HQ 224914 - Protest No. 2704-93-101295; Tentative Determination to Revoke Dumping Finding; Interest; De Minimis Margin; Cash Deposits; 19 U.S.C. 1675(a); 19 CFR 353.54; 19 U.S.C. 1677g(a); 19 CFR 353.24 - United States International Trade Commision Rulings

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HQ 224914

September 26, 1995

ENT-1-03/LIQ-4-01 CO:R:C:E 224914 SLR

CATEGORY: ENTRY LIQUIDATION

District Director of Customs
U.S. Customs Service
300 S. Ferry Street, Rm 1001
Terminal Island, CA 90731

RE: Protest No. 2704-93-101295; Tentative Determination to Revoke Dumping Finding; Interest; De Minimis Margin; Cash Deposits; 19 U.S.C. 1675(a); 19 CFR 353.54; 19 U.S.C. 1677g(a); 19 CFR 353.24

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised and our decision follows.

FACTS:

This protest involves entries made between July 19, 1985 and February 20, 1986, by protestant (Montgomery Ward & Co.), of color televisions produced by Sharp in Japan. The merchandise subject to an dumping finding (T.D. 71-76) published by the Department of the Treasury on television receiving sets (color or monochrome) produced in Japan. 36 FR 4597 (Mar. 10, 1971).

On January 1, 1980, the Antidumping Act of 1921 was repealed by the Trade Agreements Act of 1979 ("the Act") and replaced by the addition of an antidumping duties title to the Tariff Act of 1930. The Act made two major changes in the antidumping laws: (1) the requirement that cash deposits instead of bonds be posted at the time of entry; and (2) that interest be paid on overpayments as well as underpayments of cash deposits.

Under the Act, all outstanding dumping findings were made subject to annual administrative review. These reviews form the basis for the assessment of antidumping duties on reviewed entries and for cash deposits, including interest, on future entries.

On June 5, 1981, the Department of Commerce ("Commerce") published the final results of the administrative review of T.D. 71-76 for the period April 1, 1979 through March 31, 1980 (period 1). 46 FR 30163. In its review, Commerce found that the dumping margin for Sharp Corporation ("Sharp") was 0.30 percent ad valorem. However, inasmuch as the weighted average margin listed for Sharp was less than 0.5 percent and therefore de minimis, Commerce waived collection of the cash deposit on that manufacturer's entries.

On August 18, 1983, Commerce published the preliminary results of its administrative review of T.D. 71-76 for the period April 1, 1980 through March 31, 1981 (period 2).48 FR 37506. In its review, Commerce preliminarily found that the dumping margin for entries of Sharp televisions during this period was zero.

On August 18, 1983, Commerce published its tentative determination to revoke T.D. 71-76 with respect to Sharp. 48 F.R. 37508. The notice specified that a final revocation "could not be issued until administrative reviews [have] been completed on imports of [television] receiving sets from April 1, 1981, through the date of this notice." Id. This is known as the "gap period" -- the time between the last review conducted giving rise to the tentative decision to revoke, and the d~te that tentative determination was published(19 CFR 353.54(1982 1987 ed.)

Subsequently, Commerce initiated administrative reviews for periods April 1, 1981 through March 31, 1982 (period 3) and April 1, 1982 through March 31, 1983 (period 4) on November 27, 1985. 50 FR 48825. Reviews for April 1, 1983 through March 31, 1984 (period 5) and April 1, 1984 through February 28, 1985 (period 6) were initiated on July 9, 1986.51 FR 24883. The review for March 1, 1985 through February 28, 1986 (period 7) was initiated on April 18, 1986. 51 FR 13273.

On October 26, 1986, Sharp sued Commerce to enjoin reviews of post gap period entries until Sharp's request for revocation was decided. After this suit was brought, Commerce adopted the "update" policy. It agreed to suspend (i.e., stay) the review of post gap period entries except for the most recent period (the "update" review) until the revocation issue was decided. This update review for Sharp initially was the seventh review, but as litigation progressed, it became the ninth review. See generally 55 FR 35916, 35920 (Sept. 4, 1990).

