Application for Further Review of Protest No. 2704-92-103114 concerningcountry of origin marking on computer software and computer mouse units; 19U.S.C. 1304(f).

HQ 734894 July 18, 1994 MAR-2-05 CO:R:C:S 734894 KR CATEGORY: Marking District Director U.S. Customs Service Los Angeles 300 S. Ferry Street, Suite 1001 Terminal Island San Pedro, CA 90731 RE: Application for Further Review of Protest No. 2704-92-103114 concerning country of origin marking on computer software and computer mouse units; 19 U.S.C. 1304(f). Dear Sir: This is in response to Protest No. 2704-92-103114 and the application for Further Review dated November 6, 1992, submitted by Spring Circle Technology, Inc. ("protestant") against your decision to assess marking duties in connection with an entry of imported computer softwear and computer mouse units. FACTS: Entry for 6000 packages of Microsoft Windows 3.0 software and 300 Microsoft Mouse units were made on February 25, 1992. On February 25, 1992, a notice of marking/redelivery (CF 4647) was issued because the country of origin marking on the software was a small adhesive label which fell off, and there was no country of origin marking on the mouse units. Redelivery of the merchandise was required on or before March 25, 1992. On March 31, 1992, Customs received a letter from the importer stating that their certified CF 4647 and marked samples were never mailed to Customs and that a portion of the products already had been sold. On April 8, 1992, Customs assessed 10% marking duties in the amount of $9,409.49 against the products which were sold without Customs verification of proper country of origin marking. On May 22, 1992, the entry was liquidated with marking duties being assessed at the rate of 10 percent. A timely protest was filed on July 31, 1992. Protestant presents the following claims: In a telephone conversation a Customs official told the importer that the items could be re-marked at the importer's own warehouse, and that once the units were re-marked and the Notice of redelivery certified by the importer, that the items could be sold. The items were re-marked on March 2, 1992, and the Notice to redeliver was certified, and Customs was scheduled to inspect the items on March 2, 1992. Customs, however, informed the importer that no inspection was required since the certified Notice and a requested sample would be sufficient. In addition, a problem in their mail room caused the certified Notice to redeliver and the sample not to be mailed to Customs. Upon realizing the mistake the items were mailed on March 31, 1992, after the required 30 day period. Customs determined that the re-marked sample was still not properly marked. However, some of the product had been sold in the improperly marked format without Customs approval. Protestant submits that the products were marked with their country of origin in an appropriate manner; that Customs misinformed the importer concerning the certification process; and that if not for the error in the importer's mail room, Customs would have received the sample and certification within the required 30 days and would have had time to further correct any continuing deficiencies. The protestant therefore believes that the marking duties should be removed or reduced. ISSUE: Whether the assessment of marking duties is proper under the circumstances in this case. LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. 19 U.S.C. 1304(f) provides that 10 percent marking duties shall be levied, collected, and paid if an imported article is not properly marked with the country of origin at the time of importation, and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.51, Customs Regulations (19 CFR 134.51), provides that when articles or containers are found upon examination not to be legally marked, the district director shall notify the importer on Customs Form 4647 to arrange with the district director's office to properly mark the article or container or to return all released articles to Customs custody for marking, exportation or destruction. This section further provides that the identity of the imported article shall be established to the satisfaction of the district director. Section 134.52, Customs Regulations (19 CFR 134.52), allows a district director to accept a certification of marking supported by samples from the importer or actual owner in lieu of marking under Customs supervision if specified conditions are satisfied. In Headquarters Ruling Letter (HRL) 731775 (November 3, 1988), Customs ruled that two prerequisites must be present in order for it to be proper to assess marking duties under 19 U.S.C. 1304(f). These two prerequisites are: 1. the merchandise was not legally marked at the time of importation; 2. the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation. Here, Spring Circle Technology, Inc., argues that the marking of the software and mouse units was proper, that they have no prior record of Customs violations, that it was only due to an error in their mailing room that Customs did not receive the re-marked sample and certification, and that they should not have to pay marking duties because a Customs employee misinformed them by telephone of the requirements of the certification process for re-marking the products. Protestant states that the assessment of marking duties was not proper because it discussed the re-marking and certification process with a Customs official prior to importation who misinformed them of the requirements. We find that protestant has not substantiated any of its claims, and the marking duties were properly assessed in this case. First, pursuant to 19 CFR 177.1(b) oral advice given by Customs personnel is not binding. This regulation is meant to avoid just this type of situation where a mistake due to lack of information, lack of time to fully research the situation, misunderstanding of intent, misunderstanding of a statement, or misunderstanding of some other nature, can easily be made. See HRL 734585 (October 31, 1992). Second, marking duties should not be construed as penal and are not avoidable. When Congress amended section 304(b) of the Tariff Act of 1930 it stated: "[marking duties] which shall be deemed to have accrued at the time of importation, shall not be construed to be penal, and shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause". Section 304(c) of the Customs Administrative Act of 1938. See also C.S.D. 92-32 (April 6, 1992); HRL 734151 (April 6, 1992). As noted by the United States Customs Court in A.N. Deringer, Inc. v. United States, 51 Cust. Ct. 21, C.D. 2408 (1963), "those who import goods into the United States accept certain responsibilities that have been laid on them by Congress. One such responsibility, and an important one, is to see that imported merchandise of foreign origin is properly marked to show the country of origin, before it enters into the commerce of the United States." Therefore, the prior record of protestant and its actions concerning the subsequent shipment of the software and mouse units have no relevance to the determination of the propriety of marking duties assessed on the products in this case. Because Customs did not receive the certification within the required 30 days, and the importer did not allow Customs to inspect the goods prior to their being released for consumption as required, we find that the assessment of marking duties was proper. HOLDING: The notice of marking/redelivery was properly issued and the assessment of marking duties was properly assessed in this case. The importer failed to properly mark the software and mouse units under Customs supervision prior to liquidation. Accordingly, the protest should be denied. A copy of this decision should be attached to the Customs Form 19, to be sent to the protestant. Sincerely, John Durant, Director Commercial Rulings Division