LIQ-4-01/02 CO:R:C:E 224610 TLS
District Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, California 90731
RE: Further review of protest #2704-91-102694 concerning the
assessment of anti-dumping duties (ADD) and countervailing duties
(CVD) on a certain entry; 19 U.S.C. 1504; Nunn Bush and Weyco Group,
Inc. v. United States, CIT slip op. 92-9 (February 5, 1992).
Dear Sir:
This office has received the above-referenced application for
further review of the protest as provided for under Customs
regulations. We have considered the request and have made the
following decision.
FACTS:
The entry in question was filed on May 24, 1984. Customs was
ordered to suspend liquidation on the subject entry, as well as
other entries, through a Federal Register notice published at 49
Fed. Reg. 19547 (May 8, 1984). The notice also ordered the district
director holding the entry to require a cash deposit or bond to
cover antidumping duties (ADD) on the entry at a 13.7% rate. Customs
received instructions on November 14, 1986 lifting the suspension of
liquidation and orders to liquidate. There was no extension of
liquidation on the entry after that date.
The entry was also subject to a countervailing duty order which
was issued on October 1, 1984, suspending liquidation. Customs
received instructions on December 23, 1986 lifting the suspension
and orders to liquidate the entry at a 24.04% rate. As with the ADD,
there was no extension of liquidation after the suspension was
lifted.
Your office claims that the ADD rate is 13.7% as the protestant
says and the CVD rate is 24.04%. No interest is to be assessed on
the ADD but interest is to be charged on unpaid
countervailing duties, according to your office. Your office also
explains that the delay in liquidating the entry is attributed to
the entry being the subject of a fraud investigation- It is conceded
that the entry was not extended during this time.
Liquidation was done on November 30, 1990. Customs made a Formal
Demand on Surety on March 4, 1991 for payment of the subject duties.
This protest was timely filed within 90 days of that action on May
29, 1991 in response to the demand.
ISSUE:
Whether the rate and interest to be charged on ADD and CVD is
proper in light of no bond being posted and the entry not being
extended or liquidated after suspension was lifted.
LAW AND ANALYSIS:
The relevant parts of 19 U.S.C. 1504 read as follows:
(d) Limitation.--Any entry of merchandise not liquidated at the
expiration of four years from the applicable date specified in
subsection (a) of this section, shall be deemed liquidated at
the rate of duty, value, quantity, and amount of duty asserted
at the time of entry by the importer, his consignee, or agent,
unless liquidation continues to be suspended as required by
statute or court order. When such a suspension of liquidation
is removed, the entry shall be liquidated within 90 days
therefrom.
The Act of December 8, 1993 (Pub. L. No. 103-182 sec. 641, 107 Stat.
2057) amended 19 U.S.C. 1504 to deem liquidate on its fourth-year
anniversary any entry whose liquidation is extended that is not
liquidated within four years; any entry whose liquidation is
suspended and such suspension is subsequently removed but the entry
is not liquidated within six months after Customs receives notice of
the removal is deemed liquidated at that time. The present entry is
not subject to this amendment because the suspension of liquidation
was lifted before the effective date of the amendment.
With respect to the liquidation issue in this case, we
believe the recent court holding in Nunn Bush and Weyco Group,
Inc. v. United States, CIT slip op. 92-9 (February 5, 1992), is
controlling. The Nunn Bush decision held that 19 U.S.C. 1504(d)
should be read to deem as liquidated any entry which is not
subject to valid suspension on its fourth-year anniversary. Id.
As noted above, Commerce issued instructions lifting the
suspension on November 14, 1986 (ADD) and December 23, 1986
(CVD), requiring Customs to liquidate the entry. The entry
remained unliquidated on its fourth-year anniversary, May 24, 1988.
Thus, pursuant to Nunn Bush, the entry was deemed liquidated on that
date at the rate asserted by the importer at the time of entry.
Your office concedes that no extension was done after the
suspension was lifted, but explains the delay was due to a pending
fraud investigation involving the entry. Customs laws at the time of
entry allowed for reliquidation of an entry if the appropriate
customs officer found probable cause to believe fraud is involved.
19 U.S.C. 1521. Thus, the possibility of fraud on the entry did not
preclude Customs from following instructions to liquidate that
entry. Furthermore, there is no apparent finding of fraud in this
case. Therefore, as noted above, absent an extension of liquidation,
the entry in question is deemed liquidated on its fourth-year
anniversary at the rates of duty asserted when entered.
The entry was made with 0.73% asserted as the ADD and 29.94% for
CVD. The total duties when calculated under the asserted ADD and CVD
rates is $257,890.23. The actual rates to be assessed should have
been 13.7% for ADD and 24.04% for CVD. The total duties under these
rates would be $317,338.68. The difference in the two sums is
$59,448.45. Customs cannot collect this difference because of the
deemed liquidation. Customs also cannot collect any interest on
either the ADD or the CVD because the entry was deemed liquidated at
the duty rate asserted at time of entry. Therefore, only $257,890.23
is owed on the entry in question.
The protestant also contends that since an ADD/CVD bond was not
posted on this entry pursuant to T.D. 82-56, it is not liable for
any ADD or CVD. We find this argument to be without merit. The clear
and explicit language of the CF 7595 General Term Bond posted with
this entry states in section (8), "...the above-bounden principal
shall pay to the district director of customs, when demanded, all
duties, taxes, and charges found legally due and unpaid..." A
Federal district court held that notwithstanding the fact that a
particular bond was not posted on an entry, a surety remains liable
under a general bond which calls for payment on demand of all
duties, however they arise. Gissel v. United States, 353 F. Supp.
768, 777 (S.D. Tex. 1973), aff'd, 493 F.2d 332 (5th Cir. 1974),
cert. denied, 419 U.S. 1012 (1975). Such is true with the general
bond posted in this case. Therefore, the surety remains liable for
the ADD and CVD in this case under the general term bond posted.
HOLDING:
The subject entry is deemed liquidated pursuant to 19 U.S.C.
1504 and Nunn Bush, on the fourth-year anniversary of the entry
date, or May 24, 1988.
The duty rates applicable to this entry are those which were
asserted at the time of entry, 0.73% for ADD and 29.94% for CVD. The
ADD and CVD rates published subsequent to the entry date are not
applicable in this case. Interest cannot be charged on either the
ADD or CVD. The total ADD owed is $6,138.24 and CVD owed is
$251,751.99, or $257,890.23 altogether.
The protestant is liable for the amounts of ADD and CVD asserted
on the entry under its general term bond. The fact that an ADD/CVD
bond was not posted on the subject entry does not reduce or
eliminate its liability under the posted entry bond.
This protest should be ALLOWED with respect to the deemed
liquidation and DENIED with respect to the protestant's liability
under general bond.
In accordance with Section 3A(ll)(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 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,
Commercial Rulings Division