LIQ-4-01-LIQ-11-PRO-2-01 228571 IOR
U.S. Customs Service
300 S. Ferry St.
Terminal Island CA 90731
Attn: Gerald Rankin
RE: Protest Application for Further Review No. 2704-90-004096; 19 U.S.C. 1504; 19 U.S.C. 1514; Antidumping duties; liquidation; voidable liquidations; suspension of liquidation; LG Electronics U.S.A., Inc. v United States
The above-referenced protest, along with protest no. 2704-91-102840, was forwarded to this office for further review by memorandum dated August 18, 1999, from your office. Protest no. 2704-91-102840 is decided in HQ 228570, of this same date. Our decision follows.
The protest pertains to 8 entries of ball bearings and parts of ball bearings from Japan, subject to antidumping duties (ADD) in cases A-588-054, A-588-604, and A-588-804. The entries were made on April 14, 1989, and April 21, 1989. Liquidation of entries made from April 14, 1989 through April 21, 1989, and subject to the foregoing antidumping cases was to be suspended at the time the merchandise was entered, according to published Federal Register notices. See Appendix for chart showing entry dates and applicable ADD case numbers. The entries were not subject to court injunctions.
Case A-588-054 concerns tapered roller bearings, four inches or less in outside diameter, and certain components thereof, from Japan. The manufacturer specific Customs case number is A-588-054-036, however for reference purposes in this decision, only the general number is used. In a withholding of appraisement notice (Federal Register of June 5, 1974 (39 FR 19969)), Customs was directed to withhold appraisement of such merchandise. According to the import specialist handling the subject entries, instructions received by Customs indicate the bonding rate for the subject merchandise was 2.93%, effective as of April 14, 1980.
Case A-588-604 concerns tapered roller bearings and parts thereof, finished and unfinished, from Japan. In a notice of preliminary determination (Federal Register of March 27, 1987 (52 FR 9905)), Customs was directed to suspend liquidation of all entries of such merchandise, that are entered or withdrawn from warehouse, for consumption, on or after the date of publication, March 27, 1987. Customs was also directed to require a cash deposit or a bond equal to the estimated preliminary dumping margin of 16.09%. On October 6, 1987, in an Antidumping Duty Order, a determination was published in the Federal Register (52 FR 37352) that importations of the merchandise materially injure a U.S. industry and Customs was directed to require a cash deposit equal to the estimated weighted-average antidumping duty margin of 47.57%.
Case A-588-804 is the Commerce identification number for the case concerning antifriction bearings (other than tapered roller bearings) and parts thereof from Japan. The Customs identification numbers pertinent to this case are A-588-201 (ball bearings and parts) and A-588-203 (cylindrical roller bearings and parts). The manufacturer specific Customs case numbers are A-588-201-008 and A-588-203-008, respectively, however for reference purposes in this decision, only the general numbers are used. In a notice of preliminary determination (Federal Register of November 9, 1988 (53 FR 45343)), Customs was directed to suspend liquidation of all entries of such merchandise, that are entered or withdrawn from warehouse, for consumption, on or after the date of publication, November 9, 1988. Customs was also directed to require a cash deposit or posting of a bond equal to the estimated preliminary dumping margin of 56.32% for A-588-201, and 10.69% for A-588-203. On May 15, 1989, in an Antidumping Duty Order, published in the Federal Register (54 FR 20904), Customs was directed to require a cash deposit equal to the estimated weighted-average dumping margins of 42.99% for A-588-201, and 12.28% for A-588-203.
For all of the entries, bonds in the amounts of estimated antidumping duties were posted and for one entry, which included merchandise subject to antidumping order, a cash deposit was made. All of the entries were entered into the Automated Commercial System (“ACS”) as “03” type, or ADD entries. Notices of suspension were issued on May 6, 1989 for the April 14, 1989 entries, and May 13, 1989 for the April 21, 1989 entries. On April 20, 1990, 4 entries were automatically liquidated, and 4 entries were deemed liquidated. The liquidations were for ordinary duties and did not include the amounts asserted for ADD. See Appendix for specific dates and entries.
