HQ 229294 - FAG Holdings – Protest number 5501-01-100145; 19 USC § 1504(d); 19 USC § 1514; 19 USC § 1520(c); mistake of fact; roller bearings; antidumping case number A-428-801; notice; Fujitsu General America, Inc. v. United States; error in the construction of law; court-ordered suspension of liquidation; SCA International, Inc. v. United States, 14 CIT 59 (Ct. Intl. Trade 1990). - United States International Trade Commision Rulings

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HQ 229294

May 13, 2002

LIQ-9-01; PRO-2-02; PRO-2-01 RR:CR:DR
229294 RDC

CATEGORY: PROTEST

U.S. Customs Service
1205 Royal Lane - P.O. Box 619050
DFW Int'l. Airport
TX 75261-0950
Att: Paul Rimmer

RE: FAG Holdings – Protest number 5501-01-100145; 19 USC § 1504(d); 19 USC § 1514; 19 USC § 1520(c); mistake of fact; roller bearings; antidumping case number A-428-801; notice; Fujitsu General America, Inc. v. United States; error in the construction of law; court-ordered suspension of liquidation; SCA International, Inc. v. United States, 14 CIT 59 (Ct. Intl. Trade 1990).

Dear Mr. Rimmer:

The above-referenced Protest was forwarded to this office for further review. We have considered the points raised by your office and the Protestant. Our decision follows.

FACTS:

FAG Bearings of Stamford Connecticut, (“FAG”), herein requests further review of Protest number 5501-01-100145 which protests the denial of its Petition for Reliquidation per 19 USC § 1520(c).

FAG is the importer of record for the three protested entries of cylindrical roller bearings. The CF 7501s for these entries, as prepared by the importer’s agent, show an antidumping duty rate of 3.9 percent per order A-428-801. This 3.9 percent rate is crossed out and replaced with an antidumping duty rate of 32.62 percent per liquidation instructions 9287212, dated October 14, 1999.

The roller bearings were entered in August and November of 1991 and the liquidation of these entries was suspended several weeks after entry because the cylindrical roller bearings were subject to antidumping order A-428-801. This suspension was directed by the Department of Commerce (DOC), International Trade Administration, which published a “Notice of preliminary determinations of sales at less than fair value: anti-friction bearings (other than tapered roller bearings) and parts thereof” on November 9, 1988, (53 FR 45353).

On July 6, 1992, the DOC published in the Federal Register a “Notice of initiation of antidumping administrative reviews” (57 FR 29700). Because merchandise subject to antidumping order A-428-801 was included by the DOC in this administrative review, the liquidations continued to be suspended. After the administrative reviews were completed and the publication of the final determination (58 FR 39729), this antidumping order was the subject of litigation in the Court of International Trade. According to the Protestant, “soon after the initiation of those lawsuits, the CIT issued preliminary injunctions restraining the liquidation” of any entries covered by the order, which included those at issue here.

After that litigation was concluded, the DOC published in the Federal Register on April 16, 1998, a “Notice of final court decision and amended final results of administrative reviews” concerning antidumping order A-428-801 (among others). On October 14, 1999, the Director, Trade Enforcement and Control, issued liquidation instructions number 9287212 to the Customs Service regarding entries subject to antidumping order A-428-801 and entered between May 1, 1991 and April 30, 1992. These instructions directed Customs to impose an antidumping duty rate of 32.62 percent on the entries of the cylindrical roller bearings (A-428-203) imported by FAG. Consequently, on January 21, 2000, Customs liquidated the subject protested entries and imposed the antidumping duty rate of 32.62 percent on the entries per DOC’s liquidation instructions number 9287212.

ISSUE:

If the entries were deemed liquidated as entered per § 1504(d) is the January 21, 2000, liquidation a mistake of fact correctable per § 1520(c)?

LAW AND ANALYSIS:

Initially, we note that the Petition for Reliquidation under 19 USC § 1520(c)(1) was timely filed, i.e. within 1 year after the date of liquidation (19 CFR § 173.4(c)). The three protested entries were liquidated on January 21, 2000, and the Petition for Reliquidation was filed on January 19, 2001. Moreover, we note that this Protest was timely filed, i.e., within 90 days after the denial of the request for relief under 19 USC § 1520(c)(1) (19 USC 1514(c)(3)(B); 19 CFR § 174.12(e)(2)). The Port denied the Petition for Reliquidation on February 26, 2001. This Protest was filed May 18, 2001.

Under 19 USC § 1514(a) “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the refusal to reliquidate an entry under § 1520(c)” are final unless a protest of that decision is filed (19 USC § 1514(a)(7)). Section 1520(c)(1) of 19 USC is an exception to the finality of § 1514. Thus, the matter protested, “the refusal to reliquidate an entry under § 1520(c)” is protestable per 19 USC § 1514(a)(7) (19 CFR § 174.11(g)).

