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HQ 229174




March 5, 2002

PRO-2-02 RR:CR:DR 229174 jsj
LIQ-4-01 RR:CR:DR 229174
LIQ-4-02 RR:CR:DR 229174

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
423 Canal Street
New Orleans, Louisiana 70130

Attn: Protest Office, Room 200; and Team 506.

Port File Number: ENT-V:NO:CO:EU PK

RE: Application for Further Review of Protest No.:2002-01-100092; Continuous Cast Steel Slabs; Subheading 7207.12.0050, HTSUS; Companhia Siderurgica de Tubarao; Product of Brazil; Department of Commerce Countervailing Duty Order: C-351-818.

Dear Port Director:

The purpose of this correspondence is to address the Application for Further Review of Protest Number: 2002-01-100092, dated February 2, 2001. The Importer of Record and Protesting Party is Trade Arbed, Inc.

The Customs Service issued a Notice of Action (Customs Form 29) on February 26, 1999, to the Customs broker retained by Trade Arbed. The Notice of Action indicated that Customs proposed to take a rate advance on the Trade Arbed entry in issue concluding that the merchandise was subject to a Department of Commerce countervailing duty order. Customs liquidated the entry on December 27, 2000, and this protest was filed on February 5, 2001.

The Importer, subsequent to receipt of the Notice of Action, filed a protest challenging Customs proposed rate advance. Trade Arbed’s protest was accompanied by an Application for Further Review that was approved.

A review of Customs Automated Commercial System (ACS) records indicates that the protest was timely filed pursuant to 19 U.S.C. 1514 (c) (3) (West 1999) and 19 C.F.R. 174.12 (e) (2).

This protest decision is being issued subsequent to the following: (1) A review of the Protest filed by Trade Arbed; (2) A review of the Customs Protest and Summons Information Report; (3) A review of the Notice of Action; (4) A review of correspondence from Trade Arbed dated February 2, 1999, that accompanied its protest; (5) A review of the Department of Commerce’s countervailing duty order in Commerce case number: C-351-818, 58 Fed. Reg. 44164 (1993); (6) A review of Customs Administrative Message: 00-1034, dated September 9, 2000; (7) A review of a printout of Customs Antidumping and Countervailing Module addressing Customs countervailing duty case number: C-351-209-000; (8) A review of the Department of Commerce’s Final Scope Ruling on Profile Slabs requested by Wirth Limited; (9) A review of Wirth Limited v. United States, 5 F. Supp. 2d 968 (Ct. Int’l Trade 1998); and (10) Discussions with the Customs Service Import Specialist Team Leader of Team 506, the Customs Service National Import Specialists responsible for steel merchandise, a representative of the Customs Service Headquarters Office of Field Operations, Other Governmental Agencies Branch, and two representatives of the Department of Commerce, International Trade Administration.

FACTS

The merchandise in issue in this protest decision is described by the importer as “continuous cast steel slabs.” The importer classified the merchandise in subheading 7207.12.0050, Harmonized Tariff Schedule of the United States (HTSUS), as:

7207 Semifinished products of iron or nonalloy steel:

Containing by weight less than 0.25 percent of carbon: 7207.12.00 Other, of rectangular (other than square) cross section;

7207.12.0050 Having a width measuring at least four times the thickness.

The merchandise is a product of Brazil and is produced by Companhia Siderurgica de Tubarao (CST).

The Department of Commerce in countervailing investigation C-351-818 determined that certain cut-to-length carbon steel plate from Brazil, fully described in its Countervailing Duty Order, 58 Fed. Reg. 43751 (1993), was subject to countervailing duties.

The merchandise in issue in this protest, according to the Department of Commerce, is the same merchandise addressed in Commerce’s Final Scope Ruling -- Antidumping and Countervailing Duty Orders on Certain Cut-to-Length Carbon Steel Plate From Brazil –Requested by Wirth Limited for a Ruling on Profile Slab, dated April 2, 1997, referencing Commerce’s antidumping (AD) and countervailing duty (CVD) cases: A-351-817 and C-351-818. Commerce’s determination in its scope ruling, although undertaken for a different importer, addressed CST’s profile slab. The decision of the Department of Commerce, that CST’s profile slab was within the scope of its AD and CVD orders was determined by the Court of International Trade in Wirth Ltd. v. United States, 5 F. Supp. 2d 968 (Ct. Int’l Trade 1998) to be supported by substantial evidence or otherwise in accordance with law.

ISSUE

Did the Customs Service properly issue the Notice of Action proposing to take a rate advance on the entry of merchandise in issue in Protest No.: 2002-01-100092 based on the conclusion of the Customs Service Import Specialist that merchandise classified in subheading 7207.12.0050, Harmonized Tariff Schedule of the United States, was subject to the Department of Commerce’s countervailing duty order in Department of Commerce case number: C-351-818 ?

LAW AND ANALYSIS

Trade Arbed, the Importer and Protestant, maintains pursuant to Item 28 of the Customs Protest and Summons Information Report that it “protests the rate advance” proposed by Customs in the Notice of Action dated February 26, 1999. The CF 6445 further states, however, that

[t]hey [the Protestant] contend that harmonized tariff schedule heading 7207.12.0050 does not fall or not include within the scope of the antidumping/countervailing duty order. Trade Arbed believes that their merchandise, continuous cast slabs, should not be subject to the AD/CVD order due to the fact that the merchandise is not plate and will be further processed into hot rolled steel sheets in coils. Customs Protest and Summons Information Report, Item 28.

