HQ 225239 - Protest 3001-93-100711; extension of liquidation; 19 U.S.C. 1504(a); 19 U.S.C. 1504(b); HQ 224294; HQ 225162; 19 CFR 159.12(d); 19 CFR 159.12(e); 19 U.S.C. 1504(d); Pagoda Trading Co. v. U.S.; Nunn Bush Shoe Co. v. U.S.; Inter- national Cargo & Surety Ins. Co. v. U.S.; 19 CFR 353.26(b). - United States International Trade Commision Rulings

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HQ 225239

September 20, 1994

LIQ-4/11-CO:R:C:E 225239 AJS

CATEGORY: LIQUIDATION

District Director of Customs
U.S. Customs Service
Key Tower Bldg. #2200
1000 2nd Avenue
Seattle, WA 98104-1049

RE: Protest 3001-93-100711; extension of liquidation; 19 U.S.C. 1504(a); 19 U.S.C. 1504(b); HQ 224294; HQ 225162; 19 CFR 159.12(d); 19 CFR 159.12(e); 19 U.S.C. 1504(d); Pagoda Trading Co. v. U.S.; Nunn Bush Shoe Co. v. U.S.; Inter- national Cargo & Surety Ins. Co. v. U.S.; 19 CFR 353.26(b).

Dear District Director:

This is our decision in Protest 3001-93-100711, dated October 22, 1993, concerning extension of liquidation.

FACTS:

On August 28, 1986, a Federal Register notice was published for wax candles from the People's Republic of China (PRC) under Antidumping Duty Order (A-570-504). 51 Fed. Reg. 30,686. On August 8, 1990, a Federal Register Notice was published affording an "Opportunity to Request Administrative Review" for the entry period August 1, 1989 through July 31, 1990 for the subject wax candles. 55 Fed. Reg. 32,279. This notice states that if the Department of Commerce (DOC) did not receive by August 31, 1990, a request for review of entries covered by an order or finding listed in this notice and for the period identified above, the DOC will instruct Customs to assess antidumping or countervailing duties on those entries at a rate equal to the cash deposit of (or bond for) estimated antidumping or countervailing duties required on those entries at the time of entry and to continue to collect the cash deposits previously ordered.

The subject wax candles were entered on October 13, 1989, with a claimed country of origin of Macao. The protestant claims that the DOC indicated that no such
requests were made under the August 8 notice and that the DOC contacted Customs on September 8, 1990, terminating liquidation suspension for entries covered by the review period. After a lengthy overseas investigation, Customs subsequently determined that the country of origin for the subject candles was the PRC, and that as such they were subject to Antidumping Order A-570-504. The importer was informed of this determination by a Customs Form (CF) 29, Notice of Action, on February 3, 1993. Notices for extension of liquidation were also issued on June 30, 1990, June 22, 1991 and June 20, 1992, while Customs was awaiting information concerning the assessment of duties on the subject entry. Also, an additional notice was issued in February of 1993 to indicate a change in the entry type code to indicate the entry was subject to antidumping duties. The subject entry was liquidated on September 3, 1993.

On February 19, 1993, the protestant was forwarded a "Reimbursement of Dumping Duties" form. On February 23, 1993, the protestant declined to sign this form and stated that it would attempt to be reimbursed for antidumping duties assessed in this case. On June 16, 1993, protestant's counsel stated "[t]hat the importer herein attests that no agreement or understanding for reimbursement of any kind was consummated for the instant shipment."

ISSUE:

Whether the subject entry was deemed liquidated pursuant to 19 U.S.C. 1504(a) or properly extended and liquidated by the actions of Customs.

LAW AND ANALYSIS:

Initially, we note that this protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(A). The entry was liquidated on September 3, 1993, and this protest was filed on October 22, 1993. We also note that the liquidation of an entry is protestable pursuant to 19 U.S.C. 1514(a)(5).

19 U.S.C. 1504(a)(1) provides that except as provided in subsection (b) of this section, an entry of merchandise not liquidated within one year from the date of entry (i.e., October 13, 1990) 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 of record. The subject entry was liquidated more than one year after the date of entry. Thus, the protestant asserts that the subject entry was deemed liquidated pursuant to section 1504(a)(1).

