## Facts

- Cherry Hill Textiles, Inc. imported textile dyeing machines from Taiwan and entered them duty-free at the Port of Newark on September 18, 1987.
- International Cargo & Surety Insurance Co. (IC & S) was the surety on Cherry Hill’s customs bond.
- More than 13 months after entry, Customs liquidated the entry on October 28, 1988 as dutiable in the amount of $12,220.62 and provided notice to Cherry Hill.
- Cherry Hill did not file a protest within the statutory period, and Customs demanded payment from IC & S under the bond; IC & S refused.
- The United States sued IC & S in the Court of International Trade to collect the unpaid duties.
- IC & S argued that the entry had already been “deemed liquidated” by operation of law under 19 U.S.C. § 1504 before the October 28, 1988 liquidation, making the later liquidation unauthorized.

## Issues

1. Whether 19 U.S.C. § 1514’s protest requirement and finality rule for liquidations apply in government enforcement actions to collect duties from a surety.
2. Whether IC & S was barred from contesting Customs’ October 28, 1988 liquidation because it did not file a protest, where the entry allegedly had already been deemed liquidated by operation of law.

## Decision

- The Federal Circuit rejected IC & S’s argument that § 1514 finality is limited to refund suits and does not apply to government duty-collection actions.
- The court held, however, that on these facts IC & S was not required to file a protest to argue that the October 28, 1988 liquidation was legally ineffective because a deemed liquidation had already occurred.
- The court reversed the grant of summary judgment to the United States insofar as it rested on IC & S’s failure to protest the later liquidation, and remanded for further proceedings.

## Legal Principles

- Under 19 U.S.C. § 1514, Customs’ liquidation is generally “final and conclusive upon all persons (including the United States)” unless a timely administrative protest is filed, subject to limited statutory exceptions.
- Section 1514’s protest-and-finality scheme applies in government enforcement actions as well as in suits brought by importers or sureties.
- Under 19 U.S.C. § 1504, if Customs does not liquidate within the statutory time limits, the entry is deemed liquidated by operation of law at the duty rate and amount asserted at entry.
- When deemed liquidation has already occurred, a later attempted liquidation changing the result is unauthorized; failure to protest that later attempted liquidation does not preclude a party from arguing that deemed liquidation controls.

## Conclusion

The Federal Circuit held that § 1514 ordinarily bars collateral attacks on Customs liquidations even in government collection actions, but it allowed the surety to contest a later liquidation without a protest where the entry may have already been deemed liquidated under § 1504, reversing and remanding for determination of whether deemed liquidation occurred and what duties, if any, were owed.


United States v. Cherry Hill Textiles, Inc., 112 F.3d 1550 (Fed. Cir. 1997)