PRO-2-06 CO:R:C:E 220975 TLS
District Director
U.S. Customs Service
300 South Ferry Street
Terminal Island, California 90731
RE: Request for further review of protest #2704-6-000804
concerning the assessment of interest on liquidated increases of
anti-dumping duties.
Dear Sir:
We have received your memorandum of March 31, 1986,
forwarded to us from the Pacific regional office requesting
further review of the above-referenced protest. Upon review of
your position and the protestant's arguments, we have reached a
decision that is discussed in detail below.
FACTS:
The protestant made an entry on May 28, 1980 through the
Terminal Island port. Upon a finding of antidumping with respect
to the subject merchandise, Customs charged the importer with
antidumping duties with interest accruing from the date of entry.
The total amount of interest charged came to $7,252.23. A bill
was sent to the protestant for this amount on the date of
liquidation, November 29, 1985.
The importer claims that the interest on the antidumping
duties should not accrue from the date of entry as Customs has
done. Instead, the protestant contends that the interest charged
should be cancelled because subsection (c) of 19 U.S.C. 1505,
which allegedly gives Customs the authority to charge interest in
these types of cases, was not enacted until 30 days after October
30, 1984. This date is over four years beyond the date of entry
but about a year before the liquidation date.
Your office maintains that a telex that was sent to Customs
field offices gives Customs the authority to charge the interest
in this case. The telex was sent out on March 30, 1980 and
states that the rate of interest should be calculated from the
date of payment of estimated duties through the date of
liquidation. Estimated duties were paid on the entry date in
this case.
ISSUE:
Whether Customs has the authority to charge interest
pursuant to an antidumping order retroactive to the date of entry
on estimated duties paid.
LAW AND ANALYSIS:
Under T.D. 76-48 (February 6, 1976), Customs was authorized
to assess antidumping duties on birch 3 ply doorskins from Japan,
which is the subject merchandise in this case. That the imported
goods are subject to the antidumping order is not in dispute.
The protestant claims that the interest charged in this case
should be cancelled based on the holding in United States v.
Heraeus-Amersil, Inc., 60 CCPA 86, 671 F.2d 1356 (1982). That
case held that increased duties assessed pursuant to an
antidumping order cannot be found delinquent until the filing of
a civil action in the Court of International Trade or the
applicable statute of limitations has run. The Tariff Act of
1930 provides for when interest is due with regards to
antidumping duties. Section 677g(a) of the Tariff Act reads as
follows:
Interest shall be payable on overpayments and
underpayments of amounts deposited on merchandise
entered, or withdrawn from warehouse, for consumption
on and after-
(1) the date of publication of a
countervailing or antidumping order under
this subtitle or section 1303 of this title,
or
(2) the date of a finding under the
Antidumping Act, 1921.
In the present case, the importer was notified of the
antidumping duties through a notice of action dated June 19,
1984. The notice covers several entries, including the entry at
issue here. The amount of interest due was calculated from the
date of entry, May 28, 1980, which is also the date estimated
duties were paid. Customs files indicate that estimated duties
totalling $10,853.00 were paid by the importer before liquidation
took place. Upon liquidation, the interest totaled $7,252.23;
this amount was billed to the importer on November 29, 1985, the
date of liquidation. The interest was computed at a 20% per
annum rate (which was in effect on the date of publication of the
antidumping order), as provided for under section 6621 of the
Internal Revenue Code of 1954. 19 U.S.C. 1677g(b) (1984).
The protestant argues that section 505 of the Tariff Act is
not applicable in this case because it became effective more than
four years after the date of entry. Heraeus, on the other hand,
was issued more than two years before the entry date. As a
result, the importer considers Customs application of interest
from the entry date pursuant to section 505 to be an ex post
facto action and therefore unconstitutional.
Section 505 provides for the collection of estimated duties
upon entry or within 30 days of entry and for the collection of
additional or increased duties owed upon liquidation as well as
refund of any excess duties paid. While 505 does apply to the
collection of additional or increased duties, section 677g is
directly applicable to situations where interest is being charged
pursuant to an antidumping order, as is the case here.
The court in Heraeus ruled on the delinquency of increased
duties owed, not the charging of duties themselves. Section 677g
was amended in 1984 to authorize Customs to charge interest on
antidumping duties; the provision applies in this case from its
effective date, October 30, 1984. Thus, we do not find reason to
apply Heraeus-Amersil to the present case. If we were to find
Heraeus controlling in this case, it would effectively ignore
677g altogether. We are not in a position to do so. Therefore,
we find that Customs acted properly in charging interest on
antidumping duties in this case pursuant to an order published
covering the subject merchandise.
The 1984 amendment to 19 U.S.C. 1677g is applicable in this
case only from its effective date. Section 677g was originally
enacted in 1979 and became effective the same year. The
provision as enacted under the 1979 Act provides that interest is
payable on any overpayments or underpayments of estimated duties
on merchandise entered for consumption on or after the
publication of the final affirmative injury determination by the
International Trade Commission. This is distinguished from the
1984 Amendment, which provides that interest is payable on
estimated duties on merchandise entered on or after the date of
publication of a countervailing duty or antidumping order. The
1979 provision is further distinguished by its requirement that
interest be computed at an 8% rate per annum or the rate in
effect under 26 U.S.C. 6621 on the date on which the amount of
duty is finally determined, whichever is higher. This differs
from the 1984 Amendment, which simply calls for the interest rate
in effect under 26 U.S.C. 6621 on or after the date of
publication of a countervailing duty or antidumping order.
To the extent that the subject entry is covered by the 1984
Amendment only from the time of its effective date, October 30,
1984, to the date of liquidation, the period of time of the entry
not covered by such is covered by the 1979 provision. The 1979
provision was in effect at the time of entry and remained in
effect until superseded by the 1984 Amendment. This finding is
consistent with the decision in Canadian Fur Trappers Corp. v.
United States, 691 F. Supp. 364 (CIT 1988), aff'd, 884 F.2d 563
(Fed. Cir. 1989), which held that the 1984 Amendment cannot be
applied for interest accruing before the effective date of that
amendment. Thus, the 1979 provision is controlling from the date
of entry to October 29, 1984, the day before the effective date
of the 1984 Amendment, with the 1984 Amendment controlling
thereafter.
HOLDING:
Customs acted within its authority by charging interest on
antidumping duties as provided for under 19 U.S.C. 1677g(a). The
1979 provision of section 677g is controlling in this case from
the date of entry to October 29, 1984, and the 1984 amendment
section 677g is controlling from October 30, 1984 through the
date of liquidation. You are instructed to deny this protest
accordingly.
Sincerely,
John Durant, Director