International Trading Co. v. U.S., 04-1259.

• Decision Date: 16 June 2005
• Docket Number: No. 04-1259.,04-1259.
• Parties: INTERNATIONAL TRADING CO., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

412 F.3d 1303

INTERNATIONAL TRADING CO., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

No. 04-1259.

United States Court of Appeals, Federal Circuit.

June 16, 2005.

R. Brian Burke, Rode & Qualey, New York, New York, argued for plaintiff-appellee. With him on the brief was William J. Maloney.

James A. Curley, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellant. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, of Washington, DC, and Barbara S. Williams, Attorney-in-Charge, International Trade Field Office, of New York, New York. Of counsel on the brief were Edward N. Maurer, Attorney, Office of Assistant Chief Counsel, United States Customs and Border Protection, of New York, New York, and Dean A. Pinkert, Attorney, Office of Chief Counsel for Import Administration, United States Department of Commerce, Washington, DC.

Before LOURIE, RADER, and SCHALL, Circuit Judges.

SCHALL, Circuit Judge.

The United States appeals from a decision of the United States Court of International Trade holding that the United States Customs Service ("Customs")¹ did not liquidate a particular entry of goods within the statutorily allotted time, and that therefore, pursuant to 19 U.S.C. § 1504(d),² the entry was deemed liquidated at the rate and amount of duty deposited by the importer. The government challenges the court's ruling as to when the period for Customs to liquidate the entry began to run. It also challenges the court's interpretation of section 1504(d). Because we reject the government's arguments, we affirm the court's decision.

BACKGROUND

I.

In March of 1994, International Trading Company ("ITC") imported shop towels from a company in Bangladesh, Sonar Cotton Mills, Ltd. ("Sonar"). At the time of their entry into the United States, the towels were subject to an antidumping duty order that required a cash deposit of an antidumping duty computed at the rate of 2.72%. This resulted in ITC depositing an antidumping duty in the amount of $1962.48 with respect to the March 1994 entry. On April 14, 1995, the Department of Commerce ("Commerce") published a notice in the Federal Register that it would conduct a third administrative review of the antidumping duty order, covering the period from March 1, 1994, to February 28, 1995. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 60 Fed.Reg. 19,017 (Apr. 14, 1995). Final liquidation of the March 1994 entry was therefore suspended pursuant to 19 U.S.C. § 1673b(d).

The final results of the third administrative review were published on October 30, 1996. Shop Towels from Bangladesh; Final Results of Administrative Review, 61 Fed.Reg. 55,957 (Oct. 30, 1996). The final results announced an antidumping duty rate of 27.31% for Sonar's towels for the period March 1, 1994, through February 28, 1995. On July 1, 1997, Commerce issued liquidation instructions to Customs by e-mail, informing Customs that suspension of liquidation was lifted and ordering Customs to liquidate entries subject to the administrative review.

On September 26, 1997, almost one year after publication of the final results, Customs liquidated ITC's March 1994 shop towel entry at the rate determined in the third administrative review. This resulted in $17,779.92 in additional antidumping duty being owed with respect to the entry. ITC protested the liquidation, pointing to 19 U.S.C. § 1504(d). Section 1504(d) provides that "[e]xcept as provided in section 1675(a)(3) of this title," when a suspension of liquidation is removed, Customs shall liquidate the entry, unless liquidation is extended, within six months after receiving notice of the removal from Commerce. The statute also provides that "[a]ny entry... not liquidated by Customs within six months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity and amount of duty asserted at the time of entry by the importer of record." Id. ITC argued that the suspension of liquidation was removed in this case on October 30, 1996, when the results of the third administrative review were published. Therefore, according to ITC, pursuant to section 1504(d), the March 1994 entry was deemed liquidated six months later on April 30, 1997, at the rate in effect (2.72%) and the amount of duty deposited ($1962.48) at the time of entry. After Customs denied the protest, ITC paid the increased antidumping duty.

II.

