HQ 226385 - Protest 1001-91-108392; steel wall swimming pools; T.D. 77-223; Customs Procedural Reform and Simplification Act of 1978; Data Export Corp. v. U.S.; HQ 224162; laches; equitable estoppel; 19 U.S.C. 1504(d); Section 632, NAFTA Implementation Act. - United States International Trade Commision Rulings

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HQ 226385

September 16, 1996

LIQ-4-RR:IT:EC 226385 AJS

CATEGORY: LIQUIDATION

CMC Director of Customs
U.S. Customs Service c/o Protest and Control Section
6 World Trade Center, Room 761
New York, NY 10048-0945

RE: Protest 1001-91-108392; steel wall swimming pools; T.D. 77-223; Customs Procedural Reform and Simplification Act of 1978; Data Export Corp. v. U.S.; HQ 224162; laches; equitable estoppel; 19 U.S.C. 1504(d); Section 632, NAFTA Implementation Act.

Dear Sir:

This is our decision in protest 1001-91-108392, dated November 27, 1991, concerning the liquidation of steel wall swimming pools.

FACTS:

In Treasury Decision (T.D.) 77-223 a finding of dumping for metal-walled aboveground swimming pools from Japan was published in 42 Fed. Reg. 44,811 (September 7, 1977). This notice stated that all unappraised entries of this merchandise will be liable for the possible assessment of special dumping duties.

The subject steel wall swimming pools from Japan and manufactured by Asahi Chemical Industry Co. (ACI) were entered on January 8, 1979.

On August 30, 1983, the Final Results of Administrative Review of Antidumping Finding for the subject merchandise was published in 48 Fed. Reg. 39,267. These results listed a 28.87% dumping margin for metal-walled above ground swimming pools from Japan manufactured or exported by ACI from 11/01/78 -10/31/79.

On November 15, 1983, the Customs Information Exchange (CIE) issued a notification of specific action in a master list of the foreign market values and purchase prices applicable to shipments of Japanese metal-walled above ground swimming pools exported by ACI and purchased during the period 11/01/78 - 10/31/79. CIE N-28/76, Supplement 19. This list was received from the International Trade Administration (ITA) of the Department of Commerce (DOC). This notification stated that effective as of the date of issuance of this master list, Customs should no longer suspend liquidation of entries covered by this master list, and liquidation should proceed accordingly.

The subject entry was liquidated on August 30, 1991. The Customs Form (CF) 6445A states that at the time CIE N-28/76 was issued the subject merchandise was assigned to another commodity team. No reason was given for why that team did not liquidate the subject entry. The team which prepared the form was assigned the subject merchandise subsequent to the adoption of the Harmonized Tariff Schedule (HTS) in 1989. At the time the entries were transferred to that team, it is claimed that no dumping liquidation orders were available. Upon further research, the team finally received copies of CIE N-28/76 in May of 1991. Upon review of the instructions, the subject entry was liquidated pursuant to these instructions.

ISSUE:

Whether the subject entry was properly liquidated by Customs or deemed liquidated by operation of law pursuant to 19 U.S.C. 1504.

LAW AND ANALYSIS:

Initially, we note that the subject protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(B). The date of decision as to which protest is made was August 30, 1991, and the date of this protest is November 27, 1991. We also note that the liquidation of an entry is protestable pursuant to 19 U.S.C. 1514(a)(5).

Liquidation has been defined as "the final computation by the Customs Service of all duties (including any antidumping or countervailing duties) accruing on that entry." American Permac, Inc. v. United States, 10 CIT 535, 537 (1986). The Customs Procedural Reform and Simplification Act of 1978 (the 1978 Act) provides in section 209(a), 19 U.S.C. 1504, that an entry is deemed liquidated as entered if Customs has not liquidated the entry within one year from the date of entry or withdrawal from warehouse. The 1978 Act was effective as to entries or withdrawals for consumption on or after 180 days after the enactment of the Act (i.e., October 3, 1978). Thus, only entries or withdrawals made on or after April 1, 1979, were covered by the 1978 Act.

Previous to the 1978 Act, there was no time limit for the liquidation of an entry. Dart Export Corp. et al. v. United States, 43 CCPA 64, C.A.D. 610 (1956), cert. denied, 352 U.S. 824, 77 S. Ct. 33, 1 L. Ed. 2d 48 (1956). The Court in Dart Export stated that the law prescribed no time limit within which the collector shall make the original liquidation. This conclusion is supported by the legislative history of the 1978 Act. In the statement of Reason for Change contained in S. Rep. No. 95-788 at 832, it is stated:

Reason for change.--The provisions adopted by the committee [section 209] would increase certainty in the customs process for importers, surety companies, and other third parties with a potential liability relating to a customs transaction. Under the present law, an importer may learn years after goods have been imported and sold that additional duties are due, or may have deposited more money for estimated duties than are actually due but be unable to recover the excess for years as he awaits liquidation . . .

