Rheem Metalurgica S/a v. U.S.
| Decision Date | 20 December 1996 |
| Docket Number | Court No. 92-06-00380.,Slip Op. No. 96-196. |
| Citation | 951 F.Supp. 241 |
| Parties | RHEEM METALURGICA S/A, formerly Rheem Empreendimentos Industriais E Comerciais S.A., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
David P. Schulingkamp, New Orleans, LA, for plaintiff.
Frank W. Hunger, Washington, DC, Assistant Attorney General of the United States; Joseph I. Liebman, Attorney-in-Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (James A. Curley, New York City); Edward N. Maurer, Spring Valley, NY, Office of the Assistant Chief Counsel, United States Customs Service, of Counsel, for defendant.
This case is before the Court on cross-motions for summary judgment pursuant to USCIT R. 56. Plaintiff challenges the United States Customs Service's ("Customs") denial of its protests concerning the assessment and collection of countervailing duties on nine entries of cold rolled carbon steel sheet from Brazil. Plaintiff moves for summary judgment, contending the entries became liquidated by operation of law on the dates of their fourth anniversary of entering into the United States. Plaintiff asserts the goods became liquidated by operation of law at the value, quantity, rate of duty and amount of duty asserted by plaintiff at the time of entry, and claims that because plaintiff did not assert countervailing duties were due in the entry summary documentation accompanying the nine entries, Customs improperly assessed and collected countervailing duties when the goods ultimately were liquidated.
Defendant cross-moves for summary judgment, contending the nine entries never were eligible to become liquidated by operation of law due to confusion over the status of the entries, and asserts a counterclaim with respect to certain entries, which it contends should have been liquidated at a higher countervailing duty rate. Alternatively, defendant asserts if the nine entries did become liquidated by operation of law, they became liquidated by operation of law at a higher rate than was assessed when Customs liquidated the goods in 1989. Defendant asserts a second counterclaim, contingent upon this Court's finding the entries at issue became liquidated by operation of law, for additional countervailing duties it claims are due upon the merchandise at issue. The cross-movants agree, and the Court finds, there are no genuine material issues of fact in dispute and this action may be decided on motion for summary judgment under USCIT R. 56. This Court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (1988), and for the reasons set forth below denies plaintiff's motion for summary judgment and defendant's counterclaims, and grants in part and denies in part defendant's cross-motion for summary judgment.
At issue in this case are nine entries of cold rolled carbon steel sheet which plaintiff exported from Brazil — where the merchandise was manufactured — and imported into the United States. Plaintiff is not a manufacturer of cold rolled carbon steel sheet. Rather, Rheem purchased the goods from three Brazilian manufacturers: Companhia Siderurgica Paulista ("COSIPA"), Companhia Siderurgica Nacional ("CSN") and Usinas Siderurgicas de Minas Gerais ("USIMINAS"). The goods entered the United States at the ports of Houston and New Orleans between February 16, 1984 and June 15, 1984. The following chart lists the entries, as well as their dates of entry and liquidation.1
Entry Number Date of Entry Date of Liquidation
84-343083-7 2/16/84 11/24/89
84-343092-1 3/20/84 11/13/89
84-343093-4 3/26/84 11/17/89
84-344297-7 4/02/84 11/13/89
84-343097-6 4/22/84 11/17/89
84-344910-3 5/02/84 09/15/89
84-345314-4 6/15/84 11/24/89
558-84231317-5 5/08/84 7/28/89
558-84232292-0 5/30/84 7/28/89
On February 10, 1984, several days before the first of the nine entries at issue was imported into the United States, the Department of Commerce ("Commerce") published its preliminary determination in countervailing duty investigation C-351-021, the scope of which included cold rolled carbon steel sheet from Brazil. See Certain Carbon Steel Products from Brazil, 49 Fed.Reg. 5,157 (Dep't Comm.1984) (prelim.determ.). Commerce's preliminary determination found that Brazilian manufacturers, producers, or exporters of certain carbon steel products were receiving subsidies, and estimated the net subsidy to be 27.42% ad valorem. The preliminary determination directed the Customs Service to suspend liquidation of all entries of subject merchandise from Brazil and to require a cash deposit or bond on the subject merchandise equal to the estimated net subsidy.
