HQ 0220975 - Request for further review of protest #2704-6-000804 concerning the assessment of interest on liquidated increases of anti-dumping duties. - United States International Trade Commision Rulings

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HQ 220975

May 10, 1991

PRO-2-06 CO:R:C:E 220975 TLS

CATEGORY: ENTRY

District Director
U.S. Customs Service
300 South Ferry Street
Terminal Island, California 90731

RE: Request for further review of protest #2704-6-000804 concerning the assessment of interest on liquidated increases of anti-dumping duties.

Dear Sir:

We have received your memorandum of March 31, 1986, forwarded to us from the Pacific regional office requesting further review of the above-referenced protest. Upon review of your position and the protestant's arguments, we have reached a decision that is discussed in detail below.

FACTS:

The protestant made an entry on May 28, 1980 through the Terminal Island port. Upon a finding of antidumping with respect to the subject merchandise, Customs charged the importer with antidumping duties with interest accruing from the date of entry. The total amount of interest charged came to $7,252.23. A bill was sent to the protestant for this amount on the date of liquidation, November 29, 1985.

The importer claims that the interest on the antidumping duties should not accrue from the date of entry as Customs has done. Instead, the protestant contends that the interest charged should be cancelled because subsection (c) of 19 U.S.C. 1505, which allegedly gives Customs the authority to charge interest in these types of cases, was not enacted until 30 days after October 30, 1984. This date is over four years beyond the date of entry but about a year before the liquidation date.

Your office maintains that a telex that was sent to Customs field offices gives Customs the authority to charge the interest in this case. The telex was sent out on March 30, 1980 and states that the rate of interest should be calculated from the date of payment of estimated duties through the date of liquidation. Estimated duties were paid on the entry date in this case.

ISSUE:

Whether Customs has the authority to charge interest pursuant to an antidumping order retroactive to the date of entry on estimated duties paid.

LAW AND ANALYSIS:

Under T.D. 76-48 (February 6, 1976), Customs was authorized to assess antidumping duties on birch 3 ply doorskins from Japan, which is the subject merchandise in this case. That the imported goods are subject to the antidumping order is not in dispute.

The protestant claims that the interest charged in this case should be cancelled based on the holding in United States v. Heraeus-Amersil, Inc., 60 CCPA 86, 671 F.2d 1356 (1982). That case held that increased duties assessed pursuant to an antidumping order cannot be found delinquent until the filing of a civil action in the Court of International Trade or the applicable statute of limitations has run. The Tariff Act of 1930 provides for when interest is due with regards to antidumping duties. Section 677g(a) of the Tariff Act reads as follows:

Interest shall be payable on overpayments and underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after-
(1) the date of publication of a countervailing or antidumping order under this subtitle or section 1303 of this title, or
(2) the date of a finding under the
Antidumping Act, 1921.

In the present case, the importer was notified of the antidumping duties through a notice of action dated June 19, 1984. The notice covers several entries, including the entry at issue here. The amount of interest due was calculated from the date of entry, May 28, 1980, which is also the date estimated duties were paid. Customs files indicate that estimated duties totalling $10,853.00 were paid by the importer before liquidation took place. Upon liquidation, the interest totaled $7,252.23; this amount was billed to the importer on November 29, 1985, the date of liquidation. The interest was computed at a 20% per annum rate (which was in effect on the date of publication of the antidumping order), as provided for under section 6621 of the Internal Revenue Code of 1954. 19 U.S.C. 1677g(b) (1984).

The protestant argues that section 505 of the Tariff Act is not applicable in this case because it became effective more than four years after the date of entry. Heraeus, on the other hand, was issued more than two years before the entry date. As a result, the importer considers Customs application of interest from the entry date pursuant to section 505 to be an ex post facto action and therefore unconstitutional.

Section 505 provides for the collection of estimated duties upon entry or within 30 days of entry and for the collection of additional or increased duties owed upon liquidation as well as refund of any excess duties paid. While 505 does apply to the collection of additional or increased duties, section 677g is directly applicable to situations where interest is being charged pursuant to an antidumping order, as is the case here.

The court in Heraeus ruled on the delinquency of increased duties owed, not the charging of duties themselves. Section 677g was amended in 1984 to authorize Customs to charge interest on antidumping duties; the provision applies in this case from its effective date, October 30, 1984. Thus, we do not find reason to apply Heraeus-Amersil to the present case. If we were to find Heraeus controlling in this case, it would effectively ignore 677g altogether. We are not in a position to do so. Therefore, we find that Customs acted properly in charging interest on antidumping duties in this case pursuant to an order published covering the subject merchandise.

The 1984 amendment to 19 U.S.C. 1677g is applicable in this case only from its effective date. Section 677g was originally enacted in 1979 and became effective the same year. The provision as enacted under the 1979 Act provides that interest is payable on any overpayments or underpayments of estimated duties on merchandise entered for consumption on or after the publication of the final affirmative injury determination by the International Trade Commission. This is distinguished from the 1984 Amendment, which provides that interest is payable on estimated duties on merchandise entered on or after the date of publication of a countervailing duty or antidumping order. The 1979 provision is further distinguished by its requirement that interest be computed at an 8% rate per annum or the rate in effect under 26 U.S.C. 6621 on the date on which the amount of duty is finally determined, whichever is higher. This differs from the 1984 Amendment, which simply calls for the interest rate in effect under 26 U.S.C. 6621 on or after the date of publication of a countervailing duty or antidumping order.

To the extent that the subject entry is covered by the 1984 Amendment only from the time of its effective date, October 30, 1984, to the date of liquidation, the period of time of the entry not covered by such is covered by the 1979 provision. The 1979 provision was in effect at the time of entry and remained in effect until superseded by the 1984 Amendment. This finding is consistent with the decision in Canadian Fur Trappers Corp. v. United States, 691 F. Supp. 364 (CIT 1988), aff'd, 884 F.2d 563 (Fed. Cir. 1989), which held that the 1984 Amendment cannot be applied for interest accruing before the effective date of that amendment. Thus, the 1979 provision is controlling from the date of entry to October 29, 1984, the day before the effective date of the 1984 Amendment, with the 1984 Amendment controlling thereafter.

HOLDING:

Customs acted within its authority by charging interest on antidumping duties as provided for under 19 U.S.C. 1677g(a). The 1979 provision of section 677g is controlling in this case from the date of entry to October 29, 1984, and the 1984 amendment section 677g is controlling from October 30, 1984 through the date of liquidation. You are instructed to deny this protest accordingly.

Sincerely,

John Durant, Director

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