Protest and Application for Further Review 4601-06-102618

HQ H005628 September 4, 2007 DRA-4, LIQ-15 OT:RR:CTF:ER H005628 DCC Ms. Jennifer Tagliaferro U.S. Customs and Border Protection Protest Division, Room 402 1100 Raymond Blvd. Newark, NJ 07102 Re: Protest and Application for Further Review 4601-06-102618 Dear Ms. Tagliaferro: This letter is in response to your correspondence, dated January 12, 2007, whereby you forwarded an Application for Further Review (“AFR”) of Protest Number 4601-06-102618 filed on behalf of Acciaierie Valbruna S.p.A. (“Valbruna”). Our decision follows. FACTS: Valbruna protests the liquidation of 18 entries of stainless steel bar made between October 10, 2002, and January 23, 2003. CBP liquidated the protested entries on August 25, 2006, and assessed antidumping pursuant to antidumping duty case number A-475-829, stainless steel bar from Italy. CBP also assessed Section 201 duties in accordance with Presidential Proclamation 7529 (67 Fed. Reg. 10553) (imposing tariffs and tariff-rate quotas (hereinafter, “Section 201 duties”) on certain steel products entered for consumption as of March 20, 2002). The protest covers the following entries: Entry No. Date of Entry Date of Liquidation 002-6110316-2* 11/02/2002 08/25/2006 002-6111115-7 12/20/2002 08/25/2006 002-6111223-9 1/09/2003 08/25/2006 002-6111109-0 12/19/2002 08/25/2006 002-6111082-9 12/18/2002 08/25/2006 002-6110748-6 11/26/2002 08/25/2006 002-6111267-6 1/06/2003 08/25/2006 002-6110711-4 11/26/2002 08/25/2006 002-6111447-4 1/23/2003 08/25/2006 002-6110706-4 11/27/2002 08/25/2006 002-6111495-3 1/22/2003 08/25/2006 002-6110240-4* 10/24/2002 08/25/2006 002-6111224-7 1/09/2003 08/25/2006 002-6110467-3* 11/06/2002 08/25/2006 002-6110076-2* 10/10/2002 08/25/2006 002-6111490-4 1/22/2003 08/25/2006 002-6110501-9* 11/13/2002 08/25/2006 002-6110380-8* 10/31/2002 08/25/2006 *Indicates six entries made before November 14, 2002, which are the subject of Valbruna’s second claim. Deemed Liquidation On January 23, 2002, Commerce published a notice regarding the final determination of its dumping investigation for stainless steel products from Italy. See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Bar from Italy, 67 Fed. Reg. 3155 (Jan. 23, 2002). That notice states: [I]n accordance with section 735(c)(1)(C) of the [Tariff Act of 1930], we are directing Customs to suspend liquidation of all imports of subject merchandise by Valbruna (which had a de minimis weighted-average margin for the Preliminary Determination) that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice [January 23, 2002] in the Federal Register. Customs shall require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP or CEP, as appropriate, as indicated in the chart below. These suspension of liquidation instructions will remain in effect until further notice. On March 7, 2002, Commerce issued the antidumping duty order for imported stainless steel bar. See Notice of Antidumping Duty Order: Stainless Steel Bar from Italy, 67 Fed. Reg. 19,384 (March 7, 2002). That notice states: For Acciaierie Valbruna Srl/Acciaierie Bolzano S.p.A., antidumping duties will be assessed on all unliquidated entries of stainless steel bar entered, or withdrawn from warehouse, for consumption on or after January 23, 2002, the date of publication of the Department’s final determination in the Federal Register (67 FR 3155), and the Department will direct Customs to refund any cash deposits made, or bonds posted, on any subject merchandise which was entered prior to the Department’s final determination publication date of January 23, 2002. On August 13, 2003, the U.S. Court of International Trade (“CIT”) issued an injunction enjoining liquidation of entries of merchandise that was entered or withdrawn from warehouse for consumption on or after August 2, 2001, and on or before February 28, 2002. On September 3, 2003, Commerce issued Message number 3246201, which contained liquidation instructions for stainless steel bar from Italy subject to Antidumping Duty Order A-475-829. This message contains the following instructions: On 8/13/2003, the U.S. Court of International Trade issued a preliminary injunction enjoining liquidation of certain entries which are subject to the antidumping duty order or finding on stainless steel bar from Italy (A-475-829), produced or exported by Acciaierie Valbruna, S.p.A. (“Valbruna”) for the period August 2, 2001 through February 28, 2002. Accordingly, until further notice, do not liquidate entries of subject merchandise produced or exported by Valbruna and which were entered, or withdrawn from warehouse, for consumption during the period August 2, 2001 through February 28, 2002. Continue to suspend liquidation of other entries until liquidation instructions are provided. Any entries which may be set for liquidation need to be unset immediately. On