A memorandum dated June 29, 1990 was sent from the Assistant Commissioner of Commercial Operations to all Regional Commissioners, notifying them that entries subject to antidumping duties have been liquidated prematurely, and requesting research and reports pertaining to the entries at issue. The memorandum states that the “reprogramming needed to preclude future erroneous liquidations is now in place; the system should now properly suspend entries subject to antidumping/countervailing duties.” Attachment A to the memorandum provided instructions as to the entries at issue.
For entries within the 90-day reliquidation period, which had not been redlined, and for which bonds were posted, the instructions were as follows:
1) If the final liquidation instructions had been issued by the Department of Commerce since the liquidation occurred, the entry should be reliquidated in accordance with the final liquidation instructions and a bulletin notice of liquidation to show the reliquidation action should be posted;
2) If no final liquidation instructions had been issued by the Department of Commerce since the liquidation occurred, a bill should be issued for the amount of ADD duties for which a bond had been posted, and a bulletin notice of liquidation to show the reliquidation action should be posted.
For entries within the 90-day reliquidation period, which had not been redlined and for which cash deposits were posted, the instructions were as follows, in pertinent part:
1) If the final liquidation instructions had been issued by the Department of Commerce since the liquidation occurred, and the amounts differ from the original liquidation, the entry should be billed in accordance with the final liquidation instructions and a bulletin notice of liquidation to show the reliquidation action should be posted;
2) If no final liquidation instructions had been issued by the Department of Commerce since the liquidation occurred, an information notice should be issued to the importer, and the entry should be held.
For entries not within the 90-day reliquidation period, the instructions were as follows:
1) For those entries for which a bond was posted, the list of entries was to be so annotated and the entries held pending further instructions;
2) For those entries for which cash deposits were made, and final liquidation instructions had been issued by the Department of Commerce since the liquidation occurred:
a) If the amount deposited is the same as in the final liquidation instructions, the list of entries was to be so annotated and the entry filed;
b) If the amount deposited was not the same as that in the final liquidation instructions, the list of entries was to be so annotated and an information notice was to be issued to the importer and the entry held pending further instructions.
3) For those entries for which cash deposits were made and no final liquidation instructions have been issued by Commerce, the list of entries was to be so annotated and an information notice was to be issued to the importer and the entry held pending further instructions.
The “Notice to Importers” attached to the memorandum, stated that Customs, “due to a programming flaw…inadvertently posted bulletin notices of liquidation for certain entries subject to countervailing and/or antidumping duties when those entries should have remained suspended”; “Customs will shortly reliquidate many of these entries pursuant to 19 U.S.C. 1501 or generate bills in the amount of unpaid duties asserted at the time of entry by the importer of record;” and “[a]ffected importers are reminded of their right to file protests pursuant to 19 U.S.C. 1514, Customs Form 19, or petitions for reliquidation pursuant to 19 U.S.C. 1520(c), in accordance with those statutes and within the appropriate time periods.” The June 29, 1990 instructions were supplemented with a November 14, 1990 electronic memorandum no. 1299071. Electronic memorandum no. 1299071 specifically instructed that for those entries for which a bond had been posted but had gone beyond the reliquidation period:
You should immediately proceed to issue bills using ACS function code DSCA for those entries for which a bond was posted to cover the antidumping/countervailing duties and which were beyond the reliquidation period provided for by 19 U.S.C. 1501. The bills should be for the amount of antidumping/countervailing duties asserted by the importer on the entry summary plus, to the extent not deposited, any other duties or charges asserted.
By electronic message dated August 6, 1990, instructions were issued to the field offices that all protests and requests for reliquidation be submitted to headquarters before any action is to be taken. Electronic memorandum no. 1302071, dated November 14, 1990, instructed that Chief Counsel recommended that the protests not be decided until the Department of Commerce issued final liquidation instructions. A November 19, 1990 electronic message regarding the premature liquidations and instructions in electronic memorandum 1299071, passes on information that in the future, entries that automatically liquidate prior to a final order should be reliquidated and billed for the amount of ADD asserted on the entry summary.
