Customs Ruling HQ H305019 - Application for Further Review of Protest No. 4601-2019-102002; Pipe Fittings from the People's Republic of China under Antidumping Orders A-570-875 and A-570-881; Scope

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HQ H305019
Feb 08, 2024

Type : Entry • HTSUS :
Related: H258302; H284348; H298167

OT:RR:CTF:EPDR H305019 HvB

Center Director
Base Metals Center of Excellence and Expertise
U.S. Customs and Border Protection
510 S. Canal Street, Room 300
Chicago, IL 60607

Attn: Sadique Mahbub, Import Specialist; Abril Pineda, Supervisory Import Specialist

Re: Application for Further Review of Protest No. 4601-2019-102002; Pipe Fittings from the People's Republic of China under Antidumping Orders A-570-875 and A-570-881; Scope

Dear Center Director,

The following is our decision regarding the Application for Further Review ("AFR") of Protest Number 4601-2019-102002, dated January 25, 2019, filed on behalf of Steel Electric Products Company, Inc. ("SEPCO"). SEPCO contests the antidumping duties ("ADD") that were assessed on its entry of cast iron pipe fittings. We regret the delay.

FACTS:

On May 5, 2017, SEPCO entered cast iron pipe fittings from the People's Republic of China ("PRC"). According to the Automated Commercial Environment ("ACE") and the entry summary (U.S. Customs and Border Protection ("CBP") Form 7501), SEPCO initially entered the merchandise as type 01, meaning a formal consumption entry not subject to ADD. In addition, the initial entry summary reflected classification errors, which SEPCO later corrected upon filing a Post-Summary Correction ("PSC") on January 8 and March 14, 2018.

The merchandise at issue in this protest consist of two categories of cast iron pipe fittings that are subject to two different antidumping orders. SEPCO describes these goods as electrical conduit fittings: (1) the first category consists of conduit pipe fittings made from malleable iron, which were subject to ADD order A-570-881; and (2) the second category of merchandise consists of non-malleable cast iron pipe fittings, which are subject to ADD order A-570-875.

On August 24, 2018, CBP liquidated the entry at issue under two separate Department of Commerce ("Commerce") instructions. Below, we address each antidumping order separately.

1. Case A-570-881

Malleable cast iron pipe fittings ("MCPF") from the PRC are subject to ADD order A-570-881. See Antidumping Duty Order: Certain Malleable Iron Pipe Fittings From the People's Republic of China,68 FR 69376 (December 12, 2003).[1] The period of review for this order is December 1, 2016 - November 30, 2017.

On March 12, 2018, Commerce issued instructions to CBP regarding ADD order A-570-881 (and the applicable period of review) via Message 8071316, stating that notice of lifting of suspension of MCPF had occurred on February 23, 2018.[2] Commerce instructed CBP to assess antidumping duties on merchandise entered, or withdrawn for warehouse, for consumption at the case deposit rate in effect on the date of entry for the period 12/01/2016 through 11/30/2017.

Subsequently, on August 24, 2018, for the malleable pipe fittings subject to case A570-881, CBP liquidated the applicable line item pertaining to SEPCO's entry of MCPF, in accordance with Message 8071316 (Mar. 12, 2018).

On December 20, 2018, Commerce granted SEPCO's request for a ruling that certain conduit fittings were outside the scope of A-570-881. See "Dep't of Commerce, Final Scope Ruling, A-570-881, Scope - SEPCO Conduit Fittings, dated Dec. 20, 2018 ("SEPCO Scope Ruling"). SEPCO submitted its Scope Request to Commerce on September 27, 2018. See SEPCO's Letter, "Certain Malleable Cast Iron Pipe Fittings from the People's Republic of China: Request for Scope Ruling for Electric Conduit Fittings," dated September 27, 2018.

On February 11, 2019, Commerce notified CBP of its SEPCO final scope determination. See Message 9042308, dated Feb. 11, 2019). In Commerce Message 9042308, Commerce stated that it had determined that electrical conduit fittings ("i.e., conduit bodies, conduit nipples, and conduit couplings and connectors") imported by SEPCO are outside the scope of the order on malleable iron pipe fittings. In addition, in paragraph 4, Commerce instructed CBP to refund any cash deposits relating to the electrical conduits described in the message. See Message 9042308, dated Feb. 11, 2019.

