HQ 228750 - Internal Advice; Protest No. 0901-99-100325; Application for Further Review; Stelco, Inc.; 19 U.S.C. § 1677g(a); 19 U.S.C. § 1505; antidumping duty deposit; interest; HQ 227689 (November 24, 1998); HQ 226263 (December 10, 1996); 19 U.S.C. § 1514(c)(2) - United States International Trade Commision Rulings

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HQ 228750

June 26, 2002

LIQ-15; LIQ-4-01
RR:CR:DR 228750 LLB

Category: LIQUIDATION

Port Director of Customs
Attn: Joseph Wilson
111 W. Huron Street
Buffalo, New York 14202

RE: Internal Advice; Protest No. 0901-99-100325; Application for Further Review; Stelco, Inc.; 19 U.S.C. § 1677g(a); 19 U.S.C. § 1505; antidumping duty deposit; interest; HQ 227689 (November 24, 1998); HQ 226263 (December 10, 1996); 19 U.S.C. § 1514(c)(2)

Dear Mr. Wilson:

The above-referenced protest has been forwarded to our office for further review. As explained below, because the requirements for further review have not been met, we are treating the application as a request for internal advice per 19 C.F.R. § 177.11. We have considered the points raised by the protestant, Stelco, Inc., and your office. Our decision follows.

FACTS

On February 4, 1993, the Department of Commerce (“Commerce”) issued a notice of preliminary determination of sales at less than fair value of, inter alia, certain corrosion-resistant carbon steel flat products from Canada. 58 Fed. Reg. 7085 (February 4, 1993). The protestant’s merchandise was found to have a weighted-average margin of 7.19%. The notice stated that Customs “shall require a cash deposit or posting of a bond equal to the estimated preliminary dumping margins . . .” The anti-dumping duty order was issued on August 19, 1993. 58 Fed. Reg. 44162 (August 19, 1993).

The subject protest involves 945 entries of certain corrosion-resistant carbon flat steel products from Canada made between February 16, 1993 and May 10, 1994. With the exception of one entry, this office was not provided with any entry summaries, therefore, we base the following facts on the protestant’s protest and the
port’s assertions in the CF 6445A. According to the port

The port also asserts that “where duties were included in the price of the goods, [those] entries were reappraised to include an increase in regular Customs duties when the antidumping duties was decreased.” and the protestant’s assertions, the protestant made cash deposits on each of the foregoing entries. Following an affirmative final determination in the antidumping investigation, 61 Fed. Reg. 13815 (March 28, 1996), and the court appeals taken thereto, the entries were liquidated between July 9, 1999 and September 10, 1999, and the anti-dumping duty deposits, according to the protestant, were refunded without interest. The protestant filed a protest and application for further review challenging the port’s liquidation of these entries.

ISSUES

1. Whether the protest is timely

2. Whether the protestant has standing to protest the liquidation of entry number 112-xxxxxx-3

3. Whether the port erroneously liquidated the entries without the benefit of interest

LAW and ANALYSIS

Initially, we note that the protestant’s application for further review (AFR) does not meet the requirements set forth in 19 C.F.R. § 174.24, which provides:

Further review of a protest which would otherwise be denied by the port director shall be accorded a party filing an application for further review which meets the requirements of § 174.25 when the decision against which the protest was filed: (a) Is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise; (b) Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts; (c) Involves matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling; or (d) is alleged to involve questions which the Headquarters Office, United States Customs Service, refused to consider in the form of a request for internal advice pursuant to § 177.11(b)(5) of this chapter.

Therefore, further review will be accorded to the party filing an application for further review which meets the requirements of § 174.25 and at least one of the criterion in § 174.24. In the subject protest, the port approved the AFR notwithstanding the fact the protestant has not alleged any of the conditions required in § 174.24 of the decision protested. Consequently, the criteria for further review have not been met and therefore, we are treating protestant’s application as a request for internal advice. We note that insofar as the analysis below is consistent with the position set forth by the Port in the CF 6445A, referral to Headquarters, either for Further Review or Internal Advice, was not necessary.

Issue 1

A protest may be filed against the liquidation of an entry, if the protest is filed within, but not before 90 days of liquidation of the entry of the merchandise. See 19 U.S.C. § 1514(a)(5) and (c)(3). According to the port’s Exhibit C, 928 of the subject entries were liquidated between July 16, and September 10, 1999. Inasmuch as the protestant filed this protest on October 8, 1999, the protest against the liquidation of the foregoing entries was within the 90-day statutory period and, therefore, timely. See 19 U.S.C. § 1514(c)(3). However, according to the port’s Exhibit A, 17 of the subject entries were liquidated July 9, 1999, and insofar as the 90-day period elapsed on October 7, 1999, the protestant’s October 8, 1999, protest is untimely as to those entries.

Issue 2

Pursuant to 19 U.S.C. § 1514(c)(2),

. . . protests may be filed with respect to merchandise which is the subject of a decision specified in subsection(a) of this section by—

(A) the importers or consignees shown on the entry papers, or their sureties; (B) any person paying any charge or exaction; (C) any person seeking entry or delivery; (D) any person seeking a claim for drawback; (E) with respect to a determination of origin under section 3332 of this title, any exporter or producer of the merchandise subject to that determination, if the exporter or producer completed and signed the NAFTA Certificate of Origin covering the merchandise; or (F) any authorized agent of any of the persons described in clauses (A) through (E).

According to the CF-7501 that was submitted, the protestant is not the importer or the consignee of the merchandise for entry 112-xxxxxx-3. Insofar as the record does not reflect that the protestant does not fall within any of the other foregoing categories, the protestant does not have standing to challenge the liquidation of entry 112-xxxxxx-3 pursuant to § 1514(c)(2).

