PRO-2-02; LIQ 11 RR:CR:DR 228678 LLB
Category: Liquidation/Protests
Port Director of Customs
200 East Bay Street
Charleston, SC 29401
RE: Protest No. 1601-99-100183; Application for Further Review; deemed liquidation;19 U.S.C. § 1504(d); Fujitsu General America, Inc. et. al v. United States, 110 F. Supp. 2d 1061(Ct. Int’l Trade 2000), affirmed, No. 01-0142, 2002 U.S. App. Lexis 4402 (Fed. Cir. March 20, 2002); 19 U.S.C. § 1514; HQ 227793 (November 4, 1998); HQ 228249 (August 23, 1999);Rheem Metalurgica S/A v. United States, 951 F. Supp. 241, 249-50 (Ct. Int’l Trade 1996) aff’d 160 F. 3d 1357 (Fed. Cir.1998); 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).
Dear Sir:
The above-referenced protest has been forwarded to this office for further review. We have considered the points raised by the protestant and your office. Our decision follows.
FACTS
The subject protest covers an entry of manhole covers, rings and frames made on September 4, 1996. According to the record before us, the subject merchandise was manufactured by Kajaria Iron Castings, Ltd. The merchandise was the subject of countervailing order issued by the Department of Commerce (Commerce). 45 Fed. Reg. 68650 (October 16, 1980). Countervailing duties at the rate of 16.14% were deposited at entry.
In 1997, liquidation of the entry was suspended as Commerce initiated a review of iron-metal castings from India for the relevant period of January 1, 1996 through December 31, 1996. 62 Fed. Reg. 63069 (November 26, 1997). On July 13, 1998, Commerce published the preliminary results of its administrative review, finding that net subsidy rate was 1.69%. 63 Fed. Reg. 37534, 37538 (July 13, 1998). The final results issued thereto, which Commerce published on November 18, 1998, also found the subject merchandise to have a net subsidy rate of 1.69%. 63 Fed. Reg. 64050, 64061 (November 18, 1998). Commerce stated that it would instruct Customs to assess countervailing duties as detailed in the final results. Id. at 64050.
On January 7, 1999, Commerce issued liquidation instructions to Customs for the subject merchandise entered between January 1, 1996 and December 31, 1996. The liquidation instructions directed Customs to assess countervailing duties at 1.69%. The instructions noted that the assessment of countervailing duties by Customs on entries of the subject merchandise is subject to the provisions of section 778 of the Tariff Act of 1930. Furthermore, the instructions noted that the interest provisions are not applicable to cash or bonds posted as estimated countervailing duties before the date of publication of the countervailing duty order, and interest shall be calculated from the date payment of estimated countervailing duties is required through the date of liquidation. Customs manually liquidated the entry “no change” on September 3, 1999.
Pursuant to 19 U.S.C. § 1514, the protestant filed this protest on the liquidation on October 28, 1999. The protestant argues that the entry deemed liquidated; however, it argues that the countervailing duty rate should be 1.69% as directed in the liquidation instructions from Commerce rather than 16.14% which was the rate asserted by the protestant at the time of entry.
ISSUES
1. Whether the matter is protestable and timely filed pursuant to 19 U.S.C. § 1514
2. Whether the entry was deemed liquidated by operation of law, pursuant to 19 U.S.C.
§ 1504
a. If so, whether the countervailing duty rate is the countervailing duty rate “asserted at the time of entry by the importer of record” or the rate indicated in the liquidation instructions from the Department of Commerce
Issue 1
Generally, decisions of the Customs Service, including, inter alia, the liquidation or reliquidation of an entry, are final unless a valid protest is filed. 19 U.S.C. § 1514(a)(5). The protestant argues that the subject entry deemed liquidated. The Court of International Trade recently held that deemed liquidation occurs by operation of law, and, therefore, does not involve a Customs decision. Fujitsu General America, Inc. et. al v. United States, 110 F. Supp. 2d 1061, 1069 (Ct. Int’l Trade 2000), affirmed, No. 01-0142, 2002 U.S. App. Lexis 4402 (Fed. Cir. March 20, 2002). However, “[a] Customs decision to liquidate certain entries anew after the entries had already deemed liquidated is a protestable decision under 19 U.S.C. § 1514(a)(5).” Id. (internal citation omitted). Insofar as Customs liquidated the entry on September 3, 1999, close to two months after the entry deemed liquidated (as discussed in Issue 2), such liquidation constituted a Customs decision and is, therefore, protestable under 19 U.S.C. § 1514(a)(5).
In addition, the protest must be filed within 90 days after, but not before, the notice of liquidation. 19 U.S.C. §1514(c)(3). Since the protestant filed the protest on October 28, 1999, the protest is well within 90 days of the September 3, 1999, liquidation date; and, therefore timely.
Issue 2
Pursuant to 19 U.S.C. 1504(d),
… when 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.
(emphasis added). According to the record, the liquidation instructions regarding the subject merchandise were issued on January 7, 1999. Therefore, the entry deemed liquidated on July 7, 1999.
The protestant argues that the entry should be liquidated at 1.69%, which is the rate indicated in Commerce’s liquidation instructions. Customs has held, 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 (November 4, 1998); HQ 228249 (August 23, 1999); 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. 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.
Based on the foregoing, the subject entry was liquidated by operation of law with countervailing 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
Insofar as Customs liquidated the entry after the entry liquidated by operation of law, Customs liquidation of the entry constituted a Customs decision and is, therefore, protestable under 19 U.S.C. § 1514(a)(5). However, while the entry was liquidated by operation of law, the port’s liquidation was consistent with 19 U.S.C. § 1504. The protest should be DENIED.
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
Commercial Rulings Division