LIQ-4-01-LIQ-4-02-LIQ-11-
RR:CR:DR 227793 IOR
Port Director
U.S. Customs Service
700 Doug Davis Drive
Atlanta, GA 30354
ATTN: Jim Pearce, SIS
RE: Protest and Application for Further Review No. 1704-97-100399; antidumping duty order; countervailing duties; shop towels; deemed liquidated; 19 U.S.C. §1504(d); liquidation; Rheem Metalurgica v. United States
Dear Sir:
The above-referenced protest was forwarded to this office for further review. We have considered the arguments made by the protestant and Customs records.
FACTS:
The protestant entered 195 bales of shop towels from Bangladesh, purchased from Sonar, by entry no.100-xxxx831-2, dated April 16, 1993. Shop towels from Bangladesh became subject to an anti-dumping order (case A-538-802) which was published in the Federal Register March 20, 1992 (57 FR 9688). Antidumping duties at the rate of 2.72% were deposited with the entry. Liquidation was suspended and a notice was issued on May 1, 1993. The Final Results of Antidumping Duty Administrative Review were published in the Federal Register on February 12, 1996 (61 FR 5377). Liquidation instructions for the entry involved were issued in Message 6242111, dated August 29, 1996. These instructions were stated to constitute the “immediate lifting of suspension of liquidation of entry summaries for the merchandise [ shop towels from Bangladesh sold by Sonar] and period [March 1, 1993 through February 28, 1994]....” The antidumping margin was stated to be 42.31%.
In addition to the antidumping case, there was also a countervailing duty investigation, case no. C-538-801, pertaining to shop towels from Bangladesh initiated by notice published in the Federal Register on January 8, 1991 (56 FR 680). On January 22, 1991, Customs issued to the field, message no. 1022112, giving notice of the initiation of countervailing duty investigation on shop towels from Bangladesh. The message did not address suspension of liquidation. On April 16, 1991, in a Federal Register notice, the International Trade Administration (ITA), published a preliminary negative countervailing duty determination (56 FR 15330). In the notice, the section titled “Suspension of Liquidation,” stated:
Due to the fact that the estimated net bounty or grant rate is de minimis, we are not directing the U.S. Customs Service to suspend liquidation on entries of shop towels from Bangladesh.
On April 18, 1991, Customs issued to the field message no. 1108117, which described the April 16, 1991 Federal Register notice, but made no reference to instructions regarding suspension of liquidation. According to Customs Automated Commercial System (ACS) records, suspension of liquidation for shop towels in case no. C-538-801 became effective on April 16, 1991. On July 1, 1991, the ITA published a final negative countervailing duty determination (56 FR 29941). The section on “Suspension of Liquidation” contained the same language as the preliminary negative countervailing duty determination. On July 3, 1991, Customs issued to the field message no. 1184111, which described the July 1, 1991 Federal Register notice, but made no reference to instructions regarding suspension of liquidation. Customs ACS records indicate that suspension of liquidation for shop towels in case no. C-538-801 was terminated on July 1, 1991. Subsequently, on June 12, 1997, Customs issued to the field message no. 7163111, again describing the July 1, 1991 Federal Register notice, and included the statement that no final margin exists and that Customs is directed to terminate the suspension of liquidation. The subject entry was liquidated July 7, 1997, in accordance with the stated antidumping margin.
According to the CF 6445A, Customs Protest and Summons Information Report, the subject merchandise was subject to both an antidumping duty and countervailing duty order upon entry, and suspension of liquidation was not lifted until the June 12, 1997 instructions on the countervailing duty case, and therefore liquidation was within six months of the removal of the remaining suspension of liquidation. Neither Customs nor the Department of Commerce have been able to locate any documents that support the suspension of liquidation or termination of suspension of liquidation record in ACS, in the countervailing duty case.
The protestant takes the position that the entry was deemed liquidated by operation of law under 19 U.S.C. §1504(d) at the amount of duty deposited at the time of entry. The grounds stated by the protestant are that Customs did not liquidate the entry within six months of the publication of the final results of the administrative review in the Federal Register on February 12, 1996, and alternatively, that Customs did not liquidate the entry within six months of receiving instructions from the Department Commerce in message no. 6242111 on August 29, 1996.
ISSUE:
Whether the entry was deemed liquidated by operation of law, pursuant to 19 U.S.C. §1504.
