DRA 4 OT:RR:CTF:ER
H279772 KF
U.S. Customs and Border Protection
Port of New York and New Jersey
Attn: Jennifer Tagliaferro, Protest and Control 1100 Raymond Boulevard, Suite 402
Newark, NJ 07102
RE: Application for further review of Protest No. 4601-14-101397; Rite Lite Ltd.; scope of antidumping order; liquidation instructions; petroleum wax candles; mixed wax candles; revocation of a binding ruling; 19 C.F.R. § 177.12.
Dear Port Director:
The above-referenced Protest was forwarded to this office for further review, and was received on September 19, 2016. We have considered the points raised by your office and the Protestant. Our decision follows.
FACTS:
On August 14, 2012, Rite Lite Ltd. (“Rite Lite”) entered a shipment of wax candles from the People’s Republic of China (“China”). The entry was assigned entry number xxx-xxxx8706. The entry was liquidated by United States Customs and Border Protection (“CBP”) on March 7, 2014 pursuant to liquidation instructions issued by the United States Department of Commerce (“Commerce”). CBP determined the entry was subject to an antidumping duty order on petroleum wax candles from China (Case No. A-570-504) (“Order”) and assessed duties accordingly. Rite Lite protests CBP’s determination of antidumping liability.
On March 24, 1999, CBP issued a ruling on the classification of Rite Lite’s Chanuka candles which included an opinion that they were not subject to the Order. CBP’s ruling was based on Commerce’s exclusion of candles “measuring less than 6” in height and ¾” in diameter” from the scope of the Order.
On October 6, 2006, Commerce determined that mixed wax candles containing “any amount of petroleum” are within the scope of the Order. On October 13, 2006, Commerce determined that mixed wax candles consisting of over 50% beeswax and consisting of 100% vegetable oil are excluded from the scope of the Order.
On January 5, 2012, Commerce revised the scope of the Order to include all petroleum wax candles except birthday, utility, and figurine candles. Simultaneously, Commerce instructed CBP to “collect cash deposits and suspend liquidation of entries of petroleum wax candles… including holiday/religious/special occasion-themed candles that do not otherwise meet the birthday candle, utility candle, or figuring candle exclusions.” Commerce stated its scope revision superseded all prior conflicting rulings and was effective retroactively as of August 2, 2011.
On August 22, 2012, Rite Lite submitted an Entry Summary (CBP Form 7501) for its August 14, 2012 entry of wax candles from China. The commercial invoice enclosed with the CBP Form 7501 identifies the entered merchandise as Chanukah candles of varying composition:
Item No.
Composition
C-10-CO
Not Stated
C-10-BW-C799
Not Stated
C-10-BW
Not Stated
C-22-F-B915
Honeycomb Beeswax
C-10-CO-P66
Not Stated
C-10-BW-P66
Not Stated
C-10-WOWN-B915
Not Stated
C-23-I
Vegetable Wax
C-31-M
Not Stated
C-29-BW
Not Stated
On May 22, 2013, Commerce determined that Rite Lite’s Chanukah candles are within the scope of the Order. On October 29, 2013, CBP issued a Notice of Action to Rite Lite proposing to liquidate the entry subject to the 108.3% duty rate required by the Order.
Prior to liquidation, CBP requested samples of the candles included in Rite Lite’s entry. CBP provided the samples it received from Rite Lite to its Laboratories and Scientific Services Directorate (“LSSD”) for testing and composition analysis. LSSD determined the candles were composed of:
Item No.
Composition
C-10-CO
Petroleum
C-10-BW-C799
Petroleum and Vegetable
C-10-BW
Petroleum
C-22-F-B915
Not Tested (invoiced as Honeycomb Beeswax)
C-10-CO-P66
Sample Not Provided
C-10-BW-P66
Sample Not Provided
C-10-WOWN-B915
Vegetable Wax
C-23-I
Vegetable Wax
C-31-M
Petroleum and Vegetable
C-29-BW
Sample Not Provided
Concurrently, CBP began to investigate multiple entries of candles by Rite Lite unrelated to this protest in order to determine whether Rite Lite was evading the Order. To facilitate CBP’s investigation, Rite Lite provided CBP with samples of candles from other entries. CBP sent the additional candles provided by Rite Lite to LSSD for testing. LSSD determined that some candles identified by different item numbers were identical in composition to the untested candles from the protested entry. LSSD determined the candles were composed of:
Item No.