Under 19 USC § 1515, “[u]pon the request of the protesting party . . . a protest may be subject to further review by another appropriate customs officer, under the circumstances and in the form and manner that may be prescribed . . . in regulations." Per 19 CFR § 174.24, further review (as provided for in 19 USC § 1515) shall be accorded a party when the decision against which the protest was filed, among other things, 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. Under 19 CFR § 174.26(b), a protest with an application for further review shall be reviewed (as pertinent to the grounds under which further review was requested in this matter) by the Commissioner of Customs or his designee if the protest and application for further review raise an issue involving questions which have not been the subject of a Customs ruling or court decision.

It is the opinion of the Dallas / Fort Worth port that this Protest warrants further review although the port does not specify why further review is warranted. We agree that further review is warranted. The Protestant alleges “that this matter has not been ruled upon by the Commissioner of Customs courts.” It appears that Protestant’s counsel is seeking further review per 19 CFR § 174.24(b). This section grants further review when the decision against which the protest was filed, 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” (19 CFR § 174.24(b)). The Court of International Trade has recently ruled upon one of the issues presented: that publication by the DOC of the “Notice of final court decision and amended final results of administrative review” in the Federal Register constitutes notice to Customs, within the meaning of 19 USC § 1504(d), that a court-ordered suspension of liquidation is removed. The additional issue, whether or not an additional subsequent liquidation by Customs, after an entry has liquidated by operation of law, is a mistake of fact in the circumstances presented, has not yet been the subject of a ruling or court decision.

FAG herein contends that the DOC “Notice of final court decision and amended final results of administrative reviews” which was published in the Federal Register on April 16, 1998, constitutes § 1504 notice to Customs that the court-ordered liquidation suspension of the subject entries was removed. Therefore, FAG argues that under § 1504 Customs had a maximum of 6 months during which to liquidated these entries. Since Customs did not liquidate the protested entries before six months elapsed, FAG reasons that the entries were deemed liquidated as entered six months after the DOC published the Notice. Thus FAG concludes that the entries liquidated as entered by operation of law on October 16, 1998, and also asserts that the subsequent liquidation on January 21, 2000, with antidumping duties of 32.62 percent, was a mistake of fact correctable under 19 USC § 1520(c). FAG states that a mistake of a fact occurred because Customs was unaware of the fact that the entries had liquidated by operation of law “as entered, i.e., ‘no change’” prior to January 21, 2000.

In Headquarters Ruling Letter (HRL) 226215 (March 28, 1996), we held that § 1504(d), as amended, was applicable where liquidation of the entries occurred after the amended statute’s effective date: December 8, 1993, (see § 692, Public Law 103-182). Thus the amended § 1504(d) applies whether we find that the three entries under consideration were liquidated on October 15, 1998, or January 21, 2000.

Section 1504(a) of 19 USC, as amended (see § 641, Public Law 103-182; 107 Stat. 2204), provides that an entry not liquidated within one year from the date of entry “shall be deemed liquidated at the rate of duty, value, quantity and amount of duties asserted at the time of entry by the importer of record” unless liquidation is extended, as provided in that section, or suspended as required by statute or court order. Subsection (b) of § 1504 provides for extension of the liquidation period for a statutorily valid reason (19 USC § 1504(b); see 19 CFR § 159.11). According to Customs’ electronic entry data collection system (ACS), liquidation of the 3 protested entries was suspended, not extended and hence, § 1504(b) is not applicable here.

Under § 1504(d),
when a suspension required by . . . court order is removed, the 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 jurisdiction 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.

According to the Protestant, after the litigation involving the antidumping order commenced in the CIT, the protested entries were suspended by court order pending a final determination by the Court. Thus, per § 1504(d) Customs had to liquidate the entries 6 months after receiving notice of the removal of this court-ordered suspension or the entries would have been deemed liquidated as entered.

The Protestant argues that the DOC’s publication of its “Notice of final court decision and amended final results of administrative reviews” published in the Federal Register on April 16, 1998, constitutes the “notice of the removal” of the liquidation suspension referred to in 19 USC § 1504(d). Thus, according to FAG, six months after this Notice was published, i.e., on October 16, 1998, the subject entries were deemed liquidated as entered.

The Protestant cites Fujitsu General America, Inc. v. United States, (110 F. Supp. 2d 1061 (Ct. Int’l Trade 2000); aff’d 283 F.3d 1364 (U.S. App. 2002.)) in support of its argument. In that case the liquidation of entries subject to an antidumping order had been enjoined pursuant to a preliminary injunction because the antidumping duty rate had been challenged in the CIT (id. at 1065). The plaintiff, Fujitsu argued that Commerce’s publication of its notice of the court’s decision in the Federal Register constituted notice of removal of that court-ordered suspension. Upon appeal, the Federal Circuit Court in Fujitsu held

We agree with the Court of International Trade that it was Commerce’s publication of notice of the Fujitsu General decision in the Federal Register on September 16, 1997, that constituted notice to Customs under section 1504(d) that the suspension of liquidation had been removed

(283 F.3d 1364 at 1380). Thus, Protestant’s assertion that publication by the DOC of the “Notice of final court decision and amended final results of administrative review” in the Federal Register constituted notice to Customs that the court-ordered suspension of liquidation of the subject entries was removed within the meaning of 19 USC § 1504(d) is correct. Under the Fujitsu decision, 6 months after April 16, 1998, the date on which the DOC published in the Federal Register the “Notice of final court decision and amended final results of administrative reviews” and hence, Customs received notice that the suspension of liquidation was removed, the protested entries liquidated by operation of law per 19 USC § 1504(d), i.e., on October 16, 1998.