On August 28, 1989, Commerce published the final results of its administrative review for entries of Sharp televisions made from April 1, 1980 through March 31, 1981 (period 2). 54 FR 35517. The dumping margin for Sharp during this period was .86 percent.

Commerce ended the suspension of the post gap period reviews after it was determined that Sharp was not entitled to revocation because of the margins found for the second administrative review (period 2). 55 FR at 35920. It then proceeded with the third through seventh review periods.

On September 4, 1990, Commerce published the final results of its administrative review of the antidumping finding for entries made from April 1, 1981 to February 28, 1986 (periods 3 through 7)of color televisions produced by Sharp in Japan. 55 FR 35916. Therein, Customs was instructed to assess antidumping duties against all subject entries of said merchandise at the rate of 4.76 percent ad valorem.

Sharp challenged the September 4, 1990 determination in court. It then settled the case, agreeing to a 3.24 percent margin for the period April 1, 1983 through February 28, 1986.

Commerce's liquidation instructions were issued on November 19, 1992. These instructions required interest on overpayments or underpayments of the amounts deposited a duties, calculated from the date of payment of the estimated duties through the date of liquidation, at the rate in effect under section 6621 of the Internal Revenue Code of 1954 for such period. Accordingly, on January 22, 1993, Customs liquidated the subject entries at the margin rate of 3.24 percent ($344,047.19) and assessed interest on the underpayment of estimated antidumping duties from the date of the entry through the date of liquidation ($362,065.70).

On April 20, 1993, protestant timely filed the subject protest against the liquidations. It maintains that no antidumping duties are owed since at the time of entry, Commerce had tentatively determined to revoke T.D. 71-76 with respect to color televisions produced by Sharp in Japan. It claims that no interest is owed because no cash deposits were required nor were any cash deposits actually made at the time of entry.

ISSUES:

Whether the Department of Commerce decision to assess antidumping duties following a tentative determination to revoke a dumping finding is protestable.

Whether an instruction to collect interest following a waiver of collection based on a de minimis finding is protestable.

Tentative Revocation

Under section 751 of the Tariff Act of 1930, as amended (19 U.S.C. 1675(a)), Commerce is required to review at least annually the basis and amount of duty to be assessed under an dumping finding, and to publish the results of each such review in the Federal Register. The law further provides that after such a review, Commerce may revoke the dumping finding. 19 U.S.C. 1675(c).

The regulations implementing section 751 outline the procedures for revocation of a dumping finding based on the results of these administrative reviews. Upon application, if there have been no sales at less than fair market value ("LTFV") for at least two years following the dumping finding, the Secretary (Commerce) may act to revoke the dumping finding. 19 CFR 353.54(1982-1987 ed.) If the section 751 review results indicate that revocation may be appropriate, the Secretary will publish a notice of tentative determination to revoke if the parties subject to the revocation provide in writing for reinstatement of the finding if circumstances indicate a resumption of dumping. 19 CFR 353.54.(1982-1987 ed.) Further, a final decision on revocation shall be made as soon as possible after the preliminary determination to revoke is published. 19 CFR 353.54 (1982-1987 ed.) However, the decision on whether final revocation may be warranted cannot be issued until there are no LTFV sales up to the date the notice of tentative revocation was published. Id. Final revocation, if granted, will be effective for all unliquidated entries as of that tentative revocation date. The Secretary of Commerce must be satisfied that there are no longer, and there is no likelihood of resumption of, sales at LTFV. 19 CFR 353.54 (1982-1987 ed.).

