Customs Ruling HQ 229421 - Protest No. 3901-00-101571; Antidumping Duties; 19 U.S.C. 1514; 19 U.S.C. 1504; 19 U.S.C. 1677(25); 19 U.S.C. 1673e(a)(2); 19 CFR 351.202(b)(5); 19 CFR 351.225(c)(1)(i)

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HQ 229421
Sep 27, 2002

Type : Deemed Liquidation Determination • HTSUS :

LIQ-4-01; LIQ-11; LIQ-15
RR:CR:DR 229421 IDL

Port Director of Customs
Trade Operations
610 South Canal Street
Chicago, IL 60607

Re: Protest No. 3901-00-101571; Antidumping Duties; 19 U.S.C. 1514; 19 U.S.C. 1504; 19 U.S.C. 1677(25); 19 U.S.C. 1673e(a)(2); 19 CFR 351.202(b)(5); 19 CFR 351.225(c)(1)(i)

Dear Sir or Madam:

This is in response to your correspondence concerning Usinor Steel Corporation, Protest No. 3901-00-101571.

FACTS:

On May 10, 1993, Francosteel Corporation, of New York, NY, subsequently doing business as Usinor Steel Corporation (“Usinor”), entered “FLAT RLD PROD OF SIL ELC STEEL” from France at the port of Chicago, IL, Entry No. 009-xxxx142-9 (“Entry 142-9”), under subheading 7225.90.0000, HTSUS, 5.8% duties. On October 12, 1993, the port suspended liquidation on Entry 142-9, pursuant to a preliminary determination by the Department of Commerce (“Commerce”) published on February 4, 1993 (discussed below).

On April 27, 1995, after receiving additional information, a sample, and an internal advice on the matter, the port issued a Notice of Action concerning a change in classification of the subject merchandise to subheading 7210.39.0000 HTSUS, explaining that the titanium content was less than .05%. In accordance with the change, the port submitted to us a copy of the CF 7501 Entry Summary and Entry Invoice, which include handwritten annotations concerning the existence of antidumping duty investigation number A-427-808, and antidumping duties of 29.41%. The port has informed us that Customs officers made the annotations.

On September 15, 2000, the port liquidated Entry 142-9 with a final rate of 29.41%, per Message No. 0189203, dated July 7, 2000. On December 12, 2000, Usinor filed protest, challenging the classification of the subject merchandise in subheading 7210.39.00, the assessment of antidumping duties under Case A-427-808-000, the duty rate assessed, and the assessment of interest on antidumping duties.

On February 4, 1993, prior to entry of merchandise, Commerce had published in the Federal Register (58 FR 7091) on Case A-427-808, Notice of Preliminary Determinations of Sales at Less Than Fair Value and Postponement of Final Determinations; Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate From France (“Preliminary Determination”). The Preliminary Determination ordered until further notice, the suspension of liquidation of all entries of hot-rolled, cold-rolled, and corrosion-resistant steel entered or withdrawn from warehouse, for consumption on or after February 4, 1993, the date of publication of the Preliminary Determination in the Federal Register. It further directed Customs to require a cash deposit or posting of a bond equal to the estimated preliminary dumping margins of 10.58%.

On July 9, 1993, Commerce published in the Federal Register (58 FR 37125) on Case A-427-808, Notice of Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate From France Part IV (“Final Determination”). The Final Determination directed Customs to continue to suspend liquidation, until further notice, of all entries of hot-rolled, corrosion-resistant steel, and steel plate from France that are entered, or withdrawn from warehouse, for consumption on or after February 4, 1993, the date of publication of the Preliminary Determination. The Final Determination also directed Customs to require a cash deposit or posting of a bond equal to 44.40%.

On August 19, 1993, Commerce published in the Federal Register (58 FR 44169) on Case A-427-808, Antidumping Duty Order and Amendments to Final Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from France (“Order”). The Order indicated that Commerce “will direct Customs to assess… antidumping duties equal to the amount by which the foreign market value of the merchandise exceeds the United States price for all entries of corrosion-resistant steel, other than clad plate, from France. These antidumping duties will be assessed on all unliquidated entries of corrosion-resistant steel…from France entered, or withdrawn from warehouse, for consumption on or after February 4, 1993, the date on which [Commerce] published” its Preliminary Determination. The Order listed the antidumping duty margin as 39.40%.

