HQ 224751 - Further review of protests ##2720-93-100484 and 2704-93-101344 concerning the liquidation of certain entries subject to anti-dumping duties (ADD); 19 U.S.C. 1504(a) and (d); The Act of December 8, 1993, Pub. L. No. 103-182 sec. 641, 107 Stat. 2057; Dal-Tile Corporation v. United States, 829 F. Supp. 394 (CIT 1993). - United States International Trade Commision Rulings

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HQ 224751

HQ 224877

June 2, 1994

LIQ-4-01 CO:R:C:E 224751/224877 TLS

CATEGORY: ENTRY

District Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, California

90731

RE: Further review of protests ##2720-93-100484 and 2704-93-101344 concerning the liquidation of certain entries subject to anti-dumping duties (ADD); 19 U.S.C. 1504(a) and (d); The Act of December 8, 1993, Pub. L. No. 103-182 sec. 641, 107 Stat. 2057; Dal-Tile Corporation v. United States, 829 F. Supp. 394 (CIT 1993).

Dear Sir:

This office has received the above-referenced protests for further review as provided for under Customs regulations. We have considered the protests and have made the following decision.

FACTS:

Your office has suspended protest #2704-93-101344 pending the outcome of protest #2720-93-100484 because the issue is identical in each case and the related entries were involved in the same withholding of liquidation.

The chronology of events leading to the protests is as follows:

On May 4, 1989, Customs initiated its audit of all Toshiba entries to determine if correct valuation was done on these entries.

The Department of Commerce (DOC) made a preliminary dumping finding and ordered suspensions of liquidation on entries of certain small business telephone systems from Japan on August 3, 1989 (54 Fed. Reg. 31978).

DOC made a final determination of its finding and continued suspensions of the above-noted entries on October 17, 1989 (54 Fed. Reg. 42541).

Customs Headquarters advised the field through Email on October 27, 1989 to suspend liquidation on entries of small business telephone systems from Japan entered on or after August 3, 1989.

The entries involved in protest #100484 were made between November 2, 1989 and February 23, 1990. The entry in protest #101344 was made on January 8, 1990.

The ADD order for these entries was issued on December 11, 1989 (54 Fed. Reg. 50789); the cash deposit rate for Toshiba entries was 136.77%. The subject entries made on or after this date are also subject to interest on cash deposits. The entry documents contained in our files. indicate that no cash deposits were made.

Customs Headquarters advised the field through Email on July 23, 1990 to continue withholding liquidation of Toshiba entries pending the outcome of a Customs audit.

On July 22, 1991, DOC lifted the suspensions of the subject entries and instructed Customs to liquidate them.

The Court of International Trade (CIT) had granted an injunction on January 23, 1991, continuing suspensions on these entries pending the outcome of an appeal of a challenge to the scope of the ADD order. The CIT issued a final judgment on the appeal on July 31, 1991 (Toshiba Corp. v. United States, 770 F. Supp. 660 (CIT)), effectively terminating the injunction and lifting the suspensions.

Customs Headquarters clarified the scope of the Toshiba audit and directed the field through Email on December 9, 1991 to liquidate all entries affected by the DOC instructions as noted above.

Customs Headquarters notified the field through Email on December 16, 1992 of those companies affected by the above-noted ADD order that actually were under Customs audit at that time. Toshiba not being among those companies, your office liquidated the entries involving Toshiba; between January 22 and February 12, 1993 for entries in protest #100484 and January 29, 1993 for the entry in protest #101344. All entries were liquidated at a 136.77% ADD rate, the rate required at the time of entry.

The protestant contends that it did not request an administrative review of the order and accepted the fact that the entries could as a consequence liquidate at a rate equal to the estimated duties. The protestant states that the suspensions lifted when the CIT issued a final judgment on the appeal on July 31, 1991, effectively terminating the injunction and lifting the suspensions.

Your office contends that it extended liquidation of these entries pursuant to the July 23, 1990 Customs HQ Email. The final extension notices were given on October 27, 1990 for the entries protested under #100484 and on December 12, 1992 for the entry protested under #101344.

ISSUE:

Whether the entries are deemed liquidated by operation of law at the antidumping duty rate asserted by the importer.

LAW AND ANALYSIS:

The subject entries were liquidated between January 22 and February 12, 1993 with ADD being assessed. Both protests were timely filed on April 20, 1993 within 90 days of the liquidation dates.

The relevant provisions of 19 U.S.C. 1504 read as follows:

(a) Liquidation.-- Except as provided in subsection (b) of the section, an entry of merchandise not liquidated within one year from:

(1) the date of entry of such merchandise;...

...shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer, his consignee, or agent. Notwithstanding section 1500(e) of this title, notice of liquidation need not be given of an entry deemed liquidated.

