CBP Ruling H089277

HQ H089277 January 10, 2012 LIQ-4 OT:RR:CTF:ER H089277 JLG Port Director U.S. Customs and Border Protection 4341 International Parkway, Suite 600 Atlanta, GA 30354 RE: CFC Construction, LLC; Application for Further Review of Protest No. 1704-09-100274 Dear Port Director, The following is our decision regarding the Application for Further Review ("AFR") of Protest No. 1704-09-100274, filed by Holland & Knight on behalf of the importer of record, CFC Construction, LLC ("CFC" or "protestant"), on May 19, 2009. FACTS: The protest concerns the importation of wooden bedroom furniture manufactured in the People's Republic of China ("PRC") that is subject to antidumping duty order A-570-890-000. The merchandise at issue consists of wooden headboards, part of a large shipment of furniture ordered by Kimball Hospitality, Inc. ("Kimball"), a furniture manufacturer and design company headquartered in Indiana. The headboards were initially packed and prepared for ocean shipment, but Kimball required expedited shipment of the goods so CFC agreed to take delivery of the merchandise in China and arranged for the merchandise to be shipped by air. Due to the size and weight of the merchandise, the original order was divided into six separate shipments that were imported into the United States between September 15, 2006 and October 3, 2006 under the following six entries: 112-xxxxx421, 112-xxxxx969, 112-xxxxx557, 112-xxxxx656, 112-xxxxx703, and 112-xxxxx695. The documentation for each entry contains the entry summary, CBP Form 7501 ("Form 7501"), entry/immediate delivery ("Form 3461"), a pro-forma invoice, and an airway bill. Each Form 7501 indicates that the broker, FEDEX Trade Networks Transport & Brokerage (FEDEX), filed the subject entries on behalf of the importer of record. Form 7501 and Form 3461 list CFC as the importer of record and ultimate consignee. The manufacturer ID for each of the entries is either "CNWOOINT4DAL," "CNWOOINTGUA," or "CNWOOINTDON." Each pro-forma invoice identifies the seller as "Woodworth Int'l Corp., Ltd," ("Woodworth International"), and the purchaser as "CFC Construction, LLC" with ultimate shipment to "French Lick Springs Resort." The airway bill for each entry lists the consignee as "CFC Construction, LLC"; and identifies the shipper as the company "Woodworth Wooden Industrial, Co., Ltd." Included with CFC's protest were copies of the commercial invoice and packing list issued for the consolidated shipment of headboards before they were separated. The invoice for the consolidated shipment (invoice no. 4782668), which is dated September 6, 2006, is issued by Kimball and specifically identifies the manufacturer of the merchandise as Woodworth International. The packing list on the other hand, is on the letterhead of "Woodworth Wooden Industries (Dong Guan) Co., Ltd.", and indicates that the account is for Kimball. We also note that entry 112-xxxxx421 contains a separate packing list for the shipment of headboards that identifies the shipper as Woodworth International. The antidumping duty order underlying this case (case number A-570-890-000) went into effect on January 4, 2005. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Wooden Bedroom Furniture from the People's of Republic of China, 70 Fed. Reg. 329 (January 4, 2005) ("AD Order"). On February 2, 2005, the Department of Commerce (Commerce) sent liquidation instructions, Message Number 5033207, covering the entries in this case. The instructions set a PRC-wide antidumping margin rate of 198.08 percent and assigned "Woodworth Wooden Industries (Dong Guan) Co., Ltd." ("Woodworth Wooden Ind. (Dong Guan)"), an antidumping margin cash deposit rate of 6.65 percent, under case number A-570-890-075. See also, Message 5033207 (Feb. 2, 2005). There were no separate rates given for Woodworth International or Woodworth Wooden Industrial, Co., Ltd. On November 14, 2006, CBP sent a Proposed Notice of Action to CFC, which stated: The merchandise on this entry appears to be subject to the antidumping case on wooden bedroom furniture from China. The following actions are proposed: 1. Change the entry type from 01 to 03 2. Add case number A-570-890-000/198.08% In response, CFC submitted a letter to CBP indicating that the entries should