OT:RR:CTF:ER
H174864 PTM
Port Director
U.S. Customs and Border Protection
Port of Great Falls 2108 21st Ave S Great Falls MT 59405
ATTN: Mary Munger, Entry Supervisor
RE: Further Review of Protest 3304-11-100038 concerning the assessment of antidumping duties on seamless steel pipe imported from Japan.
Dear Port Director,
We are writing in response to the protest and application for further review (“AFR”) filed on behalf of Quality Tube Supply Ltd. (“Quality Tube”) on May 18, 2011. We regret the delay in our response.
FACTS:
Protest Number 3304-11-100038 concerns the liquidation and assessment of duties by U.S. Customs and Border Protection (“CBP”) on an entry of seamless steel pipe manufactured by Sumitomo Metal Industries, Ltd. in Japan. CBP assessed antidumping duties pursuant to antidumping (“AD”) order A-588-851 and assessed AD duties of 106.07% on the entry.
On June 26, 2000, the Department of Commerce (“Commerce”) published Notice of Antidumping Duty Orders: Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Small Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Japan and the Republic of South Africa in the Federal Register. See 65 Fed. Reg. 39,360 (June 26, 2000) (the “AD Order”). The AD Order stated that the scope of the order covered certain large diameter carbon and alloy seamless standard, line and pressure pipe and excluded:
A. Boiler tubing and mechanical tubing, if such products are not produced to ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and API 5L specifications and are not used in standard, line, or pressure pipe applications….
With regard to the excluded products listed above, the Department will not instruct Customs to require end-use certification until such time as petitioner or other interested parties provide to the Department a reasonable basis to believe or suspect that the products are being utilized in a covered application. If such information is provided, we will require end-use certification only for the product(s) (or specification(s)) for which evidence is provided that such products are being used in a covered application as described above.
Id., see also, Commerce Message No. 0201202 (July 19, 2002) (providing notice of the publication of the antidumping duty order). The AD order instructed CBP to deposit estimated duties at the AD rate of 106.07% for pipe manufactured by Sumitomo Metal Industries. 75 Fed. Reg. 39,362.
On July 28, 2010, Commerce published in the Federal Register notice of administrative reviews of antidumping orders of ball bearings and parts thereof from various countries for the period of June 1, 2009 and May 31, 2010. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocations in Part, 75 Fed. Reg. 44,224 (July 28, 2010). However, Commerce did not receive a request for an administrative review for this order. Id. Subsequently, Commerce issued liquidation instructions for the applicable period. See Commerce Message No. 0230302 (Aug. 18, 2010). Message Number 0230302 instructed CBP to assess antidumping duties on merchandise entered, or withdrawn from warehouse, for consumption at the cash deposit or bonding rate in effect on the date of entry.
On June 19, 2009, Quality Tube filed entry number 300-XXXXX720 with CBP for an importation of seamless tubes from Japan. With the entry, Quality Tube provided an invoice describing the merchandise as “SA 213 T9 COLD DRAWN SEAMLESS TUBE” from Japan, and contained a certification that stated, “reason for export: repair and return.” Quality Tube also submitted a mill test certificate from Sumitomo Metal Industries showing that the seamless steel pipe conformed to ASME SA-213 standard. On July 22, 2009, CBP issued a CBP Form 28, Request for Additional Information. The request asked the importer to provide information regarding the tube products. Specifically, it stated “[a]s entered, the Japanese pipe appears to be subject to antidumping case A-588-850-003 [sic]. Please supply the following: The mill [certification] for the Japanese pipe states SEAMLESS STEEL PIPE. Is this pipe used of a kind for oil or gas pipelines? Drill pipe used for drilling for oil and gas? If neither of these, what is the purpose of the pipe? It is currently classified as a non-alloy product, however per the mill certificate it is an alloy.”
On August 24, 2009, CBP issued a CBP Form 29 Notice of Action that stated that, per a review of the mill analysis, the Japanese pipe would be subject to AD duties. On December 22, 2009, CBP issued an amended Notice of Action stating:
Per review of mill analysis/inspection certificate, the Sumitomo Japanese pipe is reclassified to 7304.51.5015…subject to antidumping case A-588-851-003 at the antidumping duty rate of 106.07%. The National Import Specialist verified that this pipe appears to be a pressure pipe as described in ASTM A-213 (which is identical to ASME SA-213 – the manufacturing spec for this pipe). The pipe appears to conform to the physical description and chemistry required by the scope of A-588-851-003…
On November 19, 2010, CBP liquidated the entry and assessed antidumping duties in the amount of 106.07%. On May 18, 2011, Quality Tube filed the instant protest asserting that the subject merchandise is excluded from the AD order. The port states that the subject merchandise falls under the scope of the order and is not subject to the exclusion, and that AD duty was properly assessed. Our office has confirmed that Quality Tube did not request a scope ruling regarding the subject merchandise from Commerce.
ISSUE:
Whether the pipe is within the scope of the AD order.
LAW AND ANALYSIS:
We note initially that the instant protest was timely filed, within 180 days from the date of liquidation. See 19 U.S.C. § 1514(c)(3)(A). CBP liquidated Quality Tube’s entries on November 19, 2010, and this protest was filed on May 18, 2011, exactly 180 days from the date of liquidation. Further, the protestant requests further review per 19 C.F.R. § 174.24. CBP’s regulations provide for further review of a protest when, inter alia, the decision against which the protest was filed:
(b) Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts
19 C.F.R. § 174.24(b). Upon review of the application for further review, we find that there are legal arguments that have not been the subject of a Headquarters ruling or court decision. See 19 C.F.R. § 174.24(b) and 19 C.F.R. § 174.26(b)(1)(iv). Specifically, CBP has not previously ruled on whether this pipe falls within the exclusion from the order. Accordingly, further review is warranted.