November 17, 2003, Commerce issued Message number 3321201, which contained the following liquidation instructions: On August 13, 2003, the U.S. Court of International Trade issued a preliminary injunction enjoining liquidation of certain entries produced or exported by Acciaierie Valbruna, S.p.A. (“Valbruna”). Accordingly, do not liquidate entries of subject merchandise produced or exported by Valbruna for the period August 2, 2001, through February 28, 2002. See Message No. 3246201 dated September 3, 2003. Liquidate all entries for all firms except the companies noted in paragraph 2 and below: Period: 8/02/2001 – 2/28/2002 A-475-829-001 Acciaierie Valbruna, S.p.A. [Paragraph 2 of the instructions listed two firms: Foroni S.p.A. and Ugine Savoie-Imphy.] Entries of merchandise of excepted firms should not be liquidated until you receive specific instructions after the completion of the antidumping review or until the injunction has been lifted. Continue to suspend liquidation of all entries of merchandise exported or produced by the listed firms and entered, or withdrawn from warehouse, for consumption during the periods noted above. These instructions constitute the immediate lifting of suspension of liquidation of entries for the merchandise and periods listed above subject to the exception and conditions set forth in paragraphs 2, 3, and 4 above. You shall continue to collect cash deposits of estimated antidumping duties for subsequent entries of the subject merchandise at the current rates. On December 16, 2003, the U.S. Court of International Trade (“CIT”) sustained Commerce’s Final Determination with respect to all but one issue, which was remanded to Commerce for further explanation. See Slater Steels Corp. v. United States, 297 F. Supp. 2d 1351 (Ct. Int’l Trade 2003). After providing an explanation, the CIT sustained the Redetermination Results on June 9, 2004. See Slater Steels v. United States, Slip Op. 2004-63 (Ct. Int’l Trade June 9, 2004). On June 24, 2004, the CIT issued an injunction enjoining the liquidation of certain entries pending appeal. That order provides, in pertinent part, as follows: the United States Customs Service, shall be, and hereby [is] enjoined from making or permitting liquidation of any unliquidated entries of stainless steel bar from Italy by Acciaierie Valbruna, S.p.A. which: are covered by the Antidumping Duty Order regarding Stainless Steel Bar from Italy, 67 Fed. Reg. 10384 (Mar. 7, 2002); * * * were entered, or withdrawn from warehouse, for consumption on or after January 23, 2002 and on or before February 29, 2004; remain unliquidated as of 5 o’clock p.m. on the first business day after the day on which copies of this Order are personally served by Acciaierie Valbruna, S.p.A. . . On June 25, 2004, Commerce issued Message number 4177203, which contained additional liquidation instructions for stainless steel bar from Italy. This message contains the following instructions: On 6/24/2004, the U.S. Court of International Trade issued an injunction pending appeal enjoining liquidation of certain entries which are subject to the antidumping order or finding on stainless steel bar from Italy (A-475-829), by Acciaierie Valbruna, S.p.A. (“Valbruna”) for the period January 23, 2002 through February 29, 2004 (Court No. 02-00189). Accordingly, until further notice, do not liquidate entries of subject merchandise from Italy by Valbruna which were entered, or withdrawn from warehouse, for consumption on or after January 23, 2002 and on or before February 29, 2004 that remain unliquidated as of 5:00 p.m. on June 25, 2004. Continue to suspend liquidation of other entries until instructions are provided. On March 28, 2005, Commerce issued Message number 5087203, which provided additional liquidation instructions for the subject merchandise. This message contains the following instructions: On 02/18/2005, the U.S. Court of Appeals for the Federal Circuit issued an injunction pending appeal enjoining liquidation of certain entries which are subject to the antidumping duty order on stainless steel bar from Italy (A-475-829), manufactured and/or exported by Acciaierie Valbruna, S.p.A. (“Valbruna”) for the period 01/23/2002 through 02/29/2004. The injunction pending appeal was issued in connection with court case number 04-1535, and enjoins liquidation of the entries described above. Accordingly, until further notice, do not liquidate entries of subject merchandise which were produced and/or exported by Valbruna and which were entered, or withdrawn from warehouse, for consumption during the period 01/23/2002 through 02/29/2004. Continue to suspend liquidation of these entries until liquidation instructions are provided. Any entries which may be set for liquidation need to be unset immediately. Liquidation instructions for entries affected by this injunction have not