receive the rate for Woodworth Wooden Ind. (Dong Guan) of 6.65 percent. However, on March 14, 2007, CBP issued another Proposed Notice of Action stating that according to Commerce, Woodworth International is not referenced on case number A-570-890-075. CBP further stated that if CFC disagrees with CBP's decision, it must provide CBP a written explanation within 20 days from the date of the March 14 Notice of Action. Receiving no further response, CBP issued a Notice of Action, dated April 16, 2007, informing CFC that it had rate advanced the subject entries. On March 7, 2007, Commerce initiated the second administrative review of the antidumping duty order on Wooden Bedroom Furniture covering the period January 1, 2006 through December 31, 2006, but later rescinded the review in part with respect to certain entities, including Woodworth Wooden Industries (Dong Guan) Co., Ltd. See Wooden Bedroom Furniture from the People's Republic of China: Notice of Partial Rescission of Antidumping Duty Administrative Review, 72 Fed. Reg. 42396 (August 2, 2007). In Message 7241204 (August 29, 2007), Commerce noted that for the review period of January 1, 2006 through March 7, 2007, it had rescinded the administrative review for certain exporters, and instructed CBP to assess antidumping duties on merchandise manufactured or exported by the companies listed in the message at the cash deposit rate in effect on the date of entry. (emphasis added). Woodworth Wooden Ind. (Dong Guan) (case number A-570-890-075) was among the companies listed in Commerce's instructions. However, because CFC had not established that Woodworth Wooden Ind. (Dong Guan) manufactured or exported the subject merchandise, CBP did not liquidate the subject entries. On January 27, 2009, Commerce instructed CBP to liquidate all remaining entries of wooden bedroom furniture from China that entered during the period of January 1, 2006, through December 31, 2006, at the final PRC-wide antidumping margin rate of 216.01 percent. See Message Number 9027213 (January 27, 2009). CBP liquidated the entries on February 13, 2009, pursuant to Commerce's instructions under case number A-570-890-000, at the PRC-wide rate of 216.01 percent. Consequently, on May 19, 2009, CFC filed a Protest and applied for further review, pursuant to 19 C.F.R. § 174.24(b) and (c). In its protest, CFC raised the following claims: (1) the entries should have been liquidated at the rate for Woodworth Wooden Ind. (Dong Guan); and (2) the value of the imported merchandise for two of the related entries should be adjusted due to mathematical errors. Specifically, CFC contends that Woodworth Wooden Ind. (Dong Guan) is the manufacturer of the subject merchandise, and that its affiliate, Woodworth International, is a Hong Kong based company that merely sells furniture manufactured by Woodworth Wooden Ind. (Dong Guan). In support of this position, CFC provided several documents. First, CFC submitted an undated letter that appears to be on the letterhead of Woodworth Wooden Ind. (Dong Guan), with the address "Yang Wu Area Dalingshan Town, Dong Guan City, Guang Dong China," and is signed by the president of the company, Lawrence M.D. Yen. The letter states in part that the subject merchandise was "manufactured by Woodworth Wood [sic] Industries (Dong Guan) Co. Ltd.," and that "Woodworth International Corp., Ltd. is a Hong Kong export company with a business address [in Hong Kong] . . . [and] is owned by the same entity that owns Woodworth Wood [sic] Industries (Dong Guan) Co., Ltd. . . . ." The letter also states that the airway bills submitted for each of the six entries contains a typographical error, and should have identified the shipper as "Woodworth Wooden Industries (Dong Guan) Co., Ltd." instead of "Woodworth Wooden Industrial Co. Ltd." (emphasis added). Second, CFC submitted an undated letter from Woodworth International Corp., Ltd., which is identical in all respects to the letter submitted by Woodworth Wooden Ind. (Dong Guan) except that this letter appears to be on Woodworth International's letterhead with the address "RM 1706-7 `BLK 1 17/F Tower 1, China Hong Kong City 33 Canton Rd. Tsimshatsui KL Hong Kong." We also note that this letter is signed by the president of the company, Lawrence M.D. Yen, who