19 U.S.C. 1504(b), however, provides that the Secretary of the Treasury may extend the period in which to liquidate an entry by giving notice of such extension to the importer of record in such form and manner as the Secretary shall prescribe in regulations, if (1) information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officer. 19 CFR 159.12(a)(1) provides that the district director may extend the 1-year statutory period of liquidation for an additional period not to exceed 1 year if information needed by Customs for the proper appraisement or classification of the merchandise is not available. Customs previously stated that this additional 1-year period expires 1 year from the expiration of the 1-year statutory period for liquidation (i.e., October 13, 1991). HQ 224294 (January 10, 1994) and HQ 225162 (May 20, 1994).

A search of Customs computer records indicates that liquidation of the subject entry was extended three times and that notice of these extensions was also issued. An extension was issued on June 30, 1990, June 22, 1991, and June 20, 1992. The entry was extended because Customs needed information for the proper appraisement of the merchandise. The protestant claims that it found no evidence that notices of extension were ever sent, but offers no specific evidence to support this statement. A later notice was also sent informing the protestant that the entry was subject to antidumping duty.

19 CFR 159.12(d) provides that if an extension has been granted because Customs needs more information and the district director thereafter determines that more time is needed, he may extend the time for liquidation for an additional period not to exceed 1 year provided he issues the notice required by paragraph (b) of this section before termination of the prior extension period. Customs previously stated that this additional period will expire 1 year from the expiration of the initial extension, or in other words it will expire on the third year anniversary of the entry date (i.e., October 13, 1992). See supra HQ 224294 & HQ 225162. Section 159.12(e) provides that the total time for which extensions may be granted may not exceed 3 years (i.e., up to four years from the date of entry). Therefore, if a third extension is issued it will expire on the fourth year anniversary of the date of entry (i.e., October 13, 1993). In this instance, Customs extended liquidation of the subject entries for two additional periods not exceeding one year because more information was needed. The total time for which extensions were granted did not exceed three years. Accordingly, Customs satisfied the regulatory requirements of section 159.12.

19 U.S.C. 1504(d) provides, in part, that 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 of record. The applicable date specified in subsection (a) in this case is the date of entry (i.e., October 13, 1989). Customs liquidated the subject entry on September 3, 1993, which precedes the expiration of four years from the date of entry (i.e., October 13, 1993). As stated previously, a proper basis also existed for extension of liquidation. Thus, Customs also satisfied the four- year liquidation requirement of section 1504(d). Consequently, the subject entry was not deemed liquidated by operation of law, but by the actions of Customs on September 3, 1993.

The protestant cites to Pagoda Trading Co. v. United States, 9 CIT 407 (1985), aff'd, 5 Fed. Cir. (T) 10 (1986), in support of its claim. In that case, the DOC instructed Customs to lift suspension of liquidation before the one year anniversary of entry. Id at 408. Customs then issued notices for suspension of liquidation before the one-year anniversary of entry. Id. Customs intended these notices to be extensions and did not know why these notices were sent. Id at 411. The CIT found that notices of suspension were not effective to serve as notices of extension and that there was also no basis for any extensions. Id. Thus, the CIT held that the entries were deemed liquidated on the one year anniversary of entry. Id.

This protest is markedly different from the decisions rendered in Pagoda. While each case initially involved suspensions of liquidation, three notices of extension were issued in this protest and a proper basis existed for these notices. The Pagoda decisions did not state that Customs could not have issued extensions if a proper basis existed for such extensions. Therefore, we do not find the decision in Pagoda supportive of the protestant's claim.

The protestant also cites to Nunn Bush Shoe Co. v. United States, 784 F. Supp. 892 (1992), in support of its claim. In that case, entries were suspended pending the results of a countervailing duty investigation and later pursuant to court injunctions. Id at 893. These 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. Id. We note that the subject protest does not involve an entry liquidated more
than four years after the date of entry. Therefore, an important factual difference exists between this protest and the Nunn Bush case.

The CIT in Nunn Bush stated that "[s]ection 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)(1)-(3)." Id at 894-95. This statement leads to the conclusion that Customs may extend liquidation of an entry after a suspension as long as the extension does not exceed the statutory four-year period. This is exactly what procedure Customs followed in this protest. The CIT in Nunn Bush did not state that Customs could not extend liquidation of an entry after a suspension is lifted. Accordingly, despite protestant's assertion to the contrary, we find the decision in Nunn Bush supportive of Customs position in this protest.

