HQ 225650 - Protest and Application for Further Review No. 1801-94-100031; antidumping and countervailing duties; 19 U.S.C. 1514; 19 U.S.C. 1677g - United States International Trade Commision Rulings

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HQ 225650

October 8, 1996

LIQ-4-01/4-02-RR:IT:EC 225650 CC

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
4430 East Adamo Drive, Suite 301
Tampa, FL 33605

RE: Protest and Application for Further Review No. 1801-94-100031; antidumping and countervailing duties; 19 U.S.C. 1514; 19 U.S.C. 1677g

Dear Sir or Madam:

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

FACTS:

According to the file, the entry of the merchandise the subject of this protest was made on October 26, 1983. The merchandise entered was certain steel pipe from Korea, manufactured by the Korea Steel Pipe Co., Ltd. Countervailing duties at the rate of 1.88 percent ($760.76) were deposited at the time of entry.

The merchandise at issue was the subject of a countervailing duty investigation (case C-580-003). Pursuant to a Notice of Preliminary Determination, published in the Federal Register on October 12, 1982 (47 FR 44807), Customs was instructed to suspend liquidation for the subject merchandise entered on or after the date of publication and to require a cash deposit or bond in the amount indicated. In a Notice of Final Determination, published in the Federal Register on December 27, 1982 (47 FR 57535), it was stated that the suspension of liquidation and cash deposit or bond remained in effect. The countervailing duty order was published in the Federal Register on February 18, 1983 (48 FR 7241); the suspension of liquidation requirement remained in effect, but cash deposits were required at that time.

In a Notice of Tentative Determination to Revoke Countervailing Duty Order, published in the Federal Register on August 20, 1985 (50 FR 33614), the Department of Commerce determined to tentatively revoke the countervailing duty order for steel pipes and tubes from Korea for entries made after October 1, 1984. It was also stated that the notice did not cover merchandise entered prior to October 1, 1984 that was not covered in a prior administrative review; the Department would cover any such entries in a separate review, if one was requested. On October 29, 1985, the countervailing duty order for entries made after October 1, 1984 was revoked. 50 FR 43757.

The Department of Commerce issued liquidation instructions for countervailing duties for the subject merchandise on July 9, 1990. In those instructions it was stated that the Department of Commerce did not receive a request for an administrative review of the countervailing duty order on small diameter carbon steel pipes and tubes from Korea for the review period October 12, 1982 through September 30, 1984. Therefore, Customs was instructed to liquidate relevant entries at the rate of cash deposit of estimated countervailing duties required at the time of entry.

The merchandise at issue was also the subject of an antidumping investigation (case A-580-007). Pursuant to a Notice of Preliminary Determination, published in the Federal Register on October 28, 1983 (48 FR 49900), Customs was instructed to suspend liquidation for the subject merchandise entered on or after the date of publication.

Notice of Preliminary Results of Antidumping Duty Administrative Review of the subject merchandise for the manufacturer under consideration was published in the Federal Register on June 19, 1987 (52 FR 23321). Notice of Final Results of Administrative Review of the subject merchandise for the manufacturer under consideration was published in the Federal Register on September 3, 1987 (52 FR 33460). In that notice, the dumping margin for the subject merchandise for the subject company was determined to be .409 percent. In addition, it was stated in that notice that the Department of Commerce would instruct the Customs Service to assess antidumping duties on all appropriate entries.

The Department of Commerce issued liquidation instructions for antidumping duties for the subject merchandise on March 18, 1988. Customs was instructed to liquidate the subject merchandise with a dumping duty of 1.52 percent.

The protested entry was liquidated on May 20, 1994, with the assessment of antidumping duties at 1.52 percent with interest ($615.08 antidumping duty and $1,136.89 interest). The protest was filed on July 22, 1994. Amended liquidation instructions were issued by the Department of Commerce on June 21, 1996, changing the period of review from October 24, 1983 through September 30, 1984 to October 28, 1983 through September 30, 1984.

