HQ 228254 - Protest and Application for Further Review No. 2501-98-100026; 19 U.S.C. '1677g(a); Assessment of Additional Duties; 19 C.F.R. '351.212(d); assessment of interest; amendment of protest; 19 C.F.R. ''174.14(a) and 174.28; revocation of countervailing duty order and interest payable - United States International Trade Commision Rulings

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HQ 228254

December 3, 1999

LIQ- 11-LIQ-4-01
RR:CR:DR 228254 CK

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
Otay Mesa Border Station
9777 Via De La Amistad
San Ysidro, CA 92173

RE: Protest and Application for Further Review No. 2501-98-100026; 19 U.S.C. '1677g(a); Assessment of Additional Duties; 19 C.F.R. '351.212(d); assessment of interest; amendment of protest; 19 C.F.R. ''174.14(a) and 174.28; revocation of countervailing duty order and interest payable

Dear Sir/Madam:

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

FACTS:

The subject protest covers one hundred and twenty (120) entries of gray Portland cement made between April 12, 1990 and August 31, 1990. The merchandise at issue was the subject of an antidumping investigation (A-201-802). At the time of entry, the merchandise was subject to estimated antidumping duty deposit rate of 56.58%. Accordingly, a bond was posted to cover the estimated dumping duties. Pursuant to a Notice of Preliminary Determination of Sales At Less Than Fair Value, published in the Federal Register on April 12, 1990 (55 FR 13817), 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 of Sales At Less Than Fair Value, published in the Federal Register on July 18, 1990 (55 FR 29244), the Customs Service was advised that the suspension of liquidation remained in effect, and was advised as to the amounts of the final dumping margins. The Antidumping Duty Order was published in the Federal Register on August 30, 1990 (55 FR 35443). The suspension of liquidation requirement remained in effect, but cash deposits were required at that time. The Department of Commerce issued liquidation instructions for gray portland cement on December 23, 1997. Customs was instructed to liquidate relevant entries for the period between April 12, 1990 and July 31, 1991 and assess an antidumping liability of 61.42% of the entered value of the merchandise. The instructions also provided that the interest provisions were not applicable to cash or bonds posted as estimated antidumping duties before the date of publication of the antidumping duty order. See Customs Message 8357111, dated December 23, 1997. The protested entries were liquidated on May 1, 1998 and May 8, 1998. The entries were liquidated at the higher dumping rate and interest was also assessed on entries that Customs determined did not have a bond. The following entries were assessed interest: w31-xxxx880-5, w31-xxxx615-9, 635-xxxx127-2, and w31-xxxx528-9.

The subject protest was filed on May 28, 1998. When the protest was filed, Protestant was contesting liquidation only with respect to the dumping duties and the interest assessed by Customs. By way of a letter dated July 6, 1998, Protestant filed an amendment to include an additional challenge to the liquidations. Protestant sought to include the additional claim that Customs failed to refund the countervailing duty deposited at the time of entry, plus interest thereon.

Protestants claim regarding the refund of countervailing duties involved sixty (60) entries. Those sixty entries (60) are also part of the one hundred and twenty (120) protested entries that were assessed antidumping duties.

The Department of Commerce issued on April 25, 1991, its Final Results of Changed Circumstances Countervailing Duty Administrative Review and Revocation of Countervailing Duty Order (56 FR 19094). The case number for the countervailing duty determination was C-201-013. The countervailing duty order was revoked effective August 24, 1986, and ordered the refund of any cash deposits of estimated countervailing duties on any shipment of Portland Hydraulic Cement and Cement Clinker from Mexico entered or withdrawn from warehouse, for consumption on or after August 24, 1986.

ISSUES:

1. Whether the assessment of the higher dumping rate with interest was proper in the instant case.

2. Whether Protestant is entitled to a refund of its countervailing duty deposited at the time of entry, plus interest thereon.

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed under the statutory and regulatory
provisions for protests (see 19 U.S.C. '1514 and 19 CFR Part 174). The entries were liquidated on May 1, 1998 and May 8, 1998, and the subject protest was filed on May 28, 1998.

Issue 1.

Section 778 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. '1677g(a)), states the general rule on interest:

[i]nterest shall be payable on overpayments and underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after --

(1) the date of the publication of a countervailing or antidumping duty order under this subtitle or section 1301 of this title, or

(2) the date of a finding under the Antidumping Act, 1921.

19 U.S.C. '1677g(a)(1998 supp.) (emphasis added). This provision contemplates situations where a cash deposit is required to have been made upon entry, rather than where a bond is required, because interest is only collectable on cash deposits. See Timken Co. v. United States, 37 F.3d 1470, 1472 (Fed. Cir. 1994) wherein the court held that the phrase Aamounts deposited@ refers only to cash deposits of estimated antidumping duties and not to bonds.

