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HQ 229153




June 27, 2002

RR:CR:DR
229153RDJ/WGR

Port Director of Customs
200 East Bay St.
Room 221
Charleston, SC

Attn: Brenda H. Gibson

RE: PROTEST No.1603-01-100010, Petree & Stoudt Associates, Inc. Anti-dumping duties, Liquidation, scope determinations.

Dear Ms. Gibson:

This is in reference to the above-identified protest filed by Petree & Stoudt Associates, Inc. We have considered the issues raised and our reply follows.

FACTS:

The Department of Commerce published a dumping order on May 15,1989 ( 54 F.R. 20900 ) that covered ball bearings, cylindrical roller bearings and spherical plain bearings. The order did not cover textile machinery components, but did cover bearings utilized in textile machinery.

On May 23, 1991, Commerce issued a final determination on a scope request of the foreign manufacturer to exclude certain of its models from the order. The determination states that a bearing that incorporates attachments such as whorls, pulleys, springs, rollers, and combs that manifestly expand the capabilities of a bearing is outside the scope of the order, but that a bearing that contains enhancements that merely facilitate the application of the bearing to textile machinery is subject to the order. The determination contains a list of components excluded from the order. That list includes a component described as a journal bearing with an attached pulley or roller and identified as SL 1625.

On July 7, 2000, Customs issued message 0202206 which instructed Customs officers to liquidate entries covered by dumping case A-428-201 for the period from May 1,1999, to April 30,2000, except listed firms, one of which was FAG and all relevant affiliates. The message stated that Commerce was conducting administrative reviews of the excepted firms.

On October 2,2001, Commerce issued a determination on a scope request of Temco Textilmaschinkomponeten GMBH and the protestant, the substance of which is set forth in Customs message 1284203 of October 11,2001. The determination lists the excluded journal bearings by model number and associated component which is attached to or augments the journal bearing. The list contains SL 1625, SL 1639-03 and SL 1922-00.2D. Opposite each model number is listed the attachment or augmentation. The attachment for all three models was a pulley or roller.

This protest lists 16 entries for the period from June 27,1999, to July 23,2000. Two of those entries, 555-XXXX546-0 of January 31,2000, and 554-XXXX821-7 of February 22,2000, were submitted as illustrative of the issue protested. The protestant identified bearing SL1639-03 as the merchandise in issue on entry 546-0. That bearing was invoiced as a journal bearing and was entered under subheading 8482.10.10, HTSUS, and as being subject to dumping case A 428-201-000. The protestant identified bearings SL 1625, SL 1922-00.2D and SL 1639-03 as the merchandise involved in entry 821-7. Those bearings were invoiced as journal bearings and entered under subheading 8482.10.10, HTSUS. The file contains a FAG brochure that illustrates journal bearings and lists the dimensional specifications of the three bearing models in issue. The brochure shows that each of the bearings has the same configuration. The cylindrical housing for the three bearing models is between 22mm and 39mm in length and between 15.66mm and 19mm in diameter. The integral shaft of each bearing extends out of one side of the housing and varies in length between 28mm and 69.65mm and in diameter between 7.5mm and 9mm. The illustration does not show any pulley or roller as being attached unless the part described as the housing represents a pulley or roller. The Temco engineering drawings for SL 1639-03 and SL 1922-00.2D K (the only ones that appear to be relevant to the merchandise on the two entries provided) match the dimensions shown on the FAG brochure for the corresponding numbers.

The file also contains an excerpt from a Customs Seminar on Textile Machinery Bearings which illustrates journal bearings without attachments and journal bearings with attachments mounted on the bearing housing.

Entry 546-0 was liquidated on December 15, 2002, and entry 821-7 was liquidated January 5, 2001, and re-liquidated February 16, 2001. The protest was filed March 8, 2001.

ISSUE:

Whether Customs correctly assessed dumping duties on the imported merchandise?

