HQ 229277 - Protest No. 3901-00-100865 and Application for Further Review; 19 U.S.C. §1504(d); 19 U.S.C. §1677g; “deemed liquidation”; liquidation instructions; American Permac, Inc. v. United States; Rheem Metalurgica S/A v. United States; Nunn Bush Shoe Co. v. United States. - United States International Trade Commision Rulings

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HQ 229277

September 27, 2002

LIQ-4-01-LIQ-11-RR:CR:DR 229277DR

Port Director of Customs
Attn: Robert Lehman, Assistant Port Director Trade Operations
610 Canal Street
Chicago, IL 60607

RE: Protest No. 3901-00-100865 and Application for Further Review; 19 U.S.C. §1504(d); 19 U.S.C. §1677g; “deemed liquidation”; liquidation instructions; American Permac, Inc. v. United States; Rheem Metalurgica S/A v. United States; Nunn Bush Shoe Co. v. United States.

Dear Mr. Lehman:

The above referenced protest and application for further review was forwarded to this office for a determination. We have considered the points raised and a decision follows. FACTS:

The merchandise in issue consists of eight entries of bicycle speedometers from Japan manufactured by Tsuyama Mfg. Co. of Japan (“Tsuyama”) and entered by Protestant between February 8, 1985, and October 29, 1985. The merchandise fell within the scope of a dumping finding published by the Treasury Department (“Treasury”) on November 22, 1972. See 37 Fed.Reg. 24826. A copy of entries 86XXX095-5 and 85XXX963-7 were included in the file. However, a complete copy of the CF 7501 was provided only for entry 86XXX095-5. We were informed by the port that the handwritten annotations on the entry papers were done by Customs officers. The CF 7501 shows that Protestant did not cite any antidumping duty investigation number on the entry documents, nor did it assert that any antidumping duties were owed upon entry. The handwritten notations on the Entry Summaries concerning antidumping duty investigation A-588-038-042, and antidumping duties of 0.07%, were made by Customs at a later date. Protestant placed bonds on those imports, and liquidation was suspended.

On December 13, 1985, the Department of Commerce (“Commerce”) initiated an administrative review of the 1972 dumping finding for the subject bicycle speedometers entered between November 1, 1984, and October 31, 1985. See Notice of Initiation of Antidumping Administrative Reviews (50 Fed.Reg. 50933).

On November 14, 1986, Commerce published its Notice of Preliminary Results of Antidumping Duty Administrative Review (“Preliminary Results”), pursuant to 19 U.S.C. §1675(a)(1)(1984). The Preliminary Results stated “ as provided by section 751(a)(1) of the Tariff Act, a cash deposit of estimated antidumping duties based on the above margins shall be required for [the reviewed] firms.” It also stated that Commerce would instruct Customs to assess antidumping duties on all the subject entries and collect the cash deposit. Merchandise manufactured and exported by Tsuyama required a cash deposit of 0.07% of the value of the subject merchandise. See 51 Fed.Reg. 41363.

On April 10, 1987, Commerce published its Notice of Final Results of Antidumping Duty Administrative Review (“Final Results”) (52 Fed.Reg. 11720), which set the dumping margin at 0.07% ad valorem. The Final Results stated “ as provided by section 751(a)(1) of the Tariff Act, a cash deposit of estimated antidumping duties based on the above margins shall be required for [the reviewed] firms.” It also stated that Commerce would instruct Customs to assess antidumping duties on all the subject entries and collect the cash deposit. See 19 C.F.R. 353.53a(9) (1987). Merchandise manufactured and exported by Tsuyama required a cash deposit of 0.07% of the value of the subject merchandise.

On August 23, 2000, Commerce issued liquidation instructions to Customs that notified Customs of the lifting of the suspension of liquidation, and instructed Customs to assess an antidumping duty of 0.07% on the subject merchandise entered or withdrawn from warehouse, for consumption during the period 11/1/1984 through 10/31/1985. See Message #0236216. The documents included in the file indicate that Customs liquidated the entries early 2001, and assessed antidumping duties, with interest assessed from 1985. See Notice of Action (January 17, 2001).

Protestant has now challenged those liquidations, asserting that the entries were deemed liquidated by operation of law four years after their dates of entry (twelve years before their actual liquidation dates), and should have been assessed at the rates asserted by the importer at time of entry.

ISSUES:

Whether the subject entries were “deemed liquidated” within the meaning of 19 U.S.C. §1504(d) (1984).

Whether Protestant owes interest on any underpaid antidumping duties

LAW AND ANALYSIS:

First, we note that the protest was filed in a timely manner. Customs issued Notices of Liquidation for the subject entries on February 9, 2001, and the protest was filed on April 30, 2001. See 19 U.S.C. §1514(c)(3) (requiring that protest of a decision regarding liquidation of an entry be filed within 90 days after the notice of liquidation or reliquidation).