Accordingly, your office agrees that those invoiced items indicated as malleable cast iron fittings are outside the scope of ADD order A-570-881. Hence, we turn to the sole issue before us in this protest. 2. Case A-570-875

SEPCO's electrical conduit fittings subject to ADD order A-570-875 consists of threaded non-malleable pipe fittings (or "NMPF"). The invoice attached to the entry summary described these goods as "steel tube parts." SEPCO classified the goods in subheading 7307.19.30, Harmonized Tariff Schedule of the United States (HTSUS), and listed them as "AX 75, AX-100, AX-125, AX-150, AX-200, AX-250, AX-300, AX-350, AX-400." SEPCO product catalogue describes these goods as "Type AX" and Expansion Fittings for Rigid Metal Conduit & IMC ["Intermediate Metallic Conduit"]. According to SEPCO's catalogue, the fittings at issue consist of threaded "expansion fittings," which are made from hot dipped galvanized ductile iron. The Type AX is shown with one threaded end, that is described as "Hub Size (NPT) Tapered Threads." NPT stands for the National Pipe Thread Tapered, which is defined by ASME B1.20.1 standard for Pipe Thread.[3] The product catalogue advertises that the Type AX fittings are available in different sizes, with diameters ranging from two inches to six inches. SEPCO's product catalogue also indicates that fittings are listed under UL Listing E198258. We note that ASTM B1.20.1 covers dimensions and gauging for NPT and other common pipe threads.

Non-malleable cast iron pipe fittings ("NMPF") from the PRC are subject to ADD order A-570-875. See "Notice of Antidumping Duty Order: Non-Malleable Cast Iron Pipe Filings from the People's Republic of China, 68 Fed. Reg. 16765 (Apr. 7, 2003). That notice also announces a 75.50% weighted-average dumping rate of PRC-wide rate of 75.50% for all exporters. The scope of the order is as follows:

The products covered by the order are finished and unfinished non-malleable cast iron pipe fittings with an inside diameter ranging from inch to 6 inches, whether threaded or unthreaded, regardless of industry or proprietary specifications. The subject fittings include elbows, ells, tees, crosses, and reducers as well as flanged fittings. These pipe fittings are also known as "cast iron pipe fittings" or "gray iron pipe fittings." These cast iron pipe fittings are normally produced to ASTM A-126 and ASME B.16.4 specifications and are threaded to ASME B1.20.1 specifications. Most building codes require that these products are Underwriters Laboratories (UL) certified. The scope does not include cast iron soil pipe fittings or grooved fittings or grooved couplings.

Fittings that are made out of ductile iron that have the same physical characteristics as the gray or cast iron fittings subject to the scope above or which have the same physical characteristics and are produced to ASME B.16.3, ASME B.16.4, or ASTM A-395 specifications, threaded to ASME B1.20.1 specifications and UL certified, regardless of metallurgical differences between gray and ductile iron, are also included in the scope of the Order. These ductile fittings do not include grooved fittings or grooved couplings. Ductile cast iron fittings with mechanical joint ends (MJ), or push on ends (PO), or flanged ends and produced to American Water Works Association (AWWA) specifications AWWA C110 or AWWA C153 are not included.

Imports of covered merchandise are classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers 7307.11.00.30, 7307.11.00.60, 7307.19.30.60 and 7307.19.30.85. HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of the Order is dispositive. Id.

In 2004, Commerce determined that electrical conduits are within the scope of ADD order A-570-875. See Commerce, "Final Scope Ruling- Antidumping Order on Non-Malleable Pipe Fittings from the [PRC]." (Nov. 5, 2004). On April 19, 2017, CBP sought guidance from Commerce to follow up on this scope determination, specifically as to whether non-malleable cast iron electrical conduits are still considered to be within the order. This inquiry did not refer to any particular entry or importer. On June 16, 2017, Commerce responded that "the status of scope determination for electrical conduit fittings has not changed and they are still within the scope of order A-570-875." See DOC Inquiry 42680 (June 16, 2017).

On February 12, 2014, the U.S. Department of Commerce ("Commerce") published a notice of continuation for ADD order A-570-875. See Non-Malleable Cast Iron Pipe Fittings from the [PRC]: A Continuation of Antidumping Order, 69 Fed. Reg. 8437 (Feb. 12, 2014). Commerce also ordered CBP to continue to collect antidumping duty cash deposits at the rates in effect at the time of entry. See also Commerce Message No. 6267302. (Sept. 23, 2016).

