HQ 223482 - Protest 1001-91-002901; Liquidation of Entries Subject to Suspension of Liquidation; Antidumping Duties; 19 U.S.C. 1520(a)(4); 19 U.S.C. 1520(c)(1); 19 U.S.C. 1514 - United States International Trade Commision Rulings

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HQ 223482

December 20, 1994

LIQ-9-01/-4-01-CO:R:C:E 223482 PH

CATEGORY: LIQUIDATION

U. S. Customs Service
Protest and Control Section
6 World Trade Center, Room 762
New York, New York 10048-0945

RE: Protest 1001-91-002901; Liquidation of Entries Subject to Suspension of Liquidation; Antidumping Duties; 19 U.S.C. 1520(a)(4); 19 U.S.C. 1520(c)(1); 19 U.S.C. 1514

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. The delay in processing this protest has been at the request of the protestant. Our decision follows.

FACTS:

According to the file, on July 10, 17, and 25, August 1, 3 (two entries), 9, and 29, and September 4, of 1984, the protestant entered certain color television receivers from Korea. The entries were subject to a deposit of antidumping duties in the amount of 15.95 percent (49 F.R. 18336, April 30, 1984). Liquidation of entries of this merchandise was directed to be suspended (48 Federal Register (F.R.) 48487, October 19, 1983; 49 F.R. 7620, March 1, 1984; and 49 F.R. 18336, April 30, 1984). Each of the entries was stamped and marked to indicate that it was suspended. After final administrative review, antidumping duties in the amount of 2.06 percent were ordered for the merchandise under consideration (51 F.R. 41365, November 14, 1986).

Notwithstanding the directions to suspend the liquidation of the entries, the entries were liquidated as entered (i.e., with antidumping duties in the amount of 15.95 percent), each shortly before the 1-year anniversary date of the entry. Bulletin notices of liquidation were posted for each of the entries.

By letter of November 8, 1990, the protestant, through its representative, requested relief under 19 U.S.C. 1520(a)(4) or 1520(c)(1), contending that the entries under consideration "did not liquidate" or that the clerical error which caused the liquidation was discovered by Customs within one year and was therefore correctable under law. On January 8, 1991, this request was denied because of untimeliness.

On April 3, 1991, the protestant filed the subject protest. The protestant applied for further review and the application for further review was approved. The bases of the protest were the contentions made in the November 8, 1990, request for relief by the protestant. These contentions included the claim that the liquidations "did not liquidate" because all of the necessary component parts of liquidation (including particularly the "mental ... decision") did not occur and no Customs official intended and/or affirmatively caused the liquidations, nor were the entries stamped "liquidated." It was contended that the printing of the bulletin notices of liquidation was a "clerical error" because there could have been no intention to print entry numbers and liquidation dates for these entries. Thus, the protestant claimed that no liquidations took place so that relief could be granted under 19 U.S.C. 1520(a)(4).

Alternatively, the protestant claimed that relief could be granted under 19 U.S.C. 1520(c)(1) because Customs should have been made aware by the Federal Register notice that any liquidation of entries subject to suspension (including those under consideration) should be corrected by reliquidation. The protestant also claimed that even if liquidations were considered to have occurred and a timely protest or application for relief under 19 U.S.C. 1520(c)(1) had been filed, it could not have obtained such relief.

In its protest, and in a letter of September 12, 1991, supplementing the protest and explaining why the protestant believed further review should be granted, the protestant again argued that the printed bulletin notices of liquidation merely reflect the work product of the import specialist and are not, themselves, liquidations. The protestant contended that "the import specialist did all that he could not to liquidate the entries" and therefore that "the notices reflect[ed] an event that never occurred."

Further review, which was requested (see above), was granted.

ISSUE:

If liquidation of entries is suspended under the Antidumping law but Customs "erroneously" or "prematurely" liquidates the entries, may relief be granted under 19 U.S.C. 1520(a)(4) or 1520(c)(1) when relief is not applied for until more than five years after the "erroneous" or "premature" liquidations?

LAW AND ANALYSIS:

Initially, we note that the protest (of the refusal to reliquidate the entries under 19 U.S.C. 1520(c)) was timely filed (i.e., within 90 days of the date of such refusal; see 19 U.S.C. 1514(c)(2)(B)). The decision protested is protestable under 19 U.S.C. 1514 (see 19 U.S.C. 1514(a)(7)).

Under 19 U.S.C. 1500, Customs shall, among other things, liquidate the entry of imported merchandise and give notice of such liquidation to "the importer, his consignee, or agent", under rules and regulations prescribed by the Secretary of the Treasury. The Customs Regulations pertaining to liquidation of entries are found in 19 CFR Part 159. Under the Customs Regulations, bulletin notices of liquidation are the official notice of the liquidation of entries (Treasury Decision (T.D.) 90-92; see also Tropicana Products, Inc., v. United States, 8 Fed. Cit. (T) 145, 909 F. 2d 504 (1990)).

