HQ 224877: Further review of protests ##2720-93-100484 and 2704-93-101344 concerning the liquidation of certain entries subject toanti-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 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 Ciruit 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(11)(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