HQ 229173 - Protest NTN Bearing Corp. of America; Protest 3001-01-100114; Deemed liquidation, 19 U.S.C. 1504. - United States International Trade Commision Rulings

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HQ 229173

July 11, 2002

LIQ-11-LIQ-4-01 LIQ4-02
RR:CR:DR:RDJ

Ms. Kathleen Sarten
Port Director of Customs
1000 2nd Avenue
Suite 2200
Seattle, WA 98104-1020

RE: Protest NTN Bearing Corp. of America; Protest 3001-01-100114; Deemed liquidation, 19 U.S.C. 1504.

Dear Ms. Sarten:

This is in reference to the above-identified Protest # 3001-01-100114 submitted by NTN Bearing Corp. of America (“NTN”). Our decision follows.

FACTS:

NTN Bearing Corp. of America (NTN) submitted Protest No. 3001-01-10014 protesting the liquidation and assessment of antidumping duties plus interest on the following three entries:

Entry # 286-XXXX274-6 dated 11-07-93 liquidation date : 01-12-01 Entry # 286-XXXX391-8 dated 12-05-93 liquidation date : 01-12-01 Entry # 286-XXXX605-1 dated 02-23-94 liquidation date : 01-12-01

At the time of entry, 2.6% estimated duties were deposited on these entries. On January 12, 2001, Customs transmitted the following message to the field offices to liquidate entries in accordance to the Department of Commerce’s liquidation instructions. The message stated as follows:

Message No. 0334210, Reference A-588-201 A-588-205 DATE: November 29, 2000 Period covered 05-01-1993 to 04-30-1994

RE: LIQUIDATON INSTRUCTIONS FOR ANTIFRICTION BEARINGS (OTHER THAN TAPERED ROLLER BEARINGS) AND PARTS FROM JAPAN PRODUCED BY NTN CORP (A-588-201, 203,205).

FOR ALL SHIPMENTS OF AFBS FROM JAPAN PRODUCED BY NTN CORPORATION (NTN), IMPORTED BY NTN BEARING CORPORATION OF AMERICA, AMERICAN NTN BEARING MANUFACTURING CORPORATION, NTN BOWER CORPORATION, OR NTN DRIVESHAFT INC. AND ENTERED OR WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION DURING THE PERIOD 05/01/1993 THROUGH 04/30/1994, ASSESS ANTIDUMPING LIABILITIES EQUAL TO THE PERCENTAGES LISTED BELOW OF THE ENTERED VALUES:

PRODUCT: BALL BEARINGS A-588-201-009 .FOR NTN BEARING CORP OF AMERICA 05-01-1993 THROUGH 04-30-1994 : 17.30%

PRODUCT: CYLINDRICAL ROLLER BEARING, A-588-203-009 .NTN BEARING CORP. OF AMERICA05-01-1993 THROUGH 04-30-1994: 16.26%

PRODUCT: SPHERICAL PLAIN S A-588-205-009 .FOR NTN BEARING CORP OF AMERICA 05-01-1993 THROUGH 04-30-1994 : .88%

2.

3. THESE INSTRUCTIONS CONSTITUTE THE IMMEDIATE LIFTING OF SUSPENSION OF LIQUIDATION OF ENTRIES FOR THE MERCHANDISE AND PERIOD LISTED ABOVE. FOR ALL OTHER SHIPMENTS OF AFBS, YOU SHALL CONTINUE TO COLLECT CASH DEPOSITS OF ESTIMATED ANTIDUMPING DUTIES FOR THE MERCHANDISE AT THE CURRENT RATE, UNLESS INSTRUCTED OTHERWISE.

4. THE ASSESSMENT OF ANTIDUMPING DUTIES BY THE CUSTOMS SERVICE ON ENTRIES IS SUBJECT TO THE PROVISIONS OF SECTION 778 OF THE TARIFF ACT OF 1930. SECTION 778 REQUIRES THAT CUSTOMS PAY INTEREST ON OVERPAYMENTSAND ASSESS INTEREST ON UNDERPAYMENTS OF THE REQUIRED AMOUNTS DEPOSITED AS ESTIMATED ANTIDUMPING DUTIES. .INTEREST SHALL BE CALCULATED FROM THE DATE PAYMENT OF ESTIMATED ANTIDUMPING DUTIES IS REQUIRED THROUGH THE DATE OF LIQUIDATION.