The statutory provision for protests is found in 19 U.S.C. 1514. Under this statute, at the time under consideration (section 1514 has since been amended by section 645 of Public Law 103-182 (NAFTA Implementation Act, 107 Stat. 2057, 2206-2207)), the liquidation or reliquidation of an entry is final and conclusive upon all persons unless a protest is filed in accordance with the statute or a civil action contesting the denial of a protest is timely filed in the Court of International Trade. Under paragraph (c)(2) of this provision, a protest under this section must be filed with Customs within 90 days after "the notice of liquidation", or the date of the decision which is protested.

Under 19 U.S.C. 1520(a)(4), Customs may refund duties or other receipts if, prior to the liquidation of an entry, it is ascertained that excess duties, fees, charges, or exactions have been deposited or paid by reason of clerical error. Under 19 U.S.C. 1520(c)(1), Customs may reliquidate an entry to correct a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law if the clerical error, mistake of fact, or other inadvertence is adverse to the importer, manifest from the record or established by documentary evidence, and brought to the attention of the appropriate Customs officer within one year after the date of liquidation of the entry.

Two relatively recent decisions of the Court of Appeals for the Federal Circuit are particularly apposite to this case. In Omni U.S.A., Inc., v. United States, 6 Fed. Cir. (T) 99, 840 F. 2d 912 (1988), the Court considered the application for relief under 19 U.S.C. 1520(c)(1) against the liquidation, notwithstanding an order to suspend liquidation, of entries for which countervailing duties had been deposited. Although, according to the Court, "[s]ection 1520(c)(1) appears to fit the present case like a glove" (6 Fed. Cir. (T) at 101), because the request for reliquidation under that provision was not made until more than a year after liquidation, "the original liquidations were considered final and binding on all persons under section 1514." (6 Fed. Cir. (T) at 100) Before agreeing with the Court of International Trade that this was not a case for equity (i.e., "[a legal remedy] is not made inadequate simply because appellant failed to invoke it within the time frame [prescribed]" (6 Fed. Cir. (T) at 104)), the Court stated:

Since nobody brought the errors to the attention of the appropriate customs officers within a year of the date of liquidation, authority to correct them lapsed according to the term of section 1520(c)(1), the refusal by customs to correct them upon untimely notice was correct, and was the only course open to them. [6 Fed. Cir. (T) at 101]

The second decision of the Court of Appeals for the Federal Circuit is United States v. Utex International, Inc., 6 Fed. Cir. (T) 166, 857 F. 2d 1408 (1988). This case involved what the Court described as the "premature" liquidation of the entry of shrimp (the liquidation was described as "premature" because a Notice of Detention and Hearing for the merchandise under consideration (frozen shrimp) had been issued and under the Customs Regulations (19 CFR 159.55), liquidation was required to be suspended). The Court, as had the same Court in the Omni decision (above, 6 Fed. Cir. (T) at 102-103), rejected the "void" liquidation doctrine (6 Fed. Cir. (T) at 170). The Court noted that in such a situation, "[b]oth the Omni and Deringer [i.e., United States v. Deringer, Inc., 66 CCPA 50, 593 F. 2d 1015 (1979)] courts held that the erroneous liquidation could be corrected only by following the statutory procedures, and that failure to do so within the period set by statute leaves the liquidation final." (6 Fed. Cir. (T) at 170) The Court concluded (with regard to this issue):

We do not hold that the liquidation was correct. But absent timely reliquidation or protest it was final as to all aspects of the entry. The importer, the surety, and the government are bound by and have the right to rely on the finality of liquidation. [6 Fed. Cir. (T) at 172]

In the case under consideration, the principal arguments of the protestant are, basically, that the entries under consideration were never actually liquidated and that what it calls the "putative" 1985 liquidations were void because of the suspension of liquidation under the Antidumping Law. Bulletin notices of the 1985 liquidations were properly posted. Bulletin notices of liquidation are the official notification of liquidation of entries. Therefore, under Tropicana and the other authorities cited above, the entries were actually liquidated by the 1985 liquidations. As described above, the "void" liquidation theory has been rejected by the Courts. Even if a liquidation is "premature" or "erroneous", unless it is timely protested, or other appropriate administrative remedy is timely sought, the liquidation is final as to all aspects of entry. As the Court stated in Omni (quoted above), "the refusal by customs to correct [the errors in liquidation] upon untimely notice was correct, and was the only course open to them." (Emphasis added.)

