HQ 0222364 - Internal Advice request on protests of prematurely reliquidated entries; Antidumping duties; Protests 30017- 000496, 30017-000497, and 30017-000498, April 14, 1987 - United States International Trade Commision Rulings

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HQ 222364

August 21, 1990

LIQ-4-01-CO:R:C:E 222364 PH

CATEGORY: LIQUIDATION

District Director
U.S. Customs Service
909 First Avenue, Room 2039
Seattle, Washington 98174

RE: Internal Advice request on protests of prematurely reliquidated entries; Antidumping duties; Protests 30017- 000496, 30017-000497, and 30017-000498, April 14, 1987

Dear Sir:

With an April 24, 1990, Transmittal and Routing Slip, the Protest Section in your District forwarded the subject protest files. Because no action is indicated to have been taken on the protests/applications for further review, we are treating your transmittal as a request for internal advice (see 19 CFR 177.11). We are returning the protest files for action as indicated in this letter. Our advice follows.

FACTS:

Protest/application for further review 30017-000496 concerns 1,260 five-inch Color TV/Monitors manufactured by Cosmos Electric Co. in Seoul, Korea, which, according to the file, were imported into the United States at Seattle, Washington, on September 17, 1986. The merchandise was exported from Korea on September 4, 1986. The merchandise was entered on September 18, 1986, and the entry summary date for the merchandise was September 30, 1986.

Protest/application for further review 30017-000497 also concerns 1,260 five-inch Color TV/Monitors manufactured by Cosmos Electric Co. in Seoul, Korea. According to the file, this merchandise was imported into the United States at Seattle, Washington, on September 9, 1986. The merchandise was exported from Korea on August 28, 1986. The merchandise was entered on September 4, 1986, and the entry summary date for the merchandise was September 16, 1986.

Protest/application for further review 30017-000498 also concerns 1,260 five-inch Color TV/Monitors manufactured by Cosmos Electric Co. in Seoul, Korea. According to the file, this merchandise was imported into the United States at Seattle, Washington, on September 19, 1986. The merchandise was exported from Korea on September 8, 1986. The merchandise was entered on September 19, 1986, and the entry summary date for the merchandise was October 1, 1986.

The merchandise was initially misclassified as five-inch Color Monitors (a classification not subject to antidumping duties) and liquidated on October 31, 1986, without antidumping duties. Customs notified the importer of the misclassification and demanded the deposit of 14.88 percent antidumping duties on November 6, 1986. On the basis of a November 14, 1986, Federal Register (51 FR 41365) Notice, the importer asked Customs to be allowed to deposit antidumping duties of 3.49 percent instead of 14.88 percent. The importer states that, based on the advice of a Customs officer in your District, the importer paid 3.49 per- cent antidumping duties on December 30, 1986.

On January 16, 1987, the entries were reliquidated and bills were issued for additional antidumping duties. The importer states that these bills were received and paid on March 24, 1987, by check.

The importer filed protests/applications for further review in your District on April 14, 1987, supported by letters dated May 19, 23, and 27, 1988, from its counsel. The protestant claims that the antidumping duties applicable at the time of importation of the merchandise were 3.49 percent instead of 14.88 percent.

ISSUE:

May Customs "unliquidate" the premature reliquidation of an entry when antidumping duties have been exacted for the entry even though no final order on the amount of the antidumping duties has been issued?

LAW AND ANALYSIS:

On April 30, 1984, the International Trade Administration, Department of Commerce (ITA), published in the Federal Register (49 FR 18336) a Notice of Antidumping Duty Order Concerning Color Television Receivers from Korea. The Notice provided that effec- tive on the date of publication, Customs must require a 13.90 percent cash deposit equal to the estimated weighted-average antidumping duty margins for companies other than those listed in the Notice (Cosmos was not listed). On the basis of this Notice, Instructions 84/135, dated May 10, 1984, were issued to Customs officers. These Instructions stated that, with certain excep- tions not applicable in this case, field officers should continue to suspend liquidation on all unliquidated entries of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after October 19, 1983 (this suspension of liquidation continues to be in effect with regard to color television receiv- ers from Korea manufactured or exported by Cosmos and entered at the time of the entries under consideration; see telex to Customs field officers dated June 10, 1987). In addition, Customs officers were instructed to require importers, with certain exceptions not applicable in this case, to post a cash deposit of 13.90 percent of the entered value for manufacturers/exporters other than those listed (Cosmos was not listed).

On December 28, 1984, the ITA published in the Federal Register (49 FR 50420) a Notice of Final Results of Administra- tive Review of Antidumping Duty Order which stated that "[f]or any future shipments from a new exporter not covered in this review, whose first shipments occurred after April 30, 1984, and who is unrelated to any reviewed firm, a cash deposit of 14.88 percent shall be required." According to the Notice, "[t]hese deposit requirements are effective for all shipments entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice [i.e., December 28, 1984, which is also the effective date of the Notice]."