The file contains two complete representative entries, nos. 442-xxxx563-8, and 442-xxxx800-3, including documentation showing action taken with respect to those entries. The pertinent documents included specifically with respect to entry no. 442-xxxx563-8, are described as follows:
1) CF 3461 dated April 12, 1989 shows entry type as “01”;
2) ENXI (entry archive file query) ACS screen shows that a notice of extension was dated May 6, 1989 and that the entry is a type “03” entry;
3) ASHS (extension suspension history query) ACS screens show that on May 6, 1989, notices of suspension for the entry were processed for the protestant, and the protestant’s broker and surety;
4) a copy of a computer-generated Bulletin Notice of Entries Liquidated, for April 20, 1990, includes the subject entries;
5) ENAI (entry master file query) ACS screen dated May 18, 1990 indicating that the entry is a type “03”, and was liquidated on April 20, 1990 with duty in the amount of $4727.34. The duty amount does not include the asserted ADD;
6) a copy of the CF 7501 annotated in the duty column with the amount of ADD calculated to be owed for each line item, in accordance with the ADD rate asserted on the CF 7501. The entry is stamped “liquidated” and has handwritten the word “manually” and the date of July 20, 1990;
7) a “Reliquidation” worksheet dated July 3, 1990, indicating the ascertained ADD/CVD duties in the amount of $11,423.34, in addition to ordinary duties of $4727.34. The worksheet indicates bill number 90076740 is to be issued in the amount of $11,423.34;
8) a copy of a July 20, 1990 manually produced Bulletin of Entries Liquidated, which includes the subject entries, and with regard to the subject entries, in the remarks section states “increase”;
9) a CLCI (entry collection query) ACS screen printout from October 11, 1990, indicating that the status of the billed amount of $11,423.34 is “open”; and
10) a completed liquidation/reliquidation worksheet for the entry. The worksheet indicates that the liquidation is original and indicates the ascertained amount of ordinary duties, $4727.34, and ADD, $7843.85(, and indicates the instructions lifting the suspension of liquidation and the applicable duty rate for each ADD case. This worksheet was completed after the last applicable instruction lifting the suspension of liquidation was issued as it has the date of such instructions (August 3, 1999).
For the second entry, 442-xxxx800-3, the CF 3461 showed the entry as a type “03”.
According to ACS, each protested entry was liquidated again on December 3, 1999. The 1999 liquidations followed Customs issuance of the following
Message #9215111 dated August 3, 1999 for A-588-054 (6.01%) covering entries made from 8/1/88 through 7/31/89;
Message #9029112 dated January 29, 1999 for A-588-604 (15.59%) covering entries made from October 1, 1988 through September 30, 1989; and
Message # 7213111 dated August 1, 1997 for A-588-201 (9.56%) and A-588-203 (58.99%) covering entries made from November 9, 1988 through April 30, 1990.
Some of the December 3, 1999 liquidations occurred more than 6 months after the date of the liquidation instructions. According to the import specialist that liquidated the entries, the liquidations were only done after all instructions for all of the protested entries had been received, even if some entries concerned only one ADD case and the liquidation instructions had been received more than 6 months earlier. The import specialists spreadsheet regarding the calculations has been provided. The information regarding the other entries is obtained from that document. For example, entry 442-xxxx802-9, made April 21, 1989, only involved case A-588-201, for which the instructions were received on August 1, 1997. For that entry, for which all necessary instructions had been received more than 6 months prior to December 3, 1999, the liquidation was in accordance with Rheem Metalurgica v. United States, 21 C.I.T. 963, 951 F. Supp. 241 (1996), aff’d., Lexis 28110, 20 Int’l Trade Rep. (BNA) 1705 (Fed. Cir. 1998) (entries subject to CVD which liquidate by operation of law, liquidate at the rate at which a cash deposit or bond was required upon entry). However, if separate line items were subject to different ADD cases, the entry could not be liquidated until all of the instructions relevant to that entry were issued. For example, in entry 442-xxxx563-8, line items 4,5,6, 9,10, 11, and 12 were subject to cases A-588-201, and A-588-203, for which instructions were issued August 1, 1997, however the entry could not be liquidated until instructions were issued on August 3, 1999 in case A-588-054, which pertained to the merchandise on line item 7. In such a case the line items were liquidated in accordance with the liquidation instructions.
