United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 224790 - HQ 225332 > HQ 225121

Previous Ruling Next Ruling
HQ 225121





March 30, 1994

LIQ-4-01/LIQ-11/PRO-4-CO:R:C:E 225121 PH

CATEGORY: LIQUIDATION

District Director of Customs
Chicago, Illinois 60607

RE: Application for Further Review of Protest No. 3901-93- 101190; Antidumping Duties; Reimbursement Certification; Deemed Liquidation; Time for Liquidation after Removal of Suspension of Liquidation; Nunn Bush Shoe Co. v. United States; 19 CFR 353.26; 19 U.S.C. 1504(d); 19 U.S.C. 1514

Dear Sir:

The above-referenced protest was forwarded to this office for further review. The protestant filed supplemental submissions, dated December 10 and 16, 1993, on this matter, copies of which we are enclosing for the protest file. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

According to the file, between August 25 and December 15, 1986, the importer entered certain merchandise (certain carbon steel fittings) from Taiwan. Eight entries are involved in the protest. The protestant acted as surety for the entries.

The merchandise under consideration was the subject of an antidumping investigation (case A-583-602) (Federal Register of March 24, 1986 (51 FR 10070)). In a notice of preliminary determination (Federal Register of August 11, 1986 (51 FR 28735)), Customs was directed to suspend liquidation of all entries of such merchandise that are entered, or withdrawn from warehouse, for consumption, on or after the date of publication. A final determination was published in the Federal Register on October 24, 1986 (51 FR 37772), pursuant to which Customs was directed to continue to suspend liquidation of entries of the merchandise. On December 17, 1986, in an Antidumping Duty Order, the International Trade Administration (ITA) published a determination in the Federal Register (51 FR 45153) that importations of the merchandise materially injure a United States industry and Customs was directed to require a cash deposit based on the estimated weighted-average antidumping duty margins provided in the notice.

Pursuant to the above determinations, the importer deposited antidumping duties for the entries protested in the total amount of $112,059.66. In its letters depositing the antidumping duties, the importer stated that it was depositing the antidumping duties under "protest," basically on the basis that the merchandise under consideration was already shipped when the antidumping duties became applicable.

On February 8, 1988, Customs issued a telegram (No. 001557, Subject: Antidumping Duties (88-16)) advising that the Depart- ment of Commerce had not received a request for an administrative review of the antidumping duty finding/order for certain periods on merchandise listed in the telegram. Therefore, Customs offic- ers were directed to assess antidumping duties on the subject merchandise entered, or withdrawn from warehouse, for consumption during the periods listed in the telegram at the cash deposit or bonding rate required at the time of entry. The instructions for the merchandise under consideration were to "liquidate all entries for all firms [for the] period [of] 8/11/86 - 11/30/87".

Customs sent a Customs Form 28, Request for Information, to the importer on January 15, 1991, in which Customs requested the importer to complete and return an attached "reimbursement statement" form. This form listed each of the protested entries and stated that pursuant to 19 CFR 353.55, the certification on the form must be furnished (this requirement is now in 19 CFR 353.26). The certification on the form concerned whether the importer had entered into any agreement or understanding for the payment or refunding to the importer by the manufacturer, producer, seller or exporter of all or any part of the antidumping duties upon the listed entries.

On December 21, 1991, Customs sent a Customs Form 29, Notice of Action, to the importer. This notice was in regard to the protested entries, which were listed in the notice. Customs stated in the notice that antidumping duties had been deposited for the protested entries and enclosed another "reimbursement statement" form, as described above. Customs requested the im- porter to complete and return the reimbursement notice. Customs stated that failure to complete and return the reimbursement notice would result in a presumption that reimbursement occurred and an additional assessment equal to the total dumping duties deposited at the time of entry would be made. Customs further advised the importer that, in general, if reimbursement is made or expected, additional duties would be assessed in the amount of the reimbursement. According to the box checked on the Customs Form 29, if the importer disagreed with the proposed action, the importer was requested to furnish its reasons in writing to Customs within 20 days from the date of the notice; after 20 days the entry was to be liquidated as proposed.

The entries were liquidated on December 18, 1992, with an increase in the antidumping duties in the total amount of $112,059.66 (representing the additional assessment equal to the total dumping duties deposited, on the basis that the reimbursement notice was not returned to Customs, as provided for in the above-referenced Customs Forms 28 and 29) for the protested entries. On April 2, 1993, demand for payment of the increased antidumping duties (i.e., the $112,059.66, plus interest) was made on the protestant surety.

On June 22, 1993, the protestant filed the protest under consideration. The basis of the protest was that, according to the protestant, the liquidation resulted in the incorrect and excessive assessment of duties, including countervailing and/or antidumping duties. The protestant stated that it intended to submit a supplemental memorandum in support of the protest.

The protestant did submit supplementary memorandums, dated December 10 and 16, 1993, relating to the protest/application for further review. The December 10 submission cited a June 5, 1991, letter from the Department of Commerce to Customs relating to the requirement for filing a reimbursement certificate. According to this letter, for entries during the time-period in which the protested entries were made, the Department of Commerce required the importer to file a reimbursement certificate with Customs within 30 days after the earlier of: (1) publication of the antidumping order or any administrative review thereof pursuant to 19 CFR 353.53, or, if appropriate, 19 CFR 353.49; or (2) importation of the merchandise in a district in which not previously imported (see also 19 CFR 153.55, between 1980 and 1989). The letter also stated that, "[i]f the importer goes out of business before the deadline for filing the certificate has passed, Customs should not presume that reimbursement has occurred [and] if the importer goes out of business after the deadline for filing the certificate has passed, Customs should presume that reimbursement occurred." With its December 10 submission, the protestant also provided a copy of a report from a financial investigative and reporting service indicating that as of May 16, 1988, the importer had discontinued operations at the address given in the entries under protest.

