HQ H014711 - Protest and Application for Further Review 2720-06-100383 - United States International Trade Commision Rulings

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HQ H014711

February 13, 2008

LIQ-4-01
PRO-2-01
OT:RR:CTF:ER H014711 DCC

Port Director
U.S. Customs and Border Protection
11099 South La Cienega Boulevard
Los Angeles, CA 90045

Attn: Susan Frias

RE: Protest and Application for Further Review 2720-06-100383

Dear Sir or Madam:

This letter is in response to your correspondence, dated July 13, 2007, whereby you forwarded an Application for Further Review (“AFR”) of Protest Number 2720-06-100383, filed on behalf of Mel Hare, the Protestant. In addition, the Protestant filed a second protest concerning the liquidation of some of the same entries alleging a mistake of fact under 19 U.S.C. § 1520(c)(1). That protest is addressed in Headquarters Ruling Letter (“HRL”) H018936.

FACTS:

Protest 2720-06-100383 concerns the liquidation of entries of ball bearings made between May 5, 2003, and March 29, 2004. The Protestant filed the Protest at the port at Los Angeles International Airport (“LAX”), on June 27, 2006.

The Protestant previously filed Protest 2704-06-101203 at the port at Los Angeles/Long Beach on June 21, 2006. That Protest concerned the liquidation of 23 entries of ball bearings entered at either the seaport at Los Angeles/Long Beach or the LAX airport. CBP staff at the seaport rejected that Protest with regard to 20 entries entered at the airport, but allowed the protest for three entries that were entered at the seaport. The Protestant subsequently filed the protest that is the subject of this ruling (Protest 2720-06-100383) at the airport. Protest 2720-06-100383 is the same as protest filed at the seaport, except it did not include the three entries entered at, and approved by, the seaport in Protest 2704-06-101203.

The subject Protest (2720-06-100383) covers the following entries:

Date of Duration from
Entry No. Date of Entry Liquidation Liquidation to Protest 1. XXX-XXXX915-7 05/05/2003 03/31/2006 88 days 2. XXX-XXXX188-0 05/23/2003 03/31/2006 88 days 3. XXX-XXXX191-4 05/30/2003 03/17/2006 102 days 4. XXX-XXXX555-0 06/19/2003 03/17/2006 102 days 5. XXX-XXXX653-3 06/26/2003 03/17/2006 102 days 6. XXX-XXXX774-7 07/08/2003 03/17/2006 102 days 7. XXX-XXXX893-5 07/14/2003 03/31/2006 88 days 8. XXX-XXXX136-8 07/29/2003 03/17/2006 102 days 9. XXX-XXXX874-4 09/22/2003 03/17/2006 102 days 10. XXX-XXXX000-3 10/02/2003 03/31/2006 88 days 11. XXX-XXXX680-2 11/17/2003 03/31/2006 88 days 12. XXX-XXXX978-0 12/09/2003 03/31/2006 88 days 13. XXX-XXXX039-0 12/10/2003 03/31/2006 88 days 14. XXX-XXXX266-9 01/07/2004 03/31/2006 88 days 15. XXX-XXXX596-9 01/22/2004 03/24/2006 95 days 16. XXX-XXXX626-4

According to the Protestant, the entry date for Entry No. XXX-XXXX626-4 is January 20, 2004. 01/22/2004 03/24/2006 95 days 17. XXX-XXXX866-6 02/13/2004 03/31/2006 88 days 18. XXX-XXXX147-0 03/10/2004 03/24/2006 95 days 19. XXX-XXXX238-7
According to the Protestant, the liquidation date for Entry No. XXX-XXXX238-7 is March 31, 2006. 03/10/2004 03/24/2006 95 days 20. XXX-XXXX402-9 03/29/2004 03/31/2006 88 days

