Dal-Tile Corp. v. US, Court No. 90-11-00598.

• Decision Date: 28 July 1993
• Docket Number: Court No. 90-11-00598.
• Citation: 829 F. Supp. 394,17 CIT 764
• Parties: DAL-TILE CORPORATION, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

829 F. Supp. 394

17 CIT 764

DAL-TILE CORPORATION, Plaintiff, v. UNITED STATES, Defendant.

Court No. 90-11-00598.

United States Court of International Trade.

July 28, 1993.

Brownstein Zeidman and Lore, Steven P. Kersner, Ronald M. Wisla, and Claudia G. Pasche, Washington, DC, for plaintiff.

Frank W. Hunger, Asst. Atty. Gen. of U.S., Joseph I. Liebman, Attorney-in-Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, James A. Curley, Dept. of Justice, New York City, Edward N. Maurer, Office of Asst. Chief Counsel, Intern. Trade Litigation, U.S. Customs Service, New York City, of counsel, for defendant.

OPINION AND JUDGMENT

CARMAN, Judge:

This case is before the Court on the parties' cross-motions for summary judgment after the United States Customs Service (Customs) denied plaintiff's protests over the imposition of supplemental countervailing duties on imports of ceramic tile from Mexico. Plaintiff claims Customs failed to liquidate the entries within the time allowed by 19 U.S.C. § 1504 (1988) and seeks to recover the supplemental countervailing duties paid on the entries. Defendant opposes the motion. This Court has jurisdiction under 28 U.S.C. § 1581(a) (1988).

I. BACKGROUND

A. The Facts

The countervailing duties at issue in this case arise out a final affirmative determination and countervailing duty order issued by the ITA on May 10, 1982. See Ceramic Tile From Mexico, 47 Fed.Reg. 20,012 (Dep't Comm.1982) (final affirm. determ.). This order directed Customs to suspend liquidation and collect cash deposits equal to 15.84% ad valorem, the amount of the subsidy found in the final determination. Id. at 20,015. Plaintiff posted cash deposits equal to 15.84% for entries made between May 10 and December 20, 1982. Pl's Mem at 2.

The ITA conducted a subsequent administrative review covering entries made between February 23 and December 31, 1982. Ceramic Tile From Mexico, 49 Fed.Reg. 9,919 (Dep't Comm.1984) (final admin. rev.). In this review, the ITA found net subsidies equal to 16.49% ad valorem and instructed Customs to liquidate the covered entries and assess countervailing duties equal to the net subsidy found. Id. at 9,921.

A Mexican exporter of ceramic tile later filed suit in the Court of International Trade (CIT) on March 22, 1984 to challenge the results of the 1982 administrative review. On March 24, 1984, the CIT issued a preliminary injunction suspending liquidation. On May 9, 1986, the Court issued an opinion upholding the ITA's determination and dissolving the injunction suspending liquidation. Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 636 F.Supp. 961 (1986).

On July 16, 1986, the CIT issued a new injunction suspending liquidation pending the outcome on appeal. On February 2, 1987, the Court of Appeals for the Federal Circuit affirmed the CIT's decision upholding the ITA's determination of countervailing duties of 16.49% ad valorem. Ceramica Regiomontana, S.A. v. United States, 810 F.2d 1137 (1987). On February 28, 1987, the CIT dissolved the injunction suspending liquidation.

Customs did not liquidate the entries covered by the 1982 administrative review until August 19 and August 26, 1988, approximately eighteen months after the appeal to the Federal Circuit became final.¹ At that time, Customs assessed supplemental countervailing duties of .65% ad valorem plus interest, an amount representing the difference between the duties found in the final determination and the administrative review (16.49% less 15.84%). Plaintiff's action challenges the assessment of these supplemental duties.

B. Statutory Provisions

The statute at issue in this case is 19 U.S.C. § 1504, which provides for the following in relevant part:

(a) Liquidation

Except as provided in subsection (b) of this 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 of record. Notwithstanding section 1500(e) of this title, notice of liquidation need not be given of an entry deemed liquidated.

(b) Extension

The Secretary may extend the period in which to liquidate an entry by giving notice of such extension to the importer of record in such form and manner as the Secretary shall prescribe in regulations, if —

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

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

(3) the importer of record requests such extension and shows good cause therefor.