yet been issued. On June 16, 2006, Commerce issued Message number 6167210, which provided additional liquidation instructions for the subject merchandise. This message contains the following instructions: On December 6, 2005, the U.S. Court of Appeals for the Federal Circuit (“CAFC”) issued a final decision in the case of Slater Steels Corp. v. United States: CAFC Case Number 04-1535, U.S. Court of International Trade (“CIT”) Case Number 02-00189. As a result of this decision, the injunctions enjoining liquidation of entries which are subject to the antidumping duty order or finding on stainless steel bar from Italy (A-475-829), manufactured and/or exported by Acciaierie Valbruna, S.p.A. (“Valbruna”) dissolved on March 6, 2006. As a result of the CAFC’s decision, entries of the subject merchandise which were manufactured and/or exported by Valbruna and which were entered, or withdrawn from warehouse, for consumption during the period 08/02/2001 through 02/29/2004 can be liquidated. (See message numbers 5087203 dated 03/28/2005, 4177203 dated 06/25/2004, and 3246201 dated 09/03/2003, for reference). As a result of the CAFC’s decision cited in paragraph 1, liquidate entries of stainless steel bar from Italy entered, or withdrawn from warehouse, for consumption during the period 08/02/2001 through 02/29/2004. Assess antidumping duties on merchandise entered, or withdrawn from warehouse, for consumption by Valbruna at the cash deposit or bonding rate in effect on the date of entry. As a result of the court’s decision, for entries made from 08/02/2001 through 02/29/2004, the antidumping duty liability is not to exceed 2.50 percent of the entered value (see message no. 2059216 dated 02/28/2001). Stainless Steel Bar from Italy (A-475-829) Period: 08/02/2001 through 02/29/2004 Liquidate entries by Acciaierie Valbruna, S.p.A.: A-475-829-001 These instructions constitute the immediate lifting of suspension of liquidation of entries for the exporter, merchandise, and period listed above (see paragraph 3 above). . . . On August 25, 2006, CBP liquidated the 18 entries in accordance with the liquidation instructions issued by Commerce on June 16, 2006. According to those instructions, the injunctions enjoining liquidation of the subject entries dissolved on March 6, 2006, three months after the Federal Circuits affirmed the CIT’s decision sustaining the Commerce’s Redetermination Results in Slater Steels Corp. v. United States, Slip Op. 2004-63 (Ct. Int’l Trade June 9, 2004). The liquidation instructions directed CBP to liquidate Valbruna’s entries of the subject merchandise that were entered, or withdrawn from warehouse, for consumption Between August 2, 2001 and February 29, 2004, at the cash deposit or bonding rate in effect on the date of entry. Valbruna claims that subject entries were deemed liquidated pursuant to 19 U.S.C. 1504(d) on May 17, 2004. Section 201 Duties The port assessed Section 201 duties on all 18 of the subject entries. The relevant facts are derived from the various Federal Register notices regarding the implementation of, and exclusions from, the Section 201 safeguard duties applied to certain steel products in 2002. On March 5, 2002, the U.S. International Trade Commission (“ITC”) transmitted to the President a report on its investigation under section 202 of the Trade Act of 1974, as amended (the “Trade Act”) (19 U.S.C. § 2252), with respect to imports of certain steel products. See 67 Fed. Reg. 10,553 (March 7, 2002). Pursuant to that report, the President issued Presidential Proclamation 7529, which applied temporary duties to certain steel products (“Section 201 duties”). Proclamation 7529 also directed the U.S. Trade Representative (“USTR”) to determine whether any particular products should be excluded from the list of covered products. On July 12, 2002, USTR published a notice excluding certain steel products excluded from Section 201 duties, which were set forth in Note 11(c) of Chapter 99, HTSUS (2003), and applied retroactively to March 20, 2002. See Exclusion of Particular Products from Actions under Section 203 of the Trade Act of 1974 With Regard to Certain Steel Products; Conforming Changes and Technical Corrections to the Harmonized Tariff Schedule of the United States, 67 Fed. Reg. 46,221 (July 12, 2002). August 30, 2002, USTR published additional exclusions and technical changes to the list of products excluded from Section 201 duties. See Exclusions of Particular Products From Actions Under Section 203 of the Trade Act of 1974 With Regard to Certain Steel Products; Conforming Changes and Technical Corrections to the Harmonized Tariff Schedule of the United States, 67 Fed. Reg. 56,182 (Aug. 30, 2002). Among the additional exclusions was an amendment to subdivision (cxcvi) of U.S. Note 11(c). The amendment provided as follows:  Stainless steel bars, designated as X–090 