HQ 229267 - Protest 1704-00-100313; antidumping duties; Canon USA Inc. Deemed Liquidation; Classification 676.05, TSUS, Deemed Liquidation; Rheem Metalurgica S/A v U.S. 951 F.Supp. 241 (Ct. Int'l Trade ) aff'd 160 F.3d. 1357 (Fed.Cir.1998); International Trading Co. v. U.S. 281 F.3d 1268 (Fed Cir. 2002). - United States International Trade Commision Rulings

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HQ 229267

September 27, 2002

PRO-2-02-LIQ-4-01 RR:CR:DR
229267 RDJ

Port Director of Customs
4341 International Parkway
Suite 600
Atlanta, Georgia 30354

RE: Protest 1704-00-100313; antidumping duties; Canon USA Inc. Deemed Liquidation; Classification 676.05, TSUS, Deemed Liquidation; Rheem Metalurgica S/A v U.S. 951 F.Supp. 241 (Ct. Int'l Trade ) aff'd 160 F.3d. 1357 (Fed.Cir.1998); International Trading Co. v. U.S. 281 F.3d 1268 (Fed Cir. 2002).

Dear Sir or Madam:

This is in reference to the above-identified protest submitted by Canon USA, Inc. ("Canon"). Our decision follows.

FACTS:

This protest pertains to entry number 203-XXXX0113-6. Canon imported 54 typewriters on November 27, 1985. Upon entry, the merchandise was subject to antidumping duty case no. A588-087-000. The CF7501 described the typewriters (contained in line no. 7) as "TYWTR PORT N-AUTO N-CAL EL", Antidumping Case No. A-A588-087-000. Canon classified the typewriters under subheading 676.0510, TSUS, duty free. The subheading covered non-automatic portable electric typewriters ("PETs") without a calculating mechanism. Canon supplied sales literature which described the typewriters as having a correction memory with automatic underlining, bold face capability and other automatic functions. The literature also stated that the typewriters had calculator functions. Although entered as "PETs", Canon referred the typewriters as automatic portable electric typewriters ("PATs") in its protest.

At the time of entry, the liquidation was held in suspense pending the final results of Commerce's completion of the administrative review of the antidumping case. On May 9, 1980, Commerce published an antidumping order in the Federal Register, 45 Fed. Reg. 30618, (Antidumping Duty Order on Portable Electric Typewriters from Japan), announcing that portable electric typewriters (PETs) from Japan were being sold at less than fair value and that these sales were materially injuring an industry in the United States It stated that for purposes of this notice, the term "portable electric typewriters" ("PETs") were those provided in item 676.0510, TSUS.

Initially, the ITA determined that only PETs were within the scope of the 45 Fed. Reg. 30618 (May 9, 1980) (see 52 Fed. Reg. 1504 (1987). However, litigation ensued as to whether automatic portable electric typewriters incorporating text memory (PATs) and portable electric typewriters incorporating calculating mechanisms were included within the scope of the 45 Fed. Reg. 30618 (May 9, 1980) antidumping order.

On March 18, 1988, Commerce filed a revised scope determination with the CIT, in which it determined that non-automatic portable electric typewriters which incorporated a calculating mechanism were included within the scope of the May 9, 1980 antidumping duty order and that automatic portable electric typewriters (PATs) were not within the scope of that order (see background information, 55 Fed Reg. 12701 (1990)).

On September 20, 1988, after reviewing Commerce's revised scope determination, the CIT in Smith Corona Corporation v U.S.,(12 CIT 854, 698 F.Supp.240 (1988)), affirmed Commerce's decision with respect to the non-automatic portable electric typewriters (considered these within the scope of the antidumping order) but reversed Commerce's determination that automatic portable electric typewriters (PATs) were not within the scope.

On November 23, 1988, the Commerce Department (following the CIT determination), included automatic portable electric (PATs) within the scope of the May 9, 1980 antidumping order.

On February 3, 1989, the CIT affirmed Commerce's determination with respect to the automatic portable electric typewriters (as well as Commerce's March 18, 1988 determination concerning the non-automatic portable electric typewriters with calculating mechanisms (see background information, 55 Fed Reg. 12701 (1990)).

On March 29, 1990, a notice was issued in 55 Fed Reg. 12701 (1990) stating the following:

"On February 3, 1989, the CIT affirmed the Department's November 23, 1988 determination with respect to automatic portable electric typewriters, and the Department's March 18, 1988 determination with respect to non- automatic portable electric typewriters incorporating a calculating mechanism.

On April 3, 1989, respondents appealed the CIT decision in the Court of Appeals for the Federal Circuit Court ("CAFC"). A decision from this Court is still pending.