The protestant protests the assessment of antidumping duties with interest. The protestant also requests a refund of the countervailing duty cash deposit, with interest, pursuant to 19 CFR 355.24.

ISSUE:

Whether the deposit of estimated countervailing duties should be refunded for the subject entry?

Whether the assessment of antidumping duties with interest is proper for the subject entry?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed pursuant to 19 U.S.C. 1514(c).

The protestant protests Customs failure to refund at liquidation a cash deposit of estimated countervailing duties and Customs assessment of antidumping duties with interest at liquidation. The first issue is whether these matters are protestable under 19 U.S.C. 1514.

Under the applicable statues, The Department of Commerce, not Customs, has the authority to calculate and determine antidumping and countervailing duties. In Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973 (Fed Cir. 1994) the following is stated:

Commerce, not Customs, calculates antidumping duties. The Trade Agreements Act of 1979 (1979 Act) transferred administration of the antidumping laws from the United States Treasury Department to Commerce. Pub.L. No. 96-39, ? 101, 93 Stat. 144, 169-70 (1979). Under the present antidumping law, Commerce calculates and determines antidumping rates. 19 U.S.C. ? 1675 (1988 & Supp. V 1993). Commerce conducts the antidumping duty investigation, calculates the antidumping margin, and issues the antidumping duty order. Commerce then directs Customs to collect the estimated duties. See 19 U.S.C. ? 1673e(a)(1) (1990).

Since the Trade Agreements Act of 1979 also transferred administration of the countervailing duty laws from the Treasury Department to Commerce, the above principle of Commerce determining antidumping duties would also apply to countervailing duties.

Customs has the authority to grant or deny protestable decisions. According to 19 U.S.C. 1514(a), these include, "decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to ...(5) the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof." Concerning the role of Customs in liquidating antidumping duties, which would also apply to the liquidation of countervailing duties, the court stated in Mitsubishi Electronics, supra, at page 977:

Further, Customs has a merely ministerial role in liquidating antidumping duties under 19 U.S.C. ? 1514(a)(5). Customs cannot "modify ... [Commerce's] determinations, their underlying facts, or their enforcement." Royal Business Machs., Inc. v. United States, 507 F.Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd, 669 F.2d 692 (CCPA 1982).

Countervailing Duties

In the liquidation instructions issued from the Department of Commerce on July 9, 1990, Customs was instructed, in relevant part the following:

The Department of Commerce did not receive a request for an administrative review of the countervailing duty order on small diameter carbon steel pipes and tubes from Korea for the review period October 12, 1982 through September 30, 1984. Therefore, relevant entries are to be liquidated at the rate of cash deposit of estimated countervailing duties required at the time of entry.

...

The following rates of estimated countervailing duties were required to be deposited for merchandise entered, or withdrawn from warehouse, for consumption on or after December 27, 1982 and exported on or before September 30, 1984:

Manufacturer\Producer\Exporter Ad Valorem Rate

...

Korea Steel Pipe Co., Ltd. .......... 0.00

Pursuant to a Notice of Preliminary Determination, published in the Federal Register on October 12, 1982 (47 FR 44807), Customs was instructed to suspend liquidation for the subject merchandise entered on or after the date of publication. The cash deposit or bond rate listed in that notice that was required for the subject manufacturer was 0.00 percent. Subsequently, this same rate for the subject manufacturer for the subject merchandise was published in the Federal Register prior to entry. See 47 FR 57535 (December 27, 1982) and 48 FR 7241 (February 18, 1983). In addition, the record does not reveal that Commerce issued any instructions to Customs to collect a cash deposit or bond for the subject merchandise for the subject manufacturer in excess of 0.00 percent.