On February 25, 2000, ITC filed suit in the Court of International Trade, seeking a refund of the $17,779.92 in additional antidumping duty it had paid with respect to the March 1994 entry of shop towels. Eventually moving for summary judgment, ITC contended that the March 1994 entry should have been deemed liquidated at the original deposit rate of 2.72% pursuant to 19 U.S.C. § 1504(d), because Customs had failed to liquidate the entry within the allotted six-month period. Cross-moving for summary judgment, the government argued that publication of the final results of an administrative review in the Federal Register does not constitute notice to Customs of the removal of a suspension of liquidation within the meaning of section 1504(d). It also argued that the proviso in the first sentence of section 1504(d), "[e]xcept as provided in section 1675(a)(3) of this title," means that if an entry is subject to section 1675(a)(3), it is not subject to the deemed liquidation mandate of section 1504(d). For these reasons, the government urged, the six-month time period for liquidating the March 1994 entry of shop towels did not begin until July 1, 1997, when Commerce issued liquidation instructions to Customs by e-mail.

Ruling on the motions for summary judgment, the Court of International Trade held that, in accordance with 19 U.S.C. § 1504(d), the March 1994 entry was deemed liquidated at the 2.72% deposit rate because Customs had failed to liquidate the entry within the allotted six-month period. Int'l Trading Co. v. United States, 306 F.Supp.2d 1265 (CIT 2004) ("Summary Judgment Order"). The court rejected the government's contention that publication of the final results of the third administrative review in the Federal Register did not constitute notice to Customs of removal of the suspension of liquidation within the meaning of 1504(d). In addressing the government's argument on this point, the court relied on our decision in International Trading Co. v. United States, 281 F.3d 1268 (Fed.Cir.2002) ("International Trading II"). Summary Judgment Order, 306 F.Supp.2d at 1266. In International Trading II, we held that the April 1994 suspension of liquidation of shop towel entries from Bangladesh during the period March 1, 1993, to February 28, 1994, was removed upon publication of the final results of the second administrative review in the Federal Register, and that this publication constituted notice to Customs within the meaning of 19 U.S.C. § 1504(d).

The Court of International Trade noted that the case before it was similar in all material respects to the action that was the subject of our decision in International Trading II, except that the entry at issue in this case was made approximately one month after the last entry covered by International Trading II. Summary Judgment Order, 306 F.Supp.2d at 1266. Unlike the entries at issue in International Trading II, which were covered by the second administrative review, the entries at issue in this case were covered by the third administrative review and, consequently, were subject to the 1994 amendments under the Uruguay Round Agreements Act ("URAA"), Pub.L. No. 103-465, 108 Stat. 4809 (1994). These amendments added the "[e]xcept as provided in section 1675(a)(3) of this title" proviso to section 1504(d). Section 1675(a)(3) provides, in relevant part, that if Commerce orders the liquidation of entries pursuant to an administrative review, the entries are to be liquidated "promptly and, to the greatest extent practicable, within 90 days after the instructions to Commerce are issued." 19 U.S.C. § 1675(a)(3)(B). The court rejected the government's contention that the proviso meant that an entry subject to the administrative review provisions of section 1675(a)(3) is exempt from the deemed liquidation mandate of section 1504(d). The Court of International Trade determined that sections 1504(d) and 1675(a)(3) work together to effectuate expedient Customs liquidation in the following manner:

Under § 1675(a)(3), an entry that is not liquidated by Customs within 90 days after the Commerce liquidation order confers the right upon the importer to demand an explanation from the Secretary of the Treasury. If the entry has still not been liquidated (or extended) six months after notice of removal of suspension (i.e. publication in the Federal Register), then § 1504(d) (1994) directs that liquidation be effected by operation of the law.

Summary Judgment Order, 306 F.Supp.2d at 1275.

The court consequently granted ITC's motion for summary judgment, ruling that the period for deemed liquidation pursuant to section 1504(d) was not triggered when Customs received e-mail liquidation instructions from Commerce on July 1, 1997, but rather, when the results of the third administrative review were published in the Federal Register on October 30, 1996. As a result, the court held, the March 1994 entry was deemed liquidated by operation of law six months later on April 30, 1997, at the rate asserted and the amount of duty deposited at the time of entry. Summary Judgment Order, 306 F.Supp.2d at 1278-79.

DISCUSSION

I.

We review the Court of International Trade's grant of summary judgment for correctness as a matter of law, deciding de novo (i) the proper interpretation of the governing statute and regulations; and (ii) whether genuine issues of material fact exist. Int'l Light Metals v. United States, 194...