The CAFC issued a decision in The Timken Co. v U.S., 893 F.2d 337 (Fed Cir. 1990) that stated in part that "if the CIT (or this court) renders a decision which is not in harmony with Commerce's determination, then Commerce must publish notice of the decision within ten days of issuance (i.e. entry of judgment)..

In accordance with the decision in Timken, we will instruct the Customs Service to suspend liquidation of all unliquidated entries of automatic portable electric typewriters ...and portable electric typewriters incorporating a calculating mechanism which were entered or withdrawn from warehouse, for consumption on or after February 3, 1989."

On September 26, 1990, the CAFC in Smith Corona Corp. v United States and Brother Industries, et al (915 F. 2d. 683 (Fed. Cir.1990) (hearing en banc denied December 9, 1990)) affirmed the decision that PETs with text memory (PATS) were within the scope of the May 9, 1980 antidumping duty order.

On October 19, 1990, 55 Fed.Reg. 42423 (October 19, 1990) provided notice that the CAFC had affirmed the CIT's decision that PATs are within the scope of the antidumping order and that the continued suspension of entries should be made in accordance to 53 Fed. Reg. 40926 which lists (period between May 1, 1985 to April 30, 1986) Canon as having a weighed average margin of 5.51%.

On August 17, 1999, Commerce issued message # 9229115 to Customs instructing the liquidation of Canon's entries that were suspended between May 1, 1985 to April 30, 1986. It stated the following:

REFERENCE CASES: A-588-087 TYPE: LIQ
REFERENCE DATE

DATE: 08 17 1999
PERIOD COVERED: 05 01 1985 TO 04 30 1986

RE: LIQUIDATION INSTRUCTIONS FOR PORTABLE ELECTRIC TYPEWRITERS FROM JAPAN (A-588-087), MANUFACTURED AND EXPORTED BY CANON, INC. (A-588-087-010)

1. FOR ALL SHIPMENTS OF PORTABLE TYPEWRITERS FROM JAPAN MANUFACTURED AND EXPORTED BY CANON, INC. (A-588-087-010), ENTERED OR WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION DURING THE PERIOD 05/01/1985 THROUGH 04/30/86, ASSESS AN ANTIDUMPING LIABILITY OF 5.51 PERCENT OF THE ENTERED VALUE.

2. THESE INSTRUCTIONS CONSTITUTE THE IMMEDIATE UPLIFTING OF SUSPENSION OF LIQUIDATION OF ENTRIES FOR THE MERCHANDISE AND THE PERIOD LISTED ABOVE. ON 05/02/94, THE DEPARTMENT OF COMMERCE PUBLISHED IN THE FEDERAL REGISTER (59 FR 22584) ITS NOTICE OF REVOCATION OF THE ANTIDUMPING ORDER ON PORTABLE ELECTRIC TYPEWRITERS FROM JAPAN. THEREFORE, ALL ENTRIES OF PORTABLE TYPEWRITERS FROM JAPAN ON OR AFTER 05/02/1994 SHOULD BE ENTERED OR WITHDRAWN FROM WAREHOUSE, FOR CONSUMPTION WITHOUT REGARD TO ANTIDUMPING DUTIES (I.E. RELEASE ALL BONDS AND REFUND ALL CASH DEPOSITS).

On September 1, 2000, Customs liquidated the subject entry assessing an antidumping duty of 5.51% of the entered value. Canon filed a protest to this liquidation on October 31, 2000.

In the protest, Canon claimed that the subject merchandise were "PATs" and outside the scope of the antidumping order (A588-087) since it covered "PETs" ("portable electric typewriters") and only those PATs" entered after February 3, 1989 (according to 55 Fed. Reg. 12701). Canon also claimed that the subject entry should be considered deemed liquidated under 19 U.S.C.1504, and the subject typewriters reclassified under subheading 676.0700, TSUS.

ISSUES:

1) Whether Customs correctly applied the liquidation instructions issued by the Department of Commerce by assessing antidumping duties on the protestant's typewriters?

2) Was the subject merchandise covered within the scope of the antidumping order A-588-087-000 ?
a) What is the scope of the September 26, 1990?
b) does the scope exclude all "PATs" except those entered after February 3, 1989, as claimed by Canon?
c) did the antidumping margin of 5.51% apply only to PETs and not PATs?

3) Whether Canon is entitled to the re-classification of its typewriters?

LAW & ANALYSIS:

1) Whether Customs correctly applied the liquidation instructions issued by the Department of Commerce by assessing antidumping duties on the protestant's typewriters?

Initially, we note that the protest was timely filed under the statutory provisions for protests, 19 U.S.C. 1514 and 19 C.F.R. 174. The entry liquidated on September 1, 2000. The subject protest was filed by Canon on October 31, 2000 within the 90-day statutory period provided by section 1514. We review this case under the provisions of section 1514(a)(5) involving the liquidation and reliquidation of an entry, or reconciliation as to the issues contained therein or any modification thereof. The issue of classification will be reviewed under the purview of 1514(a)(2).