The instant protest was filed by the importer on October 4, 1990. The protest is of the reliquidation of the entries asserted to have occurred on July 20, 1990. The protestant takes the position that the asserted reliquidations made on July 20, 1990 are outside of the 90-day time limit allowed by 19 U.S.C. §1501, and are therefore unlawful and void. The protested actions of Customs and relief sought are summarized in the protest as follows:
Based upon the foregoing, it is clear that: (1) Customs’ reliquidations of the NSK entries in question were undertaken in contravention of 19 U.S.C. §1501 and thus, are unlawful; (2) the unlawful liquidations are voidable under the authority of Omni, and Philip Morris; (3) because NSK has challenged the legality of the reliquidations by filing a timely protest, they must be canceled as void, along with the assessments of antidumping duties made pursuant to the unlawful liquidations; and (4) the original liquidations of NSK’s entries on April 20, 1990, without assessment of antidumping duties, are final and conclusive on the government and NSK.
The protest asserts that on April 20, 1990, the entries were liquidated “no change”.
In the file there is a November 16, 1994 memorandum to Customs from Commerce, commenting on the subject protest. The memorandum concludes that the issue of voluntary reliquidations is within the purview of Customs and recommends that the matter be resolved by Customs.
At the time the protest was filed the July 20, 1990 bills issued by Customs had not been paid. According to ACS, the July 20, 1990 bills were cancelled in conjunction with the December 3, 1999 liquidations and billing. According to ACS, the bills issued in association with the December 3, 1999 liquidations have been paid. No protests were filed subsequent to this one.
In the August 18, 1999 memorandum, the Port Director takes the position that the protest is premature as it was filed prior to a liquidation of the entries, and that no reliquidation occurred on July 20, 1990. According to the Port Director, the July 20, 1990 action was simply a billing for the bonded antidumping duties asserted on the entries. The Port Director states that “[a]pparently, this action was taken in an attempt to comply with instructions issued by Headquarters on June 29, 1990, directing the field to ‘reliquidate’ whatever entries could be reached under 19 U.S.C. §1501.” The import specialist asserts in the Protest Report that on July 20, 1990, the entries were processed in accordance with the instructions for entries within the 90-day reliquidation period, for which no final liquidation instructions had been issued by Commerce.
Whether the liquidations of July 20, 1990 were illegal and voidable.
LAW AND ANALYSIS:
The actions protested in this case are the asserted reliquidations of July 20, 1990. Reliquidation and liquidation is protestable under 19 U.S.C. §1514(a)(5). In order to determine whether the July 20, 1990 liquidations were legal, and protestable, we must also determine whether liquidations occurred on April 20, 1990 and on July 20, 1990. We note that the 90th day from April 20, 1990 is July 19, 1990.
The issue of whether liquidations had occurred was analyzed in LG Electronics U.S.A., Inc. v. United States, 21 C.I.T. 1421, 991 F. Supp. 668 (1997). The liquidations addressed in LG Electronics were “no change”, “automatic” and “deemed” liquidations. The facts giving rise to the issue in LG Electronics were similar to those in the instant case. In LG Electronics, liquidation of entries was suspended pending the determination of the applicable antidumping duty rates. During the suspension period, Customs prematurely posted notices of liquidation for all of the entries at issue. The notices were for “no change”, “automatic” and “deemed” liquidations. Subsequently, LG Electronics filed an action for the C.I.T. to order the government to liquidate the entries at a rate of dumping duties as determined by the Department of Commerce, and to refund excess duties paid by LG Electronics. Customs asked the court to rule instead that the entries had already been liquidated and that the court lacked jurisdiction with respect to those entries. The issue was whether liquidation of the entries had occurred to trigger the 90-day protest period. If the 90-day protest period had been triggered by the liquidations, then the court had no jurisdiction, as no protests had been filed and the liquidations were therefore final. The parties had agreed that computer-
generated notices of liquidation were posted.
The statute on the limitation of liquidation, 19 U.S.C. §1504, applicable to the subject entries and those in LG Electronics, provided for an extension of liquidation on the grounds of suspension. The statute provided that liquidation could be suspended as required by statute or court order. An ADD order of suspension is grounds for suspension under 19 U.S.C. §1504. See Pagoda Trading Corporation v. United States, 804 F.2d 665 (Fed. Cir. 1986).
