HQ 222575: Application for further review of Protest No. 5301-7-000493 and 5301-7-000494 under 19 U.S.C. 1504(d)

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 222575

                        October 30, 1990

LIQ-4-01-CO:R:C:E  222575 CB

CATEGORY:  Liquidation/Protest

Regional Commissioner
U.S. Customs Service
Suite 500
5850 San Felipe Street
Houston, TX  77057-3012

RE:  Application for further review of Protest No. 5301-7-000493
     and 5301-7-000494 under 19 U.S.C. 1504(d)

Dear Sir:

     The above-referenced protests were forwarded to this office
for further review.  We have considered the points raised and our
decision follows.

FACTS:

     It is the protestant's position that the subject entries
were deemed liquidated as entered, without imposition of
antidumping duties, 90 days after the International Trade
Administration (ITA) issued instructions to the Customs Service
to lift the suspension of liquidation and assess antidumping
duties.

     According to protestant, the subject merchandise was entered
on June 23, 1983, and estimated tariff duties were posted.
Protestant claims that no antidumping duty deposits were required
because entry was made prior to the preliminary antidumping duty
determination.  An affirmative preliminary antidumping duty
determination was issued regarding the importation of potassium
permanganate, from the People's Republic of China, by the ITA on
August 9, 1983.  Liquidation of all entries of the subject
merchandise was suspended.

     The ITA issued its final antidumping determination on
December 29, 1983.  The ITA modified the suspension of
liquidation order, pursuant to 19 U.S.C. 1673d(c)(4)(B), to apply
to unliquidated entries of merchandise entered, or withdrawn from
warehouse, 90 days before the date of the preliminary
determination, or May 8, 1983.  Accordingly, the subject entries
were ordered suspended.  As a result of 19 CFR 353.53 (1983 ed.),

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Commerce no longer conducted automatic administrative reviews.
Instead, reviews must be requested.  The Department of Commerce
did not receive a request for a review of the subject
merchandise.  The ITA issued instructions lifting the suspension
of liquidation on November 27, 1985.  Commerce issued
Instructions No. 85/397 indicating that the applicable rate of
duty for the subject entries during the period from May 1, 1983
to December 31, 1983 was 42.54 percent ad valorem.  It appears
that Customs issued appropriate liquidation instructions to all
field offices on December 3, 1985.

     The subject entries were liquidated on August 21, 1987.  The
file indicates that the extension of liquidation was not lifted
until June of 1987 because a reimbursement statement had not been
furnished by the importer as required under 19 CFR 353.26.  It is
the protestant's position that the liquidations were untimely and
are, therefore, deemed liquidated as entered by operation of law
pursuant to 19 U.S.C. 1504.  Since the question of whether proper
notices under 19 U.S.C. 1504 were issued is not disputed, it is
assumed such notices were issued properly.

ISSUES:

     1)  Whether there was a deemed liquidation by operation of
law?

     2)  If not, whether interest can be charged on the
antidumping duties assessed?

LAW AND ANALYSIS:

Issue #1

     Liquidation of an entry of merchandise constitutes the final
computation by Customs of all duties accruing on that entry.  See
generally, Ambassador Division of Florsheim Shoes v. United
States, 748 F.2d 1560, 1562 (Fed. Cir. 1984).  As provided for in
section 504, Tariff Act of 1930, as amended (19 U.S.C. 1504
(1988)), if Customs fails to liquidate an entry within one year
from the date of entry or final withdrawal from warehouse, that
entry is 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.  Customs is permitted to
extend the one year period, under 19 U.S.C. 1504(b), if
additional information is needed to classify the goods,
liquidation is suspended by statute or court order, or if the
importer, consignee, or his agent requests an extension.  Customs
must provide the importer with notice of the extension.  Any
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entry not liquidated at the expiration of four years from the
date of entry or withdrawal from warehouse is deemed liquidated
at the rate of duty, value, quantity, and amount of duty asserted
at the time of entry by the importer, unless liquidation was to
be suspended beyond the first year.

