HQ 229557 - AFR Protest No. 1101-02-100248; antidumping duties; deemed liquidation; 19 U.S.C. 1504(d); 19 CFR 353.26; International Trading Co. v. United States; Rheem Metalurgica S/A v. United States; Wolff Shoe Co. v. United States - United States International Trade Commision Rulings

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HQ 229557

August 27, 2002
LIQ-11- LIQ-4-01-RR:CR:DR
229557 IOR

CATEGORY: LIQUIDATION

Port Director
U.S. Customs Service
Second & Chestnut Sts.
Philadelphia, PA 19106

Attn: Brenda Neely, Import Specialist

RE: AFR Protest No. 1101-02-100248; antidumping duties; deemed liquidation; 19 U.S.C. 1504(d); 19 CFR 353.26; International Trading Co. v. United States; Rheem Metalurgica S/A v. United States; Wolff Shoe Co. v. United States

Dear Sir:

The above-referenced protest was forwarded to this office for further review. Our decision follows.

FACTS:

Protestant, imported eraser tipped pencils from China, by entry no. 336-xxxx8490, filed on June 13, 1996. The protest is against the liquidation of the entry with increased and doubled antidumping duties. The protestant deposited 44.66% in antidumping duties, in accordance with the Department of Commerce’s (“Commerce”) Antidumping Duty Order of December 28, 1994 (Antidumping Duty Order: Certain Cased Pencils from the People’s Republic of China) (“Order”)(59 FR 66909).

On January 7, 1998, Commerce published its notice of final results of the administrative review for the subject period, on Case A-570-827, in the Federal Register (Certain Cased Pencils From the People’s Republic of China; Final Results of Antidumping Administrative Review)(63 FR 779). The final results set the antidumping rate for the period at 53.65% for the period. The final results notice stated it would issue appraisement instructions directly to Customs, and served as the “final reminder to importers of their responsibility under 19 CFR 353.26 to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period.” 63 FR at 781. The notice further stated “[f]ailure to comply with this [the reimbursement certificate] requirement could result in the Secretary’s presumption that reimbursement occurred and the subsequent assessment of double antidumping duties.” Id.

On November 30, 2001, based on Commerce instructions issued to Customs, Customs issued liquidation instructions for Case A-570-827, Message No. 1334201, which covered cased pencils from China, entered or withdrawn from warehouse, for consumption during the period of December 1, 1995 through November 30, 1996. The entries were to be liquidated at the deposit rate in effect at the time of entry. The subject entry was liquidated on February 1, 2002, at the deposited rate of 44.66%, with doubled antidumping duties. On April 10, 2002, based on Commerce instructions issued to Customs, Customs issued liquidation instructions for Case A-570-827, Message No. 2100204, which covered cased pencils from China, entered or withdrawn from warehouse, for consumption during the period of December 1, 1995 through November 30, 1996. According to the instructions, they replaced and corrected the November 30, 2001 instructions, and instructed that the entries liquidated under the prior instructions be reliquidated at the rate of 53.65%, pursuant to 19 U.S.C. §1501. Subsequently, the entry was reliquidated on May 10, 2002

 The entry was input for liquidation on April 22, 2002, but the date of liquidation was May 10, 2002., at the rate of 53.65%, with doubled antidumping duties.

The subject protest was filed on April 24, 2002, against the February 1, 2002 liquidation. The protestant asserts that the entry had liquidated by operation of law as of July 8, 1998, that is six months after publication of the Final Results in the Federal Register, and had therefore already been liquidated at the time of Customs liquidation on February 1, 2002, at the amount of duty asserted upon entry, which did not include doubled antidumping duties. The protestant has submitted a reimbursement certificate dated April 15, 2002, and argues that in light of the submitted certification, the presumption of reimbursement is contrary to fact, and the antidumping duties should not be doubled.

ISSUE:

Whether the liquidation by Customs of the subject entries on February 1, 2002 was barred by a prior liquidation by operation of law under 19 U.S.C. §1504(d).

LAW AND ANALYSIS:

We note that the protest was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. §1514 and 19 CFR Part 174). Customs liquidated the entries on February 1, 2002, and the subject protest was filed on April 24, 2002.

Generally, antidumping duty instructions applied by Customs are not protestable. Fujitsu Ten Corp. v. United States, 21 CIT 104, 957 F. Supp. 245 (1997). The role of Customs in the antidumping process is “simply to follow Commerce’s instructions in collecting deposits of estimated duties and in assessing antidumping dutiesat the time of liquidation.” HQ 228611; HQ 225382; see also, Mitsubishi Electronics America, Inc. v. United States, 44 F. 3d 973 (Fed. Cir. 1994); Nichimen America, Inc. v. United States, 938 F. 2d 1286 (1991). However, an importer may protest the failure of Customs to follow a Commerce instruction under 19 U.S.C. §1514. American Hi-Fi International, Inc. v. United States, 19 C.I.T. 1340 (1995).