In LG Electronics, the court found a distinction between the “no change” liquidations and the “automatic” and “deemed” liquidations. The “no change” liquidations involved a protestable decision of an appropriate customs officer, whereas the “automatic” and “deemed” liquidations did not. A “no change” liquidation is when an entry is liquidated with the same duties due as was asserted on the entry. The court described the “no change” liquidation as follows:
The erroneous "no change liquidations" were protestable decisions as defined
by statute. 19 U.S.C. §1514(a) (1988). Customs decisions are
"substantive determinations involving the application of pertinent law and
precedent to a set of facts, such as tariff classification and applicable rate
of duty." United States Shoe Corp. v. United States, 114 F.3d 1564,
1569-70 (Fed. Cir. 1997) (collecting harbor maintenance tax a purely
"ministerial task" not requiring a decision by Customs), cert. granted, 118 S. Ct. 361, 139 L. Ed. 2d 281, 1997 WL 561769 (1997). A passive activity is not a decision. Id.; see also Dart Export Corp. v. United States, 43 C.C.P.A. 64, 69-70, 74 (1956) (accepting duty deposits falls short of decision-making). Where Customs only collects antidumping duties and does not determine the rate or amount of duties, Customs has not made a protestable decision. Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973, 976-77 (Fed. Cir. 1994). By contrast, calculation of antidumping duties by Commerce is a decision. Id. In the instant case, Customs has more than merely received duties. The actions here were more than merely ministerial. Relatively soon after entry, Customs decided for each "no change" entry that the rate of duty imposed at the time of deposit was correct and that the entry should be liquidated at that rate. By ordering the liquidations, Customs went beyond ministerial acts; Customs determined the amount of duty imposed.
Plaintiff fails to persuade the court that Customs' failure to stamp some
files "liquidated" indicates a lack of decision to liquidate. Stamping the files
is not required, although a stamped file is prima facie evidence of
liquidation. Tropicana Prods., Inc. v. United States, 909 F.2d 504, 506
(Fed. Cir. 1990). Stamping "simply provides the importer with a form of
documentary proof that liquidation has taken place." Id.
As the statute requires, the decisions to liquidate the "no change" entries
were made by the "appropriate customs officer." 19 U.S.C.§1500 (1988).
Customs designates who is the appropriate customs officer. This court has
found the appropriate customs officer to be "the officer making the
decision to liquidate." International Cargo & Surety Ins. Co. v. United
States, 15 C.I.T. 541, 545, 779 F. Supp. 174, 178 (1991). Because there is no
evidence to contradict the presumption that the individuals who entered the "no
change liquidations" had authority to do so, the court considers they were
"appropriate customs officers" within the meaning of the statute.
In addition to a decision to liquidate, for effective liquidation, appropriate notice of an ordered liquidation must be given. Juice Farms v. United States, 68 F.3d at 1346. Notices of liquidation posted at the Customs' Office at the port of entry (bulletin notice of liquidation) are sufficient notice, 19 C.F.R. §159.9 (1997) and Goldhofer Fahrzeugwerk GmbH & Co. v. United States, 885 F.2d 858, 862 (Fed. Cir. 1989), satisfying the importer's due process rights and providing evidence that the liquidation has occurred. Tropicana, 909 F.2d at 506.
Proper notice of liquidation was given for the "no change" entries. There is
no dispute that computer generated notices were posted. Consistent with
its view that the entries had not actually been liquidated, LG questions the
validity of the notice given as not the "notices of liquidation" required by
19 C.F.R. §159.9. As the court finds there to have been decisions to
liquidate the "no change" entries, the notices were valid under any reading of
the requirements of 19 C.F.R. §159.9.