2001 – 2002 Administrative Review and Reseller Policy

On March 10, 2003, the U.S. Department of Commerce (“Commerce”) published the preliminary results of its dumping investigation for ball bearing products from Japan for the period May 1, 2001, through April 30, 2002. See Ball Bearings and Parts Thereof From Japan: Preliminary Results of Antidumping Duty Administrative Review, Partial Rescission of Administrative Review, and Notice of Intent to Rescind Administrative Review, 68 Fed. Reg. 11,357 (March 10, 2003) (the “Preliminary Results, 2001 – 2002 Administrative Review”). That notice states:

We intend to rescind the administrative reviews we initiated of Jiro Okayama, Eisho Trading Co., Ltd., and Phoenix International Corporation (collectively ‘‘Japanese trading companies’’) with respect to subject merchandise from Japan. These Japanese trading companies informed us that, although they are the resellers of Japanese-manufactured ball bearings, their suppliers knew at the time of sale that the merchandise was destined for exportation to the United States. If in fact the suppliers had knowledge that the sales they made to these trading companies were destined for exportation to the United States, then the suppliers would be the proper parties to an administrative review since their sales would be the point in the sales chain at which merchandise ‘‘is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States * * *’’ pursuant to section 772(a) of the Tariff Act of 1930, as amended (the Act).

68 Fed. Reg. 11,357 – 58.

On May 6, 2003, Commerce published a clarification on the automatic-liquidation regulation where a reseller has been involved in the chain of commerce. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 Fed. Reg. 23,954 (May 6, 2003). That notice states:

As described in the October 15, 1998, Federal Register notice, automatic liquidation at the cash-deposit rate required at the time of entry can only apply to a reseller which does not have its own rate if no administrative review has been requested, either of the reseller or of any producer of merchandise the reseller exported to the United States. If the Department conducts a review of a producer of the reseller’s merchandise where entries of the merchandise were suspended at the producer’s rate, automatic liquidation will not apply to the reseller’s sales. If, in the course of an administrative review, the Department determines that the producer knew, or should have known, that the merchandise it sold to the reseller was destined for the United States, the reseller’s merchandise will be liquidated at the producer’s assessment rate which the Department calculates for the producer in the review. If, on the other hand, the Department determines in the administrative review that the producer did not know that the merchandise it sold to the reseller was destined for the United States, the reseller’s merchandise will not be liquidated at the assessment rate the Department determines for the producer or automatically at the rate required as a deposit at the time of entry. In that situation, the entries of merchandise from the reseller during the period of review will be liquidated at the all-others rate if there was no company-specific review of the reseller for that review period.

68 Fed. Reg. at 23,954 (emphasis added).

2003 – 2004 Administrative Review

On September 16, 2005, Commerce published a notice regarding the final determination of its dumping investigation for ball bearing products from Japan for the period May 1, 2003, through April 30, 2004. See Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, 70 Fed. Reg. 54,711 (September 16, 2005). That notice states:

Assessment Rates

The Department will determine and CBP shall assess antidumping duties on all appropriate entries. We will issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of reviews. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an importer/customer–specific assessment rate or value for subject merchandise. The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003 (68 FR 23954). This clarification will apply to entries of subject merchandise during the period of review produced by companies included in these final results of reviews for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all–others rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Notice of Policy Concerning Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

70 Fed. Reg. at 54,713.

On February 18, 2006, Commerce issued message number 6047204, which contained liquidation instructions for ball bearings from Japan produced or exported by Nippon Seiko K.K. (“NSK”) that were subject to Antidumping Duty Orders A-588-201-008. On February 27, 2006, Commerce issued Message number 6058201, which contained liquidation instructions for ball bearings from Japan produced or exported by NTN Corporation (“NTN”) that were subject to Antidumping Duty Orders A-588-201-009. Pursuant to those instructions and Commerce’s clarification of its assessment regulation, Commerce set the antidumping duty rate for shipments of BBs from Japan that were not subject to the manufacturer-specific rates for NSK and NTN, that were entered or withdrawn from warehouse for consumption during the period May 1, 2003 through April 30, 2004, at the all-others rate of 45.83 percent.

