American Permac, Inc. v. United States

• Decision Date: 12 August 1986
• Docket Number: Court No. 85-1-00050.
• Citation: 642 F. Supp. 1187,10 CIT 535
• Parties: AMERICAN PERMAC, INC., and Boewe Maschinenfabrik, GmbH, Plaintiffs, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

642 F. Supp. 1187

10 CIT 535

AMERICAN PERMAC, INC., and Boewe Maschinenfabrik, GmbH, Plaintiffs, v. The UNITED STATES, Defendant.

Court No. 85-1-00050.

United States Court of International Trade.

August 12, 1986.

Barnes, Richardson & Colburn (Rufus E. Jarman, Jr.), New York City, for plaintiffs.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C. (Velta A. Melnbrencis), New York City, for defendant.

MEMORANDUM OPINION AND ORDER

WATSON, Judge:

This action is brought by Boewe Maschinenfabrik, GmbH ("Boewe"), a West German manufacturer of drycleaning machinery, and American Permac, Inc. ("API"), Boewe's American distributor. The plaintiffs contest the final results of a periodic review of an antidumping finding, conducted by the United States Department of Commerce, International Trade Administration ("ITA") pursuant to Section 751(a) of the Tariff Act of 1930, 19 U.S.C. § 1675(a). 50 Fed.Reg. 1256 (Jan. 10, 1985). The ITA found that drycleaning machinery manufactured by Boewe and sold in the United States between July 1, 1979 and June 30, 1980 was dumped at a weighted average margin of 30.05 percent.¹

Plaintiffs have moved for partial judgment upon the agency record, pursuant to Rule 56.1 of this court, contending that application of the ITA's January 10, 1985 determination to the entries covered by the review is barred by the four-year limitation on liquidations imposed under 19 U.S.C. § 1504(d). By that provision, any entry of merchandise not liquidated within four years after the date of entry or final withdrawal from warehouse shall be "deemed liquidated" at the amount of duty asserted at the time of entry by the importer "unless liquidation continues to be suspended as required by statute or court order." For the reasons set forth below, the court concludes that suspension of liquidation was required by statute so that § 1504(d) does not bar application of the challenged determination to the entries under review.²

Background

The ITA review involved in this case arises from a 1972 antidumping finding by the Treasury Department under the Anti-dumping Act of 1921, 19 U.S.C. § 160 et seq. (1976). 37 Fed.Reg. 23715 (November 8, 1972). Because that finding remained in effect on January 1, 1980, the effective date of the Trade Agreements Act of 1979 ("1979 Act")³, the amount of duties imposed under the finding became subject to periodic review pursuant to 19 U.S.C. § 1675(a) (1982).⁴See 45 Fed.Reg. 20511 (March 28, 1980).

In its preliminary results, published December 14, 1981 (46 Fed.Reg. 60868), the ITA calculated the weighted average margin for the Boewe imports under review to be 65.95 percent. The high margin was due in part to the agency's denial of certain selling expense adjustments which it felt Boewe and API had not properly quantified in their questionnaire responses.

On February 8, 1982, the ITA conducted a hearing pursuant to 19 C.F.R. § 353.47. Subsequently, Boewe and API filed two submissions of additional data. The first, filed February 25, 1982, pertained to trade-in allowances in the German home market. The second, filed March 18, 1982, corrected certain errors Boewe and API had discovered in their prior submissions. The ITA initially deemed this new data to be untimely and refused to incorporate it into the final margin calculations. However, prior to issuance of a final determination, the West German Embassy contacted the Commerce Department expressing concern over certain aspects of the ITA's computations. West German representatives thereafter met with Commerce officials and requested delay in the publication of the final results to allow the West German government time to submit additional legal arguments. In January 1983, Commerce agreed to incorporate the February and March, 1982 submissions of Boewe and API in the final determination.

The ITA completed its final draft in the summer of 1983, finding a weighted average margin for Boewe entries of 31.03 percent. The proposed notice was approved on August 9, 1983 and forwarded to the Federal Register for publication on August 10. However, because the West German government sought further discussion on legal aspects of the review, the notice was recalled. Following a meeting with West German officials on August 24, 1983, the ITA decided not to publish the final results and to further review certain data. The final results which the ITA ultimately issued were signed by the Under Secretary of Commerce on January 3, 1985 and published on January 10, 1985. As noted above, the weighted average margin calculated for Boewe equipment was 30.05 percent.