LAW AND ANALYSIS:
Initially, we note that the protest was timely filed (i.e., within 90 days of July 7, 1997, the date of liquidation of the entry) under 19 U.S.C. §1514(c)(3)) and the matter protested is protestable under 19 U.S.C. §1514(a)(5).
Under 19 U.S.C. §1504, as amended (see section 641, Public Law 103 182; 107 Stat. 2204), an entry not liquidated within one year from the date of entry (as pertinent in this case) 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. Under section 1504(c), "[i]f the liquidation of any entry is suspended, the Secretary shall, by regulation [see 19 C.F.R. §159.12], require that notice of the suspension be provided, in such manner as the Secretary considers appropriate, to the importer of record and to any authorized agent and surety of such importer of record." Under section 1504(d), "[w]hen a suspension required by statute or 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."
In this case, the date of entry was April 16, 1993, and liquidation of the entry was properly suspended within one year of the dates of entry (date of notice of suspension: May 1, 1993) (see International Cargo & Surety Insurance Co. [Data Memory Corp.] v. United States, 15 CIT 541, 779 F. Supp. 174 (1991)) and Enron Oil Trading and Transportation Co. v. United States, 15 CIT 511 (1991), vacated 988 F. 2d 130 (Fed. Cir. 1993), and rulings HQ 224792 and 224397). Suspension of liquidation in the antidumping case was lifted on August 29, 1996. However, suspension of liquidation in the countervailing duty case was not lifted until June 12, 1997. The entry was liquidated on July 7, 1997, promptly after the lifting of the suspension in the countervailing duty case. However, we do not find any evidence or Customs records that the suspension in the countervailing duty case was either imposed or lifted pursuant to any instructions from the Department of Commerce, or for any other reason, therefore we do not find that the suspension was pursuant to statute under 19 U.S.C. §1504(a), and could not extend the period of liquidation beyond the six months following the lifting of the suspension in the antidumping duty case. The liquidation occurred on July 7, 1997, more than six months after the lifting of the suspension in the antidumping duty case. Since liquidation was after the effective date (December 8, 1993; section 692, Public Law 103 182) of the amendments to 19 U.S.C. §1504(d) effected by Public Law 103 182 (see above), that statute controls in regard to the issue of the time for liquidation after the suspension of liquidation was lifted. The protested entry was not liquidated within 6 months after Customs received notice of the removal of the suspension of liquidation, as required by the amended section 1504(d). Therefore we find that the entry 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, in accordance with 19 U.S.C. §1504(d), and the protest should be granted on the issue of liquidation by operation of law.
Once it is determined that the entries in question were liquidated by operation of law, the remaining issue is to determine the rate at which those entries became liquidated by operation of law. The entries should be liquidated in accordance with Rheem Metalurgica v. United States, 951 F.Supp 241 (Ct. Int’l. Trade 1996)(appeal pending). In Rheem Metalurgica v. United States, the court held that entries subject to countervailing duties which liquidated by operation of law, liquidated with countervailing duties due at the rate at which the importer was required to post a bond or deposit cash, upon entry.
With respect to the protestant’s position that the six month period in which Customs must liquidate begins to run upon the publication of the final order in the Federal Register, we find no support for that position. Numerous administrative Headquarters decisions have been issued which state that the date for lifting of the liquidation suspension is the date Customs receives instructions from the Department of Commerce to liquidate the subject entries. See, e.g. HQ
225343 dated November 23, 1994 (cited in protest), HQ 226215 dated March 28, 1996 (cited in protest), HQ 225674 dated June 21, 1995, HQ 225107 dated September 20, 1994, and HQ 224778, dated December 23, 1993. The protest did not cite any Headquarters decisions inconsistent with the foregoing. It is also clear from the statute and Customs Regulations that the notice of final review published in the Federal Register and the liquidation instructions given to Customs by Commerce, are distinctly different and each have a purpose. See 19 U.S.C. §1675(a)(1)(C), (a)(3)(B) and (C); §1504(d); 19 CFR 353.22(c)(8) and (10).
HOLDING:
The entry was deemed liquidated by operation of law, pursuant to 19 U.S.C. §1504. The protest is granted and the entry should be reliquidated in accordance with the court’s decision in Rheem Metalurgica v. United States, supra, in the amounts asserted by the importer and accepted by Customs on the entry.
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
Commercial Rulings Division