A tentative revocation is not a final decision; it is only a proposed action. Among other things, it offers the public an opportunity to comment on the proposed action. 19 CFR 353.54 (1982-1987 ed.) A tentative determination to revoke is not tantamount to a final revocation. (See Sharp v. United States, 837 F.2d 1058, 1060 (Fed. Cir. 1988), wherein the Court of Appeals for the Federal Circuit stated: "The revocation of an antidumping duty order is presaged by the publication by Commerce of a 'Notice of Tentative Determination to Revoke or Terminate.' 19 C.F.R. 353.54 (1982-86 ed.)" Rather, a final revocation occurs when Commerce publishes its determination to revoke the finding. 19 CFR 353.54 (1982-1987 ed.) Consequently, entries made during the tenure of a tentative termination to revoke remain subject to possible antidumping duty assessments.

Protestant maintains that Commerce failed to meet the regulatory requirement that the Secretary "as soon as possible" after the publication of the tentative revocation determine whether to revoke the dumping finding.

This claim was addressed in Matsushita Electric Industrial,. Co. v. United States, 12 CIT 455, 688 F. Supp. 617 (1988), aff'd, 861 F.2d 257 (1988). In that case, Commerce commenced an "update" review even though none of the earlier gap period reviews had been completed. Plaintiff argued that in doing so, Commerce had failed to issue a final decision on the tentative revocation "as soon as possible" and had exceeded the statutory deadline for the completion of administrative reviews. The court responded that the one year timetable for completion of section 751 reviews is directory not mandatory because no prohibition or adverse consequences are imposed for failing to meet the deadline. It held that Commerce could conduct an "update" review and use those results in determining final revocation even though the Department had exceeded statutory deadlines for completing reviews and issuing a final decision on the revocation. Id. at 624.

In any event it seems clear that the issue involves an interpretation of the law and regulations that are within the jurisdiction of the Department of Commerce, rather than the Customs Service. Protests under 19 U.S.C. 1514, are limited to decisions of the Customs Service. Consequently, this issue is not the proper subject of a protest. See also }{Q 225382 of July 3, 1995.

Interest

Section 778 of the Tariff Act of 1930, as amended (19 U.S.C. 1677g(a)), provides that interest shall be payable on overpayments and underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of an antidumping duty order or the date of a finding under the Antidumping Act of 1921.

The words "amounts deposited" refer only to cash deposits of estimated antidumping duties upon entry and not to other kinds of security such as a bond, Consequently, no interest is owed on the underpayment or overpayment of duties on entries subject to a pre-1980 antidumping finding where a bond, not cash, was posted and no annual administrative review of that finding has been published. Timkin Co. v. United States, 15 CIT 526, 777 F. Supp. 20 (1991), cited with approval in Timkin Co. v. United States, 16 CIT 999, 809 F. Supp. 121 (1992).

Section 353.24(a) Of the Commerce Regulations, 19 CFR 353.24(a) , states:

(a) In general, The Secretary will instruct the Customs Service to pay or collect, as appropriate, interest on the difference between the cash deposit of estimated antidumping duties and the assessed antidumping duties on entries of the merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of an antidumping duty order.

At the dates of entry, July 19, 1985 through February 20, 1986, the antidumping duty rate in effect was the 1981 administrative review (46 FR 30163, June 5, 1981) finding of a 0.30 percent margin for Sharp. Commerce reported that "because the weighted average margin[] listed above for . . .Sharp. . . [is] less than 0.5 percent and therefore de minimis, the Department shall not require cash deposits on [that] manufacturer's entries." 46 FR at 30166.

Protestant maintains that no interest is owed because Commerce waived the cash deposit requirement and no actual cash deposits were made.

These claims were addressed in EQ 224043 of December 17, 1992. In that case, the entries involved were also of Sharp televisions governed by the June 5, 1981 administrative review. Customs held that interest on the underpayment of duties was owed despite the fact that the administrative review revealed de minimis dumping margin and the cash deposit requirement for entries of Sharp televisions had been waived. It stated, in part:

A requirement of a deposit of zero dollars is a requirement of a cash deposit. Commerce considers a de minimis margin to be the equivalent to a zero dollar cash deposit. Although the cash deposit requirement of 0.30 percent in this case was waived, the entry was nevertheless subject to a cash deposit requirement, albeit de minimis, and as such, interest would be owing to the government on any underpayment at the date of liquidation. As an antidumping duty of 3.24 percent was ultimately determined, interest is owed on the underpayment of duties on the entries represented by the difference between the amount deposited (i.e., zero dollars) and the amount ultimately due.