We are in agreement with Protestants contention that liquidation of the subject entries at a higher dumping rate and with the assessment of interest was contrary to law. First, regarding the assessment of interest, the liquidation instructions issued by Commerce specifically provide that the interest provisions are not applicable to cash or bonds posted as estimated antidumping duties before the date of publication of the final order. In the instant case, the majority of the entries occurred, and estimated antidumping duties were secured through a bond, prior to August 30, 1990. Thus, the interest provisions of 19 U.S.C. '1677g did not apply to one hundred and eighteen (118) entries. As stated in the FACTS portion of this ruling, interest was assessed on four entries of the total subject one hundred and twenty entries (120). Interest should not have been charged for entry w31-xxxx716-2, dated May 17, 1990, since it was secured by a bond and entered after the Notice of the Preliminary Determination of Sales At Less Than Fair Value published April 12, 1990, (55 F.R. 13817) but before the Antidumping Duty Order was published on August 30, 1990 (55 F.R. 35443). Entry w31-xxxx880-5, dated August 2, 1990, was entered and secured by a bond, after the Notice of Final Determination of Sales At Less Than Fair Value published July 18, 1990, (55 F.R. 29244) but before the Antidumping Duty Order was published on August 30, 1990 (55 F.R. 35443). Thus, entry w31-xxxx880-5 was entered with a bond, and interest should not have been assessed on it entry pursuant to 19 U.S.C. '1677G. However, as to the two other entries assessed interest, entry 635-xxxx127-2, entered August 30, 1990, and entry w31-xxxx615-9, entered August 31, 1990, these two entries were entered on and after the date of the Antidumping Duty Order was published in the Federal Register on August 30, 1990 (55 FR 35443). These two entries are subject to the Antidumping Duty Order, and interest is payable on the cash deposits that were required by the order.

Second, pursuant to 19 C.F.R. '351.212(d), the Protestant argues that Customs must disregard the difference between the bond amount required under an affirmative preliminary determination and the duty determined under the order when liquidating an entry subject to dumping duties where the bond amount is less than the dumping duty.

When informed of the apparent inconsistency between its liquidation instructions, and 19 CFR 353.23, the Department of Commerce on October 27, 1999, asked that the Customs Service reliquidate the entries to comply with the following modified instructions:

IF A BOND OR CASH DEPOSIT WAS COLLECTED AS SECURITY FOR AN ESTIMATED ANTIDUMPING DUTY FOR ANY SHIPMENT OF GRAY PORTLAND CEMENT AND CLINKER FROM MEXICO THAT WAS ENTERED, OR WITHDRAWN FROM WAREHOUSE, FOR CONSUMPTION DURING THE PERIOD APRIL 12, 1990, THROUGH AUGUST 22, 1990, ASSESS A DUMPING LIABILITY EQUAL TO 61.42 PERCENT OF THE ENTERED CUSTOMS VALUE OR EQUAL TO THE AMOUNT OF THE BOND OR CASH DEPOSIT WHICHEVER IS LESS.

Therefore, for one hundred and eighteen entries of the subject one hundred and twenty entries, the protested issue of the assessment of the higher dumping rates is moot. The Port has received the above reliquidation instructions, and will reliquidate the entries accordingly.

However, entry 635-xxxx127-2, entered August 30, 1990, and entry w31-xxxx528-9, entered August 31, 1990, that were entered after the final antidumping duty order, are subject to the rate established by the Antidumping Duty Order of August 30, 1990.

Issue 2.

Section 174.14(a), Customs Regulations (19 C.F.R. '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 C.F.R. '174.12(e) (i.e., in this case, within 90 days after liquidation of the entries), to include additional claims on the same issue protested or to challenge an additional administrative decision relating to the same category of merchandise. Therefore, the July 6, 1998 amendment to the protest was timely filed.

Countervailing duties were assessed on sixty (60) of the one hundred and twenty (120) entries that are part of the antidumping part of this protest.

The Department of Commerce published in the Federal Register on April 25, 1991, its Final Results of Changed Circumstances Countervailing Duty Administrative Review and Revocation of Countervailing Duty Order (56 FR 19094). This final order revoked all countervailing duty orders, effective August 24, 1986.