In the December 16, 1993, submission, the protestant argued that Customs was without authority to liquidate the entries under consideration because they were deemed liquidated as entered by operation of law on the four-year anniversary date for each of the entries, citing 19 U.S.C. 1504(d).

Further review for the protest was requested and granted.

ISSUE:

May the protest in this case be granted?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed (i.e., within 90 days of the demand upon the protestant surety; see 19 U.S.C. 1514(c)(2)) and the matter protested is protestable (see 19 U.S.C. 19 U.S.C. 1514(a)(5)). The certification that the protest is not being filed collusively to extend another authorized person's time to protest, as required for a protest by a surety (see 19 U.S.C. 1514(c)(2)), was provided.

For your information, we note that each of the letters from the importer purporting to "protest" the assessment of antidumping duties (and depositing those antidumping duties) was sent to Customs either before the dates of entries or, in the case of one entry, 3 days after the date of entry. The purported "protests" were filed before liquidation and, as such, are not valid protests under 19 U.S.C. 1514 (see 19 U.S.C. 1514(c)(2); Atari Caribe v. United States, 16 CIT ___, 799 F. Supp. 99 (1992); Peg Bandage, Inc., v. United States, 17 CIT ___, printed in the January 5, 1994, edition of the Customs Bulletin and Decisions, vol. 28, no. 1, p. 265; Spiegel Bros. v. United States, 21 CCPA 310, T.D. 46831 (1933); and Gallagher & Ascher v. United States, 21 CCPA 313, T.D. 46832 (1933)). According to Customs records, the only protest of the entries under consideration is the protest here considered (i.e., the protest by the surety of the demand for payment of the additional assessment of antidumping duties).

Because of our decision below on the "deemed liquidation" issue under 19 U.S.C. 1504, we need not find whether the additional assessment of antidumping duties was proper under the applicable ITA Regulations, as explained in the June 5, 1991, letter from the Department of Commerce to Customs (described above). However, we note that the date of the antidumping order in this case was December 17, 1986, and that according to the February 8, 1988, Customs telegram issuing liquidation instruc- tions (see above), there was no request for administrative review of the antidumping order. You state that the date of first importation of the merchandise in the Chicago district was August 13, 1986. The evidence submitted by the protestant on the date the importer terminated operations at the address given in the entries under protest indicates that the importer was not operat- ing at the address given as of May 16, 1988. Thus, according to the evidence presented, if the importer went out of business (we note that the evidence is as to operations at one address) the evidence that it may have done so is as of a date after the deadline for filing the reimbursement certificate, in which case the Department of Commerce advised in its June 5, 1991, letter that Customs should presume that reimbursement occurred.

Notwithstanding the above, the controlling statute in this matter is 19 U.S.C. 1504. This provision was amended by section 641 of Public Law 103-182, the North American Free Trade Agreement Implementation Act (107 Stat. 2057, 2204), enacted December 8, 1993. Before its amendment, section 1504 provided, in pertinent part, that, except as otherwise provided in the provision, an entry not liquidated within one year from the date of entry was required to 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. The exception to this general rule was that Customs could extend the time for liquidation or suspend the liquidation of the entry (suspension of liquidation referred to cases in which liquidation was suspended as required by statute or court order). When liquidation of any entry was suspended, Customs was required to provide notice of the suspension to the importer of record concerned and to any authorized agent and surety of the importer of record. Section 1504(d) provided that any entry not liquidated at the expiration of four years from the date of entry 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, unless liquidation continued to be suspended as required by statute or court order. The subsection also provided that when such a suspension of liquidation was removed, the entry was required to be liquidated within 90 days from the date of removal.

This provision was interpreted in the case of Nunn Bush Shoe Co. v. United States, 784 F. Supp. 892 (CIT 1992). The Court held that when the liquidation of entries had been suspended (under the countervailing duty law) and the suspension of liquidation was terminated before the expiration of the four- year period after the date of entry but the entry was not liquid- ated within that 4-year period, section 1504 "unambiguously" required the entries to be deemed liquidated by operation of law. The Court held that any subsequent attempts to liquidate such entries was invalid.

As stated above, section 641 of Public Law 103-182 amended section 1504. As amended, section 1504(d) provides that:

When a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry within 6 months after receiving notice of the removal from the
Department of Commerce, other agency, or a court with jurisdiction over the entry. Any entry not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record.

In this case the relevant times are as follows:

Dates of entry: August 25 - December 15, 1986

Liquidation instructions: February 8, 1988

Dates of liquidation: December 18, 1992

Thus, under either section 1504 before its amendment by section 641 of Public Law 103-182 or section 1504 after the amendment, the protested entries were required to be deemed liquidated as entered before the December 18, 1992, date of purported liquidation. I.e., under section 1504 before amendment, as interpreted in the Nunn Bush case, supra, liquidation was required before the four-year anniversary of the entries, but the entries were not liquidated until after that anniversary. Under section 1504 as amended, liquidation was required within 6 months after Customs received notice of removal of the suspension. Since the entries were not liquidated until more than 4 years after issuance of the liquidation instructions, they clearly were not liquidated within the required time. The protest must be GRANTED.

HOLDING:

The protest (i.e., as to the demand on the surety for payment of the increased antidumping duties) is GRANTED. 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 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 ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling