ASG Industries, Inc. v. United States

• Citation: 467 F. Supp. 1200
• Decision Date: 29 March 1979
• Docket Number: C.D. 4794,Court No. 77-5-00879.
• Court: United States Court of Customs and Patent Appeals
• Parties: ASG INDUSTRIES, INC., PPG Industries, Inc., Libbey-Owens-Ford Company, and C E Glass, Plaintiffs, v. UNITED STATES, Defendant.

467 F. Supp. 1200

ASG INDUSTRIES, INC., PPG Industries, Inc., Libbey-Owens-Ford Company, and C E Glass, Plaintiffs, v. UNITED STATES, Defendant.

C.D. 4794; Court No. 77-5-00879.

United States Customs Court.

March 29, 1979.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Stewart & Ikenson, Washington, D. C. (Eugene L. Stewart and Frederick L. Ikenson, Washington, D. C., of counsel), for plaintiffs.

Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C., David M. Cohen, Branch Director, Joseph I. Liebman, New York City, Atty. in Charge, Field Office for Customs Litigation, John J. Mahon and Sidney N. Weiss, Trial Attys., New York City, for defendant.

MALETZ, Judge:

Introduction

Plaintiffs are domestic manufacturers and wholesalers of float glass. In 1974 they filed with the Commissioner of Customs a petition under 19 U.S.C. § 1303, alleging that bounties or grants were being paid or bestowed, directly or indirectly, upon the manufacture or production of float glass in Italy or upon the exportation of float glass from Italy. Included among the alleged bounties or grants described in plaintiffs' petition were certain benefits received by float glass manufacturers in Italy under various regional development programs administered by the Italian Government, including investment grants, low-interest rate financing, and the reduction of the contribution to state welfare organizations by the float glass manufacturers. These benefits were more than de minimis, and were paid in respect of expenditures incurred by float glass producers in the creation or expansion of float glass production facilities in certain regions of Italy.

Thereupon, the Secretary of the Treasury conducted an investigation and published, on July 3, 1975, a "Notice of Preliminary Countervailing Duty Determination" in the Federal Register which read in part (40 Fed.Reg. 28105):

On the basis of an investigation conducted pursuant to § 159.47(c) Customs regulations (19 C.F.R. 159.47(c)), it has tentatively been determined that benefits have been received under various programs maintained by the Italian Government. These include Government assistance in the form of investments sic grants, low-interest rate financing, and other incentives for facilities located in economically depressed areas, as well as preferential financing available outside the economically depressed areas.

Benefits derived from programs such as those which are the subject of this investigation can, in some circumstances, constitute bounties or grants within the meaning of the law. Since the information thus far made available concerning these programs has not been sufficient to permit a thorough analysis of their nature and effect, it has been determined preliminarily that imports of float glass from Italy benefit from the payment or bestowal of a bounty or grant directly or indirectly, within the meaning of the sic section 303 of the Tariff Act of 1930, as amended, by reason of the incentive programs mentioned above.

Thereafter, an "Amendment to Notices of Preliminary Countervailing Duty Determinations" was published on August 15, 1975 (40 Fed.Reg. 34423), extending the time within which the public could make submissions.

On January 7, 1976, the Treasury Department published in the Federal Register a "Notice of Final Countervailing Duty Determination" which provided (41 Fed.Reg. 1274):

After consideration of all information received, it has been determined that imports of float glass from Societa Italiana Vetro, S.p.A. and Fabbrica Pisana, S.p.A. benefit from the payment or bestowal of bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303) by reason of various incentive programs including investment grants, special tax reductions, low-interest rate financing and the reduction of the contribution to state welfare organizations by the float glass manufacturers. It aso sic has been determined that float glass produced by Verrera di Vernante, S.p.A. does not benefit from the payment or bestowal of bounties or grants. Accordingly, notice is hereby given that float glass imported directly or indirectly from Italy produced by Societa Italiana Vetro, S.p.A. (SIV) and Fabbrica Pisana, S.p.A. (Pisana), entered or withdrawn from warehouse for consumption on or after January 7, 1976, will be subject to payment of countervailing duties equal to the net amount of any bounty or grant determined or estimated to have been paid or bestowed. This determination is based on the best information available, since the three firms named above have declined to provide any detailed information regarding the benefits they have received under these programs.