2004 - 2005 Administrative Review

On July 14, 2006, Commerce published a notice regarding the final determination of its dumping investigation for ball bearing products from Japan for the period May 1, 2004, through April 30, 2005. See Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, 71 Fed. Reg. 40,064 (July 14, 2006). That notice states:

Assessment Rates
The Department will determine and U.S. Customs and Boarder Protection (CBP) shall assess antidumping duties on all appropriate entries. We intend to issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of reviews. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an importer/customer–specific assessment rate or value for subject merchandise.

The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003. See Notice of Policy Concerning Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment–Policy Notice). This clarification will apply to entries of subject merchandise during the period of review produced by companies included in these final results of reviews for which the reviewed companies did not know that the merchandise it sold to the intermediary (e.g., a reseller, trading company, or exporter) was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all–others rate if there is no rate for the intermediary involved in the transaction. See the Assessment–Policy Notice for a full discussion of this clarification.

On August 10, 2006, Commerce issued Message numbers 6222208 and 6222209, which contained liquidation instructions for ball bearings from Japan produced or exported by Nippon Seiko K.K. (“NSK”) and NTN Corporation (“NTN”) that were subject to Antidumping Duty Orders A-588-201-008 and A-588-201-009, respectively. Pursuant to those instructions and Commerce’s clarification of its assessment regulation, Commerce set the antidumping duty rate for shipments of BBs from Japan that were not subject to the manufacturer-specific rates for NSK and NTN, that were entered or withdrawn from warehouse for consumption during the period May 1, 2004 through April 30, 2005, at the all-others rate of 45.83 percent.

The Protestant claims that CBP improperly liquidated the subject entries with the assessment of antidumping duties on ball bearings at the all others rate of 45.83%, and that the entries should have been liquidated with the antidumping duty rates assigned to Japanese manufacturers.

ISSUES:

Whether the Protestant properly filed the Protest; and Whether CBP properly liquidated the subject entries at the “all others” rate.

LAW AND ANALYSIS:

Protest Filing

Under 19 U.S.C. § 1514(a), “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry . . . shall be final and conclusive . . . unless a protest is filed in accordance with this section.” For merchandise entered before December 18, 2004, a protest of a liquidation is timely if it is filed within 90 days after but not before the date of liquidation. See 19 U.S.C. § 1514 (c)(3).

In addition to limiting the time for filing protests, section 1514 allows interested parties to file only one protest for a particular entry of merchandise. Specifically, section 1514(c)(1) states:

A protest of a decision made under subsection (a) shall be filed in writing, or transmitted electronically pursuant to an electronic data interchange system, in accordance with regulations prescribed by the Secretary.

Only one protest may be filed for each entry of merchandise, except that where the entry covers merchandise of different categories, a separate protest may be filed for each category.

CBP liquidated the subject entries between March 17 and 31, 2006. The Protestant filed Protest No. 2704-06-101203 at the port at Long Beach on June 23, 2006, covering 23 entries of ball bearings from Japan. The port at Long Beach rejected the protest for 20 of the entries because they involved merchandise entered at the port at LAX. The regulations implementing 19 U.S.C. § 1514 provide, in pertinent part, that “protests shall be filed with the port director whose decision is protested.” See 19 C.F.R. 174.12(d). Pursuant to section 174.12(d), the port at Long Beach properly rejected Protest 2704-06-101203 with regard to the entries entered at LAX.

On June 27, 2006, the Protestant filed a second protest (Protest No. 2720-06-100383) at LAX for the 20 entries that were entered at the airport. Of the 20 entries covered by that protest, the protest was untimely with regard to the six entries liquidated on March 17, 2006, and the four entries liquidated on March 24, 2006, because the protest was filed more than 90 days after the date of liquidation of those entries.

In a letter dated June 26, 2006, which accompanied Protest 2720-06-100383, the Protestant explained that the protest covered 20 of the same entries that were included in its earlier protest (Protest 2720-06-101203), which was filed on June 21, 2006. In that letter, the Protestant requested that CBP assign Protest 2720-06-100383 the earlier filing date used for Protest 2720-06-101203 because the protest involved the same entries.