On June 22, 2018, Commerce issued liquidation instructions to CBP for ADD order A-570-875 for the period of April 1, 2017 - March 31, 2018. See Message 8173305 (June 22, 2018).[4] In that message, Commerce also instructed CBP to assess antidumping at the cash deposit rate in effect on the date of entry and to "liquidate entries for all firms." See Message 8173305 (June 22, 2018).[5] Accordingly, on August 24, 2018, CBP liquidated CBP's entry.

In its protest, SEPCO asserts that CBP incorrectly assessed ADD under A-570-875 on its entry because the subject fittings are outside the scope of ADD A-570-875. SEPCO argues that because the subject goods are "conduit fittings" and not "pipe fittings" as defined by the order, a scope ruling is unnecessary. According to SEPCO, its products do not constitute pipe fittings because they do not carry water, fluid, or gas, but rather contain water which are being protected from outside agencies. SEPCO argues that the articles at issue are designed for electrical applications. SEPCO specifically argues that these are not pipe fittings, as is readily apparent from both the language of the Atkore Steel Components, Inc. v. United States, 2018 Ct. Int'l Trade (Aug. 3, 2018) decision and the scope decision SEPCO received with respect to malleable pipe fittings [A-570-881]. See Atkore Steel Components, Inc. v. United States, 39 Int'l Trade Rep. (BNA) 3615 (Aug. 3, 2018). SEPCO similarly argues that the products are not made to any of the specifications set forth in the scope of the order, but rather meet UL safety standards directly related to the protection of wires, not the movement of fluids or gases.

In its review of the protest, the port denied SEPCO's protest with regard to its argument on the application of A-570-875, stating: "PROTEST DENIED; INSUFFICIENT DOCUMENTS. MILL TEST REPORT AND DETAILED DESCRIPTION OF THE IMPORTED MERCHANDISE MISSING."

Therefore, as noted above, the sole issue before us is whether the port properly assessed antidumping duties under Case A-570-857 to SEPCO's entry.

ISSUE:

Whether CBP properly assessed ADD on SEPCO's entry of NMPF?

LAW AND ANALYSIS:

It is the opinion of your office that this protest meets the criteria for further review. We agree and are of the opinion that this protest involves question of fact which have not been ruled upon, namely whether the described merchandise is subject to antidumping duties. See 19 C.F.R. 172.24(b).

We also note that the instant protest was timely filed. Pursuant to 19 U.S.C. 1514(c)(3)(A), a party must file a protest within 180 days after the date of liquidation. CBP liquidated the protested entry on April 6, 2018. SEPCO filed its protest on January 25, 2019, which is within 180 days of the liquidation date.

Generally, assessed ADD duties properly applied by CBP are not protestable. It is well settled that when assessing and collecting ADD duties, CBP follows Commerce's instructions. "Customs has a merely ministerial role in liquidating ADD duties." Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). The courts have consistently held that CBP's role in the ADD process is simply to follow Commerce's instructions in collecting deposits of estimated duties and in assessing ADD duties, together with interest, at the time of liquidation. See Fujitsu Ten Corporation of America v. United States, 21 C.I.T. 104, 107 (1997); American Hi-Fi International, Inc. v United States, 19 C.I.T. 1340, 1342-43 (1995).

However, "Customs, incident to its 'ministerial' function of fixing the amount of duties chargeable, must make factual findings to determine 'what the merchandise is, and whether it is described in an order' and must decide whether to apply the order to the merchandise." LDA Incorporado v. United States, 79 F. Supp. 3d 1331, 1339 (Ct. Int'l Trade 2015); see also Sunpreme, Inc. v. United States, 946 F.3d 1300, 1320-21 (Fed. Cir. 2020) (internal citation omitted). CBP "is tasked with determining, for every imported product, whether the product falls within the scope of an antidumping or countervailing duty order. 19 U.S.C. 1500(c). That necessarily entails evaluating both the product and the order." Sunpreme, 946 F.3d at 1320-21. "In each instance, Customs is statutorily tasked with answering a yes-or-no question as to whether the order applies, in order to fix the duty owed. Id. Pursuant to its ministerial function, though, CBP cannot "affect the scope of the order." LDA Incorporado, 79 F. Supp. 3d at 1339.

