Intercargo Insurance Company F/k/a International Cargo & Surety Co., (Surety for M. Genauer) v. United States

RADER, Circuit Judge,

dissenting.

This court’s decision in St. Paul Fire & Marine Ins. Co. v. United States, 6 F.3d 763 (Fed.Cir.1993), governs this dispute over whether the United States Customs Service (Customs) obtained a valid extension of time for liquidation of Intercargo’s entries.

In St. Paul, this court held that section 1504 gives Customs one year to liquidate entries unless “properly noticed extensions” were granted “for statutory reasons.” Id. at 770. This court stated that Customs must “notif[y] the importer of the extension and articulate[] one of three statutory reasons for the extension.” Id. at 767. In this case, as this court notes, Customs did not give proper notice.

Customs’ notices to Intereargo did not give a statutory reason for the extension. The statutory reason that Customs intended to invoke was that “information needed for the appraisement or classification of the merchandise is not available to the appropriate customs officer.” 19 U.S.C. § 1504(b)(l)(1988). Customs, however, did not mention the need for information in its notices. Thus, these notices did not satisfy the requirement of the regulation. St. Paul, 6 F.3d at 767.

This court, however, treats Customs’ defective notices as harmless error. This court inaccurately analogizes Customs’ defective notices to procedural errors in notices of appeal. In a defective notice of appeal, the opposing party is not prejudiced by the defect. Any procedural defect can be easily cured without harm to the opposing party. In this case, however, Customs’ defective notices have prejudiced Intercargo. Inter-cargo was prejudiced by the delays that section 1504 was enacted to correct.

Section 1504 was passed, in part, to “increase certainty in the process for importers, surety companies and other third parties with a potential liability relating to a customs transaction.” S.Rep. No. 778, 95th Cong., 2d Sess. 32 (1978), reprinted ■ in 1978 U.S.C.C.A.N. 2211, 2243. Under the prior law, importers learned years after goods had been imported and sold that additional duties were due, or an excess of duties had been paid pending liquidation. Id. The 1978 enactment changed the law to address these lengthy and prejudicial delays to importers.

. Thus, the Customs’ extension notices were improper because they did not give a statutory reason for the extension. These notices did not satisfy the requirement of the regulation as interpreted in St. Paul. I would thus affirm the Court of International Trade’s holding that the Customs’ extension notices were defective.