and entered in an aggregate quantity not to exceed 5,000 t during the 12-month period beginning on September 1, 2002 or September 1, 2003 or during the period from September 1, 2004 through March 20, 2005, inclusive; the foregoing free machining; diameter from 1.5 mm to 125.0 mm in round or hexagonal profile; length ranging from 3.0 m to 5.0 m; microstructure containing complex oxides of limesilico-aluminate (comprising metallurgical phases anhorthite and/or pseudowollastonite); with calcium content from 30 to 300 ppm and oxygen from 70 to 300 ppm, and with calciumto-oxygen ratio from 0.2 to 0.6; sometimes referred to as (but not limited to) products known as ‘‘UGIMA’; 67 Fed. Reg. at 56,199 (emphasis added). Subsequently, on November 14, 2002, USTR published a notice of corrections to the Section 201 exclusion list. See Technical Corrections to the Harmonized Tariff Schedule of the United States, 67 Fed. Reg. 69,065 (Nov. 14, 2002). The Annex to that notice amended the August 30, 2002 exclusion described in U.S. Note 11(c)(cxcvi) by deleting the phrase “sometimes referred to as (but not limited to) products known as ‘UGIMA’” and adding the phrase “products referred to as ‘UGIMA.’”  the language ‘‘microstructure containing complex oxides of lime-silico-aluminate (comprising metallurgical phases anhorthite and/or pseudowollastonite); with calcium content from 30 to 300 ppm and oxygen from 70 to 300 ppm, and with calcium-to-oxygen ratio from 0.2 to 0.6; sometimes referred to as (but not limited to) products known as ‘UGIMA’ ’’ is deleted and ‘‘austenitic, ferritic or martensitic crystalline structure as applicable, and containing oxides of lime silicoaluminate that form the CaO-Al2O3–SiO2 ternary composition primarily comprising anorthite and/or pseudowollastonite phases; with calcium content between 30 and 100 ppm and oxygen content between 70 and 200 ppm; products referred to as ‘UGIMA’’’ is inserted in lieu thereof; 67 Fed. Reg. at 69,069 (emphasis added). On March 26, 2004, USTR published further corrections to the list of steel products excluded from Section 201 duties. See Technical Corrections to the Harmonized Tariff Schedule of the United States, 69 Fed. Reg. 15917 (Mar. 26, 2004). That notice amended the exclusion for stainless steel products under subdivision (cxcvi). The amendment provided as follows:  Effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after September 1, 2002, and before the close of November 13, 2002, subdivision (c)(cxcvi) of such note is modified by deleting the language ‘‘austenitic, ferritic or martensitic crystalline structure as applicable, and containing oxides of lime silicoaluminate that form the CaO–Al2O3–SiO2 ternary composition primarily comprising anorthite and/or pseudowollastonite phases; with calcium content between 30 and 100 ppm and oxygen content between 70 and 200 ppm; products referred to as ‘UGIMA’ ’’ and by inserting the following language in lieu thereof: ‘‘microstructure containing complex oxides of lime-silico-aluminate (comprising metallurgical phases anhorthite and/or pseudowollastonite); with calcium content from 30 to 300 ppm and oxygen from 70 to 300 ppm, and with calcium-to-oxygen ratio from 0.2 to 0.6; sometimes referred to as (but not limited to) products known as ‘UGIMA’. 69 Fed. Reg. at 15,918-19 (emphasis added). The port states in a Rate Advance Notice of Action dated August 26, 2003 that Valbruna’s entry documentation does not support the importer’s claim that the merchandise is on the list of products excluded from Section 201 duties because the exclusion for merchandise classified under 9903.77.76, HTSUS, is limited to products specifically referred to as “UGIMA.” Valbruna claims that Section 201 duties should not be assessed on the six entries that were entered before November 14, 2002 because the imported merchandise was covered by an exclusion. ISSUES: Whether the entries were deemed liquidated as entered pursuant to 19 U.S.C. § 1504(d). Whether Section 201 steel safeguard duties were properly assessed. LAW AND ANALYSIS:   We note initially that the instant Protest was timely filed, i.e., within 180 days of the liquidation of the entries. Under 19 U.S.C. § 1514(a), “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry . . . shall be final and conclusive . . . unless a protest is filed in accordance with this section.” The port liquidated the subject entry on August 25, 2006, and Valbruna filed this Protest on November 22, 2006. In addition, pursuant to § 1514(a)(5), the matter protested—the liquidation of the subject entries—is subject to protest. Deemed Liquidation Valbruna argues that the subject entries were deemed liquidated by operation of law on May 17, 2004. The importer argues that the liquidation instructions issued on November 17, 2003 constituted the immediate lifting of the suspension of liquidation a