"[W]here the importer claims that Customs erred as a matter of fact by including its goods within the scope of the order, Customs' determination is the proper subject for a protest." LDA Incorporado v. United States, 978 F. Supp. 2d 1359, 1367 (Ct. Int'l Trade 2014) (citing Xerox Corp. v. United States, 289 F.3d 792, 795 (Fed. Cir. 2002). On the other hand, if the scope of the order is unambiguous and CBP follows Commerce's instructions, there is no decision that is made by CBP that would be protestable. See Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994) (holding that CBP "cannot modify Commerce's determinations, their underlying facts, or their enforcement"); Headquarters Ruling ("HQ") H258302 (Sept. 3, 2015) (finding that ". . . . because the scope of the antidumping and countervailing duty orders was clear and CBP acted in accordance with Commerce's instructions, CBP acted in its ministerial capacity when it liquidated its entries."); see also HQ H284348 (Aug. 10, 2017).

Accordingly, "where CBP can conclude that a product falls within the words of the order, both the affirmative scope language and any exclusions, CBP properly requires an importer to enter its goods as subject to an order." Sunpreme, Inc. v. United States, 190 F. Supp. 3d 1185, 1202 (Ct. Int'l Trade 2016). The inquiry "comes down to whether CBP can determine that merchandise falls within the common meaning of the scope language based upon observable physical characteristics." Id. If the importer believes that CBP has made a mistake of fact and does not want its goods to be covered by the order, the remedy is to seek a scope ruling. See LDA Incorporado, 79 F. Supp. 3d, at 1342 n.12.

In its protest submission, SEPCO asserts that CBP incorrectly assessed ADD under A-570-875 on its entry because subject fittings are outside the scope of ADD order A-570-875. SEPCO argues that the subject goods are "conduit fittings" and not "pipe fittings" as defined by the order. According to SEPCO, its products do not constitute pipe fittings because they do not carry water, fluid, or gas, but rather contain wires which are being protected from outside agencies. Instead, SEPCO argues that the articles at issue are designed for electrical applications. SEPCO specifically argues that these are not pipe fittings as is readily apparent from both the language of the Atkore Steel Components, Inc. v. United States, 2018 Ct. Int'l Trade, SLIP OP. 18-94 (Aug. 3, 2018) decision and the scope decision SEPCO received with respect to malleable pipe fittings [A-570-881]. See Atkore Steel Components, Inc. v. United States, 39 Int'l Trade Rep. (BNA) 3615 (Aug. 3, 2018). SEPCO similarly argues that the products are not made to any of the specifications set forth in the scope of the order, but rather meet UL safety standards directly related to the protection of wires, not the movement of fluids or gases. SEPCO therefore concludes that a scope order is not necessary. First, we look to the plain language of the scope order to determine whether SEPCO's NMPF at issue under this protest is subject to ADD order A-570-875. This order provides, in pertinent part:

The products covered by the order are finished and unfinished non-malleable cast iron pipe fittings with an inside diameter ranging from inch to 6 inches, whether threaded or unthreaded, regardless of industry or proprietary specifications. The subject fittings include elbows, ells, tees, crosses, and reducers as well as flanged fittings. These pipe fittings are also known as "cast iron pipe fittings" or "gray iron pipe fittings." These cast iron pipe fittings are normally produced to ASTM A-126 and ASME B.16.4 specifications and are threaded to ASME B1.20.1 specifications. Most building codes require that these products are Underwriters Laboratories (UL) certified. The scope does not include cast iron soil pipe fittings or grooved fittings or grooved couplings.

See 68 Fed. Reg. 16.675 [emphasis added].

In the present protest, SEPCO does not dispute CBP's factual finding that the imported expansion fittings are classifiable under subheading 7307.19.30, HTSUS, rendering them subject to AD/CVD under case number A-570-875. SEPCO's argument that the expansion fittings are outside the scope is premised on the argument that the merchandise is not a "pipe fitting" as defined by the order.