In regard to the foregoing, see also, Juice Farms, Inc., v. United States, CIT Slip Op. 94-172, printed at Customs Bulletin & Decisions, vol. 28, no. 48, p. 20 (November 30, 1994), involving a case in which Customs prematurely and erroneously liquidated 20 entries of Brazilian orange juice the liquidation of which was suspended under an antidumping order. According to the Court:

Plaintiff, however, did not check the bulletin notices and apparently did not know that the liquidations had taken place. Indeed, because Commerce had ordered the suspension of liquidation of entries of Brazilian orange juice, plaintiff believed that it did not need to check for bulletin notices. [id. at p. 21-22]

The Court held that it did not have jurisdiction to review the denial of plaintiff's protest under 28 U.S.C. 1581(a) because "it is undisputed that plaintiff failed to file a protest within 90 days of the bulletin notices of liquidations" (id. at p. 23). The Court also rejected the plaintiff's arguments that the time in which to protest was tolled on the basis that "[a]n importer cannot treat an illegal liquidation as void; rather, the importer must remain vigilant and protest the legality of such a liquida- tion within 90 days of notice [and] [i]f the importer fails to protest in a timely manner, then liquidation becomes final" (id. at p. 23). Finally, the Court rejected the plaintiff's arguments that jurisdiction existed pursuant to 28 U.S.C. 1581(i) (enabling the Court to hear a case when traditional means of obtaining judicial review are manifestly inadequate) because, "plaintiff could have sought relief by protesting within 90 days of the overt and inadvertent liquidations of its entries of orange juice[;] [t]he Court does not acquire jurisdiction simply because plaintiff failed to utilize the adequate remedy statutorily available to it" (id. at p. 24).

The protestant also contends that relief should be granted under 19 U.S.C. 1520(c)(1), if the entries are considered to have been liquidated in 1985, because, in effect, the Federal Register notice that liquidation of entries of the covered merchandise was suspended "brought to the attention of the appropriate customs officer within one year after [liquidation]" the "erroneous" or "premature" liquidations in this case. In regard to this argument, we note the statement of the Court of International Trade in PPG Industries, Inc. v. United States, 4 CIT 143 (1982), quoting in part from the lower court in Hambro Automotive Corp. v. United States, 81 Cust. Ct. 29, 31, 458 F. Sup. 1220, C.D. 4761 (1978) (aff'd, 66 CCPA 113, 603 F. 2d 850 (1979)):

... it is incumbent on the plaintiff to show by sufficient evidence the nature of the mistake of fact. The burden and duty is upon the plaintiff to inform the appropriate Customs official of the alleged mistake with
"sufficient particularity to allow remedial action." [4 CIT at 147-148; see also, ITT Corp. v. United States, 24 F. 3d 1384, 1387 (Fed. Cir. 1994), "... the importer must assert the existence of an inadvertence to Customs 'within the proper time and with sufficient particularity to allow remedial action'"; and United States v. Lineiro, 37 CCPA 5, 10, C.A.D. 410 (1949), in which the Court stated
"[d]etermination of issues in customs litigation may not be based on supposition."]

The Court in PPG went on to state that:

Decisions of this court uniformly have held that to invoke [19 U.S.C. 1520(c)(1)] the information relating to a mistake of fact must in effect constitute a request for reliquidation and be made within the time requirements specified in the statute. [4 CIT at 149; see also, the discussion of court interpretations of 19 U.S.C. 1520(c)(1) in Ruth Sturm's Customs Law & Administration, 3rd Edition, section 9.4 (issued December 1990).]

In this case, the protestant clearly has not satisfied its "burden and duty" to "inform the appropriate Customs official of the alleged mistake with 'sufficient particularity to allow remedial action.'" To paraphrase the Court in PPG (4 CIT at 148), "[c]learly, the Congress did not intend to impose upon Customs officials across the Nation, who must handle thousands of entries each week, an obligation to ferret out information [from notices in the Federal Register relating generally to suspensions of liquidations of entries not specifically identified in the applicable Federal Register notices], particularly where the information regarding such [entries and the merchandise entered under them] is singularly within the knowledge of the importer."

Under the decision in the Omni decision and as stated in that case, "[denial of relief in this case] is the only course open to [us]." (6 Fed. Cir. (T) at 101.) Relief may not be granted under 19 U.S.C. 1520(a)(4) because relief may be granted under that provision only prior to liquidation and liquidation had already occurred when such relief was sought in 1990. Relief may not be granted under 19 U.S.C. 1520(c)(1) because, even if the protestant otherwise qualified for such relief, the alleged clerical error, mistake of fact, or other inadvertence was not timely brought to the attention of Customs.