We determine that the Protestant’s request to assign a filing date of June 21, 2006, to Protest 2720-06-100383 should be dismissed. The regulations specifically address the date of filing for protests. Section 174.12(f) provides as follows: “The date on which a protest is received by the Customs officer with whom it is required to be filed shall be deemed the date on which it is filed.” As noted above pursuant to section 174.12(d), the Protestant was required to file its protest of the liquidation of the merchandise that was entered through the port at LAX at that port. Consequently, the port at LAX properly used June 27, 2006, as the protest filing date.

The issue of timeliness of protest filings has been reviewed in several decisions by the Court of International Trade (“CIT”). In Group Italglass U.S.A., Inc. v. United States, 17 C.I.T. 1205 (1993), the importer submitted a protest by facsimile after regular business hours on the ninetieth day after the notice of liquidation. Moreover, the importer sent the protest by facsimile to the Customs office in charge of fines, penalties and forfeitures rather than the Customs protest office. The CIT found that the after hours filing with an unauthorized Customs office did not constitute a legal filing. The fact that a Customs facsimile machine was able to receive a transmission in the evening did not imply that Customs intended to accept protests filed after business hours.

In US JVC Corp. v. United States, 15 F. Supp. 2d 906 (Ct. Int’l Trade 1998), the CIT held that the doctrine of equitable tolling does not apply to CBP’s protest procedures. In that case, CBP mistakenly liquidated 17 entries of JVC’s television receivers and posted bulletin notices of the liquidations. The importer was unaware of the mistake but requested a refund of its duty deposits, which CBP denied. JVC filed a protest challenging the premature liquidations, which was denied for untimeliness. At trial, the importer arguing that the court should have equitably tolled the time limitation for filing a protest. In denying the importer’s claim, the court held that once the liquidations occurred, the importer had either 90 days to file a timely protest or one year to notify customs of its mistake. The court noted that the language, structure, and purpose of 19 U.S.C.S. § 1514 rebutted the presumption that the 90-day period for filing a protest imposed by 19 U.S.C.S. § 1514(3) contained an equitable tolling exception, rendering the court without jurisdiction to review the untimely protest.

In Avecia, Inc. v. United States, 483 F. Supp. 2d 1251 (Ct. Int’l Trade 2007), the Court of International Trade reviewed CBP’s regulation requiring protests to be filed with the port director whose decision is protested (19 C.F.R. § 174.12(d)). In Avecia, the protestant filed a protest at the Port of Philadelphia that challenged the classification of merchandise imported through the ports of Newark and Baltimore, in addition to the Port of Philadelphia. The Port of Philadelphia subsequently issued a determination with regard to merchandise entered at all three ports. At trial, the CIT rejected the government’s contention that the court lacked subject matter jurisdiction under 28 U.S.C. § 1581(a) with regard to civil actions contesting the denial of protests that were not filed with the appropriate customs office pursuant to 19 C.F.R. § 174.12(d). The court noted that, “one cannot definitely conclude that the port director of Philadelphia was an ‘inappropriate’ customs officer to act with respect to entries incorrectly included on an otherwise properly-filed protest at that port.”

Unlike Avecia, the Port of Long Beach/Los Angeles did not consider the protest with regard to entries of merchandise entered at LAX. Consequently, there was no decision by the Port of Long Beach/Los Angeles regarding merchandise entered at other ports.

We note that 19 U.S.C. § 1514(c)(1) provides that only one protest may be filed for each entry of merchandise. CBP has applied this provision to deny redundant protests filed with regard to a particular entry. In HQ 226218 (March 19, 1996), for example, two protests were filed for the same entry when CBP’s processing of the initial protest was delayed by more than three months. As a result of confusion caused by the delay, the protestant filed a second protest for the same entry of merchandise. In the ruling, we noted that after denying the first protest on the substantive issues, the second protest could be dismissed as a procedural matter consistent with the requirement that only one protest may be filed for a particular entry of merchandise.