Further, SEPCO has not provided any evidence or compelling argument to support its assertion that the goods are not "pipe fittings" subject to ADD order A-570-875. It argues that the expansion fittings are designed for electrical applications. However, we note that the order specifically states that threaded fittings are included, regardless of industry specification. As noted above, the expansion fittings range have a diameter ranging from two to six inches. In addition, the scope of the order states that goods "which have the same physical characteristics and are produced to ASME B.16.3, ASME B.16.4, or ASTM A-395 specifications, threaded to ASME B1.20.1 specifications and UL certified... are also included in the scope of the order." Thus, we are not persuaded by SEPCO's argument that the expansion goods are outside the scope due to their usage in electrical applications. As stated by SEPCO, the expansions are UL certified under UL Listing E198258. We note that the product catalogue describes the Type AX expansion fitting as having a "Hub Size (NPT) Tapered Thread." Finally, SEPCO's reliance on Atkore Steel Components, Inc. v. United States is inapplicable here, as that case concerns the scope of antidumping order, A-570-881. See Atkore Steel Components, Inc. v. United States, 39 Int'l Trade Rep. (BNA) 3615 (Aug. 3, 2018).

Furthermore, SEPCO has not sought a scope ruling, but merely relies on a decision inapplicable to the instant order. As the port noted in its decision, SEPCO merely argues that its goods are not "pipe fittings," without providing supporting documentation. We agree with the port that SEPCO did not provide any evidence to support its argument that its expansion fittings are not within the scope. The plain language of ADD order A-570-875 includes pipe fittings made from ductile iron with inside diameters ranging from inch to 6 inches. As the Federal Circuit explained in TR Int'l Trading Co. v. United States, "[i]n other words, under the Sunpreme framework, Customs makes initial determinations regarding whether goods are subject to an order, even if there is some ambiguity involved in the order's application. If an importer disagrees with Customs' determination, "the proper remedy is for the importer to seek a scope inquiry from Commerce, the result of which may subsequently be challenged before the [Trade Court]." TR Int'l Trading Co. v. United States, 4 F. 4th 1363, 1369 (Fed. Cir 2021)(citing to Sunpreme, Inc. v. United States, 892 F. 3d 1186, 1193 (Fed. Cir. 2018);

Accordingly, because CBP has not erred as a matter of fact in determining that the NMPF falls under the language of the ADD order and CBP followed Commerce's instructions, CBP properly assessed antidumping duties on SEPCO's entry of NMPF. If SEPCO continues to believe that CBP has erred as a matter of fact, it must seek a scope ruling request from Commerce to determine whether the specific fittings at issue are outside of the scope of the ADD order. See HQ H298167 (Sept. 16, 2021).

HOLDING:

Based on the foregoing, the protest is should be GRANTED/DENIED, as follows: The protest should be GRANTED with respect to SEPCO's entry of malleable cast iron pipe fittings liquidated under ADD order A-570-881. This entry should be reliquidated without the assessment of ADD pursuant to DOC Message 9042308, dated Feb. 11, 2019. In addition, the protest should be DENIED with regard to the port's assessment of antidumping duties under ADD order A-570-875 to SEPCO's entry of NMPF.

You are instructed to notify the Protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System ("CROSS") at https://rulings.cbp.gov/, or other methods of public distribution.

Sincerely,

For Yuliya A. Gulis, Director
Commercial & Trade Facilitation Division
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[1] On July 21, Commerce announced a Continuation of the Order. See Malleable Cast Iron Pipe Fittings from the People's Republic of China: Final Results of Expedited Second Sunset Review of Antidumping Duty Order, 79 FR 42291 (July 21, 2014).
[2] Pursuant to Commerce notice, published 83 Fed. Reg. 8058 (Feb. 23, 2018)
[3] See, e.g., https://www.engineeringtoolbox.com/npt-national-pipe-taper-threads-d_750.html
[4] On April 2, 2018, Commerce initiated administrative review of ADD order A-570-875, providing interested parties the opportunity to request a review, for the 4/1/17 - 3/18/18 period of review. See 83 Fed. Reg. 13949 (Apr. 2, 2018). According to the notice, respondents had April 30, 2018, to request administrative review. Commerce stated that if no requests for review were received, it would instruct CBP to assess antidumping duties on those entries and to continue to collect the cash deposit.
[5] See also 83 FR 26258 (June 6, 2018). DOC published a notice providing interested parties to request administrative review of A-570-875 on April 2, 2018, stating that in cases listed in this notice and for the period of review, where no request for review was received by the last day of April 2018, it would instruct CBP to assess antidumping duties and to liquidate entries for all exporters not named in the initiation notice.