In regard to the implicit equity claim in this case, we note that equitable principles do not operate against the Government in cases involving the collection or refund of duties on imports (Air-Sea Brokers, Inc. v. United States, 66 CCPA 64, 67-68, C.A.D. 1222, 596 F. 2d 1008 (1979); see also Mitsubishi Electronics America, Inc. v. United States, CIT Slip Op. 94-155, printed in the October 26, 1994, Customs Bulletin and Decisions, Vol. 28, No. 43, p. 69). Since this is a case involving the collection or refund of duties on imports, equity is not available. Even if equity were available in this case, as the Court stated in Omni, supra, "[a legal remedy] is not made inadequate simply because appellant failed to invoke it within the time frame [prescribed]" (6 Fed. Cir. (T) at 104); see also, Juice Farms, supra, in which the Court rejected the plaintiff's arguments that traditional means of obtaining judicial review are manifestly inadequate on the basis that the plaintiff could have sought relief by timely protesting, i.e., "[t]he Court does not acquire jurisdiction simply because plaintiff failed to utilize the adequate remedy statutorily available to it" (Customs Bulletin & Decisions, vol. 28, no. 48, at p. 24).

Furthermore, in this regard, we note that protestant's assertion that even a timely protest or application for relief under 19 U.S.C. 1520(c)(1) would have been ineffective is incorrect. In cases where there was a "premature" or "erroneous" liquidation (because of the existence of directions to suspend liquidation) and no final order on the amount of antidumping duties has been issued, Customs has offered to withhold action on protests of such liquidations until a final antidumping order is issued (see, e.g., rulings 221591, February 13, 1990, and 222364, August 21, 1990). Thus, a timely protest or application for relief under 19 U.S.C. 1520(c)(1) could have been effective.

Subsequent to the protest and the September 12, 1991, supplement to the protest, the protestant made additional arguments. The protestant cited American Permac, Inc. v. United States, 16 CIT 672, 800 F. Supp. 952 (1992), for the proposition that "putative antidumping liquidations which occur during the period of suspension are not to be accorded recognition." The protestant cited Nunn Bush Shoe Co. v. United States, 16 CIT 45, 784 F. Supp. 892 (1992), for the proposition that "putative antidumping liquidations, which were bulletin noticed, should be disregarded." The protestant cited Pagoda Trading Co. v. United States, 9 CIT 407, 617 F. Supp. 96 (1985), aff'd 5 Fed. Cir. (T) 10, 804 F. 2d 665 (1986), arguing that because in that case computer generated suspension notices which were issued after the underlying suspension of liquidation was revoked were not recognized as suspensions since there was no evidence that any official with power to do so knowingly suspended liquidation, the liquidations which occurred in this case while liquidation was suspended should also not be recognized.

The American Permac case, of course, considered the applicability of the "deemed liquidation" provision in 19 U.S.C. 1504 when suspension of liquidation was not lifted until after the 4-year period for liquidation provided in section 1504. The Court held that in such a case, liquidation continued to be suspended by law (i.e., no "deemed liquidation" occurred on the fourth year of entry). We fail to see how this case supports the protestant's arguments.

The Nunn Bush case considered the applicability of 19 U.S.C. 1504 when suspension of liquidation under a countervailing duty order was lifted within the 4-year period provided for in section 1504 but Customs did not liquidate the entries until more than four years after entry. In such a case the Court held that the entries were deemed liquidated as entered, under the provisions of section 1504 (see the explanation of this case in the American Permac case, 16 CIT at 680). We note also that what the protestant calls "putative antidumping liquidations" in this case were timely protested under 19 U.S.C. 1514. Again, we fail to see how this case supports the protestant's arguments.

The Pagoda Trading Co. case also concerned 19 U.S.C. 1504, i.e., the effectiveness of notices of suspension of liquidation which were issued after the suspension of liquidation was lifted. The Court held that because the time for liquidation was not properly extended, liquidation was deemed to have occurred by operation of law prior to Customs liquidation of the entries. The liquidations which were challenged were timely protested under 19 U.S.C. 1514, in contrast to the liquidations in the protested case. Again, we fail to see how this case supports the protestant's arguments.

In regard to the above arguments, as is made very clear in our discussion of the Omni, Utex, and Juice Farms cases, the problem for the protestant is that liquidation did occur in the protested case and proper notice of liquidation was given. The liquidation in the protested entries may have been premature and erroneous, but under the Omni, Utex, and Juice Farms cases, the protestant still had the responsibility to timely challenge the liquidations. Since the protestant failed to do so, "the refusal by [C]ustoms to correct them [i.e., the liquidations] upon untimely notice was correct, and was the only course open to them [i.e., Customs]" (Omni, 6 Fed. Cir. (T) at 101; note that the same reasoning is followed in the very recent Juice Farms case).

HOLDING:

If liquidation of entries is suspended under the Antidumping law but Customs "erroneously" or "prematurely" liquidates the entries, relief may not be granted under 19 U.S.C. 1520(a)(4) or 1520(c)(1) when relief is not applied for until more than five years after the "erroneous" or "premature" liquidations.

The protest is DENIED. In accordance with Section A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ABCS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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