     Protestant's deemed liquidation argument relies on the
holding in Pagoda Trading Corp. v. United States, 804 F.2d 665
(Fed. Cir. 1986).  Protestant's reliance is misplaced.  In Pagoda
the Circuit Court agreed with the Court of International Trade in
concluding that "there was no evidence that any authorized
official had granted an extension, and that there was no basis
for extension such as a lack of information available to
Customs...." (emphasis added)  However, the subject protest can
be distinguished from Pagoda.  In the instant case, liquidation
of the subject entries was extended until such time as the
required reimbursement certificate was filed by the importer.
The Customs Service administration of antidumping duties is
governed by 19 CFR Part 353.  Part 353.26 provides that, prior
to the liquidation of an entry, the importer shall file a
certificate stating whether it has entered into a reimbursement
of antidumping duties agreement with the manufacturer, producer,
seller, or exporter.  The certificate is used in calculating the
United States price.  Therefore, there was a basis for extension
of liquidation.  Customs lacked information it required to
proceed with liquidation of the entries and properly extended the
time for liquidation.  In any event, the holding in Pagoda
applies only when suspension of liquidation is lifted before
expiration of the one year limitation set forth in 1504(a).  In
the instant case, suspension went beyond the one year period and
proper notices were issued.

     Protestant also argues that the entries were deemed
liquidated, pursuant to 19 U.S.C. 1504(d), when Customs failed to
liquidate the entries within 90 days of the lifting of the
suspension.  Customs is not required to liquidate an entry within
90 days once a suspension has been lifted.  In Canadian Fur
Trappers Corp., et al., v. United States, 691 F. Supp. 364 (CIT
1988), the Court of International Trade held that the 90 day time
frame set forth in 19 U.S.C. 1504(d) is discretionary rather than
mandatory.  This holding was affirmed by the Circuit Court on
appeal.  See Canadian Fur Trappers Corp., and Meldisco, a
Division of Melville Corp., v. United States, Appeal No. 89-1060,
89-1061, and 89-1062, 23 Cus. Bul. & Dec. 39 (Fed. Cir. 1989).
The Circuit Court held that the lack of consequential language
in 1504(d) means that Congress intended this section to be only
directory.  Therefore, following the Canadian Fur Trappers
holding, Customs failure to liquidate the subject entries within
90 days of the lifting of the suspension does not result in a
deemed liquidation.

                               -4-


Issue #2

     There is also the question of whether protestant is liable
for interest on the antidumping duties assessed.  Section 778 of
the Trade Agreements Act of 1979 (19 U.S.C. 1677g (1979)) (the
1979 Act) provided that interest was payable on amounts deposited
on merchandise entered, or withdrawn from warehouse, for
consumption on and after the date on which notice of an
affirmative determination by the Commission is published.  The
1979 Act sets the interest rate at 8 percent per annum, or if
higher, the rate in effect under section 6621 of title 26 on the
date on which the rate or amount of the duty is finally
determined.  The interest was simple interest and was to be
determined at the rate in effect on the date of the final
determination.

     The 1979 Act was amended by 621 of the Trade and Tariff Act
of 1984 (the 1984 amendment) to provide that interest shall be
payable on amounts deposited on merchandise entered, or withdrawn
from warehouse, for consumption on and after the date of
publication of a countervailing or antidumping duty order.  The
1984 amendment provides that interest was generally payable at
the rate in effect under 26 U.S.C. 6621.  Section 6622 of title
26 provides that interest calculated under 6621 must be
compounded.  Thus, this amendment provided that interest be
compounded and payable at the IRS rate for any period of time
during which the entries were suspended.  Pursuant to this
method, the interest payable varies in accordance with the
interest set forth under 6621 for the periods of suspension.
This amendment became effective on October 30, 1984.

     In 1986, Congress clarified the effective date of the 1984
amendment by indicating that the 1984 amendment should apply to
all entries unliquidated on or after November 4, 1984.  Note
(b)(4) to 19 U.S.C. 1671 (Supp. 1988).  Therefore, the subject
entries should be liquidated in accordance with the 1984
amendment because they were still unliquidated at the time of the
1986 clarification.

HOLDING:

     The subject entries were properly liquidated within the time
period allowed at the rate of 42.54 percent ad valorem and are
subject to the interest provisions set forth in the 1984
Amendment.

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     This protest should be DENIED.

                                Sincerely,




                                John Durant, Director
                                Commercial Rulings Division