Heraeus-Amersil, Inc. v. United States, 81-33

• Decision Date: 24 April 1981
• Docket Number: No. 81-33,Court No. 81-3-00251.,81-33
• Citation: 515 F. Supp. 770,1 CIT 249
• Parties: HERAEUS-AMERSIL, INC., (formerly Amersil, Inc.), Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

515 F. Supp. 770

1 CIT 249

HERAEUS-AMERSIL, INC., (formerly Amersil, Inc.), Plaintiff, v. UNITED STATES, Defendant.

No. 81-33; Court No. 81-3-00251.

United States Court of International Trade.

April 24, 1981.

Fitch, King & Caffentzis, New York City (Richard C. King and James Caffentzis, New York City, at hearing and on briefs), for plaintiff.

Thomas S. Martin, Acting Asst. Atty. Gen., Washington, D. C., Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, New York City (Sidney N. Weiss, New York City, at hearing and on briefs), for defendant.

FORD, Judge:

Plaintiff has invoked the jurisdiction of the court under 28 U.S.C. § 1581(i)(1) and (4) and 28 U.S.C. § 1585 by filing a summons and complaint on March 5, 1981, together with a motion for an order to show cause why a preliminary injunction should not be granted. The order to show cause was granted on March 6, 1981 and the matter was set for hearing on March 12, 1981.

At the hearing two witnesses were called on behalf of plaintiff. Defendant moved to dismiss on the grounds the action fails to state a cause of action upon which relief could be granted. This motion was based upon the Anti-Injunction Act, 26 U.S.C. § 7421(a) and the Declaratory Judgment Act, 28 U.S.C. § 2201, both of which prohibit the issuance of relief when it involves the collection of a tax. Additionally, defendant contended plaintiff had not met its burden of proof for a preliminary injunction. At the conclusion of the hearing defendant moved, under Rule 65(a)(2) to consolidate the hearing with a motion for summary judgment, pursuant to Rule 56(b) of the rules of this court, which provides for defending party to so move notwithstanding an answer to the complaint has not been filed. Plaintiff joined in the motion for summary judgment pursuant to Rule 56(a). The parties were granted additional time to file briefs on the question of summary judgment.

Plaintiff is a substantial importer of merchandise. On December 19, 1980 six entries covering merchandise previously imported were liquidated by the United States Customs Service reflecting increased duties of $73,583.75 determined to be due on liquidation. On January 23, 1981, the regional commissioner's office advised plaintiff by letter that this sum was due and payable upon receipt of the bill (liquidation). The letter further requested plaintiff or his representative to appear at the customhouse and bring payment or proof of payment. Plaintiff was also advised if payment were not made within ten working days from the date of the letter its privilege of delayed payment of estimated duties (ten days from the release of merchandise) would be denied and thereafter deposit of estimated duties would be required on entry. The affidavit of Remigio Ferrara, Chief, Revenue Branch, Accounting Division, in Washington, D.C., further stated such sums are due even if a protest were filed.

Counsel for plaintiff sought and was granted an extension of time to review the entry papers which were not available for review at that time. After review of the papers counsel for plaintiff determined that increased duties on the value of the merchandise were correct, but not on the classification. On February 13, 1981 plaintiff caused to be paid the sum of $61,333.17 representing the increased duties on the valuation of the merchandise covered by the six entries. On the same date, plaintiff protested the classification of the six entries. Jeffrey Margalit, Deputy Assistant Regional Commissioner, Financial Management Division, Region II, of the United States Customs Service, in his affidavit stated said sum was deposited "strictly for accounting reasons" and was applied to all entries except entry No. 413863, leaving a balance of $12,250.58 outstanding. On February 20, 1981, customs advised plaintiff its privilege of delayed payment of estimated duty was being suspended immediately since the importer was substantially delinquent in the payment of customs bills.

Defendant's motion for consolidation under Rule 65(a)(2) and for summary judgment under Rule 56, in which plaintiff joined, obviates the necessity of deciding plaintiff's motion for a preliminary injunction and defendant's motion to dismiss. Both parties agree there are no material facts in dispute and hence the matter is ripe for summary judgment.

Based upon the facts of record there is no dispute that plaintiff is indebted to the Customs Service in the sum of $12,250.58 as a result of the liquidation of six entries on December 19, 1980.

The issue presented to the court is the time when the increased duties determined to be due on liquidation must be paid to the Customs Service and whether the applicability of the "sanctions" imposed by the Customs Service requiring deposits of estimated duties on entry were proper under the provisions of 19 CFR 142.13(b) and 19 CFR 142.14.

The dispute as to the proper classification of the merchandise, for which a protest has been filed, is not before the court. However, the issue of the proper classification may be brought under 28 U.S.C. § 1581(a) by the filing of a summons within 180 days from the denial of the protest (28 U.S.C. § 2636(a)), the payment of duties (28 U.S.C. § 2637(a)), and payment of a filing fee (28 U.S.C. § 2633(a)).

The primary issue as indicated supra is the time the duties must be paid. Under the provisions of 28 U.S.C. § 2637(a), an action contesting the denial of a protest may be commenced in this court "only if all liquidated duties, charges, or exactions have been paid at the time the action is commenced * * *." Suffice it to say no such action has been instituted nor has the protest filed been denied or affirmed as of the time of the hearing. The provisions of 28 U.S.C. § 2637(d) cover all other civil actions and require exhaustion of administrative remedies where appropriate. Accordingly, plaintiff is properly before the court under 28 U.S.C. § 1581(i). Wear Me Apparel Corporation v. United States, 1 CIT ___, 511 F.Supp. 814 (1981); Sanho Collections, Limited v. Robert E. Chasen, Commissioner of Customs, et al., 1 CIT ___, 505 F.Supp. 204 (1980).

A review of the legislative history of prior statutory provisions is of assistance in placing the present statutory provision in perspective. Under the Tariff Act of 1922, Section 514 provided, in effect, that a liquidation was final unless the importer, consignee, or agent, within 60 days after liquidation, filed a protest and paid the full amount of duties, charges, and exactions ascertained to be due.

The latter portion of the above provision was transferred to Section 515 of the Tariff Act of 1930 and the language was changed to provide as follows:

Upon the filing of such protest the collector shall within ninety days thereafter review his decision, and may modify the same in whole or in part and thereafter remit or refund any duties, charge, or exaction found to have been assessed or collected in excess, or pay any drawback found due, of which notice shall be given as in the case of the original liquidation, and against which protest may be filed within the same time and in the same manner and under the same conditions as against the original liquidation or decision. If the collector shall, upon such review, affirm his original decision, or if a protest shall be filed against his modification of any decision, and, in the case of merchandise entered for consumption, if all duties and charges shall be paid, then the collector shall forthwith transmit the entry and the accompanying papers, and all the exhibits connected therewith, to the United States Customs Court for due assignment and determination, as provided by law. Such determination shall be final and conclusive upon all persons, and the papers transmitted shall be returned, with the decision and judgment order thereon, to the collector, who shall take action accordingly, except in cases in which an appeal shall be filed in the United States Court of Customs and Patent Appeals within the time and in the manner provided by law.

The revision of section 515, supra, and the intent of Congress was expressed in House of Representatives Report No. 7 to Accompany H.R.2667 at page 179,...