also signed the letter from Woodworth Wooden Ind. (Dong Guan). Third, CFC submitted a March 11, 2008, letter sent on behalf of Woodworth Wooden Ind. (Dong Guan) to Commerce. In this letter, Woodworth Wooden Ind. (Dong Guan) clarified the relationship between Woodworth Wooden Ind. (Dong Guan) and Woodworth International, and requested that Commerce treat the two companies as the same entity for purposes of dumping duties. CFC notes, however, that Commerce did not act upon this request because Woodworth Wooden Ind. (Dong Guan) did not properly submit the request in the form of a "changed circumstances review," under 19 C.F.R. § 351.216. CFC also submitted a 2009 email from an individual employed with Woodworth entities, Jane1, who states that "Woodworth International Corp. and Woodworth Dongguan are the same legal entity." Included with this email was an affidavit signed by the president of Woodworth Wooden Ind. (Dong Guan), Lawrence M.D. Yen, that provides the following: Woodworth International Corp. Limited & Woodworth Wooden Industries (Dong Guan) Co., Ltd. are exporter in HK & manufacturer in Dong Guan and both are under the same ownership, Mr. Lawrence Yen (Yen, Min-Der). This is to clarify the relationship between the Woodworth International Corp. Limited & Woodworth Wooden Industries (Dong Guan) Co., Ltd. Fourth, CFC maintains that on or about March 11, 2009, during a teleconference between CFC's attorney, and James Thatcher, an employee of Hellmann Worldwide Logistics, the freight forwarder that typically handles shipments of wooden bedroom furniture for Kimball, James Thatcher stated that Woodworth Wooden Ind. (Dong Guan) has always been identified as the manufacturer of the goods. In addition, CFC submitted two packing lists. The first is a packing list provided with entry 112-xxxxx421. This packing list is from Kimball and identifies the shipper as Woodworth International, with the address "Yang Wu Area, Dalingshan Town, Dongguan City, Guangdong Province China." The second is the packing list for the consolidated shipment of headboards before that shipment was divided into several entries and sent by air. This packing list is printed on the letterhead of Woodworth Wooden Ind. (Dong Guan), and displays the address: "Yang Wu Area, Dalingshan Town, Dongguan City, Guangdong China", the same address identified for Woodworth International, as shown on the Kimball packing list. In response, the port of Atlanta maintains that the entry documentation identifies the manufacturer as Woodworth International. The port notes that the pro-forma invoices provide a description of the merchandise, and state that the goods are "FOR AN [sic] ON BEHALF OF (Woodworth Int'l Corp. LTD)." The port further states that the "shipper listed on the airway bill is Woodworth Wooden Industrial Co. Ltd. As Woodworth Wooden Industrial Co. Ltd. is a different name from Woodworth Wooden Industries (Dong Guan) Co. Ltd. (the name listed on case A-570-890-075), CBP Atlanta used the 'all other' case rate of A-570-890-000/216.01%." CFC also contends that a review of the pro-forma invoices for entries 112xxxxx703 and 112xxxxx695 shows that there were "simple mathematical clerical errors in multiplying the number of units by the cost per unit, which [was] mirrored in the Form 7501s filed by FEDEX." The port agrees that based on the documentary evidence; there were mathematical errors for the subject entries. ISSUE: (1) Whether merchandise covered under these entries was properly liquidated with antidumping duties assessed at the "PRC-wide" rate. (2) Whether the value of the imported merchandise covered under entries 112-xxxxx703 and 112-xxxxx695 should be adjusted to account for mathematical errors on the pro-forma invoices and the Form 7501s. LAW AND ANALYSIS: Initially, we note that the instant protest was timely filed. A claimant may protest the rate and amount of duties charged, and the liquidation or reliquidation of an entry by CBP pursuant to 19 U.S.C. § 1514(a)(2) and (5). CFC timely filed its Protest on May 19, 2009, which was within 180 days of the date of liquidation on February 13, 2009. The Port preliminarily approved CFC's request for further review and forwarded the Protest to CBP Headquarters. Generally, the scope of antidumping duty