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HQ 225611




August 13, 1997

LIQ-9-01-RR:IT:EC 225611 CC

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
P.O. Box 2450
San Francisco, CA 94126

RE: Protest and Application for Further Review No. 2809-93- 100933; antidumping duties

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 protestant filed a protest on 15 entries of merchandise, made from December 19, 1985 to July 21, 1986. The merchandise the subject of this protest is certain cellular mobile telephone parts from Japan. A cash deposit for antidumping duties at the rate of 57.81 percent was made at the time of entry.

The merchandise at issue was the subject of an antidumping investigation (case A-588-405). Pursuant to a Notice of Preliminary Determination, published in the Federal Register on June 11, 1985 (50 FR 24554), Customs was instructed by the Department of Commerce 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 May 27, 1988 (53 FR 19318). Notice of Final Results of Administrative Review of the subject merchandise for the manufacturer under consideration was published in the Federal Register on November 20, 1989 (52 FR 33460). In that notice, the dumping margin for the subject merchandise for the subject company was determined to be 106.60 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.

Customs received appraisement or liquidation instructions from the Department of Commerce for the merchandise under consideration in the time period under consideration on November 30, 1992 (Message No. 3335111). In those instructions, Customs officers were instructed to liquidate all shipments of the merchandise under consideration during the period from December 19, 1985 to November 30, 1986, with a dumping duty of 106.60 percent.

All of the protested entries were liquidated on February 12, 1993. The protest was filed on May 12, 1993. The protestant argues that suspension of liquidation was lifted when the Department of Commerce published the final results of administrative review on November 20, 1989 (52 FR 33460). Therefore, the protestant contends that since suspension of liquidation was lifted within four years of the entry dates, the entries should have been deemed liquidated by operation of law four years from the dates of entry at the rate asserted by the importer at the time of entry, pursuant to 19 U.S.C. 1504(d) and Nunn Bush Shoe Co. v. United States, 16 CIT 45, 784 F. Supp. 892 (1992).

ISSUE:

Whether the subject entries were deemed liquidated by operation of law pursuant to 19 U.S.C. ? 1504(d)?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed pursuant to 19 U.S.C. ? 1514(c) and 19 CFR ? 174.12(e). In addition, the protestant filed an amendment to one of the entries, 86-17XXX52, claiming that it should not be subject to antidumping duties because some of the units of that entry were subject to drawback and exported. Section 174.14(a) of the Customs Regulations (19 CFR ? 174.14(a)) allows a protest to be amended at any time prior to the expiration of the 90-day period within which such protest may be filed in accordance with 19 CFR entry) to include additional claims on the same issue protested or to challenge an additional administrative decision relating to the same category of merchandise. See also, 19 U.S.C. ? 1514(c)(1). The amendment was filed on May 13, 1993, which was 90 days after liquidation of the subject entry. Consequently, the amendment was timely filed.

In addition, we note that 19 U.S.C. ? 1504(d) was amended by section 641, title VI - Customs Modernization, Public Law 103-182, the North American Free Trade Agreement Implementation Act (107 Stat. 2057), enacted December 8, 1993. Title VI of Public Law 103-182 took effect on the date of enactment of the Act (section 692 of the Act). Since entry and liquidation occurred prior to the date of enactment, the amended law does not apply in this instance. See Headquarters Ruling (HQ) 225576 of November 15, 1994.

Liquidation of an entry constitutes the final computation by Customs of all duties (including any antidumping or countervailing) accruing on that entry. See generally, Ambassador Division of Florsheim Shoes v. United States, 748 F.2d 1560, 1562 (Fed. Cir. 1984). The Customs Procedural Reform and Simplification Act of 1978 provides in section 209(a), 19 U.S.C. has not liquidated the entry within one year from the date of entry or withdrawal from warehouse. Customs is permitted to extend the one year period, under 19 U.S.C. ? 1504(b), if liquidation is suspended by statute or court order. The subject entry was suspended pursuant to 19 U.S.C. ? 1673, pending the results of an antidumping administrative review.

In addition, 19 U.S.C. ? 1504, prior to its amendment, states in relevant part the following:

(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 of record, 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 protestant claims that the subject entry was liquidated by operation of law, as entered, because suspension of liquidation was lifted prior to the fourth-year anniversary of the entries, and liquidation occurred over four years after the entry dates.

In Nunn Bush Shoe Co. v. United States, 16 CIT 45, 784 F. Supp. 892 (1992), entries had been suspended pursuant to an administrative review of countervailing duties on the merchandise. The suspensions were lifted prior to the fourth-year anniversaries of the entries, and Customs did not liquidate those entries until after the fourth-year anniversaries had passed. The Court held that the entries were deemed liquidated by operation of law when they became four years old, stating "[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)." The court in Nunn Bush distinguished Canadian Fur Trappers Corp. v. United States, 12 CIT 612, 691 F. Supp. 364 (1988), aff'd, 884 F.2d 563 (Fed. Cir. 1989), in which the court held that when a suspension of liquidation is lifted after the expiration of the fourth-year period after the date of entry, the entries liquidated are not deemed liquidated by operation of law.