Consequently, Customs was instructed to require a post-order cash deposit of 0.00 percent and subsequently to liquidate at that rate. Customs did not follow Commerce's liquidation instructions by not refunding the cash deposit of $760.76 (1.88 percent rate); thus, Customs liquidated with countervailing duties at the 1.88 percent rate. This action was contrary to Commerce's liquidation instructions and, therefore, is a protestable matter pursuant to 19 U.S.C. 1514. In addition, since Customs failed to follow the liquidation instructions concerning countervailing duty for the subject entry, the protest concerning this matter is allowed and the $760.76 should be refunded.

The protestant requests that interest be included with the refund of the deposited countervailing duties, pursuant to 19 CFR 355.24. 19 CFR 355.24(a) provides the following:

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

The Department of Commerce has the authority to determine whether interest is payable on overpayments and underpayments pursuant to 19 U.S.C. 1677g. See Timken Co. v. U.S., 15 CIT 526, 777 F. Supp. 20 (1991) and HQ 225597 of September 25, 1995. Once Commerce determines that interest applies, it instructs Customs to pay or collect that interest upon liquidation. See HQ 225382 of July 3, 1995.

The liquidation instructions of July 9, 1990 on countervailing duties for the subject merchandise state the following concerning interest:

The provisions of 778 of the Tariff Act require that interest be paid on overpayments or underpayments of amounts deposited as estimated countervailing duties. Such interest is payable at the rate in effect under section 6621 of the Internal Revenue Code of 1954 for such period. The interest shall be calculated at that rate from the date of payments of estimated duties through the date of liquidation.

Clearly, Commerce instructed Customs to pay interest on any overpayment of countervailing duties for the subject entry. Since, the protestant has overpaid countervailing duties in the amount of $760.76, to be refunded, interest is due on that amount.

We note that Section 778 of the Tariff Act was amended in 1984 (Trade and Tariff Act of 1984). Prior to the amended law (1979 Act), interest was calculated using a simple interest method. Subsequent to the date the law was amended, compound interest is used. The effective date of the 1984 amendment is November 4, 1984. See Canadian Fur Trappers Corp. v. United States, 12 CIT 612, 691 F. Supp. 364 (1988), aff'd, 884 F.2d 563 (Fed. Cir. 1989). Since the subject entry was entered on October 26, 1983, interest accrues according to the 1979 Act for the time period prior to November 4, 1984. For the time period after that date, interest accrues according to the 1984 amendment. (For a complete explanation of the calculation of interest under Section 778 of the Tariff Act, see Canadian Fur Trappers, supra, and HQ 223539 of May 4, 1992.)

Antidumping duties

In addition, the protestant protests the assessment of antidumping duties with interest. The protestant requests that the "overpayment (dumping duty + interest) be refunded with interest."

The date of the subject entry was October 26, 1983. The Notice of Preliminary Determination was published in the Federal Register on October 28, 1983. Pursuant to that notice, Customs was instructed to suspend liquidation for the subject merchandise entered on or after the date of publication. In the Notice of Final Determination, published in the Federal Register on March 16, 1984 (49 FR 9926), it was stated that suspension of liquidation for entries of the subject merchandise made on or after the date of publication of the preliminary determination, October 28, 1983, was to remain in effect until further notice. In the Antidumping Duty Order, published in the Federal Register on May 7, 1984 (49 FR 19369), the following is stated concerning the assessment of antidumping duties on the subject merchandise:

Therefore, all entries, or warehouse withdrawals, for consumption of CWPT from Korea made on or after October 28, 1983, the date on which the Department published its "Suspension of Liquidation" notice in the Federal Register, will be liable for the possible assessment of antidumping duties.

