LIQ-4-11-CO:R:C:E 224448 AJS
District Director
U.S. Customs Service
300 South Ferry Street
Terminal Island
Room 2017
San Pedro, CA 90731
RE: Protest for further review 2704-93-100002; liquidation after
four years from entry date; Antidumping duty order A-583-507; 19
U.S.C. 1504; American Permac, Inc. v. U.S.; 19 U.S.C. 1504(d); Nunn
Bush Shoe Co., and Weyco Group Inc. v. U.S.; Canadian Fur Trappers
Corp. v. U.S.
Dear District Director:
This is our decision in protest for further review number
2704-93-100002, dated January 4, 1993, concerning the liquidation
of certain entries of malleable cast iron pipe fittings from the
manufacturer/exporter Kwang Yu in Taiwan.
FACTS:
The subject merchandise was entered between July 8, 1987 and
March 7, 1988. In September of 1992, the import specialist for the
subject merchandise received an unsigned and undated memorandum on
Department of Commerce (DOC) letterhead. The import specialist
sought clarification of this memorandum from Headquarters, and
received instructions to liquidate the entries pursuant to the DOC
memorandum. The entries were subsequently liquidated on October
16, 1992.
Our research indicates that the DOC memorandum was originally
forwarded to Customs from the DOC on December 22, 1989. This
memorandum provided instructions to liquidate the subject
merchandise with antidumping duties of 43.19 percent of the U.S.
price. Our research also indicates that the memorandum was not
received by the proper Customs office for distribution to the field
offices. This appears to be the reason the import specialist did
not receive the DOC memorandum in a timely manner.
-2-
The DOC published its preliminary determination of sales at
less than fair value for the subject merchandise under antidumping
duty order number A-583-507 on January 14, 1986. 51 Fed. Reg. 1547
(1986). In accordance with section 733(d) of the Tariff Act of
1930 (19 U.S.C. 1673b(d)), the DOC directed Customs to suspend
liquidation of all entries of the subject merchandise which were
entered for consumption on or
after the date of publication of this notice. This suspension of
liquidation was to remain in effect until further notice.
The DOC published its final determination of sales at less
than fair value on March 31, 1986. 51 Fed. Reg. 10,901 (1986). In
accordance with 19 U.S.C. 1673b(d), the DOC directed Customs to
continue to suspend liquidation of all entries of the subject
merchandise on or after the date of publication of this notice.
This suspension of liquidation was also to remain in effect until
further notice.
On May 23, 1986, the DOC and the International Trade
Commission (ITC) determined that the subject merchandise was being
sold at less than fair value and that these sales were materially
injuring a U.S. industry. 51 Fed. Reg. 18,918 (1986). The DOC
directed, in accordance with sections 736 and 751 of the Tariff Act
of 1930 (i.e., 19 U.S.C. 1673e and 1675), Customs to assess, upon
further advice, antidumping duties for all entries of the subject
merchandise. Customs was also directed to assess antidumping
duties on all unliquidated entries of the merchandise entered for
consumption on or after January 14, 1986. On and after this date,
Customs was required, at the same time as the importer normally
deposits the estimated duties on this merchandise, to assess an
antidumping duty margin cash deposit of 7.93 percent for Kwang Yu.
On May 9, 1989, the DOC published the preliminary results of
its antidumping duty administrative review for the subject
merchandise. 54 Fed. Reg. 19,929 (1989). The review covered Kwang
Yu, and the period May 1, 1987 through April 30, 1988. As stated
previously, the subject entries fall within this period. The DOC
determined that a margin of 7.93 percent existed for the period in
question. Customs was directed to assess antidumping duties on all
appropriate entries of the subject merchandise for this period.
Further-more, a cash deposit of estimated antidumping duties based
on the above margin was to be required for Kwang Yu.
On September 20, 1989, the DOC published the final results of
their antidumping duty administrative review for the subject
merchandise. 54 Fed. Reg. 38,713 (1989). Based
-3-
on the substantial appreciation of the Taiwan dollar since the
preliminary results, the DOC determined that a margin of 43.19
percent existed for merchandise from Kwang Yu during the period at
issue. The notice states that "[t]he Depart- ment [DOC] will
instruct Customs to assess antidumping duties on all appropriate
entries [of the subject merchandise]. The Department will issue
appraisement instructions directly to the Customs Service." As
stated previously, the DOC issued these instructions to Customs on
December 22, 1989.
19 U.S.C. 1516a is the exclusive remedy for parties wishing to
contest the basis of antidumping duty assessments. American
Permac, Inc. v. United States, 10 CIT 535, 545, 642 F. Supp. 1187
(1986). Therefore, the questions raised by the protestant
concerning the DOC's determination of the 43.19 percent antidumping
duty margin need not be addressed in the decision. Section
1516a(2)(A)(i)(I) provides that within 30 days after the date of
publication in the Federal Register of the notice of a final
determination under 19 U.S.C. 1675, an interested party may
commence an action in the United States Court of International
Trade (CIT). The determination of September 20, 1989, was a final
determination under section 1675. No action was commenced in the
CIT by an interested party in this case. Thus, the final results
were beyond appeal and hence final by October 20, 1989.
ISSUE:
Whether the subject entries were properly liquidated by
Customs or deemed liquidated by operation of law pursuant to 19
U.S.C. 1504.