Generally, assessed antidumping duties properly applied by CBP are not protestable, because "Customs has a merely ministerial role in liquidating antidumping duties." Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). Per 19 U.S.C. § 1673, Commerce calculates and determines the antidumping duty rate. Commerce then directs CBP to collect the estimated duties. See 19 U.S.C. § 1673e(a)(1). CBP is required to collect the antidumping duties imposed by the Department of Commerce per 19 U.S.C. § 1673(g). In Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973 (Fed Cir. 1994) the court stated:
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).
Id. at 977. Therefore, 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 Commerce to the appraised value as determined by CBP. However, inasmuch as Quality Tube protests the liquidation, i.e., disputes the application by CBP of Commerce's liquidation instructions, this matter is protestable. See Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir. 2002).
Quality Tube asserts that the merchandise at issue is excluded from the AD order, and therefore CBP improperly assessed AD duty on the merchandise. Quality Tube states that the pipes fall under the exclusion set forth in the AD Order which states:
Specifically excluded from the scope of this order are: A. Boiler tubing and mechanical tubing, if such products are not produced to ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and API 5L specifications and are not used in standard, line, or pressure pipe applications….
(emphasis added)
65 Fed. Reg. 39,360. Quality Tube states that the pipe at issue falls under the exclusion because the pipe conforms to the ASTM A-213 standard, rather than one of the standards enumerated in the exclusion. Additionally, it states that the pipe was entered into the United States for the sole purpose of being cut and bent to customer specifications, rather than for use in standard, line, or pressure pipe application. Quality Tube points to the invoice associated with the entry that contains the notation “reason for export: repair and return” as evidence that the tubes were not used in standard, line or pressure pipe applications. Quality Tube also states that CBP should not have requested an end use certificate because the exclusion provides that “[w]ith regard to the excluded products listed above, the Department will not instruct Customs to require end-use certification until such time as petitioner or other interested parties provide to the Department a reasonable basis to believe or suspect that the products are being utilized in a covered application.” Quality Tube argues that because Commerce has not instructed CBP to collect end-use certifications, CBP should not have required one in its July 22, 2009 Request for Information. However, Quality Tube does not satisfy the criteria for the exclusion of the pipes from the AD order because it has not demonstrated that the pipes were not used in the applications set forth in the exclusion. Furthermore, no end-use certification was required by CBP.
In order for a product to fall under the exclusion to the AD order, two criteria must be satisfied. First, it must be boiler or mechanical tubing that does not conform to one of the enumerated standards. Second, the pipe must not be used in standard, line, or pressure pipe applications. Products meeting the description of the scope that do not satisfy both criteria of the exclusion are subject to the AD order.
The CBP port confirmed with the National Import Specialist that the pipes conformed to the description of the merchandise described in the scope of the AD Order. Therefore, the pipes are included within the scope of the AD Order unless they fall under the exclusion. The AD order excludes “[b]oiler tubing and mechanical tubing, if such products are not produced to ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and API 5L specifications.” The tubes at issue conform to the ASTM A-213 standard as demonstrated by the mill test certificate provided by Quality Tube. The ASTM A-213 is not one of the enumerated standards. Consequently, because the pipes were not produced to one of the enumerated specifications, the first criterion is met.
However, Quality Tube has failed to substantiate that the pipes satisfy the second criterion of the exclusion. Quality Tube has not demonstrated that the pipes are not used in standard, line, or pressure pipe applications. The only evidence Quality Tube provided was an invoice stating “for repair and return.” It never provided any documentation showing use of the pipes for purposes other than for standard, line, or pressure pipe applications as required by the exclusion. To the contrary, the National Import Specialist confirmed that the pipes at issue are capable of use for these applications and were capable for these uses at the time of entry.
Further, the entry at issue was a consumption entry, and we note that even if actual use was required, there is no evidence that Quality Tube ever re-exported the pipes. Unlike merchandise entered as a temporary importation under bond, there is no requirement for re-export for a consumption entry. The mere fact that the invoice stated that the pipes were exported to the United States “for repair and return” is insufficient basis for demonstrating exclusion. Quality Tube provided no evidence of exportation. Based on the foregoing, we find that Quality Tube did not adequately demonstrate that the tubes satisfy the exclusion from the scope of the AD order.
Additionally, CBP never requested an end-certificate as Quality Tube alleges. Quality Tube portrays CBP’s inquiry on July 22, 2009, in a CF 28 asking about information on the mill test certification as asking for an end use certificate. However, in the CF 28, the CBP import specialist simply inquired “is this pipe used of a kind for oil or gas pipelines…[i]f neither of these, what is the purpose of the pipe?” Asking for clarification on the merchandise is not a request for a certification of end-use. Moreover, CBP has authority to request information to permit it to properly classify and assess duties on imported merchandise. See, e.g. 19 CFR §§142.3(a) and 151.11.
HOLDING:
Quality Tube has not demonstrated that the pipe is excluded by the AD order. Therefore, CBP properly liquidated the entry consistent with Commerce’s instructions. You are instructed to DENY the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Sixty days from the date of the decision, the Office International Trade, 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