Customs' actions satisfy the test for liquidation. The liquidations were
illegal, however, because there were suspensions of liquidation in place at the
time. As indicated, whether legal or illegal, a liquidation not protested within
90 days becomes final as to all parties. 19 U.S.C. §1514; Juice Farms v. United States, 18 C.I.T. 1037, 1040 (1994) ("An importer cannot treat an illegal liquidation as void; rather, the importer must remain vigilant and protest the legality of such a liquidation within 90 days of notice."), aff'd, 68 F.3d 1344, 1346 (Fed. Cir. 1995); see also Omni U.S.A., Inc. v. United States, 840 F.2d 912, 914-15 (Fed. Cir. 1988). The court in Deringer noted that 19 U.S.C. §1514(a)
contemplates that both the legality and correctness of a liquidation be determined, at least initially, via the protest procedure. The wording of this statute [ 19 U.S.C. §1514] makes it clear that any challenge to the propriety of a liquidation ... must be through this statute. [Emphasis supplied]
593 F.2d at 1020. Accordingly, summary judgment is granted defendant as to the "no change" entries, because of plaintiff's failure to timely protest the liquidations and the resulting lack of jurisdiction under 28 U.S.C. §1581(a).
LG Electronics, 991 F. Supp. at 673-74. The court in LG Electronics required a decision of a Customs officer in order for there to be an actual liquidation. Following LG Electronics, the court in US JVC Corp., v. United States, 15 F. Supp. 2d 906, 909 (Ct Int’l Trade 1998), aff’d 184 F.3d 1362 (Fed. Cir. 1999), held that “no change” liquidations made during a suspension period, were protestable and if not protested, they were final and conclusive.
With respect to automatic liquidations, Customs decision to liquidate was as follows:
[T]hrough the use of automation, Customs could identify those entries nearing the 1 year [sic] to allow for abeyance of liquidation. If not suspended or extended, the automated system would automatically liquidate the entries on the 50th week thus allowing for the possibility of reliquidation….
LG Electronics, at 674.
In LG Electronics, supra, the court found that automatic and deemed liquidations, which occurred due to a programming error, “without any individualized decision of any Customs officer to act on the entries” are not liquidations under the statute in effect at the time. Id., 991 F. Supp. at 674-75. The liquidation statute in effect in 1990 was the same as that in LG Electronics. Further, with respect to deemed liquidations, the court held that a deemed liquidation can only occur by operation of law, and as a matter of law could not occur during a suspension of the entries. In LG Electronics, as in the instant case, the “liquidations” were reflected in ACS, however that did not make them liquidations. In LG Electronics, the court held that the erroneous computer-generated notices of deemed and automatic liquidation did not “create” liquidations.
According to LG Electronics, the April 20, 1990 automatic and deemed liquidations which occurred due to the system failure to properly suspend entries subject to ADD suspensions, were not liquidations under the statute. None of the actions on April 20, 1990 were “no change” liquidations. The deemed liquidations could not occur during a suspension of the entries as a matter of law, and the automatic liquidations did not occur because they were not the result of Customs decisions to liquidate. Therefore the subsequent alleged July 20, 1990 action, would have been a liquidation as opposed to a reliquidation.
The decision in Omni U.S., Inc. v. United States, 840 F.2d 912 (Fed. Cir. 1988), cited by protestant in support of the erroneous “liquidations” having become final and conclusive, is not dispositive in light of the analysis in LG Electronics, which distinguishes between “no change”, “deemed” and “automatic” liquidations, and is distinguishable on the basis of the facts in LG Electronics and in the instant case. In Omni, the error consisted of a failure by the Department of Commerce to list the relevant countervailing duty order covering the imported merchandise which would have suspended the liquidation of the entries of that merchandise. That error is discussed in the CIT decision at 11 CIT 480 and repeated in the appellate decision at 840 F.2d 912. The discussion of the events in Omni shows that the liquidation, as to the computation of the duties and the publication of the notice, was an intended act by an authorized Customs officer. In contrast, the court, in LG Electronics, found that the automatic and deemed liquidations there, which occurred as the result of a programming error without an individualized decision by a Customs officer authorized to act on the entries, were not liquidations, and further, that the posting of those notices did not turn them into liquidations, as noted in the above discussion of that court decision. The instant case also concerns a programming or system error, as opposed to an individualized decision by a Customs officer. The protestant refers to the erroneous liquidations of the entries as “no change” liquidations, whereas Customs records indicate that in the instant case the erroneous liquidations were “automatic” and “deemed” and no evidence to the contrary has been submitted. In fact, unlike a “no change” liquidation, the erroneous liquidations did not liquidate the entries with the duties at the rates asserted on the entries.