Composition
C-10-CO
Petroleum
C-10-BW-C799
Petroleum and Vegetable
C-10-BW
Petroleum
C-22-F-B915
Not Tested (invoiced as Honeycomb Beeswax)
C-10-CO-P66
Petroleum (identical to C-10-CO)
C-10-BW-P66
Petroleum (identical to C-10-BW)
C-10-WOWN-B915
Vegetable Wax
C-23-I
Vegetable Wax
C-31-M
Petroleum and Vegetable
C-29-BW
Petroleum and Vegetable (identical to C-29-BWN)
CBP received notice of suspension of liquidation from Commerce on October 25, 2013 for all entries during the period of August 1, 2012 to July 31, 2013. Based on LSSD’s findings, CBP liquidated the entry on March 7, 2014 subject to an antidumping duty rate of 108.3% for all candles except the following item numbers: C-10-WOWN-B915, C23-I, and C-22-F-B915. Rite Lite filed the Protest at issue on September 2, 2014.
ISSUES:
Whether CBP properly implemented Commerce’s liquidation instructions.
LAW AND ANALYSIS:
As an initial matter, we find that this protest meets the criteria for further review. We find that, pursuant to 19 U.S.C. § 1514(c)(3)(A), this protest was timely filed on September 2, 2014, within 180 days after the liquidation date of March 7, 2014. We further find that, pursuant to 19 C.F.R. § 174.24(b), this protest involves questions of law and fact which have not previously been ruled upon.
Antidumping duties properly assessed by CBP are generally not protestable because CBP’s role in liquidating entries of merchandise subject to an antidumping duty order is “merely ministerial.” However, the factual findings made by CBP to determine whether merchandise is subject to an antidumping duty order, and the amount of duty owed, fall within CBP’s protestable ministerial role. We note that CBP’s factual findings receive a presumption of correctness pursuant to 28 U.S.C. § 2639(a)(1). Consequently, a protestant bears the “burden to prove by a preponderance of the evidence” that CBP’s findings were incorrect.
Rite Lite premises its protest on two arguments: First, that Rite Lite’s entry is not subject to the Order pursuant to the ruling issued by CBP in NY D88312 (March 24, 1999). Second, that LSSD’s testing and composition analysis of the entered candles is contravened by the private laboratory analysis commissioned by Rite Lite. We address Rite Lite’s arguments in order.
In NY D88312, CBP opined that Rite Lite’s Chanuka candles “measuring less than 6” in height and ¾” in diameter” were outside the scope of the Order. Rite Lite asserts that absent formal revocation and notice, pursuant to 19 C.F.R. § 177.9(a) the ruling remains presently “binding on all Customs Service personnel…until modified or revoked.”
In NY D88312, the National Commodity Division issued a Classification decision on the specific a specific style of candles imported by Rite Lite. NY D88312 is therefore inapplicable to candles within Rite Lite’s protested entry that are distinct from the candles described and classified in NY D88312. Furthermore, the formal revocation and notice requirements of 19 C.F.R. § 177.12(b) are rendered inapplicable by 19 C.F.R. § 177.12(d) to circumstances:
[I]n which a Customs position is modified, revoked, or otherwise materially affected by operation of law or by publication pursuant to other legal authority or by other appropriate action taken by Customs in furtherance of an order, instruction or other policy decision of another governmental agency or entity.
Liquidation instructions and scope orders issued by Commerce constitute an “order, instruction, or other policy decision” which revoke prior inconsistent rulings by operation of law. When a ruling is revoked or modified by operation of law, “Customs is under no obligation to issue a new ruling as a result.”