LAW AND ANALYSIS:
Liquidation has been defined as "the final computation by the
Customs Service of all duties (including any anti- dumping or
countervailing duties) accruing on that entry." American Permac,
Inc. v. United States, 10 CIT 535, 537 (1986). Under 19 U.S.C.
1504, Customs is bound by certain time limits during which
liquidation must occur.
Generally, an entry of merchandise not liquidated within one
year "shall be deemed liquidated at the rate of duty, value,
quantity, and amount of duties asserted at the time of entry by the
importer of record." 19 U.S.C. 1504(a). Pursuant to section
1504(b), Customs may extend this period if:
(1) information needed for the proper appraisement or
classification of the merchandise is not available to the
appropriate customs officer;
-4-
(2) liquidation is suspended as required by statute or court
order; or
(3) the importer of record requests such extension and shows
good cause therefore.
19 U.S.C. 1504(d) states that any entry not liquidated at the
expiration of four years from the applicable date specified in
subsection (a) of this section (i.e., the date of entry in this
case), shall be deemed liquidated at the rate of duty, value,
quantity, and amount of duty asserted at the time of entry by the
importer of record, unless liquidation continues to be suspended as
required by statute or court order. The statute provides when such
a suspension of liquidation is removed, the entry shall generally
be liquidated within 90 days therefrom.
In this case, entries of the subject merchandise were
suspended as required by statute (i.e., 19 U.S.C. 1673(d)) on March
31, 1986. The DOC published the final results of its
administrative review of antidumping duty order number A-583-507 in
September of 1989. This review stated that the DOC would instruct
Customs to assess antidumping duties on entries made during the
period May 1, 1987 through April 30, 1988. These results were not
appealed and became final on October 20, 1989. The DOC issued
liquidation instructions to Customs on December 22, 1989. However,
the import specialist only received informal notice of these
instructions in September of 1992. After receiving clarification
of this notice from Headquarters, the import specialist quickly
liquidated the entries. All the relevant merchandise was entered
more than four years before the date of liquidation. These
circumstances raise the question of whether the entries were
already liquidated by operation of law pursuant to 19 U.S.C.
1504(d) because of the fact that the four-year period for
liquidation had expired.
The CIT addressed a similar issue in Nunn Bush Shoe Co. and
Weyco Group Inc. v. United States (Nunn Bush), Slip Op. 92-9,
Customs Bulletin and Decisions, vol. 26, no. 7, p. 19 (February 12,
1992), 784 F. Supp 892. Nunn Bush dealt with entries which had
been suspended pending the results of a countervailing duty
investigation and later pursuant to a court injunction. The
injunctions were dissolved before the entries were four years old,
but Customs did not liquidate certain of these entries until after
four years from the date of entry.
In Nunn Bush, the CIT discussed their decision in Canadian Fur
Trappers Corp. v. United States (Fur Trappers), 12 CIT 612 (1988).
Fur Trappers also involved the
-5-
application of 19 U.S.C 1504(d). In that case, however, the
suspension of the entries involved was lifted after four years had
expired. The CIT stated that when a suspension is lifted after
four years have passed, Customs has a
discretionary 90 days to liquidate the entries. Nunn Bush,
p. 21-22. This decision was based on the legislative history for
section 1504(d) which states that "[t]his last provision is
discretionary, rather than mandatory, and recognizes that there
will be instances when it may be
impossible to complete liquidation within 90 days because of the
sheer number of entries to be liquidated after a long continued
suspension." Nunn Bush, p. 22, See also H.R. Rep. No. 95-621, 95th
Cong., 1st Sess. 26 (1977).
The Court in Nunn Bush held that their interpretation
regarding Custom's discretion applies only to entries that remain
suspended beyond the four year statutory period. Nunn Bush, p. 22.
The CIT further added that nowhere in the legislative history is it
stated that the provisions, requiring an entry of merchandise to be
liquidated within four years, is discretionary. Id. The CIT
stated that the Fur Trappers decision is binding on the issue of
liquidation only with respect to entries that remained suspended
beyond four years. Id. Based on the plain meaning of the statute,
the CIT found that section 1504 unambiguously states that if an
entry is not liquidated within four years, then it will be deemed
liquidated by operation of law unless the period is extended as per
19 U.S.C. 1504(b). Id. Therefore, the CIT held that entries which
turned four years old were liquidated by operation of law and any
subsequent attempts by Customs to liquidate these entries was
invalid. Id.
In this case the entries were suspended by statute, but this
suspension was lifted in December of 1989. Customs did not
liquidate the entries until October of 1992, which was after four
years from the date of entry. According to the Nunn Bush decision,
this liquidation was invalid. The entries were liquidated by
operation of law on the four year anniversary date of entry at the
rate of duty asserted by the importer of record at the time of
entry. The applicable rate of antidumping duty at this time was
7.93 percent pursuant to the DOC's May 23, 1986, Federal Register
notice. The entries at issue could not be suspended beyond the
four year anniversary date of entry once the statutory suspension
was lifted.
HOLDING:
The protest is granted. The subject entries were deemed
liquidated by operation of law on the four year anniversary of the
date of entry with an antidumping duty margin of 7.93 percent.
-6-
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, with the Customs Form 19, 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 take steps to make the decision available to
customs personnel via the Customs Rulings Module in ACS and the
public via the Diskette Subscription Service, Lexis, Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division