The Notice of Preliminary Results of Antidumping Duty Administrative Review of the subject merchandise for the manufacturer under consideration was published in the Federal Register on June 19, 1987. In that notice it is stated that the review covered the period "October 24, 1983 through September 30, 1984," which was inconsistent with the Antidumping Duty Order, published in the Federal Register on May 7, 1984, in which it was stated that entries made on or after October 28, 1983 would be liable for the possible assessment of antidumping duties. In the Notice of Final Results of Administrative Review of the subject merchandise for the manufacturer under consideration, published in the Federal Register on September 3, 1987, it is stated that Commerce would instruct Customs to assess antidumping duties on all appropriate entries. The review period again was October 24, 1983 through September 30, 1984. The liquidation instructions issued in March 1988 cover this same period.

19 U.S.C. 1673 sets out the procedure for the assessment of antidumping duties. Concerning what entries are subject to antidumping duties, the court in ICC Industries, Inc. v. United States, 10 CIT 181 (1986), stated the following:

Normally, a determination that importations are being sold at less than fair value will begin to have an effect only as to those entries of merchandise entered after the date of publication of the notice of the preliminary determination by the Commerce Department. Liquidation of those entries will be suspended and the posting of security for the payment of estimated duty will be ordered in the manner set out in 19 U.S.C. ? 1673b(d).

Amended liquidation instructions were issued by the Department of Commerce on June 21, 1996, changing the period of review from October 24, 1983 through September 30, 1984 to October 28, 1983 through September 30, 1984. Entry of the subject merchandise was made on October 26, 1983. Since the subject entry was made prior to October 28, 1983, it is not subject to the assessment of antidumping duties. Consequently, the subject entry should be reliquidated without antidumping duties, and the protestant should be refunded the $615.08 antidumping duty and $1,136.89 interest paid.

The protestant is also seeking interest on the amounts of both the antidumping duty and the interest to be refunded. 19 U.S.C. 1505(c) was amended by section 642, title VI - Customs Modernization, Public Law 103-182, the North American Free Trade Agreement Implementation Act (107 Stat. 2057), enacted December 8, 1993. In addition, section 642 repealed 19 U.S.C. 1520(d). Title VI of Public Law 103-182 took effect on the date of enactment of the Act (section 692 of the Act). Since entry the subject of this protest occurred prior to the date of enactment, the amended law does not apply in this instance. See HQ 225576 of November 15, 1994.

19 U.S.C. 1520(d) provides in part, the following:

If a determination is made to reliquidate an entry as a result of a protest filed under section 1514 of this title, ..., interest shall be allowed on any amount paid as increased or additional duties under section 1505(c) of this title at the annual rate established pursuant to that section and determined as of the 15th day after the date of liquidation or reliquidation....

In order for the protestant to receive the relief granted, there must have been paid increased or additional duties under 19 U.S.C. 1505(c). Antidumping duties are treated as regular customs duties, except with respect to drawback. See HQ 224043 of December 17, 1992. Consequently, interest should be paid to the protestant on the amount of the antidumping duties to be refunded, $615.08. Interest is calculated from the date of payment of the increased or additional duties to the date of refund of those duties. See HQ 221692 of December 3, 1990.

The protestant is also seeking payment of interest on the $1,136.89 paid; in other words, the protestant is seeking payment of interest on the interest paid. Thus, this amount does not represent increased or additional duties paid under section 505(c). The relevant statutes cited above do not provide for the payment of interest on the interest paid (in this case, the $1,136.89 paid by the protestant). See HQ 225597 of September 25, 1995 and HQ 221692 of December 3, 1990. Consequently, the protestant's request for payment of interest on the $1,136.89 is denied.

HOLDING:

The protest should be ALLOWED in part and DENIED in part. The protest should be ALLOWED for cash deposits of countervailing duties, which should be refunded, with interest. In addition, antidumping duties with interest, paid at liquidation, should be refunded. Interest should be calculated on the amount of antidumping duties to be refunded ($615.08) and paid to the protestant.

The protest should be DENIED in part because no interest is due on the amount of interest to be refunded ($1,136.89).

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, Freedom of Information Act and other public access channels.

Sincerely,

Director, International Trade

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