HQ 224448 - Protest for further review 2704-93-100002; liquidation after four years from entry date; Antidumping duty order A-583-507; 19 U.S.C. 1504; American Permac, Inc. v. U.S.; 19 U.S.C. 1504(d); Nunn Bush Shoe Co., and Weyco Group Inc. v. U.S.; Canadian Fur Trappers Corp. v. U.S. - United States International Trade Commision Rulings

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HQ 224448

August 15, 1994

LIQ-4-11-CO:R:C:E 224448 AJS

CATEGORY: LIQUIDATION

District Director
U.S. Customs Service
300 South Ferry Street
Terminal Island
Room 2017
San Pedro, CA 90731

RE: Protest for further review 2704-93-100002; liquidation after four years from entry date; Antidumping duty order A-583-507; 19 U.S.C. 1504; American Permac, Inc. v. U.S.; 19 U.S.C. 1504(d); Nunn Bush Shoe Co., and Weyco Group Inc. v. U.S.; Canadian Fur Trappers Corp. v. U.S.

Dear District Director:

This is our decision in protest for further review number 2704-93-100002, dated January 4, 1993, concerning the liquidation of certain entries of malleable cast iron pipe fittings from the manufacturer/exporter Kwang Yu in Taiwan.

FACTS:

The subject merchandise was entered between July 8, 1987 and March 7, 1988. In September of 1992, the import specialist for the subject merchandise received an unsigned and undated memorandum on Department of Commerce (DOC) letterhead. The import specialist sought clarification of this memorandum from Headquarters, and received instructions to liquidate the entries pursuant to the DOC memorandum. The entries were subsequently liquidated on October 16, 1992.
Our research indicates that the DOC memorandum was originally forwarded to Customs from the DOC on December 22, 1989. This memorandum provided instructions to liquidate the subject merchandise with antidumping duties of 43.19 percent of the U.S. price. Our research also indicates that the memorandum was not received by the proper Customs office for distribution to the field offices. This appears to be the reason the import specialist did not receive the DOC memorandum in a timely manner.

The DOC published its preliminary determination of sales at less than fair value for the subject merchandise under antidumping duty order number A-583-507 on January 14, 1986. 51 Fed. Reg. 1547 (1986). In accordance with section 733(d) of the Tariff Act of 1930 (19 U.S.C. 1673b(d)), the DOC directed Customs to suspend liquidation of all entries of the subject merchandise which were entered for consumption on or after the date of publication of this notice. This suspension of liquidation was to remain in effect until further notice.

The DOC published its final determination of sales at less than fair value on March 31, 1986. 51 Fed. Reg. 10,901 (1986). In accordance with 19 U.S.C. 1673b(d), the DOC directed Customs to continue to suspend liquidation of all entries of the subject merchandise on or after the date of publication of this notice. This suspension of liquidation was also to remain in effect until further notice.

On May 23, 1986, the DOC and the International Trade Commission (ITC) determined that the subject merchandise was being sold at less than fair value and that these sales were materially injuring a U.S. industry. 51 Fed. Reg. 18,918 (1986). The DOC directed, in accordance with sections 736 and 751 of the Tariff Act of 1930 (i.e., 19 U.S.C. 1673e and 1675), Customs to assess, upon further advice, antidumping duties for all entries of the subject merchandise. Customs was also directed to assess antidumping duties on all unliquidated entries of the merchandise entered for consumption on or after January 14, 1986. On and after this date, Customs was required, at the same time as the importer normally deposits the estimated duties on this merchandise, to assess an antidumping duty margin cash deposit of 7.93 percent for Kwang Yu.

On May 9, 1989, the DOC published the preliminary results of its antidumping duty administrative review for the subject merchandise. 54 Fed. Reg. 19,929 (1989). The review covered Kwang Yu, and the period May 1, 1987 through April 30, 1988. As stated previously, the subject entries fall within this period. The DOC determined that a margin of 7.93 percent existed for the period in question. Customs was directed to assess antidumping duties on all appropriate entries of the subject merchandise for this period. Further-more, a cash deposit of estimated antidumping duties based on the above margin was to be required for Kwang Yu.

On September 20, 1989, the DOC published the final results of their antidumping duty administrative review for the subject merchandise. 54 Fed. Reg. 38,713 (1989). Based
on the substantial appreciation of the Taiwan dollar since the preliminary results, the DOC determined that a margin of 43.19 percent existed for merchandise from Kwang Yu during the period at issue. The notice states that "[t]he Depart- ment [DOC] will instruct Customs to assess antidumping duties on all appropriate entries [of the subject merchandise]. The Department will issue appraisement instructions directly to the Customs Service." As stated previously, the DOC issued these instructions to Customs on December 22, 1989.

19 U.S.C. 1516a is the exclusive remedy for parties wishing to contest the basis of antidumping duty assessments. American Permac, Inc. v. United States, 10 CIT 535, 545, 642 F. Supp. 1187 (1986). Therefore, the questions raised by the protestant concerning the DOC's determination of the 43.19 percent antidumping duty margin need not be addressed in the decision. Section 1516a(2)(A)(i)(I) provides that within 30 days after the date of publication in the Federal Register of the notice of a final determination under 19 U.S.C. 1675, an interested party may commence an action in the United States Court of International Trade (CIT). The determination of September 20, 1989, was a final determination under section 1675. No action was commenced in the CIT by an interested party in this case. Thus, the final results were beyond appeal and hence final by October 20, 1989.