We can compare the “no change” liquidations in LG Electronics to the alleged July 20, 1990 liquidations at issue in this protest, vice reliquidation as asserted in the protest. It is asserted by the Port that Customs was not attempting to liquidate or reliquidate the entries, but was attempting to bill the importer for the amount believed to be due on the basis of the initial liquidation that was reflected in ACS. For purposes of determining the intent of the responsible Customs officers in their actions of July 20, 1990, only the June 29, 1990 instructions are relevant as they are the only ones issued prior to July 20, 1990. The June 29, 1990 instructions clearly specify that for entries within the 90 day reliquidation period, for which a bond was posted and which have not been redlined, and for which final liquidation instructions from Commerce have not been issued, “a bill should be issued for the amount of ADD duties for which a bond had been posted, and a bulletin notice of liquidation to show the reliquidation action should be posted.” In the August 18, 1999 memorandum from the Port Director, forwarding the AFR, it is confirmed that the July 20, 1990 actions were taken to comply with the June 29, 1990 instructions. The Port Director characterized the instructions to bill as instructions to reliquidate.
There is no authority to issue bills for duties such as those of July 20, outside of a liquidation or reliquidation. While the instructions were only to bill, they could not be carried out without the actions that amount to a liquidation, as described in LG Electronics. Even the instructions refer to posting a bulletin notice, in conjunction with the billing, to show a reliquidation. According to the evidence, the “billing” entailed calculation of the duties due, marking the file as liquidated and posting a bulletin notice of entries “liquidated”. The stamping of the entry with “liquidated” is prima facie evidence of liquidation. Tropicana Products, Inc. v United States, 909 F.2d 504, 506 (Fed. Circ. 1990); American Distilling Co. v. United States, 32 Cust. Ct. 168, 171, CD 1598 (1954).
Because the July 20, 1990 actions were done manually, or “off-line”, they were not reflected in ACS. The amounts of ADD on the July 3, 1990 “reliquidation” worksheet match the amount shown as billed in conjunction with the July 20, 1990 actions.
The instructions of June 29, 1990 for entries outside of the 90-day period, directed Customs to simply hold the entries pending further instructions. Customs clearly did not simply hold the entries.
Based on the foregoing, we conclude that on July 20, 1990, Customs liquidated the subject entries. As no liquidation had previously occurred, there was no 90-day time limitation within which the liquidation would have had to occur. Thus we do not need to address the protestant’s position that the July 20, 1990 liquidation was untimely in relation to the April 20, 1990 liquidations under 19 U.S.C. §1501. The July 20 liquidations were also protestable. According to LG Electronics, “no change” liquidations occurring while suspensions are in place are illegal, and voidable as opposed to illegal and void. LG Electronics, 21 C.I.T. at 1426, 991 F. Supp. at 674.
Under 19 U.S.C. §1514(a), the liquidation of an entry is final and conclusive, unless a protest is filed in accordance with that section. Therefore, the filing of the subject protest prevented the July 20, 1990 liquidations from becoming final. The subject protest, not previously acted upon, can now be decided in full. The two-year period in which a protest is to be decided, set forth in 19 U.S.C. §1514(a) is directory rather than mandatory. See Canadian Fur Trappers Corp. v. United States, 884 F.2d 563 (Fed. Cir. 1989); Knickerbocker Liquors Corp. v. United States, 78 Cust. Ct. 192, 432 F. Supp. 1347 (1977).
This protest was in effect already granted by the cancellation of the July 20, 1990 bills. The relief requested by the protestant, that the April 20, 1990 liquidations without assessment of ADD be final and conclusive, was not and cannot be granted, as no liquidations occurred on April 20, 1990.