Discussion

"Liquidation" of an entry of merchandise is defined as the final computation by the Customs Service of all duties (including any antidumping or countervailing duties) accruing on that entry. See generally Ambassador Division of Florsheim Shoes v. United States, 748 F.2d 1560, 1562 (Fed.Cir.1984). Under 19 U.S.C. § 1504 (1982)⁵, if Customs fails to liquidate entries within specified time limits, those entries are 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.⁶ The general time limit on liquidation, imposed under § 1504(a), is one year from the date of entry or final withdrawal from warehouse. However, § 1504(b) permits Customs to extend that period, by providing notice to the importer, for any of the following reasons:

(1) information needed for the proper appraisement or classification of the merchandise is not available to the appropriate customs officers;

(2) liquidation is suspended as required by statute or court order; or

(3) the importer, consignee, or his agent requests such extension and shows good cause therefor.

Where liquidation of an entry is "suspended", notice to the importer and any authorized agent and surety is required under § 1504(c). Finally, under § 1504(d), any entry not liquidated at the expiration of four years from the date of entry or withdrawal from warehouse is deemed liquidated at the initially asserted amount of duty "unless liquidation continues to be suspended as required by statute or court order."⁷

In this case, the ITA did not publish its review determination until over four years after the latest entry date covered by the review. Plaintiffs do not dispute that the pendency of the § 1675(a) review necessitated an extension of the liquidation period beyond the one-year deadline specified in § 1504(a). They contend, however, that there was no lawful basis for an extension or suspension beyond the four-year limit under § 1504(d). Plaintiffs assert that there was no statutory authority for a suspension beyond that limit; and since defendant failed to seek a court ordered suspension, the entries should have been deemed liquidated after four years.

Although apparently no court has addressed a challenge to an ITA review based on 19 U.S.C. § 1504(d), in Ambassador Division of Florsheim Shoes v. United States, supra, the Federal Circuit had occasion to interpret the terms of 19 U.S.C. § 1504(a) and (b) in connection with a challenge to a periodic review of a countervailing duty determination. The court therein upheld the ITA's authority to apply the final results of its review retrospectively to entries of merchandise covered by the review. The court found that authority in the language of § 1504(b)(1) and (2), which it concluded could be invoked to extend the period within which liquidation must occur beyond the one-year limit prescribed in § 1504(a). Such an extension could be based on § 1504(b)(1), inasmuch as information concerning liability for countervailing duties (which the court reasoned "could well be considered an item of `classification'") was not available to Customs officers until the ITA had completed its review. 748 F.2d at 1563. The extension could also be based on § 1504(b)(2) because the administrative review scheme established in 19 U.S.C. § 1675(a) would be frustrated unless it created an implied statutory requirement that liquidation be suspended. Id. at 1563-65.

Applying the Florsheim analysis to this case, it is equally true that the defendant could invoke § 1504(b)(1) to extend the liquidation period beyond one year, since liability for antidumping duties is no less an "item of classification" than liability for countervailing duties. However, that ground for extension is not incorporated in § 1504(d), which sets the outside limit on extensions at three extra years. Consequently, the fact that Customs officials lack information necessary to assess antidumping duties due to the ITA's failure to complete its review would not, of itself, justify extending the liquidation deadline beyond four years.

The basis for extending the liquidation period found in § 1504(b)(2)—that "liquidation is suspended as required by statute" —is also satisfied in this case. In concluding that a periodic review of a countervailing duty determination triggers an implied statutorily required suspension of liquidation, the Federal Circuit in Florsheim focused on the "absurd consequences" of holding otherwise. That rationale is unnecessary where, as here, the administrative review is of an antidumping finding. Because 19 U.S.C. § 1675(a)(2) expressly calls for the retrospective application of antidumping review determinations (see ante, note 4), suspension of liquidation during the pendency of a periodic antidumping review is unquestionably "required by statute".

As previously noted, the suspension exception in § 1504(b)(2) is also incorporated in § 1504(d) as an exception to the four-year outside limit on liquidation. Accordingly, so long as suspension of liquidation continues to be required by statute (or court order), a suspension may continue indefinitely. In this case, suspension of liquidation was required by virtue of § 1675(a)(2). Hence, the court must determine whether that...