(d) Limitation.--Any entry of merchandise not liquidated at the expiration of four years from the applicable date specified in subsection (a) of this section, shall be deemed liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer, his consignee, or agent, unless liquidation continues to be suspended as required by statute or court order. When such a suspension of liquidation is removed, the entry shall be liquidated within 90 days therefrom. (Emphasis added.)

The Act of December 8, 1993 (Pub. L. No. 103-182 sec. 641, 107 Stat. 2057) amended 19 U.S.C. 1504 to deem liquidate on its fourth-year anniversary any entry whose liquidation is extended that is not liquidated within four years; any entry whose liquidation is suspended and such suspension is subsequently removed but the entry is not liquidated within six months after Customs receives notice of the removal is deemed liquidated at that time. The present entries are not subject to this amendment because they were filed before the effective date of the amendment.

The protestant contends that the subject entries were deemed liquidated one year after the lifting of the suspensions. The argument is based on the protestant's reading of 19 U.S.C. 1504(a). It is also argued that Customs own policies mandate that the entries should have been liquidated 90 days from the lifting of the suspensions. U.S. Customs Service Policies and Procedures Manual, Manual Supp. No. 3551-02 (December 27, 1979).

There have been several cases that have interpreted 19 U.S.C. 1504(a) and (d). The Court of Appeals for the Federal Circuit (Federal Circuit) held in one case that 19 U.S.C. 1504(a) should be read to require Customs to liquidate an entry on which suspension had been lifted within one year of the entry date, otherwise it would be deemed liquidated at the one-year anniversary of the entry date. Pagoda Trading Corp. v. United States, 804 F.2d 665 (Fed. Cir. 1986). Pagoda did not interpret subsection (d).of section 1504. The Federal Circuit soon after affirmed a Court of International Trade (CIT) ruling that held that the language in section 1504(d) that reads "[w]hen such a suspension of liquidation is removed, the entry shall be liquidated within 90 days therefrom", is discretionary and does not mandate Customs to liquidate within 90 days entries whose suspensions were lifted after the four-year anniversary of the entry date. Canadian Fur Trappers Corp. v. United States, 884 F.2d 563 (Fed. Cir. 1989). The court also concluded that the Pagoda holding did not apply to entries subject to subsection (d) of section 1504. Id. See also Eagle Cement v. United States, 17 CIT__, slip op. 93-117 (June 23, 1993).

More recently, the CIT held that once an entry has been suspended (or extended) beyond its first-year anniversary, it is no longer subject to the provisions of 1504(a). .Dal-Tile Corporation v. United States, 829 F. Supp. 394 (CIT 1993). The entries in Dal-Tile were suspended beyond their fourth-year anniversaries but were not liquidated until 18 months after suspensions were lifted. Id. The plaintiff had argued that the entries should have been deemed liquidated one year after the suspensions were lifted, pursuant to 1504(a). In the present case, the entries were suspended beyond their first-year anniversaries. The protestant makes the same argument here as did the plaintiff in Dal-Tile, that the entries should have been deemed liquidated one year after the suspensions were lifted.

Pursuant to the Dal-Tile decision and section 1504(d), we find that Customs did not abuse its authority in delaying liquidation on the subject entries more than a year beyond the lifting of the suspensions. In reaching its decision, the Dal-Tile court rejected the argument that subsections (a) and (d) should be read together so as to apply the consequence of deemed liquidation to entries not liquidated within one year after the termination of a court-ordered suspension. Id. The court emphasized that its conclusions were based in part on the holding in Fur Trappers, supra. Dal-Tile noted that the legislative history of 1504(d) does not indicate that Congress intended to apply a one-year limit on liquidation to entries falling under subsection (d). Id. Thus, we find no reason to apply a one-year limitation on liquidations under 1504(d) in this case. We must also conclude that 1504(a) does not apply to the present entries, pursuant to Dal-Tile. Therefore, we find that Customs acted within its authority as provided in 19 U.S.C. 1504(d) in delaying liquidation more than one year beyond the lifting of the suspensions.

Inasmuch as we have found the subject entries to have been properly liquidated within Customs authority, the question of whether liquidation on the entries was properly extended need not be addressed here-and is considered moot. With regards to Customs stated policy objectives, they do not take precedent over established court decisions and therefore bear no weight against the court rulings cited herein.

HOLDING:

Customs acted within its authority under 19 U.S.C. 1504(d) in delaying liquidation more than one year after suspensions were lifted on the entries. Pursuant to Dal-Tile Corporation v. United States, 829 F. Supp. 394 (CIT 1993), the entries should not be deemed liquidated one-year after the lifting of the suspensions and 19 U.S.C. 1504(a) does not apply to these entries. The Act of December 8, 1993 (Pub. L. No. 103-182 sec. 641, 107 Stat. 2057), which amended 19 U.S.C. 1504 to require liquidation of suspended entries within six months after suspension is removed, is not applicable here because the subject entries were filed before the effective date of the amendment. The subject protests should be DENIED as a result.

In accordance with Section 3A(ll)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed 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

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