With respect to the 1999 liquidations, Customs did not have authority to reliquidate an entry that had already been liquidated and which was the subject of an undecided protest and application for further review. The 1999 liquidations were outside of the authority of 19 U.S.C. §1501, and are inconsistent with 19 U.S.C. §1515(a). However, in this case, as a result of the 1999 liquidation attempts, the ADD amounts on the basis of the Commerce liquidation instructions have already been calculated, and the ADD payments were made by the protestant, in accordance with bills issued for the 1999 liquidations.
Because the 1999 actions were illegal liquidations the subsequent billings were untimely demands for duties, and as such were outside the scope of Customs authority, and were unlawful. See American Motorists, Ins. Co. v. United States, 8 F. Supp. 2d 874, 876 (Ct. Intl. Trade, 1998). In American Motorists, an “exaction” was described as a “wrongful demand for payment under color of official authority, where no payment is due.” Id. An exaction is protestable under 19 U.S.C. §1514(a)(3). The protestant paid the amounts billed in 1999, and failed to protest the exactions, thereby making them final and effective as reliquidations of the subject entries. Therefore, there is no basis for Customs to reliquidate the entries under the subject protest, whether or not the amounts paid in 1999 were correct. The 1990 bills were cancelled by the 1999 bills, and the cancellations effectively granted the protest. The unprotested 1999 bills effectively reliquidated the entries.
For example, in the representative entry, no. 422-xxxx563-8, the ADD assessed was higher at the following amounts and margins on July 20, 1990 as compared to the subsequent company specific Commerce instruction margins:
Case No. July 20, 1990 margin Final instructions
A-588-054-036 2.93% $ 16.09 6.01% $ 32.99
A-588-201-008 56.32% $10317.83 9.56% $1751.40
A-588-203-008 10.69% $ 1089.42 58.99% $6011.67
Ordinary duties $ 4727.34 $4727.34
With respect to entry no. 422-xxxx563-8, the total amount due in ordinary duties and ADD is less than the liquidated amount in 1990. Further, the amount paid in ordinary duties and ADD is $12,571.19, which is $47.79 more than the total of ADD at $7796.06 and ordinary duties at $4727.34, as a result of a calculation error in 1999. Because the illegal 1999 liquidation was not protested, the entry cannot be reliquidated in the correct amount.
As to entry no. 442-xxxx800-3, for which we also have the entry documents and calculations in our file, the ADD assessed was also higher on July 20, 1990 as compared to the subsequent company specific liquidation instruction margins:
Case No. July 20, 1990 margin Final instructions
A-588-054-036 2.93% $ 33.78 6.01% $ 69.30
A-588-201-008 56.32% $60336.19 9.56% $10241.72
A-588-203-008 10.69% $ 4978.66 58.99% $27473.42
Ordinary duties $14939.17 $14939.17
With respect to entry no. 422-xxxx800-3, the total amount due in ordinary duties and ADD is less than the liquidated amount in 1990. We note that in calculating the ADD in the 1999 liquidation/reliquidation worksheet an error was made and the ADD for the merchandise subject to case no. A-588-203-008 was calculated to be $4,452.37, when the correct amount is $27,473.42. The lower amount was paid in accordance with the 1999 liquidation attempt. The total amount of ADD paid by the protestant after the 1999 liquidation attempt was $14,863.93, or $22,920.51 less than what should have been paid in accordance with Commerce’s final liquidation instructions. Because the illegal 1999 liquidation is final, the entry cannot be reliquidated in the correct amount.
The Port asks whether upon reliquidation, the importer can be billed for a higher amount than the protested amount of the original bill. For example, in the representative entry, 442-xxxx563-8, for merchandise entered on April 14, 1989, under case A-588-054, bond was posted at the rate of 2.93% and therefore the July 20, 1990 bill was for an amount based on that rate. Message no. 9215111, of August 3, 1999, lifted the suspension of liquidation and instructed Customs to liquidate that merchandise at the rate of 6.01%. Under 19 U.S.C. §1515(a), upon reliquidation, Customs is not authorized to assess a higher amount of duties than that assessed in the protested liquidation.
The liquidations of July 20, 1990 were illegal and voidable, on the grounds that they took place during a suspension of the entries.
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, 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 make the decision available to Customs personnel, and to the public
on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Date of Entry
Date of Automatic (A) Or Deemed (D) Liquidation
ADD Case A-588