On October 8, 1993, the port issued a Notice of Action proposing the following action: a change in classification from 7225.90.0000/5.8% to 7210.39.0000/6.5%; antidumping duties under Case A-427-808-000 at 10.58% of entered value, with request for a cash deposit on the subject merchandise. On October 12, 1993, the port suspended Entry 142-9, and on October 16, 1993, it sent notice of suspension.

On April 27, 1995, the port again issued a Notice of Action, proposing the following action: a change in classification from 7225.90.0000/5.8% to 7210.39.0000/6.5%; antidumping duties under Case A-427-808-000 at 39.40 per cent of the appraised value. The Notice of Action made a request for deposit of the antidumping duties and the increased tariff rate duties.

On June 21, 1996, Commerce published in the Federal Register (61 FR 31921) on Case A-427-808, Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold- Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate from France; Notice of Court Decision and Continuation of Suspension of Liquidation (“Court Decision”). Commerce stated in the Court Decision that Commerce “would suspend liquidation until there was a ‘conclusive’ decision in the action.”

On October 1, 1996, Commerce published in the Federal Register (61 FR 51274) on Case A-427-808, Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate From France; Notice of Final Court Decision and Amended Final (“Final Decision”). The Final Decision amended the Order of August 19, 1993, which had amended the Final Determination of July 9, 1993. Commerce listed an “All Others” rate for Usinor at 29.41% for “Certain Corrosion-Resistant Carbon Steel Products. In addition, Commerce noted that it “will instruct the U.S. Customs Service to change the appropriate cash deposit requirements in accordance with the recalculated rate for corrosion-resistant steel products and to proceed with liquidation of the subject merchandise entered on or after April 6, 1993, and before August 17, 1993.” The Final Decision continued that “there is now a final and conclusive court decision in this action.”

On July 7, 2000, Commerce issued liquidation instructions, Message No.0189203. On September 15, 2000, the port liquidated Entry 142-9. On December 12, 2000, Usinor filed protest, challenging the classification of the subject merchandise in subheading 7210.39.00, the assessment of antidumping duties under Case A-427-808-000, the duty rate assessed, and the assessment of interest on antidumping duties. Arguing that Customs failed to change the classification to 7210.39.00 until some time after Commerce issued the Preliminary Determination, Protestant deduces that Customs had no legal basis to suspend Entry 142-9; that as a result, all of the changes made on the entry by the port upon liquidation were unlawful, because the entry was liquidated as entered on its first anniversary by operation of law.

ISSUES:

(1) Whether the port erred in applying Message No. 0189203 in liquidating Entry 142-9?

(2) Whether the port properly suspended the subject entry, and whether the entry deemed liquidated by operation of law pursuant to 19 U.S.C. 1504(d)?

(3) Whether the port may assess interest on antidumping duties?

(4) Whether the subject entry liquidated in accordance with the port’s changes in classification and duty rate assessment?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. § 1514 and 19 CFR Part 174). The port liquidated Entry 142-9 on September 15, 2000, and the subject protest was filed on December 12, 2000.

Issue (1) Whether the port erred in applying Message No. 0189203 in liquidating Entry 142-9?

Message No. 0189203, dated July 7, 2000 instructed Customs to assess an antidumping duty liability of 29.41% “for all shipments of certain corrosion-resistant carbon steel flat products from France, produced by all firms, entered or withdrawn from warehouse for consumption during the period July 9, 1993 through July 31, 1999. Since Entry 142-9 was made on May 10, 1993, prior to the coverage period, Message No. 0189203 did not apply.

Therefore, the port erred in applying Message No. 0189203.

Issue (2) Whether the port properly suspended the subject entry, and whether the entry deemed liquidated by operation of law pursuant to 19 U.S.C. 1504(d)?

Protestant contends that the merchandise is properly classifiable under 7225.90.0000 HTSUS; that the Order failed to address merchandise classified under 7225.90.0000; that Customs failed to change the classification to 7210.39.00 until some time after Commerce issued the Preliminary Determination; and that Customs, therefore, had no legal basis to suspend Entry 142-9. As a result, Protestant argues that, pursuant to 19 U.S.C 1504(a), Entry 142-9 was deemed liquidated by operation of law on May 10, 1994, one year after its entry.