NTN filed a protest against the liquidation and assessment of antidumping duties on these entries pursuant to section 1504(d). The protest stated that the entries should be considered deemed liquidated at the rate of duty, value, quantity and amount of duty asserted at time of entry because Customs had failed to liquidate the subject entries within 6-months from the date the Court of International Trade issued Slip Opinion 2000-6 dated January 18, 2000 (NTN Bearing Corp. of America v U.S. 2000 Ct. Intl. Trade LEXIS 6, Ct. Int’l Trade No. 2000-6, SLIP OP. 2000-6, 22 Int’l. Trade Rep. (BNS) 1064 (Jan 18, 2000). The protest also stated that, as a result of the government’s failure to timely issue liquidation instructions, the interest accrued was excessive.

We proceed to review.

ISSUES:

1) Should the subject entries be considered deemed liquidated because the U.S. Customs Service failed to liquidate within 6 months from the date of the Court of International Trade’s decision on case NTN Bearing Corp of America v U.S. 2000 Ct. Int’l. Trade LEXIS 6, Slip Op. 2000-6 (January 18,2000)?

2) Whether the accrual of interest was excessive as a result of the alleged failure to issue timely liquidation instructions.

LAW & ANALYSIS:

ISSUE #1:

Initially we note that this protest was timely filed April 11, 2001. This submission is determined to be timely since it falls within 90 days from the date of the liquidation of the subject entries. This protest is reviewable under 19 U.S.C. 1514 (c) and section 19 C.F.R. 174.13(c).

The role of Customs in the antidumping process is to follow the Department of Commerce’s instructions in collecting deposits on estimated duties and in assessing antidumping duties at the time of liquidation. Commerce is the agency that determines antidumping rates. Customs merely follows Commerce’s instructions in assessing and collecting duties. Because Customs does not calculate the antidumping rates itself, it typically awaits Commerce’s instructions before proceeding to collect final antidumping duties, 19 U.S.C. 1673(e)(a) (see, Fujitsu General America, Inc. v U.S, 283 F. 3d 1364, 2002 U.S. App. LEXIS 4402 (Fed. Cir. 2002 and International Trading Co. v U.S. 281 F.3d. 1268, 2002 US App. LEXIS 3299 (March 1, 2002). Generally, antidumping duty rates correctly applied by Customs are not protestable, however, an importer may protest Customs’ failure to follow a Commerce instruction under section 1514 (see generally, Fujitsu Ten Corp. v. U.S., 957 F. Supp. 245 (1997) (Ct. Int’l Trade, Slip Op. 97-11 (January 29, 1997) and Mitsubishi Electronics America Inc. v U.S., 44 F. 3d 973 (Fed. Cir. 1994) and American Hi-Fi International, Inc. v U.S. 19 C.I.T. 1340 (1995).

The “deemed liquidation” statute relates to 19 U.S.C. 1504(d) where it specifically states when a suspension required by statute or court order is removed, the U.S. Customs Service shall liquidate the entry within 6 months after receiving notice of the removal from the Department of Commerce, other agency or a court with jurisdictions over the entry. Any entry not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity and amount of duty asserted at the time of entry by the importer of record.

NTN argued that it is entitled to a refund of antidumping duties paid on these three entries along with the calculated interest, because the subject entries were “deemed liquidated” or liquidated by operation of law since Customs failed to liquidate the subject entries within six months from the date that the Court of International Trade issued its final decision dated January 18, 2000. NTN claimed that the 6-months allowed for liquidation began running when the Court of International Trade issued its decision on January 18, 2000 because it constituted an action by a court with jurisdiction over the entries which removed the suspension of the liquidation. NTN claimed that Customs should have liquidated the entries within six months of this date.

