receipt of information from the importer to
support the claim for entry under TSUSA item number 807.00.  

                              -5-

(Item 807.00, TSUSA, provides duty-free treatment for imports 
of articles assembled abroad with components produced in the
United States.  Classification of merchandise in item 807.00,
TSUSA, is conditioned upon the importer's submission to Customs
of supporting documentation including certificates of origin 
and actual cost data.)  St. Paul Fire & Marine Insurance Co. 
(the surety for the importer and the plaintiff in the case)
maintained that the extensions were invalid because Customs 
had all the information it needed to properly classify the
merchandise, i.e., to deny the claimed 807.00 classification, 
by the second anniversary date of each entry and because the
total length of time of the extensions for each entry was
unreasonable.  The Court held that Customs acted reasonably 
in extending the liquidation the first time because Customs      
lacked the information to liquidate the entries under the proper
classification (id. at 40).  After stating that the number of
extensions of liquidation must be reasonable in light of 
the circumstances or "relative to the situation" (id. at 41), 
the Court held that the second and third extensions were
unreasonable, citing the failure of the importer to submit the
required documentation within two years from the date it entered
the merchandise or to even make any effort to contact Customs
concerning the entries, and the failure of Customs to contact the
importer about the missing documentation until after the third
(in some cases, the second) extension of the liquidations.

     The instant case is distinguished from St. Paul Fire in 
that Customs did not have enough information to classify the
merchandise prior to the second and third liquidation extensions
of the subject entries.  The enforcement investigation which
commenced prior to the first extension of the subject entries
continued throughout the three years preceding the liquidation 
of the subject entries.  Consequently, evidence of the proper
classification of the merchandise prior to the second and third
anniversary dates of the subject entries remained inconclusive. 
Therefore, in light of the circumstances, Customs properly
extended the second and third liquidations of the subject
entries.

     The protestant maintains that it did not receive any notice
of extension for three of the subject entries, and for the other
twenty-five entries, it received only some of the notices.  

     Customs must give notice of the extension of liquidation to
the importer, his consignee or surety in the form and manner
prescribed in the regulations.  The regulations provide that
Customs shall give notice on Customs Form 4333-A, appropriately 
modified, and the notice shall state the reason for the
extension.  19 CFR 159.12(b).  Failure to provide such notice
results in liquidation by operation of law.  Enron Oil Trading
and Transportation Co. v. United States, Slip Op. 91-91, Vol. 25
Cust. B. & Dec. No. 44, p. 18, 19 (Sept. 27, 1991) (citing Pagoda
                              -6-

Trading Co. V. United States, 9 CIT 407, 411, 617 F. Supp. 96, 99
(1985), aff'd, 804 F.2d 665 (Fed. Cir. 1986)).

     Customs computer records indicate that all of the extension
notices were sent.  Government officials are entitled to a
presumption that their duties are performed in the manner
required by law.  Star Sales & Distributing Corp. v. United
States, 10 CIT 709, 710, 663 F. Supp. 1127, 1129 (1986). 
Therefore, a presumption arises that proper notice was given. 
This presumption, however, is not conclusive and may be rebutted
by evidence indicating that notice was not received.

     In Enron, the Court of International Trade found that an
affidavit from the importer's recordkeeper, stating that an
extension notice had not been received, was sufficient to rebut
the presumption.  Here, the protestant baldly asserts that it did
not receive several of the extension notices, but it does not 
provide legally sufficient evidence to support its assertion. 
Consequently, the protestant has failed to rebut the presumption
that proper notice was given.

     The protestant maintains that the liquidation extension
notices did not adequately inform the protestant of the reason
for the extensions.  Copies of the extension notices read: 

          THE LIQUIDATION OF THIS ENTRY HAS BEEN EXTENDED.
          ADDITIONAL TIME IS REQUIRED BY CUSTOMS TO PROCESS
          THIS TRANSACTION.  NO ACTION IS NECESSARY ON YOUR 
          PART UNLESS INFORMATION IS SPECIFICALLY REQUESTED
          BY CUSTOMS.

     The CIT previously has been presented with this very
language and considered it to be sufficient reason for extension. 
See Enron, supra, at 21.

     The protestant maintains that the language "NO ACTION 
IS NECESSARY ON YOUR PART UNLESS INFORMATION IS SPECIFICALLY
REQUESTED BY CUSTOMS," included in the notices, is inconsistent
with Customs basis for extending the liquidations, i.e., that
additional information was needed in order to classify the goods.

     At the time of each notice, Customs, through its Office of
Enforcement, was engaged in obtaining the evidence necessary to
finally liquidate the entries.  The language of the notice is
fully consistent with this ongoing activity.

HOLDING:

     Customs properly reliquidated the subject entries under 
19 U.S.C. 1501.  Customs timely liquidated the entries within the
19 U.S.C. 1504(d) four-year time period and timely reliquidated
the entries ninety days thereafter.
                              -7-

     Customs properly extended the liquidations of the subject
entries under 19 U.S.C. 1504.  Customs had good cause to extend
the liquidations; the liquidation extension notices provided
adequate reason for the extensions; and the protestant has 
failed to rebut the presumption that the extension notices 
were received.

     You should deny the protest in full.  A copy of this
decision should be attached to the Customs Form 19 and mailed to
the protestant as part of the notice of action on the protest.

     
                                Sincerely,


                               
                                John Durant, Director
                                Commercial Rulings Division