HQ 225343 - Further review of protest #2704-91-102697 concerning the assessment of anti-dumping duties (ADD) and countervailing duties (CVD) on a certain entry; 19 U.S.C. 1504; Nunn Bush and Weyco Group, Inc. v. United States, CIT slip op. 92-9 (February 5, 1992). - United States International Trade Commision Rulings

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 225339 - HQ 226123 > HQ 225343

Previous Ruling Next Ruling
HQ 225343

November 23, 1994

LIQ-4-01/02 CO:R:C:E 225343 TLS

CATEGORY: ENTRY

District Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, California 90731

RE: Further review of protest #2704-91-102697 concerning the assessment of anti-dumping duties (ADD) and countervailing duties (CVD) on a certain entry; 19 U.S.C. 1504; Nunn Bush and Weyco Group, Inc. v. United States, CIT slip op. 92-9 (February 5, 1992).

Dear Sir:

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

FACTS:

The entry in question was filed on July 10, 1984. Customs was ordered to suspend liquidation on the subject entry, as well as other entries, through a Federal Register notice published at 49 Fed. Reg. 19547 (May 8, 1984). The notice also ordered the district director holding the entry to require a cash deposit or bond to cover antidumping duties (ADD) on the entry at a 13.7% rate. Customs received instructions on November 14, 1986 lifting the suspension of liquidation and orders to liquidate. There was no extension of liquidation on the entry after that date.

The entry was also subject to a countervailing duty order which was issued on October 1, 1984, suspending liquidation. Customs received instructions on December 23, 1986 lifting the suspension and orders to liquidate the entry at a 24.04% rate. As with the ADD, there was no extension of liquidation after the suspension was lifted.

Your office claims that the ADD rate is 13.7% as the protestant says and the CVD rate is 24.04%. No interest is to be assessed on the ADD but interest is to be charged on unpaid countervailing duties, according to your office. Your office also explains that the delay in liquidating the entry is attributed to the entry being the subject of a fraud investigation. It is conceded that the entry was not extended during this time.

Liquidation was done on December 14, 1990. Customs made a Formal Demand on Surety on March 4, 1991 for payment of the subject duties. This protest was timely filed within 90 days of that action on May 29, 1991 in response to the demand.

ISSUE:

Whether the rate and interest to be charged on ADD and CVD is proper in light of the entry not being extended or liquidated after suspension was lifted.

LAW AND ANALYSIS:

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

(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.

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 entry is not subject to this amendment because the suspension of liquidation was lifted before the effective date of the amendment.

With respect to the liquidation issue in this case, we believe the recent court holding in Nunn Bush and Weyco Group, Inc. v. United States, CIT slip op. 92-9 (February 5, 1992), is controlling. The Nunn Bush decision held that 19 U.S.C. 1504(d) should be read to deem as liquidated any entry which is not subject to valid suspension on its fourth-year anniversary. Id. As noted above, Commerce issued instructions lifting the suspension on November 14, 1986 (ADD) and December 23, 1986 (CVD), requiring Customs to liquidate the entry. The entry remained unliquidated on its fourth-year anniversary, July 10, 1988. Thus, pursuant to Nunn Bush, the entry was deemed liquidated on that date at the rate asserted by the importer at the time of entry.

Your office concedes that no extension was done after the suspension was lifted, but explains the delay was due to a pending fraud investigation involving the entry. Customs laws at the time of entry allowed for reliquidation of an entry if the appropriate customs officer found probable cause to believe fraud is involved. 19 U.S.C. 1521. Thus, the possibility of fraud on the entry did not preclude Customs from following instructions to liquidate that entry. Furthermore, there is no apparent finding of fraud in this case. Therefore, as noted above, absent an extension of liquidation, the entry in question is deemed liquidated on its fourth-year anniversary at the rates of duty asserted when entered.

The entry was made with 0.73% asserted as the ADD and 29.94% for CVD. The actual rates to be assessed should have been 13.7% for ADD and 24.04% for CVD. Whatever the difference might be in total duties owed between the asserted amounts and the amounts that should have been assessed cannot be collected because of the deemed liquidation. Customs also cannot collect any interest on either the ADD or the CVD because the entry was deemed liquidated at the duty rate asserted at time of entry. We note that the CVD rate asserted by the protestant at time of entry, 29.94%, is higher than the CVD rate at which the subject entry was liquidated, 24.04%. The protestant contends that no CVD (or ADD) should be assessed on the subject entry no later than July 10, 1988. The rate to be assessed for the valid period before liquidation, however, is 29.94% because of the deemed liquidation. Since liquidation is deemed to have been done on July 10, 1988, the rate to be assessed is the rate asserted at time of entry, pursuant to Nunn Bush, supra.

The protestant also contends that since the ADD/CVD bond in this case covers only up to $276,572, Customs cannot collect the $1, 067,279.20 the agency claims is owed on the entry. We find this argument to be without merit. The clear and explicit language of the CF 7595 General Term Bond posted with this entry states in section (8), "...the above-bounden principal shall pay to the district director of customs, when demanded, all duties, taxes, and charges found legally due and unpaid..." A Federal district court held that notwithstanding the fact that a particular bond was not posted on an entry, a surety remains liable under a general bond which calls for payment on demand of all duties, however they arise. Gissel v. United States, 353 F. Supp. 768, 777 (S.D. Tex. 1973), aff'd, 493 F.2d 332 (5th Cir. 1974), cert. denied, 419 U.S. 1012 (1975). We follow the holding of Gissel in finding here that even if the ADD/CVD bond posted in this case does not cover the amount to be assessed, the general bond would cover any and all charges regardless. Such is true with the general bond posted in this case. Therefore, the surety remains liable for the ADD and CVD in this case under the general term bond posted.

Concerning any interest that might have been assessed in this case, we find that none is to be charged on the ADD or CVD because the entry was deemed liquidated before the final orders calling for interest were published.

HOLDING:

The subject entry is deemed liquidated pursuant to 19 U.S.C. 1504 and Nunn Bush, on the fourth-year anniversary of the entry date, or July 10, 1988.

The duty rates applicable to this entry are those which were asserted at the time of entry, 0.73% on ADD and 29.94% for CVD. The ADD and CVD rates published subsequent to the entry date are not applicable in this case. Interest cannot be charged on either the ADD or CVD.

The protestant is liable for the amounts of ADD and CVD asserted on the entry under its general term bond. The fact that an ADD/CVD bond was not posted on the subject entry does not reduce or eliminate its liability under the posted entry bond.

This protest should be ALLOWED with respect to the deemed liquidation and DENIED with respect to the protestant's liability under general bond.

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 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