HQ 224751: Further review of protests ##2720-93-100484 and 2704-93-101344concerning the liquidation of certain entries subject to anti-dumping duties (ADD); 19 U.S.C. 1504(a) and (d); The Act ofDecember 8, 1993, Pub. L. No. 103-182 sec. 641, 107 Stat. 2057;Dal-Tile Corporation v. United States, 829 F. Supp. 394 (CIT1993).

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                     
                            HQ 224751
                            HQ 224877

                           June 2, 1994

LIQ-4-01 CO:R:C:E 224751/224877 TLS

CATEGORY: Entry

District Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, California

90731

RE: Further review of protests ##2720-93-100484 and 2704-93-101344
concerning the liquidation of certain entries subject to anti-dumping duties (ADD); 19 U.S.C. 1504(a) and (d); The Act of
December 8, 1993, Pub. L. No. 103-182 sec. 641, 107 Stat. 2057;
Dal-Tile Corporation v. United States, 829 F. Supp. 394 (CIT
1993).

Dear Sir:

    This office has received the above-referenced protests for
further review as provided for under Customs regulations. We have
considered the protests and have made the following decision.

FACTS:

    Your office has suspended protest #2704-93-101344 pending the
outcome of protest #2720-93-100484 because the issue is identical
in each case and the related entries were involved in the same
withholding of liquidation.

    The chronology of events leading to the protests is as follows:

On May 4, 1989, Customs initiated its audit of all Toshiba entries
to determine if correct valuation was done on these entries.

The Department of Commerce (DOC) made a preliminary dumping
finding and ordered suspensions of liquidation on entries of
certain small business telephone systems from Japan on August 3,
1989 (54 Fed. Reg. 31978).

DOC made a final determination of its finding and continued
suspensions of the above-noted entries on October 17, 1989 (54
Fed. Reg. 42541).

Customs Headquarters advised the field through Email on October
27, 1989 to suspend liquidation on entries of small business
telephone systems from Japan entered on or after August 3, 1989.

The entries involved in protest #100484 were made between November
2, 1989 and February 23, 1990. The entry in protest #101344 was
made on January 8, 1990.

The ADD order for these entries was issued on December 11, 1989
(54 Fed. Reg. 50789); the cash deposit rate for Toshiba entries
was 136.77%. The subject entries made on or after this date are
also subject to interest on cash deposits. The entry documents
contained in our files. indicate that no cash deposits were made.

Customs Headquarters advised the field through Email on July 23,
1990 to continue withholding liquidation of Toshiba entries
pending the outcome of a Customs audit.

On July 22, 1991, DOC lifted the suspensions of the subject entries
and instructed Customs to liquidate them.

The Court of International Trade (CIT) had granted an injunction
on January 23, 1991, continuing suspensions on these entries
pending the outcome of an appeal of a challenge to the scope of
the ADD order. The CIT issued a final judgment on the appeal on
July 31, 1991 (Toshiba Corp. v. United States, 770 F. Supp. 660
(CIT)), effectively terminating the injunction and lifting the
suspensions.

Customs Headquarters clarified the scope of the Toshiba audit and
directed the field through Email on December 9, 1991 to liquidate
all entries affected by the DOC instructions as noted above.

Customs Headquarters notified the field through Email on December
16, 1992 of those companies affected by the above-noted ADD order
that actually were under Customs audit at that time. Toshiba not
being among those companies, your office liquidated the entries
involving Toshiba; between January 22 and February 12, 1993 for
entries in protest #100484 and January 29, 1993 for the entry in
protest #101344. All entries were liquidated at a 136.77% ADD
rate, the rate required at the time of entry.

The protestant contends that it did not request an administrative
review of the order and accepted the fact that the entries could
as a consequence liquidate at a rate equal to the estimated
duties. The protestant states that the suspensions lifted when the
CIT issued a final judgment on the appeal on July 31, 1991,
effectively terminating the injunction and lifting the
suspensions.

    Your office contends that it extended liquidation of these
entries pursuant to the July 23, 1990 Customs HQ Email. The final
extension notices were given on October 27, 1990 for the entries
protested under #100484 and on December 12, 1992 for the entry
protested under #101344.

ISSUE:

    Whether the entries are deemed liquidated by operation of law at
the antidumping duty rate asserted by the importer.

LAW AND ANALYSIS:

    The subject entries were liquidated between January 22 and
February 12, 1993 with ADD being assessed. Both protests were
timely filed on April 20, 1993 within 90 days of the liquidation
dates.

    The relevant provisions of 19 U.S.C. 1504 read as follows:

 (a) Liquidation.-- Except as provided in subsection (b) of the
 section, an entry of merchandise not liquidated within one year
 from:

         (1) the date of entry of such merchandise;...
                                