The protestant argues that suspension of liquidation was lifted when Notice of Final Results of Administrative Review was published in the Federal Register, which was prior to the fourth-year anniversary of the dates of entry. Customs has consistently ruled that the suspension of liquidation is lifted when Customs receives instructions from the Department of Commerce. See Headquarters Ruling (HQ) 224778 of December 23, 1993; HQ 225107 of September 20, 1994; HQ 225620 of March 1, 1995; HQ 225885 of June 7, 1995; HQ 225674 of June 21, 1995; and HQ 224427 of October 2, 1996. Since Customs did not receive liquidation instructions until November 30, 1992, the suspension of liquidation was not lifted until more than four years after entry. Consequently, Nunn Bush is inapplicable and Canadian Fur Trappers Corp. v. United States, supra, controls. The entries, therefore, are not deemed liquidated by operation of law.

The protestant protests 5 of the entries for additional reasons. For entry number 86-38XXX3-1, the protestant claims that the merchandise was misclassified relating to invoices 603491, 603492, and 603493. The merchandise was classified under item 684.59 of the Tariff Schedules of the United States (TSUS). The protestant claims that the correct classification is item 685.28, TSUS, since the invoices show that the merchandise consists of microwave radio equipment.

The items under consideration are as follows:

684.59: Electrical telegraph... and telephone apparatus and instruments and parts thereof: [t]elephone apparatus and instruments and parts thereof: [o]ther....

The column one rate of duty is 8.5 percent ad valorem.

685.28: Radiotelegraphic and radiotelephonic transmission and reception apparatus, ...: radio-telegraphic and radiotelephonic transmission and reception apparatus...: [o]ther: [o]ther transmission apparatus incorporating reception apparatus: [o]ther...

The column one rate of duty is 6 percent ad valorem.

The merchandise consists of components for cellular mobile telephones (CMTs). CMTs are able to receive and transmit voice messages by use of microwave radio signals through the ether, without the use of telephone wires. Articles capable of receiving and transmitting radiotelephonic and radiotelegraphic signals are provided for under item 685.28, TSUS.

In HQ 083298, dated February 28, 1989, Customs determined that merchandise which can be used only with microwave radio systems, and cannot be used with completely wired telephone systems, were precluded from classification as telephone apparatus. Customs concluded that merchandise used only with microwave radio systems were classifiable under item, 685.28, TSUS. See also, HQ 554810 (October 11, 1989) for a similar holding. Therefore, we find that the CMT components are classifiable under item 685.28, TSUS, which provides for: "[r]adiotelegraphic and radiotelephonic transmission and reception apparatus, ...: radiotelegraphic and radiotelephonic transmission and reception apparatus...: [o]ther : [o]ther transmission apparatus incorporating reception apparatus: [o]ther..."

For two of the entries, 86-38XXX8-2 and 86-39XXX1-8, the protestant claims that certain items should not have been subject to antidumping duties because they were valued at less than $5 and therefore specifically excluded from merchandise subject to antidumping duties under the antidumping duty order. In addition, for three entries, 86-39XXX1-8, 86-39XXX5-1, and 86-39XXX6-4, the protestant claims that certain merchandise, the mounting base, power cord, and signal cord, should not have been subject to antidumping duties because they are all nonelectronic parts which are excluded from the scope of the antidumping duty order. The protestant claims that the mounting base is simply a metal bracket with no electronic function, and the cords are cable; all are considered mechanical parts.

The scope and products covered by the antidumping investigation and subsequent results were published in the Federal Register several times relating to case number A-508-405. For example, in Final Determination of Sales at Less Than Fair Value, 50 FR 45447, published in the Federal Register on October 31, 1985, the scope of the investigation is described as follows:

The products covered by this investigation are cellular mobile telephones (CMTs), CMT transceivers, CMT control units, and certain subassemblies thereof, ....Subassemblies are any completed or partially completed circuit modules, the value of which is equal to or greater than five dollars, and which are dedicated exclusively for use in CMT transceivers or control units. The term "dedicated exclusively for use" only encompasses those subassemblies that are specifically designed for use in CMTs and could not [be] used, absent alteration, in a non-CMT device.... An importer will have to file a declaration with the Customs Service to the effect that a particular CMT subassembly is not dedicated exclusively for use in CMTs or that the dollar value is less than $5, if he wishes it to be excluded from the order.