The Court of International Trade (CIT) recently addressed an issue more similar to this protest in International Cargo & Surety Ins. Co. v. United States, 15 CIT 541 (1991). See also HQ 224397 (March 8, 1994) and HQ 225027 (June 14, 1994). In that case, Customs Headquarters directed all district directors to withhold liquidation of entries pending the reconsideration of a classification decision. The merchandise at issue was then entered and Customs issued notices extending liquidation of the entry. International Cargo denied receiving notice. After resolving the classification issue, Customs issued guidelines for classification based on the design and use of the merchandise and directed district directors to resume liquidation. The district required information concerning the design and use of the merchandise and issued a Request for Information to the importer. The importer failed to respond so the district issued a Notice of Action more than 3 months later and then subsequently liquidated the entry.

In International Cargo, Customs submitted computer records establishing that extension notices were printed on a certain date and the reason for these notices. Id. at 544. As a routine matter, the CIT noted that notices are printed on a Saturday or Sunday and mailed the following Tuesday. Id. The CIT recognized that "[g]overnment officials are entitled to a presumption that their duties are performed in the manner required by law." Id. In that case, the CIT concluded that a presumption had arisen that proper notice was given. The CIT further stated that "[t]he presumption is not conclusive, and may be rebutted by a declaration or other
evidence indicating that notice was not received." The CIT noted that it had previously concluded that an affidavit from the importer's recordkeeper, stating that an extension notice had not been received, was sufficient to rebut the presumption. Id. Since no such evidence was submitted, after concluding that the extension was permissible under the statute, the CIT held for Customs. Id at 545.

In this protest, Customs possesses similar computer records indicating the date of extension, date notice was sent, and the reason for such extension. The protestant asserts that it found no evidence that notices were ever sent, but did not provide any evidence to support this assertion. As the CIT concluded in International Cargo, we do not find this assertion sufficient to rebut the presumption that notice was given. As stated previously, proper grounds also existed for the notice of extension. Therefore, we conclude that proper notice of extension was given in this case. Consequently, the subject entry was not deemed liquidated by operation of law pursuant to section 1504(a), but rather was extended and properly liquidated by Customs on September 3, 1993.

19 CFR 353.26(b) requires the importer to file prior to liquidation a reimbursement statement with the appropriate district director. Counsel for the protestant asserts that it should be permitted to sign this statement on behalf of the importer. The Customs Form 6445A states the DOC's position in this matter is that the only acceptable signature on the reimbursement statement is that of the importer. This issue is within the jurisdiction of the Secretary of Commerce. 19 U.S.C. 1514(a) specifies the types of decisions by a customs officer which may be protested. The proper party for signing a statement under section 353.26(b) is not one of these decisions. Therefore, this matter is not subject to protest.

Counsel states that the reimbursement form need only be executed should Customs find that antidumping duties are actually owed. Counsel states that a mere belief by the government that the subject shipments are covered by an antidumping order may not automatically be equated with the conclusion that said duties can be lawfully exacted. Counsel concludes that a finding of deemed liquidation would effectively bar such action. Customs conducted a detailed investigation and determined that the country of origin of the subject merchandise is the PRC. Counsel merely claims that the merchandise was sourced in Macao, and provided no specific information to dispute Customs determination.

Entries of the subject merchandise from the PRC are subject to antidumping duties. As stated previously, the importer is required to file a reimbursement form concerning any assessed antidumping duties prior to liquidation. Therefore, the protestant was required to file a reimbursement form when requested by Customs. In addition, inasmuch as deemed liquidation did not occur in this instance, counsel's point concerning this issue is moot.

Counsel also claims that the subject candles are not subject to the antidumping duty order at issue. 19 CFR 353.22 provides the procedure for an importer to challenge whether it is subject to an antidumping duty order. Accordingly, the protestant is required to challenge the application of the subject antidumping duty order under this procedure and not under 19 U.S.C. 1514.

HOLDING:

The protest is denied. Notices for extension of liquidation were properly issued and thus the subject entry was properly liquidated on September 3, 1993.

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 this 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, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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