 ...shall be deemed liquidated at the rate of duty, value,
 quantity, and amount of duties asserted at the time of entry
 by the importer, his consignee, or agent. Notwithstanding
 section 1500(e) of this title, notice of liquidation need not
 be given of an entry deemed liquidated.

 (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. (Emphasis added.)

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 entries are not subject to this amendment
because they were filed before the effective date of the
amendment.

    The protestant contends that the subject entries were deemed
liquidated one year after the lifting of the suspensions. The
argument is based on the protestant's reading of 19 U.S.C.
1504(a). It is also argued that Customs own policies mandate that
the entries should have been liquidated 90 days from the lifting
of the suspensions. U.S. Customs Service Policies and Procedures
Manual, Manual Supp. No. 3551-02 (December 27, 1979).

    There have been several cases that have interpreted 19 U.S.C.
1504(a) and (d). The Court of Appeals for the Federal Circuit
(Federal Circuit) held in one case that 19 U.S.C. 1504(a) should
be read to require Customs to liquidate an entry on which
suspension had been lifted within one year of the entry date,
otherwise it would be deemed liquidated at the one-year
anniversary of the entry date. Pagoda Trading Corp. v. United
States, 804 F.2d 665 (Fed. Cir. 1986). Pagoda did not interpret
subsection (d).of section 1504. The Federal Circuit soon after
affirmed a Court of International Trade (CIT) ruling that held
that the language in section 1504(d) that reads "[w]hen such a
suspension of liquidation is removed, the entry shall be
liquidated within 90 days therefrom", is discretionary and does
not mandate Customs to liquidate within 90 days entries whose
suspensions were lifted after the four-year anniversary of the
entry date. Canadian Fur Trappers Corp. v. United States, 884 F.2d
563 (Fed. Cir. 1989). The court also concluded that the Pagoda
holding did not apply to entries subject to subsection (d) of
section 1504. Id. See also Eagle Cement v. United States, 17
CIT__, slip op. 93-117 (June 23, 1993).

    More recently, the CIT held that once an entry has been
suspended (or extended) beyond its first-year anniversary, it is
no longer subject to the provisions of 1504(a). .Dal-Tile
Corporation v. United States, 829 F. Supp. 394 (CIT 1993). The
entries in Dal-Tile were suspended beyond their fourth-year
anniversaries but were not liquidated until 18 months after
suspensions were lifted. Id. The plaintiff had argued that the
entries should have been deemed liquidated one year after the
suspensions were lifted, pursuant to 1504(a). In the present case,
the entries were suspended beyond their first-year anniversaries.
The protestant makes the same argument here as did the plaintiff
in Dal-Tile, that the entries should have been deemed liquidated
one year after the suspensions were lifted.

    Pursuant to the Dal-Tile decision and section 1504(d), we find
that Customs did not abuse its authority in delaying liquidation
on the subject entries more than a year beyond the lifting of the
suspensions. In reaching its decision, the Dal-Tile court rejected
the argument that subsections (a) and (d) should be read together
so as to apply the consequence of deemed liquidation to entries
not liquidated within one year after the termination of a court-ordered suspension. Id.  The court emphasized that its conclusions
were based in part on the holding in Fur Trappers, supra.  Dal-Tile noted that the legislative history of 1504(d) does not
indicate that Congress intended to apply a one-year limit on
liquidation to entries falling under subsection (d).  Id.  Thus,
we find no reason to apply a one-year limitation on liquidations
under 1504(d) in this case. We must also conclude that 1504(a)
does not apply to the present entries, pursuant to Dal-Tile. 
Therefore, we find that Customs acted within its authority as
provided in 19 U.S.C. 1504(d) in delaying liquidation more than
one year beyond the lifting of the suspensions.

    Inasmuch as we have found the subject entries to have been
properly liquidated within Customs authority, the question of
whether liquidation on the entries was properly extended need not
be addressed here-and is considered moot. With regards to Customs
stated policy objectives, they do not take precedent over
established court decisions and therefore bear no weight against
the court rulings cited herein.

HOLDING:

    Customs acted within its authority under 19 U.S.C. 1504(d) in
delaying liquidation more than one year after suspensions were
lifted on the entries. Pursuant to Dal-Tile Corporation v. United
States, 829 F. Supp. 394 (CIT 1993), the entries should not be
deemed liquidated one-year after the lifting of the suspensions
and 19 U.S.C. 1504(a) does not apply to these entries. The Act of
December 8, 1993 (Pub. L. No. 103-182 sec. 641, 107 Stat. 2057),
which amended 19 U.S.C. 1504 to require liquidation of suspended
entries within six months after suspension is removed, is not
applicable here because the subject entries were filed before the
effective date of the amendment. The subject protests should be
DENIED as a result.

    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,




                John Durant, Director
                Commercial Rulings Division