Customs field officers liquidated the entries on January 12, 2001 following Customs’ message #0334210 relegated to the field on November 29, 2000. This message was issued to field officers as a result of the Federal Register’s publication of the final results of the administrative review. The 65 Fed. Register 68974 notice read in part: ACTION: “Notice of final court decision and amended final results of administrative reviews: ANTIFRICTION BEARINGS (OTHER THAN TAPERED ROLLER BEARINGS) AND PARTS THEREOF FROM FRANCE, GERMANY, ITALY, JAPAN, SINGAPORE, SWEDEN, THAILAND AND THE UNITED KINGDOM; AMENDED FINAL RESULTS OF ANTIDUMPING DUTY ADMINISTRATIVE REVIEW”. The effective date of the Federal Register notice was November 15, 2000.

In summary, the message states that the CIT affirmed Commerce’s remand results affecting final assessment rates for the administrative reviews of antidumping orders on anti-friction bearings (other than tapered roller bearings). It stated that the period of review was between May 1, 1993 and April 30, 1994. The class of bearings covered were ball bearings and parts thereof, cylindrical roller bearings and parts thereof and spherical plain bearings and parts thereof. It declared that “as there are now final and conclusive court decisions in these actions, we (the Commerce Dept.) would be amending the final results of the review and we will subsequently instruct the U.S. Customs Service to liquidate entries subject to these reviews”.

NTN argued that the subject entries should be considered deemed liquidated because the official notification to Customs of the removal of suspension came upon the C.I.T.’s conclusive court decision, namely the Slip Op. 2000-6. The Port argued that the liquidation was done timely because it was done within 6-months from the date Customs received notice from the Department of Commerce instructing the liquidation of the subject entries.

According to Fujitsu General America Inc. v U.S., 283 F.3d 1364, 2002 U.S. App. 2002 LEXIS 4402, (decided March 20,2002) the United States Court of Appeals for the Federal Circuit affirmed the C.I.T.’s decision concerning Fujitsu’s claim for deemed liquidation. We find that the liquidation of NTN entries was done timely within the six month period required by section 1504(d). In accordance to Fujitsu, the six-month period began at the time the Dept. of Commerce published a notice to that effect on the Federal Register.

Like NTN, the Fujitsu case presented a claim to refund all antidumping duties and interest assessed by Customs on three Fujitsu protests. Fujitsu claimed its entries were entitled to a refund of antidumping duties because the entries were “deemed liquidated” or liquidated by operation of law, not at the rate assessed by Customs but “at the rate of duty value, quantity and amount of duty asserted at the time of entry by the importer of record pursuant to 19 U.S.C. 1504(d). The Fujitsu case related to three protest actions, two of which related to the fact that Fujitsu failed to timely submit its deemed liquidation arguments to Customs within the time period allotted by section 1514(c). The third protest in the Fujitsu case is relevant here.

Fujitsu claimed that Customs had “notice” that the court ordered suspension of liquidation was removed on July 3, 1996, the date the Federal Circuit issued its decision in Fujitsu General Ltd, 88 F.3d 1034 and entered judgement. Customs proceeded to liquidate the entry more than 18 months from the issuance of that decision. Fujitsu maintained that the entry must be deemed liquidated by operation of law at the rate and amount of antidumping duties asserted at the time of entry by the importer of record pursuant to section 1504(d). The question in this case became: when did Customs have notice under section 1504(d) that the court- ordered suspension of liquidation was removed? In its findings, the Court concluded that it is section 1516 (a) that governs the judicial review in countervailing duty and antidumping duty proceedings. In section 1516a(e), the term “final” means conclusive, that is, a court decision is conclusive when it can no longer be appealed (see generally, Timken Co.v. U.S. 893 F. 2d 337). However, as such, under section 1516a(e), the Court stated that “it is clear that issuance of a court decision by itself does not constitute notice for purposes of liquidation(R)ather, the administering agency must publish notice of the court decision in the Federal RegisterCustoms’ role in antidumping matters is purely ministerial (see Mitsubishi Elec. Am. Inc v U.S. 44 F.3d 973 (Fed Cir 1994)(T)herefore, unless Customs receives direct notice from a court, we cannot attribute notice to Customs of a court decision reviewing a Commerce determination made under 19 U.S.C. 1516 a(a) without publication of notice of the court decision by Commerce in the Federal Register”(see Fujitsu General America Inc. v. U.S.). The Court concluded that it logically follows that Commerce’s publication in the Federal Register of a conclusive court decision constitutes notice to Customs that a court ordered suspension of liquidation is removed. In Fujitsu , the court noted that the publication of a court decision in a case does not necessarily result in Customs’ receipt of notice that a suspension of liquidation that was in effect during the case has been removed. It also noted that it would be inconsistent with the statutory scheme to hold that Commerce’s publication of notice of a court decision and Customs’ receipt of notice as synonymous for purposes of starting the six-month time period for liquidation in section 1504(d). (see Fujitsu General v US 283 F.3d 1364, 1383). In the International Trading Co. v U.S. 281 F.3d. 1268, 2002 US App. LEXIS 3299 (March 1, 2002), the case specifically dealt with the publication of the final results of the administrative review in the Federal Register as the starting point to calculate the 6 month time period for liquidation. In the Fujitsu case, the publication in the Federal Register of a notice that a court-suspended liquidation has concluded constitutes notice to Customs that it has 6 months to liquidate any affected entry.