orders and the calculation of antidumping duty rates are not protestable because CBP has a ministerial role in liquidating antidumping duties. See Sandvik Steel Co. v. United States, 164 F.3d 596, 601 (Fed. Cir. 1998); see also Fujitsu Ten Corp. v. United States, 957 F. Supp. 245, 248-49 (Ct. Intl. Trade 1997). Accordingly, CBP "may not independently modify, directly or indirectly the determinations, [of Commerce], their underlying facts, or their enforcement" Royal Business Machines Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd, 69 C.C.P.A. 61, 669 F.2d 692 (CCPA 1982). However, inasmuch as CFC disputes the application by CBP of Commerce's liquidation instructions (i.e., disputes CBPs application of the antidumping order), the matter is protestable. See, e.g., HQ 230108 (May 4, 2006) (citing Xerox Corp. v. United States, 289 F.3d 792, 795 (Fed. Cir. 2002)) (determining whether there was sufficient notice for certain entries to be deemed liquidated under 19 USC § 1504(d), and determining whether Customs exceeded its ministerial authority by calculating the value of entered merchandise and assessing antidumping duties at the cash deposit rate in effect on the date of entry were protestable matters). Upon review of the AFR, we find that CFC's protest involves facts and legal arguments that were not considered at the time of the original ruling, and that CFC's protest raises issues that have not been the subject of a Headquarters ruling or court decision. See 19 C.F.R. § 174.24(b) (c); 19 C.F.R. § 174.26(b)(1)(iv). Accordingly, further review is warranted. CFC asserts that the antidumping margin for these entries should have been assessed at the rate of 6.65 percent, the rate for Woodworth Wooden Ind. (Dong Guan), rather than the PRC-wide rate. According to CFC, the entry documents for the subject merchandise misidentified the manufacturer as Woodworth International rather than Woodworth Wooden Ind. (Dong Guan). However, because Woodworth International Corp., the manufacturer noted on the entry summary and supporting documentation, is not identified in Commerce's instructions as one of the entities to receive a specific margin rate, and because CFC was unable to provide sales documentation showing Woodworth Wooden Ind. (Dong Guan) as the manufacturer or exporter, we determine the merchandise imported under the protested entries was properly liquidated at the PRC-wide rate. While both CBP and Commerce play a role in the enforcement of antidumping laws, their roles are separate and distinct. It is well established that Commerce is the administrating authority of the antidumping laws. Commerce determines whether foreign merchandise is being sold or is likely to be sold in the United States at less than its fair value, determines the margin at which a class or kind of merchandise is being "dumped" (i.e., sold at less than fair value), and issues an antidumping duty order describing the subject merchandise and designating its applicable rate of duty. See Xerox, 289 F.3d at 794 (citing 19 U.S.C. § 1673). CBP simply takes the dumping margin determined by Commerce and applies it to the entries as directed by Commerce's instructions. Therefore, when merchandise imported into the United States is subject to an antidumping duty order, it is CBP that makes the factual finding to ascertain what the merchandise is, and whether it is described in an order. See Xerox, 289 F.3d at 794 (citations omitted). The entry forms do not identify Woodworth Wooden Ind. (Dong Guan) as the manufacturer of the protested entries at issue. The manufacturer identification ("MID") codes designated in block 21 of the Form 7501s and block 26 of the Form 3461s do not identify the manufacturer as Woodworth Wooden Ind. (Dong Guan). The MID is established by using a combination of alphanumeric or alpha characters derived from the country of origin of the goods and the manufacturer's name, address, and city.2 Based on the approved method for deriving a manufacturer's ID, the MID codes shown on the entry and entry summaries, which were "CNWOOINT4DAL," "CNWOOINTGUA," and "CNWOOINTDON", indicate that the imported merchandise is of Chinese origin and that the manufacturer/shipper is Woodworth International. The last portion of the MID codes, which is the