Plaintiff imported the nine entries claiming they were classifiable under item 607.8360, TSUS, a tariff provision within the scope of Commerce's Certain Carbon Steel Products from Brazil countervailing duty investigation. In fulfilling the requirements for entering the goods into the United States, plaintiff completed a Customs Form 7501 ("CF 7501") and a Special Steel Summary Invoice ("SSSI") for each entry. Plaintiff or its agent acknowledged the entered goods were within the scope of Commerce's investigation by writing or typing "CVD" or "C-351-021" or both on the CF 7501 forms or the corresponding invoices accompanying the entries. Customs rejected the entry summary documentation of several entries, even though plaintiff acknowledged the applicability of Commerce's investigation to its entries, due to plaintiff's failure to post an appropriate bond as required by the preliminary determination. Once plaintiff posted a proper bond, the amount of which was calculated based on the appropriate countervailing duty rates published in the Federal Register, Customs accepted Rheem's entry summaries as filed in proper form. In addition to completing the CF 7501 forms, plaintiff completed SSSI as part of the requirements for getting its goods entered into the United States. Despite the fact that plaintiff did not manufacture cold rolled carbon steel sheet, several of the SSSI incorrectly stated that Rheem was the manufacturer of the entered merchandise.
Commerce's final determination in the countervailing duty investigation was published in the Federal Register on April 26, 1984. See Certain Carbon Steel Products from Brazil, 49 Fed.Reg. 17,988 (Dep't Comm.1984) (final determ.). Commerce's final determination made an affirmative finding of subsidization and established the following countervailing duty rates for Brazilian manufacturers exporting subject merchandise to the United States: COSIPA 36.48% ad valorem; CSN 62.18% ad valorem; USIMINAS 17.49% ad valorem; All others 36.95% ad valorem.
The day after Commerce published its final determination, Customs issued Instruction 84/113 (Telex 04272). Instruction 84/113 provided guidance to Customs officials on how to apply and enforce the results of Commerce's determination, stating United States Customs Service, Instruction 84/113 (Telex 04272) (April 27, 1984).
Slightly less than three years later, Commerce published the final results of its first administrative review, which covered the period from February 10, 1984 to September 30, 1984. Commerce's first administrative review established the following countervailing duty rates: COSIPA 9.14% ad valorem; CSN 39.98% ad valorem; USIMINAS 0.0% ad valorem; All Others 21.13% ad valorem. See Certain Carbon Steel Products from Brazil, 52 Fed.Reg. 829 (Dep't Comm.1987) (first admin. review).
Commerce's findings in the first administrative review were challenged in this Court by COSIPA, CSN and an importer of the subject merchandise.2 On February 18, 1987, slightly more than one month after the results of the first administrative review were published in the Federal Register, this Court issued an injunction prohibiting Commerce and the Customs Service from liquidating any or all unliquidated entries of carbon steel sheet exported by COSIPA or CSN that were subject to the results of the first administrative review. On February 18, 1987, the Customs Service issued Instruction 87-81 (Telex 001999), which incorrectly instructed Customs officers to withhold liquidation of all entries covered by the first administrative review, rather than only the subject merchandise exported by COSIPA or CSN. This instruction was modified on July 23, 1987, following Commerce's request that the Customs Service issue a second telex clarifying the instructions communicated in Instruction 87-81. Instruction 87-199 (Telex 08432) stated
1. THIS CORRECTS C.I.E. INSTRUCTIONS NO. 87/81 OF FEBRUARY 18, 1987.
....
THE SUSPENSION OF LIQUIDATION INSTRUCTIONS IN THAT C.I.E. APPLY ONLY TO ENTRIES OF CERTAIN CARBON STEEL PRODUCTS EXPORTED BY COMPANHIA SIDERURGICA PAULISTA ("COSIPA") OR COMPANHIA SIDERURGICA NACIONAL ("CSN").
....
THE PRELIMINARY INJUNCTION ISSUED BY THE COURT OF INTERNATIONAL TRADE APPLIES ONLY TO ENTRIES OF THIS MERCHANDISE EXPORTED BY COSIPA OR CSN.
United States Customs Service, Instruction 87-199 (Telex 08432) (July 23, 1987).
Customs ultimately liquidated the nine entries between July 28, 1989 and November 24, 1989, more than four years after the date of entry for all nine entries. Customs classified the goods under item 607.83, TSUS, and assessed regular duties of 6.6% ad valorem in addition to countervailing duties. Customs assessed countervailing duties according to the exporter identified in the entry summary documentation, unless those papers identified the goods' manufacturer, in which case Customs assessed countervailing duties at the corresponding rate for that manufacturer. In...
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