DRA-4/5-CO:R:C:E 222280 JR
Louis S. Mastriani, Esq.
Ralph H. Sheppard, Esq.
Adduci, Mastriani, Meeks & Schill
1140 Connecticut Avenue, N.W.
Washington, D.C. 20036
RE: Non-refund of antidumping duties under same condition,
substitution same condition, and rejected merchandise
drawbacks under 19 U.S.C. 1677h; 19 U.S.C. 1313(j)(1),
(j)(2), and (c).
Dear Sirs:
This is in response to your letter dated April 4, 1990, and
further submission of September 14, 1990, requesting a ruling on
behalf of your clients who import merchandise which is subject to
antidumping orders requiring the deposit of estimated antidumping
duties at the time of entry of the merchandise.
FACTS:
The inquirer sets forth a general situation in which the
laws and regulations have been met for rejected merchandise (19
U.S.C. 1313(c)) and for same condition (19 U.S.C. 1313(j))
drawback claims, and wants to designate antidumping duties paid
on imported merchandise as a basis for the payment of drawback.
The inquirer contends that rejected merchandise and same
condition claims are eligible for drawback of antidumping duties
under 19 U.S.C. 1677h, as amended, since Congress intended only
for drawback to be denied in manufacturing claims.
ISSUE:
Whether the refund of antidumping duties for same condition
(19 U.S.C. 1313(j)) and rejected merchandise (19 U.S.C. 1313(c))
drawback claims is permitted under 19 U.S.C. 1677h, as amended.
LAW AND ANALYSIS:
Section 159 of H.R. 3, as amended, amends section 779 of the
Tariff Act of 1930 (19 U.S.C. 1677h) to prohibit antidumping and
countervailing duties paid on imported merchandise from being
eligible for refund under drawback provisions.
Section 1334(a) of the Omnibus Trade and Competitiveness Act
of 1988, Pub. L. No. 100-418 (August 23, 1988) amends 19 U.S.C.
1677h to provide:
For purposes of any law relating to the
drawback of customs duties, countervailing
duties and antidumping duties imposed by this
subtitle shall not be treated as being
regular customs duties. (Emphasis added).
19 U.S.C. 1677h (1990). Dumping duties are not penal in nature,
but are "additional duties" to equalize competitive conditions
between the exporter and American industries affected. C.J.
Tower & Sons v. United States, 21 CCPA 417, T.D. 46943
(1934)(interpreting the precursor to 19 U.S.C. 1673i, current
version at 19 U.S.C. 1677h (Supp. 1991); Imbert Imports, Inc. v.
United States, 67 Cust, Ct. 569, 331 F. Supp. 1400, aff'd, 60
CCPA 123, 475 F.2d 1189 (1971). These additional duties provided
for in the Antidumping Act of 1921 were considered as duties for
all purposes. C.J. Tower, supra, at 428. The court also held
that no good reason is suggested why the Congress should have
intended that the additional duties should be considered duties
if the goods were exported, and as penalties if they remained in
the country. Id. at 428. Following that decision, the Customs
Service provided for the payment of drawback by regulation. See
T.D. 47823, Customs Regulations of 1931, as amended, Art. 800
(1935). We view the plain language of the statute as a rejection
of that position.
In House Report No. 100-40(I), the reasons for the change in
law is set out as follows:
Under section 622 of the Trade and Tariff Act of 1984,
the Congress expanded the provisions relating to
drawback to include countervailing duties as well as
antidumping duties (which were already covered). The
provisions of section 159 are intended to overrule
action taken in 1984. This reversal is a reflection of
the vigor and commitment which this Committee has to
strict enforcement of unfair trade laws and to
discouraging the continuing use of unfair trade
practices.
The provisions of current law which allow for
antidumping and countervailing duties to be refunded
under drawback are counterproductive to efforts to
discourage dumping and subsidization. If U.S. parties
are allowed to buy dumped and subsidized goods at
dumped and subsidized prices (which is essentially what
the current drawback provisions allow) then dumping and
subsidization will continue. All imports of dumped or
subsidized merchandise, regardless of who is importing
it, or for what purposes, must be subject to
appropriate antidumping or countervailing duties.