The Fujitsu case (as well as in the NTN Bearing case), contained a notice in the Federal Register which stated that “As there is now a final and conclusive court decision in this action, we are amending our final results of review in this matter and will subsequently instruct the US Customs Service to liquidate entries subject to this review. The Fujitsu court concluded that, in accordance to section 1516a(e), this notice constituted sufficient notice to Customs that the court-ordered injunction had dissolved because the notice indicated that the litigation suspending liquidation was now conclusive. Under section 1504(d), Customs must liquidate within 6 months of receiving notice that a court-ordered suspension is removed.

In placing this analysis to the facts of this NTN case, we find that the Court decision under NTN Bearing Corp of America v. U.S. (2000 Ct. Intl. Trade LEXIS 6, Slip Op. 2000-6) was issued on January 18, 2000. The Department of Commerce published a notice announcing the “final court decision amended final results of administrative reviews” on November 15, 2000. This is the date that constitutes the official notice to Customs that the court-ordered suspension was removed. Customs liquidated the entry on January 12, 2001 (acting on message # 0334210 dated November 29, 2000). Since the liquidation occurred within six months of the publication in the Federal Register of the removal of suspension, we conclude that NTN’s arguments concerning deemed liquidation are without merit.

Issue # 2:

In terms of the interest assessed, message # 0334210 established that “interest shall be calculated from the date the payment of estimated duties is required through the date of liquidation”. The message was issued on November 29, 2000. The liquidation for the three subject entries occurred on January 12, 2001. Customs has six months to liquidated affected entries. The Federal register notice was published on November 15, 2000. Customs instructions to field officers were issued on November 29, 2000. The subject entries liquidated on January 12, 2001.

Under 19 U.S.C. 1677g(a), interest shall be payable on overpayment or underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after the date of a finding under the Antidumping Act , 1921. At the time of entry, the estimated duty deposited was 2.6 %. The entries finally liquidated with an assessed 17.3% antidumping duty. At the time on entry, the protestant was aware that there was the potential for interest to be payable pursuant to section 1677(g). The liquidation instructions clearly indicate that Customs should assess interest on underpayment of these duties from the date the payment of estimated duties is required through the date of liquidation. NTN Bearing did not present any legal arguments indicative to the effect that Customs failed to follow Commerce’s liquidation instructions. We conclude that, in its ministerial capacity, Customs timely liquidated the entries.

HOLDING:

Issue #1: The subject entries should not be considered “deemed liquidated” since Customs timely liquidated these within 6 months of the Federal Register’s instruction to liquidate.

Issue #2: We find no basis to conclude that the accrual of interest was excessive as a result of Customs’ liquidation which was made in accordance to Commerce’s instructions publishes in the Federal Register on November 29, 2000.

The subject Protest should be denied.

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,

Myles Harmon

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