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HQ 224043


December 17, 1992

LIQ-4-01-CO:R:C:E 224043 JRS

CATEGORY: LIQUIDATION PROTEST

District Director of Customs
U.S.Customs Service
1000 Second Avenue, Suite 2200
Seattle, WA 98104-1049

RE: Application For Further Review Protest No. 3001-92-100406; Interest applicable to Antidumping Duties when there is a waiver of cash deposit for a de minimis margin; 19 U.S.C. 1677g(a); 19 CFR 353.24

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised, and our decision follows.

FACTS:

This protest involves an entry filed on April 22, 1987, for a Sharp brand (JC-AVI(BK) AM/FM stereo cassette tape player with a 2.5 inch LCD B/W TV receiver and head phone under item 685.4908, Tariff Schedules of the United States. The merchandise, television receivers (monochrome and color) from Japan, is the subject of an affirmative antidumping finding (T.D. 71-76) published by the Department of the Treasury (36 FR 4597, March 10, 1971).

Pursuant to the Trade Agreements Act of 1979, all outstanding dumping findings were made subject to administrative review by the Department of Commerce (45 FR 20511). These reviews form the basis for the assessment of antidumping duties on reviewed entries and for cash deposits, including interest, on future entries.

On April 19, 1991, Commerce published the final results of its antidumping duty administrative review (A-588-015) pertaining to television receivers, monochrome and color, from Japan (56 FR 16069). That review revealed that for the time period of 03/01/87 -- 02/29/88, one manufacturer/exporter, Sharp, experienced a dumping margin of 38.26 percent. Customs was instructed to assess antidumping duties against all subject entries of said merchandise at the rate of 38.26 percent ad valorem.

Customs issued liquidation instructions to all field offices on March 11, 1992. The liquidation instructions (Message No. 2071113, dated 03/11/92) required interest on overpayments or underpayments of the amounts deposited as estimated antidumping duties, calculated from the date of payment of estimated duties through the date of liquidation, at the rate in effect under section 6621 of the Internal Revenue Code of 1954 for such period. Accordingly, Customs liquidated the merchandise on April 3, 1992, with a per-unit dumping duty of $133.57, and assessed interest on the underpayment of estimated antidumping duties from the date of entry through the date of liquidation. At the date of entry, April 22, 1987, a cash deposit of 0.30 percent was determined; however, a deposit was waived since the margin was de minimis.

The protestant (importer) contends that there is no requirement for the deposit of estimated antidumping duties and that no deposit was made. Therefore, Customs has no authority to collect interest on an underpayment of antidumping duties. The protestant requests a reliquidation with a refund of the interest paid of $244,130.71.

ISSUE:

Whether interest is owed on an underpayment of antidumping duties when the cash deposit at the time of entry was 0.30 percent and, as such, the cash deposit requirement was waived because the margin was de minimis.

LAW AND ANALYSIS:

Section 778 of the Tariff Act of 1930, as amended (19 U.S.C. 1677g(a)), provided that interest shall be payable on overpayments and underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after the date of publication of an antidumping duty order or the date of a finding under the Antidumping Act of 1921.

The words "amounts deposited" refer only to cash deposits of estimated antidumping duties upon entry and not to other kinds of security such as a bond; consequently, interest would accrue only from the time that the deposit of cash was required, and would not be retroactive to the time of entry under bond. Interest is collectable only on cash deposits.

Section 353.24(c) of the Customs Regulations, 19 CFR 353.24(c), states:

The Secretary will instruct the Customs Service to calculate interest for each entry from the date that a cash deposit is required to be deposited for the entry through the date of liquidation of the entry.

The question becomes whether a cash deposit may be said to be required when Commerce waived the cash deposit because the margin was de minimis. At the date of entry, April 22, 1987, the antidumping duty rate in effect was the 1981 administrative review (46 FR 30163, June 5, 1981) finding of a 0.30 percent margin for Sharp. Commerce reported that "[b]ecause the weighted average margins listed above for Hitachi, Sharp and Mitsubishi are less than 0.5 percent and therefore de minimis, the Department shall not require cash deposits on those manufacturers' entries (46 FR 30166)."

Liability for duties accrues upon importation of the merchandise. 19 CFR 141.1. Section 141.105 of the Customs Regulations (19 CFR 141.105) authorizes the importer of record to estimate and to deposit with the district director, in whole or in part, the probable amount of unpaid duties which will be found due on an entire entry. Antidumping duties are treated as regular customs duties, except with respect to drawback (see 19 U.S.C. 1677h). See e.g., C.S.D. 82-46. As a result, an importer may make a pre-liquidation deposit of estimated antidumping duties under 19 CFR 141.105. If an importer fails to deposit estimated antidumping duties in an amount sufficient to cover any antidumping duties that are eventually determined to be due by Commerce, interest will accrue on an underpayment. A requirement of a deposit of zero dollars is a requirement of a cash deposit.

Commerce considers a de minimis margin to be equivalent to a zero dollar cash deposit. Although the cash deposit requirement of 0.30 percent was waived, the entry was nevertheless subject to a cash deposit requirement, albeit de minimis, and as such, interest would be owing to the government on any underpayment at the date of liquidation. As an antidumping duty of 38.26 percent was ultimately determined, interest is owed on the underpayment of duties on this entry represented by the difference between the amount deposited (i.e., zero dollars) and the amount ultimately due.

HOLDING:

Interest is owed on the underpayment of estimated antidumping duties for the April 22, 1987 entry. Despite the fact that the cash deposit was waived in this instance because the margin was de minimis, a de minimis margin is equivalent to a zero dollar cash deposit and interest is collectable on it.

Accordingly, you are directed to deny the protest. A copy of this decision should be furnished to the protestant in order to satisfy the notice requirement of 19 CFR 174.30(a).

Sincerely,

John A. Durant, Director

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