Protestant states that its entries were suspended during the course of an administrative review of the antidumping order against bicycle speedometers from Japan, covering the period from November 1, 1984, though October 31, 1985, but that the statutory suspension of liquidation ended when Commerce published the Final Results on April 10, 1987. On that date, according to Protestant, the suspension was removed and Customs had sufficient notice that liquidation could proceed.

The statute principally at issue in this matter is 19 U.S.C. §1504 (1984), which states in relevant part:

(a) Liquidation

Except as provided in subsection (b) of this section, an entry of merchandise not liquidated within one year from:

(1) the date of entry of such merchandise; ... 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. ...

(b) Extension

The Secretary may extend the period in which to liquidate an entry by giving notice of such extension to the importer of record in such form and manner as the Secretary shall prescribe in regulations, if liquidation is suspended as required by statute or court order; ....

....

(d) Limitation

Any entry of merchandise not liquidated at the expiration of four years from the [date of entry of such merchandise], shall be deemed liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record, unless liquidation continues to be suspended as required by statute or court order. When such a suspension of liquidation is removed, the entry shall be liquidated within 90 days therefrom.

Thus, in order to determine the date on which suspension was removed, one must first determine the date on which that removal was effected. The courts have considered that issue, and in International Trading Co. v. United States, 110 F. Supp. 2d 977, 982 (C.I.T. 2000), the Court of International Trade (“C.I.T.”) recognized that the courts have “consistently held that suspension is removed upon publication of the Final Results in the Federal Register.” (citing to American Permac, Inc. v. United States, 642 F. Supp. 1187, 10 C.I.T. 535 (1986); American Permac, Inc. v. United States, 800 F. Supp. 952, 16 C.I.T. 672 (1992); Rheem Metalurgica S/A v. United States, 951 F. Supp. 241, 20 C.I.T. at 1450 (1996)). Also, in Nunn Bush Shoe Co. v. United States, 784 F. Supp. 892, 894, 16 C.I.T. at 48 (1992), which contemplated a factual situation similar to the one at hand, the CIT stated that “[s]ection 1504 unambiguously states that if an entry is not liquidated within four years, then it will be deemed liquidated by operation of law unless the period is extended as per 19 U.S.C. § 1504(b)(1)-(3). In this case, the period was not extended beyond four years. Therefore, the Court must uphold the plain meaning of the law and hold that the entries which turned four years old were liquidated by operation of law and any subsequent attempts by Commerce to liquidate these entries are invalid.”

Here, liquidation of the subject entries was suspended pursuant to 19 U.S.C. 1675(a)(1) at the initiation of the administrative review. The Final Results of that review were published on April 10, 1987, and the suspension was lifted on that date. However, the four year anniversaries of the entry dates passed in 1989, with Customs failing to liquidate. Therefore, the entries were “deemed liquidated” at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record, which in this case included no antidumping duties.

With regard to the assessment of interest on underpaid antidumping duties, under 19 U.S.C. §1677g(a), interest shall be payable on overpayments or underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after the date of publication of a countervailing or antidumping order or the date of a finding under the Antidumping Act, 1921 (represented by the difference between any required cash deposit of estimated antidumping duties and the final amount of assessed duties on the date of liquidation). However, under Rheem, “[19 U.S.C. §1504(d)] clearly states that entries liquidated by operation of law are liquidated at ‘the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer.’” Id. at 250, 20 C.I.T. at 1462. “The 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). Also, under Timken Co. v. United States, 809 F.Supp. 121, 16 C.I.T. 999 (1992), aff’d. 37 F.3d 1470 (1994), interest is not collectable on bonds posted by importers to cover estimated antidumping duties.

Here, there was no assertion of dumping liability by the importer on the entry and, by operation of 19 U.S.C. 1504(d) (1984), no additional amount was due upon liquidation, or in this case, upon “deemed liquidation” of the entries. Therefore, no antidumping duties should have been assessed and Protestant is not liable for interest under 19 U.S.C. §1677g since there were no “underpayments” of estimated antidumping duties.

HOLDING:

This protest should be GRANTED. Under 19 U.S.C. 1504(d) (1984), because the suspension of liquidation was removed prior to the four-year anniversaries of the dates of entry, and Customs failed to liquidate those entries before the anniversaries, the entries are deemed liquidated at the rates of duty asserted by Protestant at the times of their entries. Furthermore, interest charges on underpaid antidumping duties do not apply to the subject entries because Protestant did not underpay any antidumping duties.

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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act and other methods of public distribution.

Sincerely,

Myles Harmon
Acting Director,
Commercial Rulings Division

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