(c) Notice of suspension

If the liquidation of any entry is suspended, the Secretary shall, by regulation, require that notice of such suspension be provided to the importer of record concerned and to any authorized agent and surety of such importer of record.

(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 of record, unless liquidation continues to be suspended as required by statute or court order. When such suspension of liquidation is removed, the entry shall be liquidated within 90 days therefrom.

Customs Procedural Reform and Simplification Act of 1978, Pub.L. No. 95-410, 92 Stat. 888, as amended 19 U.S.C. § 1504 (1988).

II. CONTENTIONS OF THE PARTIES

Plaintiff contends the subject entries should have been "deemed liquidated" at the rate at which they were entered, 15.84% ad valorem. Pl's Mem at 4. Plaintiff asserts that because Customs did not liquidate the entries within one year after the CIT dissolved the final injunction against liquidation and Customs did not receive an extension permitting a delay in liquidation, 19 U.S.C. § 1504(a) required Customs to treat the entries as "deemed liquidated" at 15.84% ad valorem. Id. at 6-7.

Plaintiff argues further that Congress intended to place a general one-year limit on the time available to Customs to liquidate entries absent specifically enumerated circumstances permitting an extension of time. Id. at 7-8. According to plaintiff, even though the ninety-day limit imposed by 19 U.S.C. § 1504(d) is directory rather than mandatory, the one-year limit imposed by 19 U.S.C. § 1504(a) is mandatory. Id. at 9. Plaintiff urges that Congress did not give Customs unbridled discretion in deciding when to liquidate entries after the dissolution of a court-ordered suspension of liquidation. Id. Therefore, plaintiff asserts that the nonrecognition of time limits would render § 1504's scheme meaningless. Id. at 9-12.

Defendant contends that § 1504(d) states the general rule governing unliquidated entries that are four years old and provides for an exception for court-ordered suspensions. Def's Mem at 3. According to defendant, § 1504(d) applies to the entries in this case because the entries occurred more than four years before the CIT terminated the final suspension. Id. Though defendant concedes Customs did not comply with the ninety-day requirement in § 1504(d), defendant nevertheless argues that the "deemed liquidated" provision in the first sentence does not apply to the subsection's second sentence because the second sentence does not contain such a provision, citing Canadian Fur Trappers Corp. v. United States, 12 CIT 612, 623, 691 F.Supp. 364, 367 (1988), aff'd, 884 F.2d 563 (1989). Id. at 4. The absence of a deemed liquidated penalty in the second sentence, defendant asserts, demonstrates that Congress did not intend to impose the penalty on entries whose liquidation was suspended for four years and which have not been liquidated within the ninety-day discretionary period established by § 1504(d). Id. at 10.

III. DISCUSSION

This case is before the Court on the parties' cross-motions for summary judgment. Under the rules of this Court, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." USCIT R. 56(d). After reviewing all of the parties' submissions, the Court finds that there is no genuine issue of material fact. As a result, the Court will only address the remaining question of law.

The question of law presented is whether Customs failed to liquidate the subject entries within the time allowed by 19 U.S.C. § 1504(d) so as to trigger § 1504's deemed liquidation provisions. Because the issue in this case relates to Customs' construction of a statute it administers, Customs is entitled to substantial deference from this Court. Allied-Signal Aerospace Co. v. United States, 996 F.2d 1185, 1191 (Fed.Cir.1993) (citing Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837, 843-44, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984)). For the reasons which follow, the Court concludes that Customs liquidated the entries within the time allotted by § 1504(d) and did not cause § 1504's deemed liquidation provisions to apply to the subject entries.

Previous decisions of this Court have clarified the meaning of § 1504's provisions. The most pertinent of these decisions is Canadian Fur, 12 CIT at 612, 691 F.Supp. at 364. As in the instant case, the liquidation in Canadian Fur was suspended by court order for more than four years after the importer entered the subject merchandise. Id. at 613, 691 F.Supp. at 366. Once the CIT dissolved the final suspension order, Customs waited approximately ten months before liquidating the entries. Id., 691 F.Supp. at 366. Plaintiff contended that the ninety-day time limit imposed by § 1504(d) was mandatory and Customs'...