19 U.S.C. 1504. Limitation on liquidation (a) Liquidation …[A]n entry of merchandise not liquidated within one year from: 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…. 19 U.S.C. 1504(a)

However, on February 4, 1993, Commerce issued the Preliminary Determination, ordering Customs to suspend, until further notice, liquidation of all entries of corrosion-resistant steel from France entered or withdrawn from warehouse, for consumption on or after February 4, 1993. Contrary to Usinor’s contention, the courts have held that a reference to an HTSUS number is not dispositive about the scope of an antidumping or countervailing-duty order. Novosteel, S.A. v. United States, 284 F.3d 1261 (Fed. Cir. 2002); Smith Corona Corp. v. United States, 915 F.2d 683, 687 (Fed.Cir. 1990). The CIT has held that "the inclusion of various HTSUS headings in a petition ordinarily should not be interpreted to exclude merchandise… classified under an HTSUS heading not listed in the petition. Wirth Ltd. v. United States, 5 F.Supp. 2d 968, 977-978 (C.I.T. 1998), aff'd, 185 F.3d 882 (Fed. Cir. 1999). “A tariff classification by the Customs Service does not govern an antidumping determination regarding class or kind… A product's tariff classification is merely of peripheral interest to suggest the general nature of a good. Tak Fat Trading Co., et al. v. United States, et al., Slip Op. 2000-161 (December 12, 2000).

Thus, when Usinor entered the subject merchandise on May 10, 1993, the port was required to suspend liquidation on the entry pursuant to the Preliminary Determination.

On July 9, 1993, Commerce issued the Final Determination, which directed Customs to continue to suspend liquidation, until further notice, of all entries of corrosion-resistant steel from France that are entered, or withdrawn from warehouse, for consumption on or after February 4, 1993, the date of publication of the Preliminary Determination. The port suspended Entry 142-9 on October 12, 1993. The directions contained in the Final Determination to continue to suspend liquidation remove any doubt as to whether Commerce had lifted the suspension prior to the entry of the subject merchandise.

The protestant describes the article as a galvanized steel coil. The Customs laboratory report describes the article covered by Entry 009-xxxx142-9 as galvanized steel coils zinc coated. The laboratory sample was described as an unalloyed galvanized steel sheet containing .045 percent titanium by weight. The entry invoice describes the article as a galvanized coil.

The scope of Case A-427-808 with respect to corrosion-resistant carbon steel flat products from France set forth in the antidumping duty order (58 FR 44169) describes the covered products as follows:

The corrosion-resistant products subject to [Commerce’s] antidumping order include flat-rolled carbon steel products, or rectangular shape, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness or 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the HTS under item numbers 7210.31.0000, 7210.39.0000, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.60.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.21.0000, 7212.29.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.5000, 7217.12.1000, 7217.13.1000, 7217.19.1000, 7217.19.5000, 7217.22.5000, 7217.23.5000, 7217.29.1000, 7217.29.5000, 7217.32.5000, 7217.33.5000, 7217.39.1000, and 7217.39.5000.

Included in the order are corrosion-resistant flat-rolled products of nonrectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been “worked after rolling”)-for example, products which have been bevelled or rounded at the edges.

The Order excluded articles described as follows:

Excluded from these investigations are flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead ("terne plate"), or both chromium and chromium oxides ("tin-free steel"), whether or not painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating. Also excluded from these investigations are clad products in straight lengths of 0.1875 inch or more in composite thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness. Also excluded from these investigations are certain clad stainless flat-rolled products, which are three-layered corrosion-resistant carbon steel flat-rolled products less than 4.75 millimeters in composite thickness that consist of a carbon steel flat-rolled product clad on both sides with stainless steel in a 20%-60%-20% ratio.

The protestant argues that the steel was alloy steel with a zinc coating rather than carbon steel with a zinc coating and, therefore, outside the scope of the dumping order. There is a dispute as to the composition of the steel. Under U.S. Note 1(f), Chapter 72, HTSUS, a steel, pertinent to this situation, not meeting the definition of stainless steel that contains 0.05% or more of titanium is an alloy steel for classification purposes. There is a dispute as to titanium content. The Customs laboratory found the steel to be unalloyed steel because it found the titanium content to be 0.045%. The mill reports and a separate commercial laboratory report indicate the titanium content to be 0.051%.

As the protestant pointed out in its internal advice request, the tolerance in dispute is .005% and that even slight errors in calibration could cause erroneous results. The protestant also challenged the validity of the methodology used by the Customs laboratory.