Title I, Subtitle D, Amendments to the Countervailing and
Antidumping Duty laws, Section 159, Drawback Treatment, at 141.
We view the above legislative history to parallel the
statute's language, which is itself clear. The statute (19
U.S.C. 1677h) does not limit its effect to a specific type of
drawback, but rather includes all types of drawback under 19
U.S.C. 1313. See 19 CFR 191.3(b), as amended; T.D. 90-36. By
virtue of Congress' use of the word "any" in 19 U.S.C. 1677h to
describe the drawback laws, we are certain that the inclusive
word "any" does not single out one particular type of drawback,
such as manufacturing drawback, as the inquirer contends. We
view Congress' example of manufacturing drawback in the
legislative history, see House Conf. Rep. No. 100-576 to
accompany H.R. 3, as an inclusive example (rather than exclusive
or limiting) since all other provisions of drawback were in
existence at the time of the present act. "[I]t is an
'elementary canon of construction that a statute should be
interpreted so as not to render one part inoperative'." South
Carolina v. Catawba Indian Tribe Inc., 476 U.S. 498, 510 n.22
(1986)(citing Colautti v. Franklin, 439 U.S. 379, 392 (1979)).
Accordingly, we reject as speculative the inquirer's argument
that only manufacturing drawback was intended to be changed by
legislation and that rejected merchandise or same condition
drawback were unaffected by the legislative changes in the 1988
Act.
When a statue is clear on its face, an agency need not delve
into the legislative history as the congressional intent can be
gleaned from the face of the statutory text. See National
Customs Brokers and Forwarders Association of America v. United
States, Slip Op. 90-17, 14 CIT ___ at ___ (February 23, 1990),
731 F. Supp. 1076 at 1080, 24 Cust. B. & Dec. No. 12, p. 37 at 41
(March 21, 1990). However, although the congressional intent is
apparently clear from the language of the law itself, the
legislative history recited above demonstrates that Congress
intended to encompass all types of drawback then in existence.
Unlike the inquirer, we do not consider 19 U.S.C. 1677h to be
vaguely drafted.
Certain monies or charges, such as merchandise processing
fees and penalty assessments, are not subject to drawback since
they do not fall within the category of regular customs duties.
We interpret "regular customs duties" as stated in 19 U.S.C.
1677h to includes all types of duties which are eligible to be
refunded. With the enactment of the Omnibus Trade and
Competitiveness Act of 1988, Congress specifically excluded
antidumping and countervailing duties from being considered
regular Customs duties. Customs is constrained to follow the
law.
Please note that the inquirer failed to make an argument for
substitution same condition drawback under 19 U.S.C. 1313(j)(2)
or for substitution manufacturing drawback under 19 U.S.C.
1313(b). The inquirer urges us merely to consider rejected
merchandise or direct identification same condition drawback
provisions. To allow the refund of antidumping duties on either
substitution same condition or substitution manufacturing
drawback claims, an absolute circumvention of the antidumping
statute would result.
Since Congress expressly provided that antidumping duties
are not considered to be regular Customs duties or penalties, but
rather additional duties, we decline to address the inquirer's
arguments that the imposition of antidumping duties constitutes
an assessment on the importer's property which potentially
violates the due process clause of the Fifth Amendment.
HOLDING:
Antidumping duties on same condition, substitution same
condition, and rejected merchandise drawback claims under 19
U.S.C. 1313(j)(1), (j)(2), and (c), respectively, are ineligible
for drawback under 19 U.S.C. 1677h, as amended. See 19 CFR
191.3(b), as amended; T.D. 90-36; 1334 of the Omnibus Trade and
Competitiveness Act of 1988 (Pub. L. 100-418; August 23, 1988).
Furthermore, antidumping duties cannot be refunded under 19
U.S.C. 1677h, as amended, on either direct identification or
substitution manufacturing drawback claims under 19 U.S.C.
1313(a) and (b).
Sincerely,
John Durant, Director