Under the antidumping duty law, Commerce conducts an antidumping duty investigation and the International Trade Commission conducts a simultaneous injury investigation. If dumping is found, Commerce calculates a specific dumping margin and issues an antidumping duty order. "[T]he Commerce Department is responsible for interpreting the antidumping duty order and determining whether certain products fall within the scope of the order as interpreted." Sandvik Steel Co. v. U.S., Slip Op. 97-13 (Ct. Int'l Trade Feb. 3, 1997), quoting Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, 783 (Fed. Cir. 1995). "...Customs has a merely ministerial role in liquidating antidumping duties under 19 U.S.C. ? 1514(a)(5)." Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973 (Fed Cir. 1994). Customs cannot modify...[Commerce's] determinations, their underlying facts, or their enforcement.' Mitsubishi Electronics, supra, quoting 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).

The invoices for the entries concerning the claim that certain merchandise is valued less than five dollars substantiate that claim; it is clear that this merchandise was erroneously liquidated with antidumping duties. For the claim for the entries concerning the mounting base, power cord, and signal cord, these items are not considered subassemblies and the liquidation instructions were not followed for these items. The import specialist for these goods has stated that this merchandise was erroneously liquidated. Consequently, these items should be reliquidated without antidumping duties. The protestant claims that for entry 8X-3XXX13-1, some of the merchandise is eligible for preferential treatment under item 806.20, TSUS, for repair/return goods. 19 CFR ? 10.8 contains requirements for preferential treatment for articles exported for repairs or alterations for subheading 9802.00.40 of the Harmonized Tariff Schedule of the United States (HTSUS) (formerly item 806.20, TSUS). 19 CFR ? 10.8 was amended on June 16, 1994. T.D. 94-47. Since the subject merchandise was entered and liquidated prior to the amendment of 19 CFR ? 10.8, the amended regulation does not apply. Prior to its amendment, 19 CFR ? 10.8 provided that certain documentary requirements be met before the partial duty exemption of item 806.20, TSUS, was applicable. 19 CFR ? 10.8 provided that to be eligible for the partial duty exemption of item 806.20, TSUS, a certificate of registration must be filed with Customs, unless waived by the district director. The protestant did not provide the required certificate of registration to Customs. Consequently, unless the district director waived the requirement that the certificate of registration be filed with Customs, the protestant's claim for a partial duty exemption under item 806.20, TSUS, is denied.

In a timely filed amendment to the protest, the protestant claims that amount of antidumping duties and interest charged is inappropriate for certain units of entry 86-17XXX5-2, since they were subject to drawback and exported out of the country. The entry was made on February 13, 1986, and drawback was paid to the protestant for the exported units on October 28, 1986. The entry was liquidated on February 12, 1993. The protestant claims that "[s]ince the units were exported under same condition drawback', Customs demand for additional anti dumping duties and interest for the anti dumping duties is inappropriate."

The protestant's claim appears to be that antidumping duties or additional antidumping duties should not be due on merchandise that has been exported. In HQ 224478, dated June 18, 1993, we rejected a similar claim, finding that a protestant was not eligible for a refund of antidumping duties that have accrued on merchandise that was exported. We stated in that ruling the following:

Liability for duties accrues upon importation of the merchandise. 19 CFR 141.1(a). As stated previously, antidumping duties are treated as regular Customs duties. Thus, the duties owed by the protestant became due and payable at the time of importation. As stated beforehand, the televisions were imported on August 16, 1986. The protestant argues that the televisions are not subject to antidumping duties because they were subsequently exported from the U.S. This fact, however, does not terminate a liability which accrued upon importation. A liability which has accrued is vested (i.e., fixed, settled, or absolute). Black's Law Dictionary, 19 (5th ed. 1979). Accordingly, the protestant is liable for the antidumping duties which accrued upon importation even though they later exported the televisions.

Here, as in HQ 224778, the fact that the protestant exported the subject merchandise, in this case merchandise which was eligible for drawback, does not relieve the protestant of any liability for antidumping duties due. Consequently, the protestant must pay the amount of antidumping duties due for the subject merchandise even though it was exported.

Finally, we acknowledge that although there was a recent case decided by the Court of International Trade, Rheem Metalurgica S/A v. United States, Slip Op. 96-196, decided on December 20, 1996, which contains some of the issues present in this protest, the Rheem case is being appealed.

HOLDING:

The protest is GRANTED in part and DENIED in part. The protest is granted for certain merchandise of entry 86-38XXX3-1 on the issue for tariff classification and should be reclassified under item 685.28, TSUS. In addition, the protest is granted for merchandise of the two entries for which antidumping duties were assessed for merchandise valued less than $5, and the three entries for which merchandise consisting of a mounting base, power cord, and signal cord were assessed antidumping duties.

The protest is denied for the issue of the entries being deemed liquidated by operation of law. The protest is also denied for the claim that an entry was eligible for preferential treatment under item 806.20, TSUS, unless the requirement that the certificate of registration be filed was waived. The claim that merchandise exported under drawback is not subject to antidumping duties is denied.

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
Compliance Division

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