However, Customs liquidated the subject entries on January 21, 2000. The Protestant asserts that this liquidation
was the result of mistake of fact in that Customs was unaware of the fact that the entries had liquidated, no change, in accordance with 19 USC § 1504(d).

Moreover, the Protestant states that this mistake of fact warrants reliquidation of these entries per 19 USC § 1520(c).

Under 19 USC § 1520(c)(1) Customs may reliquidate an entry to correct “a clerical error, mistake of fact, or other inadvertence,” not amounting to an error in the construction of a law. The error must be adverse to the importer and manifest from the record or established by documentary evidence (19 USC § 1520(c)(1)). Hence, FAG must establish that the liquidation of the entries on January 21, 2000, was due to “clerical error, mistake of fact, or other inadvertence, not amounting to an error in the construction of a law.” The Protestant must also establish that the January 21, 2000, liquidation was adverse to FAG and manifest from the record or established by documentary evidence.

FAG argues that Customs committed a mistake of fact. The Court of International Trade made the following distinction between mistake of fact and error of law:

Mistakes of fact are generally defined as mistakes that “take . . . place when some fact which indeed exists is unknown, or a fact which is thought to exist, in reality does not exist." C. J. Tower & Sons, Inc. v. United States, 68 Cust. Ct. 17, 336 F. Supp. 1395, 1399 (1972), aff'd, 61 C.C.P.A. 90, 499 F.2d 1277 (1974), see also Executone Info. Sys. v. United States, 96 F.3d 1383, 1386 (Fed. Cir. 1996). “Mistakes of law, on the other hand, occur where the facts are known, but their legal consequences are not known or are believed to be different than they really are." Chrysler Corp. v. United States, 87 F. Supp. 2d 1339, 1344 (Court of Int’l Trade 2000)).

(Prosegur, Inc., v. United States, 140 F. Supp. 2d 1370, 1377 (Ct. Intl. Trade 2001)). In the Protestant’s case, Customs made an error in the construction of law, specifically, its construction of § 1504(d), not a mistake of fact.

Before the CAFC March 20, 2002, decision on the appeal in Fujitsu, it was Customs long-held position that the date the liquidation suspension lifted was the date Customs received liquidation instructions from the DOC (see, e.g., HRL 225343 November 23, 1994; HRL 226215 March 28, 1996; HRL 225674 June 21, 1995; HRL 225107 September 20, 1994; and HRL 224778 December 23, 1993). Therefore, prior to the March 20, 2002, Fujitsu decision Customs did not interpret § 1504(d) as applying to the protested entries and thus such entries were not deemed liquidated by operation of law when Customs liquidated the subject entries (January 21, 2000). Since less than 6 months had elapsed since the issuing (October 14, 1999) of liquidation instructions from DOC, Customs was following its long-standing application of § 1504(d): that since the liquidation instructions from DOC constituted § 1504(d) notice it had 6 months from the issuance of these instructions to liquidate the entries before they were deemed liquidated.

Consequently, January 21, 2000, liquidation by Customs was due to its interpretation and application of § 1504 and is an “error in the construction of a law” within the meaning of § 1520(c) and cannot be remedied by this section. (See SCA International, Inc. v. United States, 14 CIT 59 (Ct. Intl. Trade 1990) which held “plaintiff must challenge a voidable liquidation through the administrative protest mechanism of 19 USC § 1514 unless the liquidation is the result of a mistake of fact. In such case a request for reliquidation may be made within one year of liquidation under 19 USC § 1520(c) as well.”

Under 19 USC § 1514(a) decisions of the Customs Service are final unless named as subject to protest, e.g., liquidation or reliquidation of an entry, or § 1520(c) is applicable. In the Protestant’s case since § 1520(c) is not available Fag’s remedy was a protest per § 1514. However, per 19 CFR § 174.12(e)(1) the protestant has “90 days from the date of notice of liquidation” in which to file the protest. Consequently since Fag’s time to protest per § 1514 has elapsed and no remedy is available under § 1520(c) the January 21, 2000, liquidation of the subject entries is final per 19 USC § 1514(a).

HOLDING:

The January 21, 2000, liquidation of the protested entries was due to Customs’ construction of § 1504(d) and is not correctable per 19 USC § 1520(c). The protest should be DENIED IN FULL.

Consistent with the decision set forth above, you are hereby directed to deny the subject protest. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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