Generally, antidumping duty rates correctly applied by Customs are not protestable. However, an importer may protest under section 1514, an alleged failure by Customs to follow an instruction as issued by the Department of Commerce. 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 duties...at the time of liquidation (see, Fujitsu Ten Corporation of America v. United States 21 C.I.T. 104; 957 F. Supp. 245; Ct. Intl. Trade, 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).

Canon challenges the liquidation as illegal and alleges that the entry was liquidated by operation of 19 U.S.C. 1504, as interpreted by the case of Nunn Bush v U.S. (784 F.Supp. 892, 16 C.I.T. 45 (1992). The Nunn-Bush court held that the lifting of the court-ordered injunctions against the liquidation terminated the suspension of liquidation. The court held that because the suspension of liquidation was removed before the end of the four-year period set in 19 U.S.C. 1504(d)(1984 ed.), the entries were liquidated by operation of law. The decision interpreted 19 U.S.C. 1504 before the amendment by the Acts of December 3, 1993 and December 8, 1994. Under the law decided by Nunn Bush court, a deemed liquidation occurred if an entry remained unliquidated at the end of the fourth year from the date of entry, unless liquidation had been extended (see discussion at 16 C.I.T. 48). The current version of 19 U.S.C. 1504(d) requires the suspension of liquidation to be removed and Customs to be notified before a liquidation by operation of law occurs (see International Trading Co. v. U.S. 110 F.Supp. 2d. 977, 281 F. 3d 1268 (Fed. Cir. March 1, 2002) and Fujitsu General America v. U.S. (110 F. Supp. 2d. 1061 (Ct. Int'l. Trade 2000), aff'd, 283 F.3d 1364 (Fed Cir 2002).

The first point to be determined is when the suspension of liquidation was removed. The Smith Corona decision became final when the period of certiorari to the Supreme Court expired. The Federal Court denied a request for rehearing on December 6, 1990, having affirmed the trial court on September 6, 1990. The Court's mandate could not have issued until December 18, 1990 ( see Fed. R. App. P. 41(b) The Court's mandate must issue, interalia 4 days after entry of an order denying a timely petition for hearing en banc).The period for certiorari expired on March 6, 1991. The subject entry was made on November 27, 1985. Four years from that date occurred on November 27, 1989. Since the court did not act on the rehearing request until December 18, 1990 and the period for certiorari did not expire until March 18, 1991, the liquidation of the entry remained suspended beyond the fourth year and the Nunn Bush decision does not apply (see also the discussion of the trial court in Smith Corona, on the failure of the trial court to continue suspension of liquidation). Commerce did not publish amended final results reflecting the Federal Circuit's opinion. The only notice received by Customs which lifted the suspension for the entry was the message # 9229115 dated August 17, 1999. Because the suspension continued until after the 1993 amendments to 19 U.S.C. 1504, under the rule in Travenol Laboratories v U.S. 118 F.3d 739 (Fed. Cir. 1997)1, that version would apply. Because the protestant has not identified any earlier event, such as the publication of final results, message 9229115 appears to have lifted the suspension (see, U.S. v Jick (USA) Industries, 27 F. Supp.2d 199 (Ct. Int'l Trade, 1998). Consequently, there would be a liquidation by operation of law under 1504, as amended by the 1993 legislation. However, the CF7501 shows that the protestant asserted that the typewriters were subject to antidumping case A 588-087-000. Under the decision of Rheem Metalurgica S.A v U.S. 951 F. Supp. 241 (Ct. Int'l Trade 1996) aff'd, 160 F.3d 1357 (Fed. Cir. 1998) the entry would be liquidated subject to anti-dumping duty.

According to Rheem, the term "asserted" in section 1504 means that which is claimed and indicated by the importer, his consignee or agent on the entry summary or warehouse withdrawal. Another relevant case is Wolff Shoe Corp. v. United States 936 F. Supp. 1084 (Ct. Int'l Trade 1996) reversed in part, 141 F.3d 1116 (Fed. Cir. 1998) (Fed Cir. 1998) In Wolff, the plaintiff argued that section 1504 (d) should be interpreted to provide a refund of all countervailing duties that had been deposited. The court stated that duties asserted included countervailing duties. Rheem Metalurgica cites American Permac, Inc v. U.S. 642 F.Supp. 1350 (Ct. Int'l Trade1986), in that the 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. It means that the duty asserted by the importer includes countervailing duties. In the Rheem case, the company had, upon entry, listed the countervailing investigation number and posted the appropriate bonds for the countervailing duties, therefore, the court concluded that Rheem had acknowledged its liability for countervailing duties payable at the rate ultimately determined to be appropriate by Commerce. In the subject case, the entry liquidated in accordance to Rheem Metalurgica at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record. Canon asserted, upon entry, that these typewriters were subject to antidumping case A 588 087 000, it asserted its liability concerning the antidumping to be at the 5.51% antidumping margin. Therefore, the entry should be liquidated in accordance to Rheem Metalurgica.