address and/or name of the city where the manufacturer is located, corresponds to the address "Yang Wu Area, Dalingshan Town, Dongguan City, Guangdong Province, China", which is the address listed for Woodworth International, as shown on the pro-forma invoices for each entry and the packing list for entry 112-xxxxx42. Although CFC maintains that Woodworth International is an export company located in Hong Kong, the protestant has not provided any entry documentation that shows a Hong Kong address for Woodworth International. Thus, based on the documentary evidence in the record, the address provided for Woodworth International is in Guangdong Province, China. Accordingly, the MID codes listed on the Form 7501s and Form 3461s identify the manufacturer of the imported merchandise as Woodworth International. We also note that the supporting entry documentation does not list Woodworth Wooden Ind. (Dong Guan) as the manufacturer or exporter of the subject merchandise. The pro-forma invoices submitted with each entry list the seller as Woodworth International Corp., Ltd., and each of the airway bills indicate that the shipper is "Woodworth Wooden Industrial Co. Ltd." not "Woodworth Wooden Industries (Dong Guan)." CFC's contention that the packing list for the consolidated shipment of headboards demonstrates that Woodworth Wooden Ind. (Dong Guan) manufactured the imported merchandise is not sufficiently supported by the evidence. Although the consolidated packing list is on the letterhead of Woodworth Wooden Ind. (Dong Guan), this packing list is for an ocean shipment that never occurred, and is therefore not relevant to the issue before us. Moreover, we note that the commercial invoice for the consolidated shipment of goods specifically states that the manufacturer of the merchandise is "Woodworth Int'l Corp. Ltd." Therefore, even the entry documentation that was prepared for the consolidated shipment contains a discrepancy regarding the manufacturer of the goods. In turning to CFC's other arguments, we determine that the evidence provided is insufficient to establish that Woodworth Wooden Ind. (Dong Guan) is the manufacturer of the merchandise at issue. None of the supplementary entry documentation provided by the protestant specifically identifies Woodworth Wooden Ind. (Dong Guan) as the manufacturer. While the letters submitted by Woodworth Wooden Ind. (Dong Guan) and Woodworth International are signed by the president of the companies, these letters merely assert that the entry summaries and supporting documents contain typographical errors, and that Woodworth Wooden Ind. (Dong Guan) manufactured the merchandise at issue.3 The letters are not, however, accompanied by any sales documentation or supporting entry documentation showing that Woodworth Wooden Ind. (Dong Guan) actually manufactured the imported headboards. We also find insufficient the statements made by the freight forwarder, Hellmann Worldwide Logistics, indicating that previous shipments of wooden furniture that it handled for Kimball, the original U.S. purchaser, identified the manufacturer as Woodworth Wooden Ind. (Dong Guan). In these discussions the freight forwarder did not provide any supporting documents to support its claims, and did not indicate who manufactured the specific entries at issue in this case. Even if prior entries were manufactured by Woodworth Wooden Ind. (Dong Guan), it does not inform our analysis of whether the protested entries at issue were manufactured by Woodworth Wooden Ind. (Dong Guan). Further, the letter Woodworth Wooden Ind. (Dong Guan) sent to Commerce attempting to clarify the relationship between the two companies is not relevant to this issue. CFC acknowledged that Commerce never reached a decision on the matter. Moreover, the issue before us concerns CFC's allegation that the entry documents were erroneous, and that Woodworth Wooden Ind. (Dong Guan) was actually the exporter, not whether they were related companies. The determination of whether a related company should receive the calculated rate is one made by Commerce and not CBP. We also determine that the March 2009, email and affidavit from Woodworth entities, which states that the two companies are "both under same ownership," does not establish that both companies