Application for Further Review of Protest No 3001-11-100387; Certain Cased Pencils from the People’s Republic of China; Antidumping Order A-570-827-002

HQ H214259 June 4, 2012 OT:RR:CTF:ER H214259 ASL Port Director U.S. Customs and Border Protection 1000 2nd Ave., Suite 2100 Seattle, WA 98104-1020 Re: Application for Further Review of Protest No: 3001-11-100387; Certain Cased Pencils from the People’s Republic of China; Antidumping Order A-570-827-002 Dear Port Director, The purpose of this correspondence is to address the Application for Further Review (“AFR”) of Protest Number: 3001-11-100387, dated July 7, 2011, which we received April 19, 2012. The protesting party is Irwin Industrial Tool Company (“Irwin”), which argues that its entries of pencils should receive the specific antidumping duty rate for Orient International Holding Shanghai Foreign Trade Corporation (“Orient International”). FACTS: At issue are the following entries Irwin made: Date of Entry Entry Number ADD Case Number Liquidation  05/24/2010 xxx-xxxx705-9 A-570-827-002 07/08/2011  06/28/2010 xxx-xxxx522-7 A-570-827-002 07/01/2011  07/07/2010 xxx-xxxx884-1 A-570-827-002 07/01/2011  08/09/2010 xxx-xxxx983-0 A-570-827-002 07/01/2011  08/30/2010 xxx-xxxx660-3 A-570-827-002 07/08/2011  09/12/2010 xxx-xxxx293-2 A-570-827-002 07/08/2011  10/03/2010 xxx-xxxx732-9 A-570-827-002 07/01/2011  10/10/2010 xxx-xxxx839-2 A-570-827-002 07/01/2011  10/19/2010 xxx-xxxx143-8 A-570-827-002 07/01/2011  11/21/2010 xxx-xxxx096-7 A-570-827-002 07/01/2011   Irwin’s entry summaries entailed multiple lines of differing merchandise from various manufacturers in the People’s Republic of China (“PRC”). One of the lines was for pencils from the PRC that were subject to antidumping duty order number A-570-827. See Antidumping Duty Order: Certain Cased Pencils from the People's Republic of China, 59 Fed. Reg. 66909, Dec. 28, 1994. Irwin’s pencils were manufactured in the PRC by Orient International, which has an individual manufacturer/exporter antidumping duty rate. Id; Invoice DOXXXXX-004/10 (May 12, 2010) and Invoice DOXXXXX-013/10 (Sept. 29, 2010) from Orient International to Irwin. All of the entries’ master sea waybills showed the shipper/exporter as a company other than Orient International. Upon entry, Irwin deposited duties at the antidumping rate for Orient International, but failed to provide documentation to substantiate its claim that its entries qualified for that rate. The entries were liquidated at the higher rate for the “PRC-wide entity.” We selected two of the above entries to review as representative of the issues, XXX-XXXX839-2 and XXX-XXXX705-9. A description of the relevant supporting documents for the selected entries follows. Entry XXX-XXXX705-9: Entry Summary: The entry summary identified sea waybill APLUXXXXX9285, the manufacturer as “Multi,” and listed 8 line numbers, with five different manufacturers. Line 1, which applied to the pencils, listed invoice number DOXXXXX00410 and product number 66305SL. Master Sea Waybill: The sea waybill, number APLUXXXXX9285, identified the shipper as “APLL on Behalf of Shanghai Xinyue Tool Co. Ltd.,” and Irwin as the ultimate consignee. APL Logistics China LTD (“APL”) was identified as the forwarding agent. The container number was TRLU733260-0 and the merchandise was laden in Shanghai, China, to be discharged in Seattle WA, and delivered to Greenfield, IN. Under the description of the goods, the other four vendors, including Orient International, were also listed as the shipper. Invoice: Orient International’s invoice, number DOXXXXX-004/10, was for pencils, item number 66305SL, to be shipped to Irwin in Greenfield, IN. Packing List: Orient International’s packing list identified invoice DOXXXXX-004/10 and was for 200 cartons of item number 66305SL pencils. Original Forwarders Cargo Receipt: Cargo receipt SHA872201 listed the seller of pencils as Orient International, with the merchandise to be laden in Shanghai, China, discharged in Seattle WA, and delivered to Greenfield, IN. It also referenced the sea waybill and container numbers, APLUXXXXX9285 and TRLU7332600 respectively. Container Manifest: Line 159 of APL’s container manifest identified Orient International as the shipper of 200 cartons of 66305SL under sea waybill APLUXXXXX9285. Document Dispatch Advice The document dispatch advice, created by APL, referenced sea waybill APLUXXXXX9285, container TRLU7332600, and the five vendors whose merchandise was shipped to Irwin, including Orient International. Orient International’s invoice number DOXXXXX-004/10, cargo receipt number SHA872201, and total packages, 200, were also referenced. Entry XXX-XXXX839-2: Entry Summary: The entry summary identified sea waybill KKLUSHXXXXX43, the manufacturer as “Multi,” and listed