Issue 3

The protestant conclusionally argues that pursuant to 19 U.S.C. § 1677g, its cash deposits should have been refunded with interest. The protestant also conclusionally argues that Customs lacks the legal authority to retain its deposits and that such violates the Due Process Clause of the Fifth Amendment to the Constitution as well as “fundamental fairness.” Insofar as the protestant does not provide any other support for its argument in fact or in law, we decline to address these arguments at this time. Section 1677g(a) provides “[i]nterest 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. Courts have conclusively held that 1677g(a) requires interest only when a cash deposit of estimated duties is required under an antidumping order. See Timken Co. v. United States, 37 F.3d 1470, 1472-73 (Fed Cir. 1994); American Hi-Fi International, Inc. v. United States, 936 F.Supp. 1032, 1038 (Ct. Int’l Trade 1996); see also, HQ 227689 (November 24, 1998); HQ 226263 (December 10, 1996).

In the current case, the antidumping order was issued on August 19, 1993. 58 Fed. Reg. 44162. According to the ACS records, 34 entries were filed, with cash deposits paid thereon, between August 19, 1993 and May 10, 1994. The ACS records further reflect, with regard to the foregoing entries, that interest was refunded on the cash deposits on August 6, 1999. Pursuant to 19 U.S.C. § 1514(a), protests may be filed against certain decisions of the Customs Service, including, as protestant raises in its protest, the liquidation of an entry. See § 1514(a)(5). Specifically, protestant argues that the antidumping duties deposited on the merchandise entered should have liquidated with interest pursuant to 19 U.S.C. § 1677g(a), which is also a protestable issue. See New Zealand Lamb Company, Inc. v. United States, 40 F.3d 377, 382 (Fed. Cir. 1994); HQ 226263 (December 10, 1996).

Based on our review of the ACS records of 34 of the entries, it is apparent that the protestant neglected to review the entries to determine that these entries had in fact liquidated with interest. Inasmuch as the 34 entries were liquidated with interest, there is no apparent basis to protest those entries. Hence, the 34 entries do not raise a protestable basis for relief and will not be considered. See 3V, Inc. v. United States, 83 F. Supp. 2d 1351 (CIT 1999)(granting defendant’s motion to dismiss for failure to state a claim upon which relief may be granted)(holding that there was no case or controversy where both the classification assessed and the classification protested are duty-free).

With regard to the remaining 894 entries, the port asserts, see port’s exhibit “C”, that these entries were filed between, with cash deposits made thereon, between February 16, 1993 and August 13, 1993. Insofar as the antidumping order was issued after these entries were filed, they were not filed under an antidumping order requiring a cash deposit and, therefore, interest, pursuant to 1677g(a), was not required. HQ 227689 (November 24, 1998) aff’d Dynacraft Industries, Inc. v. United States, 118 F. Supp. 2d 1286 (Ct. Int’l Trade 2000). Interest would also not be payable under 19 U.S.C. § 1505(c). The interest requirement of 19 U.S.C. §1505(c) is linked to 19 U.S.C. §1505(a), which provides that “[u]nless merchandise is entered for warehouse or transportation, or under bond, the importer of record shall deposit with the Customs Service at the time of making entry, or at such later time as the Secretary may prescribe by regulation, the amount of duties and fees estimated to be payable thereon.” Id. To trigger liability under 19 U.S.C. §1505(c), the importer must have deposited an estimated duty. Id. In this case, the protestant did not deposit an estimated duty, but posted a cash deposit, as security pursuant to 19 U.S.C. §1673b(d)(1)(B).

Section §1673b(d)(1)(B) provides that “[i]f the preliminary determination of the administering authority under subsection (b) of this section is affirmative, the administering authority . . . shall order the posting of a cash deposit, bond, or other security, as the administering authority deems appropriate, for each entry of the subject merchandise . . . .” See 19 C.F.R. §353.15(a)(3). We note that protestant elected to pay a cash deposit rather than posting a bond or other security pursuant to section 1673b(d)(1)(B). A cash deposit made pursuant to this section is not a deposit of an estimated duty or fee, but, like a bond, simply a form of security. Accordingly, 19 U.S.C. §1505(a), and therefore, 19 U.S.C. §1505(c), the interest provision, are inapplicable in this instance.

HOLDING

1. The protest as to 17 of the entries should be denied as untimely pursuant to 19 U.S.C. § 1514(c)(3), provided that the port can support, with evidence, its assertion that these entries were liquidated on July 9, 1999.

2. With regard to entry 112-xxxxxx-3, the protestant does not have standing to bring a protest against the liquidation of this entry insofar as it is not the importer, consignee, or other person enumerated in 19 U.S.C. § 1514(c)(2). The protest should be denied as to this entry and any other entry for which the protestant does not meet the criteria in 19 U.S.C. § 1514(c)(2).

3. (a) The protest as to 34 of the entries should be denied because they do not raise a “case or controversy” insofar as these entries liquidated with the benefit of interest on the cash deposits refunded.

(b) Pursuant to 1677g(a), interest on cash deposits of estimated duties required under an antidumping order is refundable if paid on or after the issuance of an antidumping order. The protest as to the remaining 894 entries should be denied provided that the port can support, with evidence, its assertion that these entries were filed, with cash deposits paid thereon, before the issuance of the August 19, 1993, antidumping order.

Further, cash deposits posted pursuant to 19 U.S.C. § 1673b(d)(1)(B) are not estimated “duties and fees” as provided by 19.U.S.C. § 1505(a) and therefore, the interest provision, 19 U.S.C. § 1505(c), is a inapplicable in this case.

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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