On July 28, 1986, the ITA published in the Federal Register (51 FR 41365) a Notice of Preliminary Results of Antidumping Duty Administrative Review stating that "[f]or any future shipments of this merchandise from a new export[er] not covered in this or prior administrative reviews, whose first shipments occurred after March 31, 1985, and who is unrelated to any reviewed firm, a cash deposit of 14.25 percent shall be required." According to the Notice, "[t]hese deposit requirements are effective for all shipments of Korean color television color receivers entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review."

On November 14, 1986, the ITA published in the Federal Register (51 FR 41365) a Notice of Final Results of Antidumping Duty Administrative Review stating that "[f]or any future shipments of this merchandise from a new exporter not covered in this or prior administrative reviews, whose first shipments oc- curred after March 31, 1985, and who is unrelated to any reviewed firm, a cash deposit of 3.49 percent shall be required." Accord- ing to the Notice, "[t]hese deposit requirements are effective for all shipments of Korean color television color receivers, complete or incomplete, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review [i.e., November 14, 1986, which is also the effective date of the Notice]."

Based on the foregoing, we conclude that the cash deposit required to be deposited with Customs for this merchandise could not have been 3.49 percent of the entered value of the merchan- dise because the November 14, 1986, ITA Notice specifically provides that: "[t]hese deposit requirements are effective for all shipments of Korean color television color receivers ... entered ... on or after [November 14, 1986]" and the merchandise under consideration was entered in September of 1986. Nor could the cash deposit required to be deposited with Customs have been 14.25 percent (see the July 28, 1986, Notice of Preliminary Review), because the deposit requirements provided for in that Notice were to be effective for "shipments entered ... on or after the date of publication of the final results of this admin- istrative review" (emphasis added). Since the final results of the administrative review to which the July 28, 1986, Notice re- lates were published in the November 14, 1986, Notice, after the dates of importation, the 14.25 percent cash deposit rate could not have been applicable and, in any case, the 14.25 percent cash deposit rate was over-ridden by the 3.49 percent cash deposit rate set in the November 14, 1986, Notice of Final Review.

If the merchandise was "from a new exporter not covered in [the review which was the subject of the December 28, 1984, Notice], whose first shipments occurred after April 30, 1984, and who is unrelated to any reviewed firm, a cash deposit of 14.88 percent [was] required" (see the December 28, 1984, Notice). If this was not the case, a 13.90 percent cash deposit was required under the April 30, 1984, Notice. In the absence of other information (e.g., evidence that the exporter did not meet the description in the December 28, 1984, Notice, quoted above), we believe that your office was justified in using the 14.88 percent rate to ensure that the purposes of the antidumping laws are fulfilled.

The United States Court of Appeals for the Federal Circuit has held that Customs may not "unliquidate" a liquidation (see United States v. Utex International Inc., 6 Fed. Cir. (T) 166 (1988)). Customs has issued a ruling following the Court in this regard (ruling 221591, dated February 13, 1990, copy enclosed). Customs has held that entries of merchandise which were liquidat- ed, with countervailing duties, in contravention of suspension orders issued by the ITA were liquidated as a result of a mistake of fact or inadvertence and may be reliquidated at lower counter- vailing duty rates later determined to be applicable if relief is timely sought under 19 U.S.C. 1514 or 1520(c)(1) (ruling 721792, 722226, dated August 3, 1983, copy enclosed).

Because the merchandise in this case was misclassified in the initial entries, the order suspending liquidation was inappli- cable to the entries. Therefore, the initial liquidations of the entries were proper. Because Customs cannot "unliquidate" a liquidation (see above), in order to ensure that the purposes of the antidumping law are fulfilled and to protect the revenue, Customs had no choice but to reliquidate the entries with the antidumping duties once the misclassification was discovered. As stated above, we believe that Customs was justified in using the 14.88 percent rate for the antidumping duties.

The protestant has timely filed protests under 19 U.S.C. 1514 against the reliquidation of the entries and the exaction of antidumping duties at the 14.88 percentage rate. Customs cannot "unliquidate" a liquidation or reliquidation (see the Utex Court case discussed above). Because the final order on the amount of antidumping duties has not been issued, Customs cannot determine the final amount of antidumping duties to be paid. Therefore, Customs cannot correctly liquidate the entries. If Customs is to act at this time on the protests/applications for further review, we must deny them because we cannot correctly liquidate the entries. If the protests/applications for further relief are denied, the only course of action left for the protestant to pursue is to bring an action in the Court of International Trade.

HOLDING:

Customs may not "unliquidate" the premature reliquidation of an entry when antidumping duties have been exacted for the entry even though no final order on the amount of the antidumping duties has been issued. Customs can only grant or deny the protest of the entry. Because no final order on the amount of antidumping duties has been issued, the protests/applications for further review under consideration can only be denied at this time. You are instructed to inform the protestant that Customs is willing to withhold action on the protests, notwithstanding 19 U.S.C. 1515(a), until the ITA issues a final order on the amount of antidumping duties, if the protestant so requests in writing. Absent such a written request to withhold action on the protests, the protests/applications for further review should be denied.

Sincerely,

John Durant, Director

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