nine line numbers, with four different manufacturers. Line 1, which was for pencils, listed invoice number DOXXXXX-01310. Master Sea Waybill: The sea waybill, number KKLUSHXXXXX43, identified the shipper as “APLL on Behalf of Tech-Tool Sourcing Co. Ltd.,” and Irwin as the ultimate consignee. The container number was KKFU9085917 and the merchandise was laden in Shanghai, China, discharged in Tacoma, WA, and delivered to Greenfield, IN. Under the description of the goods, the other three vendors, including Orient International, were also listed as the shipper. Invoice: Orient International’s invoice, number DOXXXXX-013/10, was for pencils, item number 66305SL, to be shipped to Irwin in Greenfield, IN Packing List: Orient International’s packing list identified invoice number DOXXXXX-013/10 and was for 600 cartons of item number 66305SL pencils. Original Forwarders Cargo Receipt: Cargo receipt number SHA199200, stated that the seller of the pencils was Orient International, with the merchandise laden in Shanghai, China, discharged in Tacoma, WA, and delivered to Greenfield, IN. It also referenced the sea waybill and container numbers, KKLUSHXXXXX43 and KKFU9085917, respectively. Container Manifest: Line 21 of APL’s container manifest identified Orient International as the shipper of 600 cartons of item 66305SL under sea waybill KKLUSHXXXXX43. Document Dispatch Advice The document dispatch advice, created by APL, referenced sea waybill KKLUSHXXXXX43, container KKFU9085917, and the four vendors whose merchandise was shipped to Irwin, including Orient International. Orient International’s invoice number, DOXXXXX-013/10, cargo receipt number SHA199200, and total of 600 cartons, were also referenced. There is no dispute that the pencils at issue in the above mentioned entries were subject to the U.S. Department of Commerce’s (“Commerce”) Antidumping Duty Order: Certain Cased Pencils from the People's Republic of China. 59 Fed. Reg. 66909 (Dec. 28, 1994). The issue here, concerns which rate is applicable. On December 1, 2010, Commerce published a notice of opportunity to request an administrative review of the antidumping duty order covering the period December 1, 2009, through November 30, 2010. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 75 Fed. Reg. 74682 (Dec. 1, 2010). No party filed a request for review of Orient International’s sales for this period of review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 76 Fed. Reg. 5137, 5138 (Jan. 28, 2011). On February 15, 2011, Commerce sent CBP non-review liquidation instructions for certain cased pencils exported by Orient International for the period of December 1, 2009 through November 30, 2010 to liquidate “at the cash deposit rate or bonding rate in effect at the time of entry.” See Administrative Message No. 1046306 (Feb. 15, 2011). On June 1, 2011, Commerce sent CBP liquidation instructions for entries exported by the PRC-wide entity for the period of December 1, 2009 through November 30, 2010 to liquidate “at the cash deposit rate or bonding rate required at time of entry.” Administrative Message No. 1152309 (June 1, 2011). Both instructions directed CBP to assess an antidumping liability equal to the cash deposit rate in effect at the time of entry. On March 9, 2011, CBP issued a Customs Form 29 Notice of Action to Irwin proposing a rate advance on the above mentioned entries, explaining that the entries were incorrectly entered under the specific antidumping duty rate (A-570-827-002), rather than the PRC-wide rate. CBP stated that Irwin failed to provide documentation to substantiate the claim that its entries qualified for Orient International’s rate. When the port reviewed the entry packets from Irwin, it determined that Irwin failed to substantiate its claim that the entries should receive the specific rate for Orient International. The master sea waybills for entries XXX-XXXX839-2 and XXX-XXXX705-9 stated that the shippers were “APLL on Behalf of Shanghai Xinyue Tool Co. Ltd.,” and “APLL on Behalf of Tech-Tool Sourcing Co. Ltd.,” respectively. Irwin protested the liquidation, stating that the listing of the shipper as “APLL on behalf of” was the result of the forwarding agent’s default template for consolidated shipments and not the identification of the exporter. Because these were less-container load shipments, the company that arranged the booking, APL, consolidated multiple purchases Irwin made from various vendors into one container. The master sea waybill did not include the names of each actual vendor/exporter in the shipper box. However, Irwin claims that the individual house bills establish Orient International as the exporter. The port concluded that Irwin failed to provide sufficient supporting documentation to show Orient International was the