Titanium Metals Corp. v. US, Slip Op. 95-153. Court No. 94-04-00236.
| Decision Date | 30 August 1995 |
| Docket Number | Slip Op. 95-153. Court No. 94-04-00236. |
| Citation | 901 F. Supp. 362 |
| Parties | TITANIUM METALS CORPORATION, Plaintiff, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
deKieffer Dibble & Horgan, J. Kevin Horgan, Washington, DC, for plaintiff.
Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Cynthia B. Schultz, Robert J. Heilferty, Attorney Advisor, Office of the Chief Counsel for International Trade, United States Department of Commerce, of counsel, for defendant.
This matter is before the court following a remand order. Titanium Metals Corp. v. United States, No. 94-04-00236 (Ct. Int'l Trade Dec. 5, 1994) (remand order). The court ordered the International Trade Administration of the United States Department of Commerce ("Commerce") to determine whether it should direct the United States Customs Service ("Customs") to collect estimated antidumping duties on future imports of titanium sponge from Kazakhstan entered under temporary importation bond ("TIB"). On remand, Commerce determined that it was inappropriate to direct Customs to collect estimated antidumping duties on such imports. Remand Determination: Titanium Metals Corp. v. United States, Court No. 94-04-00236, at 1 (Dep't Comm. Apr. 17, 1995) ("Remand Det."). Plaintiff Titanium Metals Corp. ("TIMET") objects to Commerce's remand determination.
Following a request from TIMET, a domestic titanium sponge producer, Commerce conducted an administrative review of titanium sponge imports from Kazakhstan. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 58 Fed.Reg. 51,053, 51,054 (Dep't Comm.1993). Titanium sponge is used primarily in the manufacture of aerospace vehicles, specifically, in the construction of compressor blades and wheels, stator blades, rotors, and other parts in aircraft gas turbine engines. In its preliminary determination, Commerce found no imports of titanium sponge from Kazakhstan, entered under TIB provisions or otherwise, during the period of review ("POR"), from August 1, 1992 to July 31, 1993. Titanium Sponge from Kazakhstan, 59 Fed.Reg. 6618, 6619 (Dep't Comm.1994) (prelim. results).
After receiving comments from TIMET and RMI Titanium Co., an importer of titanium sponge, Commerce published the final results of its administrative review. Titanium Sponge from Kazakhstan, 59 Fed.Reg. 16,617 (Dep't Comm.1994) (final results). In its final results, Commerce did not change its preliminary determination that no shipments of titanium sponge were imported into the United States from Kazakhstan during the POR. Id. at 16,618. Consequently, Commerce directed that the current antidumping duty deposit rate of 83.96% be maintained. Id. Commerce declined to address TIMET's claim regarding the collection of estimated antidumping duties for TIB entries as there were no imports found during the POR.
On July 1, 1994, TIMET filed a motion for judgment upon the agency record pursuant to USCIT Rule 56.2. In response, Commerce requested that its finding of no titanium sponge imports from Kazakhstan during the POR be sustained, but that the issue of whether estimated antidumping duties should be collected on future imports of titanium sponge from Kazakhstan entered under TIB be remanded. On December 5, 1994, the court recognized that TIMET and Commerce agreed that no imports of titanium sponge were made during the POR. The court remanded the issue of whether estimated antidumping duties should be collected on future imports of titanium sponge entered under TIB. Titanium Metals Corp., Court No. 94-04-00236, at 1 (remand order).
On remand, Commerce determined that it was not appropriate to direct Customs to collect estimated antidumping duties on such imports. Remand Det. at 10. TIMET now challenges this determination on the basis that titanium sponge imported under TIB is "entered for consumption" and, as such, is subject to antidumping duties. Furthermore, TIMET contends that Commerce's determination is contrary to legislative intent as it permits importers to circumvent antidumping duty orders.
In reviewing remand determinations, the court will hold unlawful those determinations by Commerce found to be unsupported by substantial evidence on the record, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1988) (current version at 19 U.S.C.A. § 1516a(b)(1)(B)(I) (West Supp. 1995)).