When all 60 of these entries that were assessed countervailing duties, which were paid at the time of entry, were liquidated Customs set-off the amount of countervailing duties paid against the amount of antidumping duties that were owed. The amount of countervailing duties paid at the time of entry were subtracted from the amount of antidumping duties that were owed, so that the bills for the antidumping duties owed were lowered by the amount of countervailing duties already paid. For example, entry 635-xxxx790-9, entered July 19, 1990, and liquidated on May 1, 1998, was assessed at the time of entry $45.98 in countervailing duties, which was paid. At the time of liquidation it was found that antidumping duties were owed in the amount of $1,961.14, a bond had been posted at entry for antidumping duties. When the bill was sent to Protestant it was in the amount of $1,915.16. This shows that $45.98 already paid in countervailing duties was subtracted from the $1,961.14 owing from antidumping duties, and how Protestant was billed for only $1,915.16, which is the antidumping duty bill minus the countervailing duty already paid. This calculation was done for all 60 entries for which Protestant claims a refund of its countervailing duties paid.

The authority for this set-off procedure is found in both the Antidumping Duty Order, published in the Federal Register on August 30, 1990 (55 F.R. 35443), and 19 CFR 24.72. The Antidumping Duty Order states, AThe Department will instruct the U.S. Customs Service to reduce the dumping deposit by the amount of the countervailing duty deposit attributable to the export subsidies found in the most recent countervailing duty administrative review concerning the subject merchandise. Furthermore, 19 CFR 24.72 states, Awhen an importer of record or other party has a judgment or other claim allowed by legal authority against the United States, and he is indebted to the United States, either as principal or surety, and undisputed, the port director shall set off so much of the judgment or other claim as will equal the amount of the debt due the Government. As Protestant was indebted to the Government for the antidumping duties assessed on its entries, and was at the same time entitled to a refund for the countervailing duties it had paid to the Government on many of the same entries, the Customs Service was entitled to set off the refund amount against the antidumping duties owed the Government.

Therefore, no money is owed Protestant in regard to the countervailing duties paid on the 60 entries at the time of entry; Protestant has already received a monetary credit for the amount of countervailing duties paid on those 60 entries.

However, Protestant also requested interest on the amount of countervailing duties paid from the time of entry, in accordance with section 778 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. '1677g(a)).

In the Final Results of Changed Circumstances Countervailing Duty Administrative Review and Revocation of Countervailing Duty Order (56 F.R. 19094), published April 25, 1991, the Department of Commerce stated it will instruct the Customs Service to terminate the suspension of liquidation requirement and refund any cash deposits of estimated duties made on any shipment of this merchandise entered or withdrawn from warehouse on or after August 24, 1986. Additionally, the Department of Commerce sent the Customs Service corrected liquidation instructions regarding this matter in message number 2002111, dated January 2, 1992. These instructions corrected the cash deposit rate, but also addressed the fact that the countervailing duty order for the subject merchandise had been revoked, and stated that section 778 of the Tariff Act requires that interest be paid on overpayment or underpayment of amounts deposited as estimated countervailing duties. It states further, that such interest is payable at the rate in effect under section 6621 of the Internal Revenue Code of 1954 for such period. Finally, it states that the interest shall be calculated at the rate from the date of payments of estimated duties through the date of liquidation.

Therefore, in accordance to the above liquidation instructions, the Protestant is entitled to interest on the cash deposits of countervailing duties it had paid the Customs Service to the time of set off when it received the benefit of the payment by the reduced bill. To clarify, Protestant has already been given a credit for the amount of countervailing duties it paid for the 60 entries, but it is entitled to receive the interest that accrued on the amount of cash deposits it made on estimated countervailing duties, from the date of entry.

HOLDINGS:

Issue 1: Protestant is correct in stating that one hundred and eighteen of the one hundred and twenty entries at issue, should have been liquidated at the antidumping margin rate required at the time of entry which it secured by bonds. However, our response is moot as to this issue, as the Department of Commerce has issued reliquidation instructions to this effect.

Additionally, interest should not have been assessed on entries w31-xxxx716-2, dated May 17, 1990, and w31-xxxx880-5, dated August 2, 1990, as they were also secured by bonds at the time of entry.

However, entry 635-xxxx127-2, entered August 30, 1990, and entry w31-xxxx528-9, entered August 31, 1990, that were entered after the final antidumping duty order, are subject to the rate established by the Antidumping Duty Order of August 30, 1990, and interest is payable on the cash deposits that were required by the order.

Issue 2: Protestant was entitled to a refund of the countervailing duties deposited at entry, however, Protestant has already been given a credit for the amount of countervailing duties it paid for the 60 entries, when Customs set off the antidumping duty amounts due, by the amount of countervailing duties already paid. Additionally, Protestant is entitled to receive the interest that accrued on the amount of cash deposits it made on estimated countervailing duties, from the date of entry.

The protest should be ALLOWED in part and DENIED in part.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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