exporter of the pencils. Furthermore, based on the master sea waybills, the port found that the shipper/exporter was a PRC entity (either APLL, Shanghai Xinyue, or Tech-Tool Sourcing) that did not have its own rate and was subject to the PRC-wide rate. On July 1, 2011 and July 8, 2011, the entries were liquidated in accordance with Administrative Message No. 1152309 and assessed an antidumping liability equal to the PRC-wide entity rate of 114.90%. On July 20, 2011, Irwin filed this protest with the port claiming that the sea waybill listing another PRC exporter was a result of the steamship carrier’s booking methods, and the merchandise was, in fact, exported by Orient International. The port denied the protest and request for AFR on February 10, 2012. On April 4, 2012, our office set aside the denial of AFR because the protest “raises questions which have not been the subject of a Headquarters, U.S. Customs Service ruling or court decision.” See 19 C.F.R. § 174.26(b)(1)(iv). Irwin seeks reliquidation of these entries under the cash deposit rate applicable to exports from Orient International. ISSUE: Whether CBP properly liquidated the entries at the PRC-wide entity rate. LAW AND ANALYSIS: We note initially that the instant protest was timely filed, within 180 days from the date of liquidation. 19 U.S.C. § 1514(c)(3)(A). 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…unless a protest…is filed in accordance with this section.” Liquidation of Irwin’s entries was made on July 1, 2011 and July 8, 2011, and this protest was filed on July 20, 2011, within 180 days. The protestant requested further review per 19 C.F.R. § 174.25(b), which was originally denied by the port. Pursuant to 19 U.S.C. §1515(c), Irwin requested CBP set aside the denial of AFR. CBP granted Irwin’s request because the protest “raises questions which have not been the subject of a Headquarters, U.S. Customs Service ruling or court decision,” thus further review is warranted. Irwin argues that the liquidation of its entries at the PRC-wide rate of 114.90% was contrary to Commerce’s instructions and is otherwise contrary to law. Instead, Irwin asserts that the merchandise was manufactured and exported by Orient International and so should receive that separate antidumping duty rate. The port determined that Irwin failed to provide sufficient supporting documentation to show Orient International was the exporter of the pencils. Based on the additional evidence Irwin provided our office, which was not available to the port at the time of entry, we find that Irwin adequately establishes that Orient International was the exporter of the pencils. CBP is charged with fixing the “amount of duty to be paid” on subject merchandise. 19 U.S.C. § 1500(c). “When merchandise may be subject to an antidumping duty order, Customs makes factual findings to ascertain what the merchandise is, and whether it is described in an order.” Xerox Corp. v. United States, 289 F.3d 792, 794 (Fed. Cir. 2002). Such findings as to the “classification and rate and amount of duties chargeable” are protestable to CBP under 19 U.S.C. § 1514(a)(2). The submitted documents, (invoices and packing receipts, original forwarders cargo receipt, container manifest, sea waybills, document dispatch advice, and entry summaries), evidence that Orient International is the manufacturer and exporter of the cased pencils. For entry XXX-XXXX705-9, Irwin provided its invoice, DOXXXXX-004/10, and packing list from Orient International for 200 cartons of item 66305SL Pencils that were to be shipped to Irwin in Greenfield, IN. Irwin’s forwarding agent, APL, issued a cargo receipt, SHA872201, which identified sea waybill APLUXXXXX9285 and container TRLU733260-0, and had the same lading, discharge, and delivery locations found on the sea waybill and invoice. The container manifest, which listed all of the items in container TRLU7332600, identified the same information found on Orient International’s invoice and also referenced sea waybill APLUXXXXX9285. The sea waybill, APLUXXXXX9285, which identified the shipper as “APLL on Behalf of Shanghai Xinyue Tool Co. Ltd.,” the ultimate consignee as Irwin, and the forwarding agent as APL, also listed container TRLU733260-0 as having the same lading, discharge, and delivery locations found on the invoice and cargo receipt. Additionally, in the description of the goods, the other four vendors, including Orient International, were listed as the shipper. Irwin also provided us with a document dispatch advice from APL, which listed the names of all the vendors, along with their corresponding invoices and cargo receipt numbers, whose merchandise was consolidated into container TRLU733260-0 and shipped under seaway bill APLUXXXXX9285. In this document, Orient International