In accordance with section 303, until further notice the net amount of such bounties or grants under the information presently available has been estimated to be 10% ad valorem for float glass produced by Societa Italiana Vetro, S.p.A. and Fabbrica Pisana, S.p.A. Declarations of the net amount of the bounties or grants ascertained and determined, or estimated, to have been paid, directly or indirectly, upon the manufacture, production, or exportation of float glass from Italy manufactured by SIV and Pisana will be published subsequently in the Federal Register.

Effective on January 7, 1976, and until further notice, upon entry for consumption or withdrawal from warehouse for consumption of such dutiable float glass from Italy manufactured by SIV and Pisana imported directly or indirectly from Italy which benefits from such bounties or grants, there shall be collected, in addition to any other duties estimated or determined to be due, countervailing duties in the amount ascertained in accordance with the above declaration.

The liquidation of all entries for consumption or withdrawals from warehouse for consumption of such dutiable float glass from Italy manufactured by SIV and Pisana imported directly or indirectly from Italy which benefits from such bounties or grants and is subject to the order shall be suspended pending declarations of the net amounts of the bounties or grants paid or bestowed. A deposit of the estimated countervailing duty, in the amount of 10% ad valorem for float glass from Italy manufactured by SIV and Pisana shall be required at the time of entry for consumption or withdrawal from warehouse for consumption.

Following the publication of this countervailing duty determination, the Secretary of the Treasury or his delegate, without having given any notice to the plaintiffs or to the public, engaged in a series of communications with representatives of the Italian Government to elicit information from the Italian Government which would have enabled the Secretary of the Treasury or his delegate to consider further whether bounties or grants were received by Societa Italiana Vetro, S.p.A. (SIV).

On March 8, 1977, without any advance notice having been given to the plaintiffs or to the public, a notice was published by the Treasury Department in the Federal Register, 42 Fed.Reg. 13016-17, T.D. 77-77, which modified the countervailing duty determination of January 7, 1976, by excluding therefrom float glass from Italy produced by SIV. The notice stated in pertinent part:

Because SIV and Pisana declined to provide any detailed information prior to the aforementioned determination regarding the benefits each received, the determination was based on the best information available, and the net amount of the bounties or grants was estimated at 10 percent ad valorem for float glass produced by both companies. Effective on January 7, 1976, liquidation was suspended of all entries for consumption or withdrawals from warehouse for consumption of such dutiable float glass produced by SIV and Pisana imported directly or indirectly from Italy which benefits from such bounties or grants.

Information has now been received with respect to SIV which permits a more complete analysis of the alleged bounties and grants. Under various regional development programs administered by the Government of Italy, it now appears that an investment grant, preferential financing and a reduction in the required contribution to the state welfare organization have been given to SIV. No special tax reductions have been utilized by SIV. The Italian Government has advised the Treasury Department that the benefits received by SIV have the effect of offsetting disadvantages which would discourage SIV from moving to and expanding in less prosperous regions. Inasmuch as SIV sells a preponderance of its production in the European Community — more than 97 percent in 1975 — the level of its exports outside the European Community is a small percentage of its production, and the amount of assistance provided by the government programs to SIV totaled less than three percent of the value of float glass it produced, those benefits are not regarded as bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303).

For the reasons stated above, it is hereby determined that no bounty or grant is being, or has been, paid or bestowed directly or indirectly, upon the manufacture, production or exportation of float glass from Italy produced by Societa Italiana Vetro, S.p.A. within the meaning of section 303, Tariff Act of 1930, as amended (19 U.S.C. 1303), and T.D. 76-9 is hereby modified so as to exclude float glass from Italy produced by SIV.

Accordingly, it has been ascertained, determined or estimated and hereby declared, that the net amount of the bounty or grant paid or bestowed upon the subject merchandise produced by SIV is 0 percent ad valorem, and no countervailing duties will be collected upon the liquidation of entries of the subject merchandise for consumption or withdrawals from warehouse for consumption for the period January 7, 1976, through the date of publication of this notice in the Federal Register. Furthermore, the order to suspend liquidation of all

...