ISSUE #2: Was the subject merchandise covered within the scope of the antidumping order A-588-087-000 ?
a) What is the scope of the antidumping order?
b) does the scope exclude all "PATs" except those entered after February 3, 1989, as claimed by Canon?
c) did the antidumping margin of 5.51% applied only to PETs and not PATs?

(a) The second issue involved a challenge to the scope of the order. The protestant makes two arguments in support of its position. First, it argues that the imported typewriters are outside the scope of the order. Second it argues that the typewriters came within the scope of the order as a result of an alleged expansion of the order following the Smith Corona decision. The arguments fail because a scope determination is protestable only if it is shown that Customs misinterpreted the scope of the order under Xerox Corp v. U.S. 289 F.3d 792, 795 (Fed Cir. 2002) by including within the order, goods that are clearly outside the scope of the order. The protestant's second argument which concedes that its typewriters were brought within the scope as a result of the court action, undercuts the argument that the typewriters are clearly outside the scope of the order. In any event, the Federal Circuit decision affirming the trial court's holding of May 9, 1980, included portable electric typewriters with text memory addresses the argument that there was an illegal expansion of the scope of the order.

(b) Canon specifically claims that, according to 55 Fed Reg. 12701 (1990), "PATs" were finally included within the scope of the initial antidumping order dated May 9, 1980, but only those "PATs" entered after February 3, 1989. The February 3, 1989 date is irrelevant as to whether "PATs" fall within or outside the scope of the May 9, 1980 antidumping order. The only relevance of the February 3, 1989 was to instruct Customs to suspend the liquidation of entries (of PATs) made on or after February 3, 1989 until there was a "conclusive court decision which decided the matter, so that subsequent entries could be liquidated in accordance to that decision" (see Smith Corona Corp. v. U.S. 915 F. 2d. 683 ( Fed.Cir.1990)). The final court decision was issued on September 26, 1990, where the court held conclusively, that PETs with text memory (PATs) were within the scope of the May 9, 1980 antidumping order. Based on the foregoing, the protestant's argument that PATs entered prior to February 3, 1989 are outside the scope of the antidumping order is without merit.

(c ) Canon claims that, according to the notice in 53 Fed. Reg. 40926, the antidumping margin of 5.51%, specifically, did not apply to "PATs" but only to PETs. This assertion is incorrect given the clarification of the Federal Circuit as to the scope. Also, the notice in 55 Fed. Reg. 42423 (October 19, 1990) published the fact that the Federal Circuit affirmed the CIT's decision that PATs were within the scope of the antidumping order and it made reference to 53 Fed. Reg. 40926 which listed the "margin currently in effect", 5.51% applying specifically to Canon.

ISSUE #3:

Whether Canon is entitled to request the reclassification of its typewriters?

Canon claims that the classification of these typewriters should have been 676.0700, TSUS. The merchandise was entered "duty free". Canon claims, the merchandise was dutiable at a rate of 3 percent ad valorem. Canon concludes that the regular duties should have been $194.40 (3%) and requests that this amount be offset by that already paid from the incorrectly assessed antidumping duties. Customs agrees that the typewriters were misclassified and should have been classified in item 676.07, TSUS.

The issue regarding classification is a protestable matter under section 1514(a)(2). However, under 19 U.S.C. 1515(a), Customs is prevented from re-liquidating an entry in a manner that would result in the imposition of a higher rate of duty (..."the appropriate Customs officer...shall...allow or deny such protest...Thereafter, any duties, charge or exaction found to have been assessed or collected in excess...shall be remitted or refunded"). Customs can only reliquidate and assess additional duties if done within 90- day period provided for under 19 U.S.C. 1501, voluntary reliquidations. After the 90-day period, the authority to reliquidate an entry with increased duties terminates ( HQ 223835 dated July 24, 1992) and HQ 221239 (May 23, 1989). We also note that under 28 U.S.C. 1582, the CIT has exclusive jurisdiction on any civil action commenced by the U.S. to recover customs duties.

HOLDING: Protest is hereby DENIED. The subject entry was deemed liquidated in accordance to 19 U.S.C.1504(d) because it was not liquidated within 6 months from the date the suspension of the liquidation was removed but, in accordance to Rheem Metalurgica at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer. That is, at a rate of duty of 5.51%.

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, Acting Director

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