Headquarters has issued numerous administrative decisions proposing that suspension of liquidation of entries is removed on the date Customs receives liquidation instructions from Commerce, and that Customs must liquidate within 6 months of that date. However, interpreting section 1504(d) in International Trading Co. v. United States, 110 F. Supp. 2d 977; (Ct. Int’l Trade 2000); aff’d, No. 00-1577, slip op. (Fed. Cir. March 1, 2002), the CIT held that suspension of liquidation for the subject entries was removed following the publication of notice of final results in the Federal Register, and was sufficient notice under section 1504(d) (1993) for the 6-month liquidation period to begin to run. Section 1504 provides:

(d) Removal of suspension
[W]hen a suspension required by statute or court order is removed, the Customs Service shall liquidate the entrywithin 6 months after receiving notice of the removal from the Department of Commerce. 19 U.S.C. 1504(d).

In this case, the subject entry was made on June 13, 1996. The protestant deposited 44.66% antidumping duties pursuant to the order in effect at the time of entry.

On January 7, 1998, Commerce published the notice of final results. Under the court’s interpretation of 19 U.S.C. 1504(d) in International Trading, the subject entries liquidated by operation of law on July 8, 1998 (i.e., 6 months after Commerce published the notice of final results). See also Fujitsu General America, Inc. v. United States, 283 F.3d 1364 (Fed. Cir. 2002); HQ 229134, dated May 14, 2002.

Therefore, the liquidation by Customs of the subject entries on February 1, 2002, was barred by a prior liquidation by operation of law under 19 U.S.C. 1504(d). We note that the reliquidation on May 10, 2002 was barred as well, however, that liquidation is not a subject of this protest. The reliquidation was beyond 90 days of the February 1, 2002 liquidation, and was untimely under 19 U.S.C. §1501.

Customs has held in countervailing cases, and continues to affirm here, "that entries subject to countervailing duties which [were] liquidated by operation of law, [are] liquidated with countervailing duties due at the rate at which the importer was required to post a bond or deposit cash, upon entry." HQ 227793, dated November 4, 1998; HQ 228249, dated August 23, 1999; HQ 228678, dated February 27, 2002; see Rheem Metalurgica S/A v. United States, 951 F. Supp. 241, 249-50 (Ct. Int’l Trade 1996)(Rheem I), aff’d 160 F. 3d 1357 (Fed. Cir.1998)(Rheem II). In Rheem I, the Court of International Trade held, "[t]he meaning of ‘asserted’ in § 1504(d) . . . means that which is claimed and indicated by the importer, his consignee or agent on the entry summary or warehouse withdrawal." Id. at 249 (citing Customs Regulations, Relating to the Entry of Merchandise, Liquidation of Entries, Warehousing Periods, and Marking of Bulk Containers of Alcoholic Beverages, Amended, 44 Fed. Reg. 46,794, 46,809 (August 9, 1979)).

Wolff Shoe Co. v. United States, 936 F. Supp. 1084, (Ct. Int'l Trade 1996), reversed in part, 141 F.3d 1116 (Fed. Cir. 1998) also addressed the foregoing issue. In Wolff, the plaintiffs argued the language of 19 U.S.C. §1504(d) should be interpreted to provide a refund of all countervailing duties that had been deposited. Wolff, 141 F. 3d at 1123. See HQ 224627, dated December 23, 1996)(applying the holding in Wolff to antidumping case). The Court held that, "duty asserted at the time of entry by the importer" means "all of the duties claimed on the entry papers, including countervailing duties.” Wolff, 141 F.3d at 1123, citing American Permac Inc. v. United States, 642 F. Supp. 1187, 1195 n.12 (Ct. Int’l Trade 1986)(holding that "[t]he amount of duties 'asserted at the time of entry by the importer,' within the meaning of § 1504(a) and (d), is not what the importer desires to assert upon entry, but what the importer is required by Customs officers to assert when filing the entry summary."); see Rheem II, 160 F.3d at 1359.

With respect to the assessment of double antidumping duties pursuant to Commerce Regulations 353.26 (19 CFR 353.26), the Secretary of Commerce may presume from the importer’s failure to file the reimbursement certificate, that payment or reimbursement of the antidumping duties occurred, and thus the Secretary is required to deduct the amount of payment or reimbursement from the United States price (this amounts to a doubling of the antidumping duty). Paragraph (b) of 19 CFR 353.26 specifically requires the reimbursement certificate to be filed prior to liquidation. In this case, a reimbursement certificate was not filed with Customs prior to liquidation. The protestant has not presented any support for the position that the presumption should not be applied in this case. The mere assertion that ultimately a reimbursement certificate was completed is insufficient to defeat the presumption in the regulation. Therefore, Customs was correct in deducting the amount of presumed reimbursement from the United States price which resulted in a doubled antidumping duty. However, because the liquidation by Customs was barred, and the entry was liquidated as entered, as described above, the doubled antidumping duties cannot be assessed, because they were not asserted at the time of entry.

Based on the foregoing, the subject entry was liquidated by operation of law with antidumping duties at the rate required of the importer to post its bond or cash deposit upon entry of its merchandise. See Rheem and Wolff, supra.

HOLDING:

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

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,

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