However, even if the protestant is correct that the steel is alloy steel for classification purposes, that determination does not determine whether such a steel is excluded from the Commerce Order. The protestant was notified by the Notice of Action dated October 8, 1993, that Customs believed the steel to be within the Order. The protestant had the ability to request a scope ruling under 19 CFR 351.225 from Commerce and failed to do so. Unlike the situation in Xerox Corp v. United States, 289 F.3d 792 (Fed. Cir. 2002), here there is dispute in the evidence on whether the steel contains 0.05% or more of titanium. Further, whether a decision on tariff classification (that the steel is an alloy steel for classification purposes because it passed the threshold of 0.005%) results in an entry being deemed as outside the scope of the Commerce Order is a decision for Commerce and not the Customs Service.

Therefore, it appears that the port properly suspended Entry 142-9 on October 12, 1993.

On August 19, 1993, Commerce had issued the Order, listing the antidumping duty margin for Usinor at 39.40%. Although the Order did not include merchandise classifiable under subheading 7225.90.0000, the listing of tariff classifications is advisory only, as discussed above. See also 19 U.S.C. 1677(25); 19 U.S.C. 1673e(a)(2); 19 CFR 351.202(b)(5); 19 CFR 351.225(c)(1)(i).

On June 21, 1996, Commerce published the Court Decision, which stated that Commerce “would suspend liquidation until there was a ‘conclusive’ decision in the action.” On October 1, 1996, Commerce published the Final Decision, which lifted suspension and listed antidumping duty liability at 29.41%. On September 15, 2000, the port liquidated Entry 142-9.

Interpreting 19 U.S.C. 1504(d) in International Trading Co. v. United States, 110 F. Supp. 2d 977; Slip Op. 00-83 (July 14, 2000); Slip Op. 00-1577 (Fed. Cir.) March 1, 2002, aff’d, the CIT held that suspension on liquidation for the subject entries was removed following the publication of notice of final results in the Federal Register, and was sufficient notice under section 1504(d) (1993) for the 6-month liquidation period to run.

19 U.S.C. 1504. Limitation on liquidation … (d) Removal of suspension …[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…. 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. 19 U.S.C. 1504(d).

On October 12, 1993, the port properly suspended liquidation on the entry, as discussed above. On June 21, 1996, Commerce published the Court Decision, indicating that liquidation would remain suspended pending a conclusive decision in the action.

On October 1, 1996, Commerce published the Final Decision, determining conclusively that Usinor was subject to antidumping duty liability at 29.41%, and that Customs shall “proceed with liquidation of the subject merchandise entered on or after April 6, 1993, and before August 17, 1993.”

On September 15, 2000, Customs liquidated Entry 142-9. However, under the court’s interpretation of 19 U.S.C. 1504(d) in International Trading, Customs was required to liquidate the subject entries within 6 months after Commerce published the Final Decision (i.e., not later than April 1, 1997). However, Customs failed to liquidate the subject entry within 6 months of the Final Decision issued by Commerce.

As noted earlier, the entry documents include handwritten annotations concerning the existence of antidumping duty issues. However, since Customs officers (and not Usinor) made the annotations, there is no evidence that Usinor asserted antidumping duty liability at the time of entry.

In Rheem Metalurgica S/A v. United States, 951 F. Supp. 241, 20 C.I.T. at 1450 (1996), the court held that 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).

Therefore, Entry 142-9 deem liquidated by operation of law, and Usinor is now liable for 0.00% antidumping duty liability.

Issue (3) Whether the port may assess interest on antidumping duties?

Since the liquidation by Customs of the subject entries on September 15, 2000 was barred by a prior liquidation by operation of law, Usinor is subject to 0.00% antidumping duty liability, rendering the issue of interest moot.

Issue (4) Whether the subject entry liquidated in accordance with the port’s changes in classification and duty rate assessment?

Usinor challenges the classification and duty rate assessed on the basis of the deemed liquidation. As discussed in Issue (2), above, Entry 142-9 deem liquidated by operation of law on April 1, 1997. Thus, Entry 142-9 deem liquidated at the rate of duty Usinor asserted (5.8%) at the time of entry.

Therefore, the subject entry did not liquidate in accordance with the port’s changes in classification and duty rate assessment.

HOLDING:

Accordingly, the protest should be GRANTED for the reasons set forth above. 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,

Myles B. Harmon
Acting Director,
Commercial Rulings Division