In this case, the initial protest (Protest 2704-06-101203) was invalid with regard to entries of merchandise entered through the port at LAX and therefore rejected by the port of Long Beach for those entries. Consequently, section 1514(c)(1) does not preclude consideration of Protest 2720-06-100383, because the entries covered by that protest were not the subject of a previous valid protest.

For the ten entries liquidated on March 31, 2006, Protest 2720-06-100383, was timely because it was filed within 90 days after, but not before, the date of liquidation.

Liquidation at the “All Others” Rate

Pursuant to 19 U.S.C. 1673, the Department of Commerce has the authority to calculate and determine antidumping duties. Commerce then directs CBP to collect the estimated duties. See 19 U.S.C. § 1673e(a)(1) (1990). Per 19 U.S.C. § 1673(g), CBP’s role in the liquidation of entries of merchandise subject to antidumping duties is to collect the antidumping duties imposed by the Commerce. As stated by Court of Appeals for the Federal Circuit (“CAFC”) in Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973 (Fed Cir. 1994):

Customs merely follows Commerce’s instructions in assessing and collecting duties. Customs does not determine the “rate and amount” of antidumping duties under 19 U.S.C. § 1514(a)(2). Customs only applies antidumping rates determined by Commerce. Further, Customs has a merely ministerial role in liquidating antidumping duties under 19 U.S.C. § 1514(a)(5).

Mitsubishi, 44 F.3d at 977.

Therefore, the Commerce is required to determine the rate of antidumping duty to be assessed. CBP’s ministerial role is to follow the liquidation instructions and to compute the duty by applying the antidumping duty rate set by the DOC to the appraised value as determined by CBP.

Furthermore, parties that do not participate in Commerce’s administrative review process are not entitled to the benefit of a producer-specific antidumping duty rate. In Consolidated Bearings Co. v. United States, 348 F.3d 997 (Fed. Cir. 2003), the CAFC held that 19 U.S.C. § 1675(a)(2)(C) does not require Commerce to apply the final results of an administrative review to entries of merchandise that were not covered by an administrative review. In that case, an importer of antifriction bearings (Consolidated) purchased and imported the subject merchandise from a foreign reseller. However, neither the importer nor the foreign reseller participated in the administrative review.

After the Court of International Trade adjudicated some challenges, Commerce issued its amended final results. Pursuant to the amended final results, Commerce issued instructions to CBP to liquidate entries of participating importers. Because Consolidated did not participate in the administrative review, the instructions did not include a new antidumping rate specifically for Consolidated or th reseller that exported to Consolidated. Consequently, the instructions from Commerce required the liquidation of Consolidated’s entries at the time-of-entry cash deposit rates, which were much higher than the rates for participating importers. In reviewing whether it was appropriate for Commerce to exclude Consolidated from the amended final results, the CAFC noted: “If no information about import transactions with a particular reseller is before Commerce during the review, then the transactions of an importer who imports the subject merchandise from that reseller do not fall within the scope of the review.” Consolidated Bearings, 348 F.3d at 1005.

The court further noted that under subsection 1675(a)(2)(C), if an importer’s transactions are not examined during an administrative review, “then that importer’s entries enjoy no statutory entitlement to the rates established by the review. The ‘entries’ must be ‘covered by the determination’ to gain entitlement to the review’s results as the ‘basis for the assessment’ of duties.” Id., at 1005-06.

The liquidation instructions that directed CBP Port Directors to, among other things, assess antidumping duties at the “all others” rate in effect on the date of entry. The “all others” rate for both administrative review periods (May 1, 2003 through April 30, 2004, and May 1, 2004 through April 30, 2005) was 45.83%. With regard to the instant protests, CBP fulfilled its statutory obligation requiring it to determine the value of the entered goods and followed the liquidation instructions by assessing antidumping duties at the all others rate in effect on the date of entry upon liquidation. Therefore, Protest 2720-06-100383 should be denied with regard to any remaining entries that were timely filed.

HOLDING:

Protests 2720-06-100383 is DENIED IN FULL for the reasons set forth in Law and Analysis above.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 claim 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 CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division

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