are the same legal entity, or that they should receive the same antidumping duty rate. Commerce's instructions relate only to Woodworth Wooden Ind. (Dong Guan) and it has never issued instructions to CBP that Woodworth International should receive the same rate as Woodworth Wooden Ind. (Dong Guan). When CBP contacted Commerce to determine whether case A570-890-075 applied to Woodworth International Corp. or Woodworth Wooden Industrial Company, Commerce stated that case number A-570-890-075 did not apply to shipments by Woodworth International, and that there had been no determination that Woodworth Wooden Industries (Dong Guan) Co. Ltd. was the same as Woodworth Wooden Industrial Co. Ltd. Because Commerce has never determined that case A-570-890-075 applies to "Woodworth International" or "Woodworth Wooden Industrial Co., Ltd.," these entries were properly liquidated at the PRC-wide rate. For the foregoing reasons, we determine that CFC has not established that these entries were manufactured or exported by Woodworth Wooden Ind. (Dong Guan), and thus they are not entitled to the specific calculated rate for Woodworth Wooden Industries (Dong Guan). With respect to the issue of calculation errors on the invoices, we note that the port agrees with CFC that there were errors. CFC contends that the value of the imported merchandise entered under entries 112-xxxxx-703 and 112-xxxxx695 is incorrect. While the description of the imported merchandise, quantity, and unit price indicated on the pro-forma invoices for entry 703 and 695 is accurate, CFC states that the clerk who prepared the invoices made a mathematical error in calculating the total value of the merchandise, which was also reflected on the corresponding entry summaries. A claimant may protest the liquidation of an entry due to any "clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in an electronic transmission, adverse to the importer, in any entry, liquidation, or reliquidation, and, decisions of the Customs Service, including the legality of all orders and findings[.]" 19 U.S.C. § 1514(a); 19 C.F.R § 174.11. The pro-forma invoices CFC provided identified the number of items sold for each entry summary, the cost for each item, and the attached airway bills confirmed shipment of the items. A review of this documentary evidence shows that there was a miscalculation of the value of the imported merchandise for entries 112-xxxxx703 and 112-xxxxx695. Therefore, we determine there was an error in value for entries 112-xxxxx703 and 112-xxxxx695. HOLDING: Consistent with the decision set forth above, you are hereby directed to GRANT in part and DENY in part the protest as set forth above. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision to counsel for the protestant, together with the Customs Form 19, no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division 1 The email does not indicate that last name or title of the employee. 2 The MID can be up to fifteen characters in length with no inserted spaces. The first two characters consist of the ISO code for the actual country of origin of the imported merchandise. The next group of characters in the MID consists of the first three alpha characters in each of the first two "words" of the manufacturer's name. Following that are the first four numeric characters of the largest number on the street address line (if there are no numbers in the address line numbers are not included in this section). The last portion of the MID consists of the first three alpha characters of the city name. See CBP Directive 3550-055, dated November 24, 1986. 3 The only document that shows a Hong Kong address for Woodworth International is an undated letter CFC submitted with its protest. This letter has Woodworth International's name at the top of the letter, with a Hong Kong address, and is signed by the president of the company who is identified as Lawrence M.D.Yen. This is the same person who signed the letter by Woodworth Ind. (Dong Guan), and this letter is identical in all respects to a letter submitted by Woodworth Wooden Ind. (Dong Guan), except that the address for Woodworth Industries is in Guangdong Province China. This letter by itself is insufficient to rebut the supporting entry documentation. ?? ?? ?? ?? 10