The provisions governing imports entered under TIB are found in the U.S. Notes to Subchapter XIII of the Harmonized Tariff Schedule of the United States, USITC Pub. 2690, ch. 98, subch. XIII, U.S. Notes at 98-37 (Supp. 1 1994) hereinafter "HTSUS".1 Item 9813.00.05.20, HTSUS, the provision at issue,2 allows duty-free importation under bond of merchandise to be processed into articles manufactured or produced in the United States, provided the merchandise is not imported for sale or sale on approval and that it is exported or destroyed in a timely manner. See HTSUS, U.S. Note 1(a), 2, at 98-37. The bond required for such entries is "an amount equal to double the duties which it is estimated would accrue (or such larger amount as ... is necessary to protect the revenue) had all the articles covered by the entry been entered under an ordinary consumption entry." 19 C.F.R. § 10.31(f); see 19 U.S.C. § 1623(a) (1988) (). Customs' practice is to include estimated antidumping (or "AD") and countervailing ("CV") duties in the amount of the temporary importation bond. See, e.g., C.S.D. 93-21, 27 Cust.Bull. & Decs. 448, 450 (1992) ().3
Upon acceptance of the TIB entry and bond, the merchandise may be released to the importer but "shall not be liquidated as the transaction does not involve liquidated duties." 19 C.F.R. § 10.31(h). Failure to export or destroy merchandise entered under TIB results in a demand for payment of liquidated damages equal to the bond amount, that is, double the estimated duties applicable to the entry. 19 C.F.R. § 10.39(d)(1).
TIMET contends that although TIB provisions allow entry of merchandise under certain circumstances "without the payment of duty," the term "duty" must be interpreted under General Note 1 of the HTSUS,4 which provides that the HTSUS provisions address only those duties provided for in the HTSUS. As AD/CV duties are not part of the HTSUS, the TIB provisions do not prevent the imposition of those duties. Commerce does not dispute this contention, but rather asserts that TIB entries are not "entries for consumption" within the meaning of the AD/CV duty laws. Consequently, according to Commerce, collection of AD/CV duties as to these entries is not required by statute.
The statutory language is clear that the assessment of AD/CV duties is restricted to merchandise "entered, or withdrawn from warehouse, for consumption." See, e.g., 19 U.S.C. § 1673b(d)(1) (1988) (current version at 19 U.S.C.A. § 1673b(d)(2) (West Supp. 1995)).5 The general term "entry" has been defined only as the filing of "documentation ... necessary to ... determine whether the merchandise may be released from customs custody." 19 U.S.C. § 1484(a)(1)(A) (1988).6 Customs has defined "entry" as "documentation ... filed ... to secure the release of imported merchandise from Customs custody, or the act of filing that documentation." 19 C.F.R. § 141.0a(a) (1995). "Entered for consumption" is defined by Customs as meaning that "an entry summary for consumption has been filed ..., with estimated duties attached." Id. § 141.0a(f).
The legislative history of the AD/CV duty laws does not define "entered, or withdrawn from warehouse, for consumption."7 TIMET argues that courts have interpreted this phrase flexibly to effectuate the purpose of the law under consideration. In Excel Shipping Corp. v. United States, 44 Cust.Ct. 55, C.D. 2153 (1960), the court determined whether goods that were withdrawn from a warehouse were considered "entered for consumption" under a certain tariff provision. The court noted that the term "entry" in acts of Congress has been interpreted in either of two ways: 1) "the bill entry, — the paper or declaration which the merchant or importer submits to the entry clerk," and 2) "not a document, but a transaction, — a series of acts which are necessary to ... the entering of the goods." Id. at 59 (quoting United States v. Legg, 105 F. 930, 933 (2d Cir.1901)). The court stated that "Congress intended to connote by the phrase `entered for consumption' a series of acts which are necessary to and which culminate in the entering of goods into the commerce of the country." Id. at 61.
TIMET claims that goods entered under TIB are "entered for consumption" within the meaning of the AD/CV duty laws. TIMET reasons that as liability for duties accrues upon the arrival of TIB imports in the United States, such imports are released into domestic commerce and "entered for consumption" at that time. Furthermore, TIMET argues that goods entered under TIB are consumption entries as Customs does not maintain adequate control over the goods once they are released to the importer. TIMET emphasizes that Customs may not recall the merchandise once it is liquidated, and upon default of the TIB, retains only a claim for liquidated damages.8
In response, Commerce relies upon Trans-Border Customs Servs., Inc. v. United States, 843 F.Supp. 1482 (Ct. Int'l Trade 1994), to support the proposition that TIB entries are temporary in nature and not "entered for consumption." In Trans-Border, the court considered whether merchandise samples entered...
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