LAW AND ANALYSIS:

Under the dumping scheme set by Congress under 19 USC 1673 et seq, Commerce has the primary role. Customs role is ministerial; Customs is to follow the instructions issued by Commerce with respect to the imposition of dumping duties, as noted by the court in the case of Mitsubishi Electronics Corp. v. U.S., 44 F.3d. 973 (Fed. Cir.1994). The protest was against the liquidation of the entries with the assessment of dumping duties on the ground that Customs failed to follow Commerce's scope determinations that excluded textile machinery from the coverage of the dumping order. The protest is within 90 days of the liquidation and would be timely under 19 USC 1514. Protest against a Customs liquidation decision is one of the grounds listed in 19 USC 1514(a). The Customs failure to correctly apply a Commerce dumping instruction in liquidation can be a decision that may be protested (American Hi-Fi International v. U.S. 19 CIT 1340 (1995) (the only applicable public decision was that of Customs, for purposes of jurisdiction the decision at issue [to charge interest in accordance with a Commerce instruction] is deemed to be a Customs decision as to a charge or exaction).

The question is whether Customs applied correctly the dumping order and the two scope determinations in its determination that the bearings were not textile machinery. The evidence of the entry papers shows that the imported merchandise was described as journal bearings. The evidence of the foreign manufacturer's brochure shows that bearings of the three model numbers here are no more than journal bearings with integral shafts.

In footnote 1 to the scope determination of May 23,1991, Commerce stated in pertinent part: These textile machinery components include “journal bearings which are imported into the United States with attached pulleys and rollers”. In footnote 2 to that determination, Commerce stated in pertinent part: “We agree with respondents that textile machinery components which are substantially advanced in function or value (i.e. products other than the bearings and parts under investigation) fall outside the scope of these investigations. ... we explicitly excluded such components from the scope... because such products are substantially more than bearings” . Furthermore, the Department determined that bearings (including mounted or housed units and flanged or enhanced bearings) which are ultimately utilized in textile machinery are clearly covered by those investigations. The determination stated that an antifriction bearing that incorporates attachments or augmentations such as pulleys or rollers that manifestly expand the capabilities of the bearing falls outside the scope of these orders. The scope determination then listed the model number (SL 1625) name (journal bearing) and attachment or augmentation(pulley/roller).

The Customs message 1284203 lists the three journal bearing models in issue and lists the relevant attachments or augmentations that would take the article outside the scope of the order; namely; pulleys or rollers.

The evidence of the foreign manufacturer's brochure does not show that a bearing with any of the three model numbers in issue includes an attached pulley or roller. The invoice description simply describes the merchandise as a journal bearing without any reference to an attached pulley or roller. The presence of the attached pulley or roller was critical to scope determination of May 23,1991 (antifriction bearing that incorporates attachments such as ...pulleys,....,rollers) (journal bearings which are imported into the United States with attached pulleys and rollers). The scope determination of October 2, 2001, that was issued to Temco and the protestant, also refers to the need for the attachments to be associated with the imported bearings in order to be outside the scope of the order. The presence of the listed attachments or augmentations opposite the bearing model number in the list of excluded models would make no sense if the bearing alone would not be subject to the order if imported without the pulley or roller. The protestant appears to argue that the model number alone controls. That argument is at odds with the explicit language of the scope determination that refers to bearings imported with attachments and in the Federal Register notice of May 3,1989 (54 F.R. 19017) which distinguishes between textile machinery components that are substantially more than bearings and bearings that are ultimately used in textile machinery. That argument would require Customs to ignore the listing of the attachments and augmentations listed opposite each of the listed bearing models in both scope determinations.

Based on the invoice descriptions for the merchandise and the foreign manufacturers' brochure and engineering drawings, the imported bearings do not appear to have been imported with either a pulley or roller attached. Consequently, the evidence is inadequate to show that the bearings met the terms of either scope determination in order to be outside the order.

HOLDING:

The protest should be denied for the reasons set forth under the law and analysis section above. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 3, 1993, Subject Revised Protest Directive, this decision should be mailed by your office with Customs Form#19, to he protestant no later than 60 days from the date of this letter. Any reliquidation must be made prior to mailing this decision. Sixty days from the date of the decision, the Office of Rulings and Regulations will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and the public via Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant

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