The entry at issue was made on January 8, 1979. As stated above, the time constraints provided for under 19 U.S.C. 1504 only apply to entries made on or after April 1, 1979. Therefore, the subject entry was not deemed liquidated by operation of law. See HQ 224162 (May 5, 1993) for a similar discussion of this issue.

In HQ 224162, we note that the protestant contended the doctrine of laches prevented the assessment of antidumping duties on the subject entries because Customs waited too long to take action on the entries. Customs cited to the general rule that "laches or neglect of duty on the part of officers of the Government is no defense to a suit by it to enforce a public right or protect a public interest." Utah Power & Light Co. v. United States, 243 U.S. 389, 37 S. Ct. 387, 61 L. Ed. 791 (1917). Customs stated in HQ 224162 that the public interest required to be protected consisted of the revenue of the United States. Customs also cited to the Court of Customs and Patent Appeals which held that equitable estoppel is not available against the Government in cases involving collection or refund of duties on imports. See Air-Sea Brokers, Inc. v. United States, 596 F.2d 1008, 66 CCPA 64 (1979). Therefore, neither laches nor equitable estoppel are a defense to the payment of the duties in question.

Section 1504(d) was amended by Section 632, title VI-Customs Modernization, Public Law 103-182, the NAFTA Implementation Act (107 Stat. 2057), enacted December 8, 1993. Section 692 of the Act states that title VI is effective on the date of enactment of the Act. The subject entry was liquidated on August 30, 1991, which was before the effective date of the NAFTA Implementation Act. Thus, the subject entry is not governed by the Act. Even if the recently amended section 1504(d) applied, Customs position is that this amendment made by the Act of December 8, 1993, applies to entries on which the suspension was lifted on or after December 8, 1993. Thus, it is Customs position that this amendment would not apply. Moreover, we note that not only was the entry made before the date of enactment but also that the liquidation occurred before that date.

The protestant raises four other issues regarding the authority of the DOC and the antidumping law. These issues are the DOC's alleged failure: to publish notice of intent to conduct the annual review of the dumping findings on swimming pools as required by 19 U.S.C. 1675; to conduct the annual review timely; to comply with the ITA's own directive of March 28, 1980 regarding completion of its annual review; to include the subject entry in the first annual review covering swimming pools from Japan. On entries involving antidumping duties, the Secretary of the Treasury and Customs Service have limited authority. Under 19 U.S.C. 1677(1), the Secretary of Commerce is responsible for administration of the antidumping law. Therefore, these antidumping issues are not protestable matters under the authority of the Customs Service pursuant to 19 U.S.C. 1514. In any event, the DOC has commented on these issues and found them to be without merit.

The protestant also cites to the proposition that even where the deemed liquidation provisions of 19 U.S.C. 1504 were not applicable, Customs was still required to "act responsibly to liquidate entries promptly after a lengthy suspension has been terminated". Eagle Cement Corp. v. United States, Slip. Op. 93-117 (CIT June 23, 1993). That case did not involve a situation where "the deemed liquidation provisions of 19 U.S.C. 1504 were not applicable". Rather, it involved a case in which the 90-day liquidation provision of section 1504(d) was held to be directory rather than mandatory. Therefore, the cited proposition is not instructive for the resolution of the subject protest. In addition, the subject protest is factually distinguishable from the Eagle Cement case. In that case, section 1504 was in fact applicable but Customs was given a discretionary 90 days to liquidate the entry. As discussed supra, however, section 1504 was not in effect for the subject entry and Customs was given no time limit for the liquidation of the entry. Thus, the Eagle Cement case is also not instructive for the resolution of the subject protest because of important factual differences between the two cases.

The protestant additionally cites to 19 CFR 159.51 which was in effect at the time the CIE issued liquidation instructions (i.e., 1983) for the subject entry. The protestant claims that this provision governed the subject suspension of liquidation and that it no longer permitted suspension of liquidation after the CIE instructions. The protestant thus asserts that Customs had no legal authority to continue the subject suspension of liquidation. However, liquidation of the subject entry was not suspended in 1983 pursuant to section 159.51 but prior to this date based on T.D. 77-223. Therefore, the suspension regulations in effect in 1983 did not govern the subject suspension. As discussed supra, the subject suspension was governed by the law prior to the 1978 Act which did not provide a time limit for the liquidation of an entry.

HOLDING:

The protest is denied. The subject entry was not deemed liquidated by operation of law pursuant to 19 U.S.C. 1504(d) because the entry was made prior to the effective date of that statute. Thus, the entry was properly liquidated by the actions of Customs on August 30, 1991.

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 the making 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, Freedom of Information Act and other public access channels.

Sincerely,

Director,

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