On January 5, 2012, Commerce revised the scope of the Order to include all petroleum wax candles except birthday, utility, and figurine candles. Commerce instructed CBP to collect cash deposits accordingly and clarified that “holiday/religious/special occasion-themed” candles were included within the Order’s expanded scope. Commerce’s scope revision was made effective retroactively as of August 2, 2011. Consequently, the opinion in ruling NY D88312 regarding the scope of the Order was revoked by operation of law effective August 2, 2011. Pursuant to 19 C.F.R. § 177.12(d), Rite Lite was not entitled to receive notice of the ruling’s modification from CBP. We therefore find that Rite Lite lacked a basis to rely on NY D88312’s opinion regarding the scope of the Order at the time of the protested entry on August 14, 2012.
To address Rite Lite’s second argument, that its privately commissioned lab results contradict the findings of CBP’s LSSD, we look to HQ H114760 (February 14, 2011) as particularly illustrative. In HQ H114760, an importer of mixed wax candles challenged CBP’s determination that its entries were subject to the Order based on LSSD’s analysis of the candles’ composition. LSSD’s analysis was based on samples of the protested entries provided by the importer. When CBP notified the importer of LSSD’s findings, the importer provided CBP with privately certified lab testing and composition analysis that were inconsistent with LSSD’s findings. CBP determined that its findings receive a presumption of correctness pursuant to 28 U.S.C. § 2639(a)(1) that include “the methods of weighing, measuring, and testing merchandise.” CBP explained that its presumption of correctness could be rebutted either by showing that LSSD’s methods/results are erroneous, or, evidence that the same merchandise tested by LSSD yielded different results when tested privately. CBP held that the importer did not rebut CBP’s presumption of correctness because it merely provided distinct testing results without challenging LSSD’s methods/results or proving that the privately tested merchandise “was removed from the actual shipment under investigation and representative of the merchandise entered.”
As in HQ H114760, Rite Lite has not attempted to show that LSSD’s testing methods or results were erroneous. Rite Lite solely asserts that any petroleum found in the composition of its allegedly natural wax candles “are typical” of such candles. Rite Lite’s private lab repeats this assertion in its testing analysis. Rite Lite’s assertion does not challenge the propriety or accuracy or LSSD’s testing methods or results. Nor has Rite Lite not provided evidence that its private lab results were derived from testing the same merchandise tested by LSSD, or from testing representative samples. As in HQ H114760, Rite Lite has not produced any evidence that its privately tested candles were “produced by the same manufacturer or manufactured in the same manner” as the candles tested by LSSD. Not a single item number from the protested entry appears in the list of candles tested by Rite Lite’s private lab. Additionally, Rite Lite’s private testing results contain a disclaimer that “testing was requested for general information and is not related to the import of any specific shipment.” Rite Lite therefore did not provide evidence that the merchandise tested by LSSD yielded different results when tested privately. In consequence, we find that Rite Lite has failed to rebut CBP’s presumption of correctness.
We note that Rite Lite did not provide CBP with samples of all the candle item numbers within the protested entry. Consequently, LSSD was not able to test the candles identified by item numbers C-10-CO-P66, C-10-BW-P66, and C-29-BW. When CBP is not provided with a sample requisite to enable sufficient testing of an entered good, CBP will assess the subject merchandise based on the evidence available to CBP. The evidence available to CBP consisted of LSSD’s testing of candles identified by different item numbers as part of CBP’s investigation to determine whether Rite Lite was evading the Order. LSSD determined that candles identified by item numbers C-10-CO, C-10-BW, and C-29-BWN were identical in composition to the candle types identified by item numbers C-10-CO-P66, C-10-BW-P66, and C-29-BW, respectively. LSSD found that candles identified by item numbers C-10-CO, C-10-BW, and C-29-BWN all contained petroleum.
Pursuant to Commerce’s determination that mixed wax candles containing “any amount of petroleum” are within the scope of the Order, CBP properly liquidated the protested entry as subject to the Order. Absent evidence overcoming CBP’s presumption of correctness, CBP properly assessed antidumping duties on all candles within the entry except C-10-WOWN-B915, C23-I, and C-22-F-B915 because all the other candles tested were found to contain petroleum. CBP timely liquidated the entry within six months of receiving notice from Commerce on October 25, 2013 that suspension of liquidation was lifted.
HOLDING:
Rite Lite’s entry was properly liquidated as a mixed wax candle and protest 4601-14-101397 should be DENIED in full.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division