ISSUE:

Whether the subject entries were properly liquidated by Customs or deemed liquidated by operation of law pursuant to 19 U.S.C. 1504.

LAW AND ANALYSIS:

Liquidation has been defined as "the final computation by the Customs Service of all duties (including any anti- dumping or countervailing duties) accruing on that entry." American Permac, Inc. v. United States, 10 CIT 535, 537 (1986). Under 19 U.S.C. 1504, Customs is bound by certain time limits during which liquidation must occur.

Generally, an entry of merchandise not liquidated within one year "shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer of record." 19 U.S.C. 1504(a). Pursuant to section 1504(b), Customs may extend this period if:

(1) information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officer;

(2) liquidation is suspended as required by statute or court order; or

(3) the importer of record requests such extension and shows good cause therefore.

19 U.S.C. 1504(d) states that any entry not liquidated at the expiration of four years from the applicable date specified in subsection (a) of this section (i.e., the date of entry in this case), shall be deemed liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record, unless liquidation continues to be suspended as required by statute or court order. The statute provides when such a suspension of liquidation is removed, the entry shall generally be liquidated within 90 days therefrom.

In this case, entries of the subject merchandise were suspended as required by statute (i.e., 19 U.S.C. 1673(d)) on March 31, 1986. The DOC published the final results of its administrative review of antidumping duty order number A-583-507 in September of 1989. This review stated that the DOC would instruct Customs to assess antidumping duties on entries made during the period May 1, 1987 through April 30, 1988. These results were not appealed and became final on October 20, 1989. The DOC issued liquidation instructions to Customs on December 22, 1989. However, the import specialist only received informal notice of these instructions in September of 1992. After receiving clarification of this notice from Headquarters, the import specialist quickly liquidated the entries. All the relevant merchandise was entered more than four years before the date of liquidation. These circumstances raise the question of whether the entries were already liquidated by operation of law pursuant to 19 U.S.C. 1504(d) because of the fact that the four-year period for liquidation had expired.

The CIT addressed a similar issue in Nunn Bush Shoe Co. and Weyco Group Inc. v. United States (Nunn Bush), Slip Op. 92-9, Customs Bulletin and Decisions, vol. 26, no. 7, p. 19 (February 12, 1992), 784 F. Supp 892. Nunn Bush dealt with entries which had been suspended pending the results of a countervailing duty investigation and later pursuant to a court injunction. The injunctions were dissolved before the entries were four years old, but Customs did not liquidate certain of these entries until after four years from the date of entry.

In Nunn Bush, the CIT discussed their decision in Canadian Fur Trappers Corp. v. United States (Fur Trappers), 12 CIT 612 (1988). Fur Trappers also involved the
application of 19 U.S.C 1504(d). In that case, however, the suspension of the entries involved was lifted after four years had expired. The CIT stated that when a suspension is lifted after four years have passed, Customs has a discretionary 90 days to liquidate the entries. Nunn Bush, p. 21-22. This decision was based on the legislative history for section 1504(d) which states that "[t]his last provision is discretionary, rather than mandatory, and recognizes that there will be instances when it may be impossible to complete liquidation within 90 days because of the sheer number of entries to be liquidated after a long continued suspension." Nunn Bush, p. 22, See also H.R. Rep. No. 95-621, 95th Cong., 1st Sess. 26 (1977).

The Court in Nunn Bush held that their interpretation regarding Custom's discretion applies only to entries that remain suspended beyond the four year statutory period. Nunn Bush, p. 22. The CIT further added that nowhere in the legislative history is it stated that the provisions, requiring an entry of merchandise to be liquidated within four years, is discretionary. Id. The CIT stated that the Fur Trappers decision is binding on the issue of liquidation only with respect to entries that remained suspended beyond four years. Id. Based on the plain meaning of the statute, the CIT found that section 1504 unambiguously states that if an entry is not liquidated within four years, then it will be deemed liquidated by operation of law unless the period is extended as per 19 U.S.C. 1504(b). Id. Therefore, the CIT held that entries which turned four years old were liquidated by operation of law and any subsequent attempts by Customs to liquidate these entries was invalid. Id.

In this case the entries were suspended by statute, but this suspension was lifted in December of 1989. Customs did not liquidate the entries until October of 1992, which was after four years from the date of entry. According to the Nunn Bush decision, this liquidation was invalid. The entries were liquidated by operation of law on the four year anniversary date of entry at the rate of duty asserted by the importer of record at the time of entry. The applicable rate of antidumping duty at this time was 7.93 percent pursuant to the DOC's May 23, 1986, Federal Register notice. The entries at issue could not be suspended beyond the four year anniversary date of entry once the statutory suspension was lifted.

HOLDING:

The protest is granted. The subject entries were deemed liquidated by operation of law on the four year anniversary of the date of entry with an antidumping duty margin of 7.93 percent.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed, with the Customs Form 19, by your office 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 ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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