The Port Director, Port of New Orleans, granted Trade Arbed’s Application for Further Review of Protest because the Customs Import Specialist at the Port maintained that he had received conflicting information from the Department of Commerce concerning the scope of Commerce’s countervailing duty order in Commerce case number: C-351-818. The Import Specialist additionally stated in the CF 6445 that it was the Port’s position that the “end use of the merchandise determines whether or not slabs are subject to the AD/CVD orders.” Customs Protest and Summons Information Report, Item 29. The CF 6445 provides that the Port of New Orleans does not believe that the merchandise of the protested entry is subject to Commerce’s countervailing duty order.

The initial confusion experienced by Customs field personnel stems from the fact that Commerce’s CVD order addresses “plate,” a finished steel product, and Customs classifies the merchandise in issue as a “semi-finished” steel product. The merchandise subject to Commerce’s CVD order is described in detail in the Federal Register notice, but for the purposes of this protest decision may generally be referred to as “cut-to-length carbon steel plate.” (Emphasis added). Plate, as previously stated, is comercially understood to be a finished steel product.

The continuous cast slabs manufactured by CST and at issue in this protest are properly classified in subheading 7207.12.0050, HTSUS. This determination is confirmed by Customs Headquarters Ruling Letter 957535 (Aug. 27, 1996) which previously classified identical CST steel. Merchandise classified in heading 7207, HTSUS, is a semi-finished steel product, for Customs classification purposes. It is not, however, Customs classification of the merchandise that determines whether it is within the scope of a Commerce Department antidumping or countervailing duty order, as will be addressed in a later aspect of this protest decision.

The Port’s confusion regarding whether the merchandise imported by Trade Arbed was encompassed within the scope of Commerce’s CVD order also resulted from a review of Customs Headquarters administrative message: 0256209 and an examination of Customs AD/CVD module. Customs administrative message provided liquidation instructions for certain cut-to-length carbon steel plate from Brazil. The administrative message has Custom case number: C-351-209, which this office has been advised corresponds to Commerce’s CVD case number: C-351-818. The instructions describe the merchandise covered by the scope of Commerce’s CVD order, but also identify, for “convenience and Customs purposes,” tariff schedule subheadings of merchandise subject to the CVD order.

58 Fed. Reg. 44164 (1993). The Federal Register notice further specifically states that Commerce’s “written description of the scope of this order is dispositive.” Subheading 7207.12.0050, HTSUS, was not included in the list of subheadings in the administrative message that fell within the scope of Commerce’s CVD order in C-351-818.

The AD/CVD module was subsequently updated by Commerce at the request of the Customs National Import Specialist. The update of relevance amended the list of tariff schedule subheadings subject to the CVD order to include subheading 7207.12.0050, HTSUS. Customs AD/CVD module was updated by Commerce on December 16, 1997.

Section 1514 (a) of Title 19 of the United States Code, 19 U.S.C. 1514 (a) (West 1999 & Supp. 2001), enumerates seven categories of decisions of the Customs Service from which an importer may seek relief by means of a protest. These decisions include:
the appraised value of merchandise; the classification and rate and amount of duties chargeable; all charges or exactions or whatever character within the jurisdiction of the Secretary of the Treasury; the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of customs laws, except a determination appealable under section 1337 of this title; the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof; the refusal to pay a claim for drawback; or the refusal to reliquidate any entry under section 1520(c) of this title. 19 U.S.C. 1514 (a).

The role of the Customs Service in the implementation of antidumping and countervailing duty laws is ministerial, as opposed to discretionary. See generally Mitsubishi Electronics America, Inc. v. United States, 44 F. 3d 973 (Fed. Cir. 1994) (discussing the role of both Customs and Commerce in the implementation of the antidumping statute); See also Fujitsu Ten Corp. v. United States, 957 F. Supp. 245 (Ct. Int’l Trade 1997) aff’d 164 F. 3d 596 (Fed Cir. 1998); Koyo Seiko Co. Ltd. v. United States, 955 F. Supp. 1532 (Ct. Int’l Trade 1997). Customs has no discretionary authority and acts solely in accordance with the instructions it receives from the Department of Commerce. See Mitsubishi, Supra.

The issue raised in this protest concerns whether the subject merchandise is within the scope of Commerce’s countervailing duty order. This is not a decision of the Customs Service and, specifically, not one of the decisions of the Customs Service subject to protest pursuant to section 1514 (a). Although Customs, in its role as the agency charged with the responsibility of classifying merchandise pursuant to the HTSUS, may conclude that CST’s merchandise is a ‘semi-finished” product, the Department of Commerce has, for the purposes of carrying out its responsibilities of administering the countervailing duty laws, determined that the merchandise is a finished product, even if only “low-end” plate.

The relief sought by Trade Arbed is a “scope ruling” available through the Department of Commerce, not the Customs Service. Section 351.225 of the regulations of the Department of Commerce, 19 C.F.R. 351.225, provides the means by which an importer may determine “whether a particular product is included within the scope of an antidumping or countervailing duty order.” See generally Sandvik Steel Co. v. United States, 164 F.3d 596 (Fed. Cir. 1998) (discussing the inter-play between the Customs Service and the Department of Commerce in the administration of the antidumping regulatory scheme).

Since the issue raised by Trade Arbed in this protest is not one of the seven enumerated section 1514(a) decisions of the Customs Service that may be resolved by means of a protest, Customs has no statutory authority to address this issue.

HOLDING

The protest is DENIED in full.

The issue raised by the Protestant is not a protestable decision of the Customs Service pursuant to 19 U.S.C. 1514 (a).

In accordance with Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, section 3 A. (11) (b), you are to mail this decision and the Protest (Customs Form 19) to the Protesant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with this decision must be accomplished prior to mailing the decision.

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

Sincerely,

John Durant, Director

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