was listed along with Irwin’s corresponding invoice DOXXXXX-004/10 and cargo receipt SHA872201 number. The first vendor that was listed on APL’s document dispatch was Shanghai Xinyue, which was the only vendor name that appeared on the master sea waybill in the shipper box. Finally, the entry summary referenced sea waybill APLUXXXXX9285, invoice DOXXXXX-004/10, and the same product number and value found on invoice DOXXXXX-004/10. For this entry, the seaway bill number, invoice number, and container number consistently correspond with one another throughout the provided documents, and trace Irwin’s procurement of pencils from Orient International from purchase, packing, consolidation, lading, exportation, and entry into the United States. It is apparent from these documents that Irwin purchased pencils from Orient International and had APL consolidate them, along with other purchases Irwin made from other vendors into one container, to be shipped to the United States. Based on the provided documents, we determine that for purposes of this entry, Orient International was the exporter of the pencils. For entry XXX-XXXX839-2, Irwin provided its invoice, DOXXXXX-013/10, and packing list from Orient International for 600 cartons of item 66305SL Pencils to be shipped to Irwin in Greenfield, IN. While the sea waybill did not specifically mention APL as the forwarding agent, the supporting documents, the document dispatch, container manifest, and cargo receipt were all created by APL. APL issued Irwin cargo receipt SHA199200, which identified sea waybill KKLUSHXXXXX43 and container KKFU9085917, as well as the same lading, discharge, and delivery locations found on the sea waybill. The accompanying container manifest, which listed all of the items in container KKFU9085917, identified the same information found on Orient International’s invoice and referenced sea waybill KKLUSHXXXXX43. The sea waybill, KKLUSHXXXXX43, which identified the shipper as “APLL on Behalf of Tech-Tool Sourcing Co. Ltd.,” and the ultimate consignee as Irwin, also listed container KKFU9085917 as having the same lading, discharge, and delivery locations found on the invoice and cargo receipt. Additionally, in the description of the goods, the other three vendors, including Orient International, were also listed as the shipper. Irwin also provided us with a document dispatch advice from APL, which listed the names of all the vendors, along with their corresponding invoices and cargo receipt numbers, whose merchandise was consolidated into container KKFU9085917and shipped under seaway bill KKLUSHXXXXX43. In this document, Orient International was listed along with Irwin’s corresponding invoice DOXXXXX-01310 and cargo receipt SHA199200 number. The first vendor which was listed on APL’s document dispatch was Tech-Tool, which was the only vendor name that appeared on the master sea waybill in the shipper box. Finally, the entry summary referenced sea waybill KKLUSHXXXXX43, invoice DOXXXXX-01310, and the same product number and value found on invoice DOXXXXX-01310. For this entry, the seaway bill number, invoice number, and container number consistently correspond with one another throughout the provided documents, and trace Irwin’s procurement of pencils from Orient International from purchase, packing, consolidation, lading, exportation, and entry into the United States. It is apparent from these documents that Irwin purchased pencils from Orient International and had APL consolidate them, along with other purchases Irwin made from other vendors into one container, to be shipped to the United States. Based on the provided documents, we determine that for purposes of this entry, Orient International was the exporter of the pencils and APL was merely the forwarding agent. Based on the information provided above, the submitted documents are sufficient to establish that Orient International was the exporter of the covered pencils. The fact that the master sea waybill identified another PRC vendor does not preclude Orient International from being the exporter. For each entry, the entry summary, house bills, and accompanying documents correspond with each other and, when taken together, adequately establish that Orient International was the exporter of the pencils in these two entries. HOLDING: Based on the facts in this case, the supporting documentation establishes that Orient International was the exporter of the subject pencils and protest 3001-11-100387 should be granted. Therefore, the entries are to be reliquidated at the cash deposit rate at the time of entry in accordance with administrative message no. 1046306. No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CPB personnel, and to the public on the CPB 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