This remains the position of Commerce and applies to protestant's entries.

Protestant makes reference to HQ 223539 of May 4, 1992 to support its claim that no interest payments should be owed. In HQ 223539, entries filed between July 20, 1983 and July 6, 1984, were subject to a pre-1980 dumping finding on fish netting from Japan. No cash deposits were required for imports of that merchandise, however, until the publication of Commerce's first administrative review of the finding on September 22, 1983. Thus, no interest was owed on the entries made prior to that date.

Here, protestant's entries were made after the June 5, 1981 publication of the final results of an administrative review for the pre-1980 antidumping finding T.D. 71-76. As indicated, there was a cash deposit requirement of zero at the time of entry, and interest is owed on the underpayment of estimated antidumping duties for those entries.

Protestant argues that the equities of this case warrant the reversal of the assessment of duties and interest. It maintains that during the period of time here, 1983-1989, the antidumping laws were not enforced as envisioned by Congress an.d states neither Montgomery Ward nor Sharp was responsible for the delays.

The Commerce regulations are clear that the publication of final administrative reviews for gap period entries is a condition precedent to the revocation of a dumping finding. 19 CFR 353.54 (1982-1987 ed.) Moreover, courts have held that it is within the discretion of the Secretary (Commerce) to conduct "update" reviews before issuing a final determination on the revocation. Matsushita Electric Industrial Co., 12 CIT at 464-65, 688 F. Supp. at 624; UST Inc. v. United States, 831F.2d 1028, 1032-33 (Fed. Cir. 1987). As indicated, these reviews can be conducted even though Commerce has exceeded the statutory deadline for completing reviews and issuing a final decision on revocation. Matsushita Electric Industrial Co., 12 CIT at 463-65,688 F. Supp. at 623-24; Nissan Motor Corp. v. United States, 10 CIT 820, 824, 651 F. Supp. 1450, 1452 (1986).

The history of Sharp and T.D. 71-76 is detailed in Sharp Corp. v. United States, 13 CIT 951 952-954, 725 F. Supp. 549, 550-552 (1989). In that case, the court held that a writ of mandamus should not be issued in part because Commerce had not refused to perform the administrative reviews or refused to finalize the revocation. Id. at 556. It stated: "Rather, delays imposed by both plaintiff [Sharp] and defendant have contributed to the lengthy review process for this particular case." Id. Likewise, the court dismissed plaintiff's complaint inasmuch as plaintiff had failed to provide a schedule for the completion of the administrative reviews. It cautioned, however, that "neither this Court nor the Court of Appeals look favorably upon the prolonged delays in Commerce's administration of its administrative reviews. * * * Any further procrastination by the government in finalizing a determination regarding revocation of T.D. 71-76 as to plaintiff will receive severe scrutiny by this court." Id. at 557. Thus, even at this juncture, the court did not find the delay in administrative reviews unreasonable. Moreover, the court expressly notes that some responsibility for delay rests with Sharp.

Again, the protestant's arguments are based on laws and regulations whose administration and interpretation was delegated by Congress to the Secretary of Commerce. The protestant is challenging the validity of the liquidation instructions received from the Department of Commerce. A protest under 19 U.S.C. 1514 is not the proper mechanism to resolve that challenge since Customs has no authority to either decide the validity of those instructions or to disregard them. HQ 225382 of July 3, 1995.

HOLDING:

The effect of a tentative determination to revoke a finding under 19 C.F.R. 353.54 (1982-1987 ed.) and whether liquidation instructions to collect interest on entries subject to an antidumping duty order are issues within the jurisdiction of the Department of Commerce and are not proper subjects for protest under 19 U.S.C. 1514.

This protest should be denied in full. 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 to 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 the mailing of 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, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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