CIT Says Valid Protest Must Meet All Reg Requirements, Dismisses Case on Classification of Rolls Royce
Customs protests must strictly adhere to statutory and regulatory requirements in order to be valid, said the Court of International Trade in a Feb. 23 ruling (here). Even if it’s obvious that a document is intended as a protest, the protest is not valid unless it includes all required information in the prescribed format, said the court as it dismissed a challenge to the classification of an imported Rolls Royce because the underlying protest wasn’t valid.
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The 1958 Rolls Royce Silver Cloud, owned by BBS Automotive Group (which does business as Carriage House), had been originally imported in the 1970s. Carriage House exported the vehicle to the United Kingdom in March 2012 for auction, but the car didn’t sell. The vehicle was then returned to Carriage House in the U.S. by the auction company, with Ovan International acting as importer of record. On the entry, Ovan classified the Rolls Royce under duty-free HTS subheading 9801.00.25 for reimported merchandise. CBP instead liquidated the entry on Feb. 22, 2013 under subheading 8703.23.00, dutiable at 2.5%, and sent Ovan a bill for $23,641 for the resulting tariffs and fees.
Ovan and Carriage House had been in communication with CBP and, partially in response to an informal request for information made by an CBP officer over the phone, on April 8, 2013 emailed a sworn affidavit from the president of Carriage House asking CBP to “waive and cancel all duty, interest and related charges relative to” the Rolls Royce. In June, Ovan and Carriage House’s lawyer emailed the CBP officer to say they hadn’t heard back. Finally, on Aug. 30, 2013, which is 189 days after liquidation, they filed a formal protest on CBP Form 19. CBP said the protest was past the 180-day deadline and denied it.
Although Ovan paid the duties to get the case in court, CIT dismissed Ovan’s lawsuit because it didn’t file either the affidavit or the protest. By law, only the party that filed the protest or its surety can challenge the denial of a protest, regardless of who served as importer of record, said CIT. The court also found the formal protest filed by Carriage House came too late, which meant the protest wasn’t valid and CBP was right to deny it. That left the affidavit from Carriage House’s president, which the company now argued was a formal protest and, having been filed 46 days after liquidation, was timely as well.
Carriage House said the affidavit conveyed all the necessary information for a CBP official to recognize and act on its protest, citing several 19th century court cases. But CIT noted the regulations for protests have since become more stringent, requiring information on the protestant, liquidation dates, the merchandise at issue, and the nature of the objection, as well as that the form be clearly labeled “protest.” Although Carriage House’s affidavit met almost all of the requirements of 19 CFR 174, it was not clearly labeled protest or filed on CBP Form 19, and did not list the liquidation date of the entry.
With no valid protest existed to serve as the basis of a lawsuit, CIT dismissed the case. “In the past, the court could have readily concluded that the [affidavit] constituted a valid protest, but at present, in order for it to be a valid protest the [affidavit] must have met all of the ‘straightforward’ and ‘not difficult to satisfy’ mandatory statutory and regulatory requirements governing the validity of a protest, which it did not,” said CIT.
(Ovan Int’l, Ltd. v. U.S., Slip Op. 15-17, CIT # 13-00390, dated 02/23/15, Judge Musgrave)
(Attorneys: Julius Cohn of Cohn & Spector for plaintiffs Ovan International, Ltd. and BSS Automotive Group, Inc.; Alexander Vanderweide for defendant U.S. government)