Review of denial of Protest and Application for Further Review No. 00101192; scope of antidumping finding; interest; 19 U.S.C. 1504(d); 19 U.S.C. 1505; 19 U.S.C. 1677g.

HQ W229062 March 16, 2001 PRO-2-05 RR:CR:DR 229062DR CATEGORY: Protest Mr. Matthew J. McConkey Arent Fox Kintner Plotkin & Kahn, PLLC 1050 Connecticut Avenue, NW Washington, DC 20036-5339 RE: Review of denial of Protest and Application for Further Review No. 00101192; scope of antidumping finding; interest; 19 U.S.C. 1504(d); 19 U.S.C. 1505; 19 U.S.C. 1677g. Dear Mr. McConkey: This is in response to your letter of January 12, 2001, requesting that we set aside the denial of further review in the above-referenced protest and application for further review (AFR). Your request for review is pursuant to the authority of 19 U.S.C. 1515(c), which provides, in part, the following: If a protesting party believes that an application for further review was erroneously or improperly denied without authority for such action, it may file with the Commissioner of Customs a written request that the denial of the application for further review be set aside. Such request must be filed within 60 days after the date of the notice of the denial. The Commissioner of Customs may review such request and, based solely on the information before the Customs Service at the time the application for further review was denied, may set aside the denial of the application for further review and void the denial of protest, if appropriate. If the Commissioner of Customs fails to act within 60 days after the date of the request, the request shall be considered denied. In this case, the denial of the AFR occurred on November 20, 2000, and on January 16, 2001, Protestant timely requested that the denial of the AFR be set aside. According to the record before us, the protest and AFR involve roller chain, other than bicycle, imported from Japan. Sugiyama Chain Co., Ltd., of Japan (“Sugiyama”) manufactured the merchandise and I&OC of Japan Co., Ltd., (“IOC) exported the merchandise from Japan. The merchandise was the subject of antidumping order Roller Chain, Other Than Bicycle, From Japan, 38 Fed. Reg. 9226 (April 12, 1973) (“Japan Roller Chain”). Protestant entered the merchandise between April 1, 1985, and March 31, 1986. On September 22, 1992, the Department of Commerce published the final results of its administrative review of the Japan Roller Chain antidumping findings with respect to Sugiyama and various Japanese exporters (including IOC) of Sugiyama products to the United States for the periods April 1, 1981, through March 31, 1987, and April 1, 1989, through March 31, 1990. 57 Fed. Reg. 43697 (September 22, 1992). In the notice, the merchandise exported by IOC (and others) was subjected to a dumping margin of 43.29% and the DOC listed the cash deposit requirements for the subject entries. The notice also stated that “the Department [of Commerce] will instruct the Customs Service to assess antidumping duties on all appropriate entries … The Department [of Commerce] will issue appraisement instructions for all companies directly to the Customs Service.” However, pursuant to 19 U.S.C. 1516a(c)(2), liquidation of the entries was enjoined until August 1, 1995, when the Court of Appeals for the Federal Circuit issued its mandate affirming the DOC’s antidumping duty assessment for entries between April 1,1985 and March 31, 1986. On May 22, 2000, the DOC issued liquidation instructions to Customs regarding the subject merchandise, and Customs liquidated the entries on June 23, 2000, and August 4, 2000. First, Protestant argues that Customs has incorrectly assessed antidumping duties on parts and certain chain models that are outside the scope of the Japan Roller Chan antidumping finding. Second, Protestant asserts that the DOC’s delay in issuing liquidation instructions to Customs regarding the subject merchandise rendered Customs’ subsequent liquidation invalid and, therefore, the entries should have been liquidated “at the rate of duty, value, quantity and amount of duties asserted at the time of entry by the importer. Finally, Protestant asserts that to the extent that the assessment of antidumping duties is lawful, no interest should be assessed on the antidumping duties, and to the extent that such interest is assessed, it should be calculated on a simple, not compound basis. The criteria for further review of a denied protest are set forth in 19 C.F.R. 174.24, and the grounds upon which an application for further review may be sought are set forth in 19 C.F.R. 174.25. Protestant alleges that the requirements of 19 C.F.R. 174.24 are met because the three above assertions “involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee of the Customs Courts.” See 19 C.F.R. 174.24(b). We disagree. The port correctly denied the AFR with regard to the scope of the antidumping finding and assessment of interest because there is well established court precedent regarding both matters. In Sandvik Steel Co. v. United States, and Fujitsu Ten Corp. of America v. United States, 164 F.3d 596 (Fed. Cir. 1998), the Court of Appeals for the Federal Circuit agreed with the lower court that a challenge to Customs’ inclusion of merchandise within the scope of an antidumping order “must be made before Commerce, and subsequently, an action commenced in the Court of International Trade” and “failure to follow that procedure renders a Customs decision concerning the scope of an antidumping order ‘final and conclusive’” and it “cannot be challenged under the protest procedure.” Furthermore, we note that the scope of the antidumping finding and review covers “chain, with or without attachments,” which consist of roller links and pin links; “leaf chain”; and chain model numbers 25 and 35. While we recognize that the above written description remains dispositive, the review also notes that roller chain is currently classified under the Harmonized Tariff Schedule (HTS) and the Tariff Schedule of the United States (TSUSA) subheadings that cover various types of chains, along with their parts, and whether the chain without rollers, or parts, entered by protestant are excluded from the scope of the review is a Commerce determination and not a Customs one. Based upon the antidumping findings and review, the liquidation instructions issued by DOC, and the lack of any contrary evidence presented by Protestant, we conclude that Customs has correctly assessed antidumping duties on the subject merchandise that appears to fall within the scope of the antidumping finding. With regard to the assessment of interest, we note that in HQ 226263, dated December 10, 1996, we stated that the courts have conclusively held that 19 U.S.C. §1677g “requires interest only when a cash deposit of estimated duties is required under an antidumping order.”  See Dynacraft Industries, Inc. v. United States, 118 F.Supp. 2d 1286 (2000) (where estimated antidumping duties are required to be deposited pursuant 19 U.S.C. 1673e(a)(3), then 19 U.S.C. 1673f(b) explicitly provides for the recovery of interest pursuant to 19 U.S.C. 1677g); see also Timken v. United States, 37 F.3d 1470 (Fed. Cir. 1994). Furthermore, Pagoda Trading Co. v. United States, 9 CIT 407, 617 F.Supp 96 (1985), aff’d, 804 F.2d 665 (1986), Koyo Seiko Co., Ltd. v. United States, 16 CIT 366, 796 F.Supp. 517 (1992), and St. Paul Fire & Marine Insurance Co. v. United States, 16 CIT 663, 799 F.Supp. 120 (1992), rev’d, 6 F.3d 763 (1993), which address the relationship between the delay of liquidation instructions being issued and the accumulated interest charges, and which are cited in support of your assertions regarding the interest charges, are not on point because each of those cases involved either a lengthy delay by the DOC in issuing the instructions, which subjected the DOC to potential liability, or a lengthy delay by Customs in liquidating the entries after receiving liquidation instructions from the DOC, which subjected Customs to potential liability. Here, neither scenario exists. There is no allegation that Customs failed to follow the liquidation instructions issued by DOC; instead, the protest appears to challenge the content and issuance of the instructions themselves, which are not protestable matters for Customs to address. Generally, we have held that the role of Customs in the antidumping process is "simply to follow Commerce’s instructions in collecting deposits of estimated duties and in assessing antidumping duties, together with interest, at the time of liquidation." HQ 225382, July 3, 1995; see also, Mitsubishi Electronic America Inc. v. United States, 44 F. 3d 973 (Fed. Cir. 1994); Nichimen America, Inc. v. United States, 9 Fed. Cir. (T) 103, 938 F. 2d 1286 (1991)). However, if Customs fails to follow the instructions of the Department of Commerce, that failure may be subject to protest under 19 U.S.C. §1514. See, e.g., ABC International Traders, Inc., v. United States, 19 C.I.T. 787 (May 23, 1995) ("... claims [that Customs erroneously liquidated certain entries and failed to follow Commerce’s liquidation instructions] may be brought before the court under 28 U.S.C. § 1581(a) (1988), after denial of protests by Customs") (vol. 29, no. 24, page 51, 54-55, Customs Bulletin and Decisions, June 14, 1995); American Hi-Fi International, Inc., v. United States, 20 C.I.T. 910; 936 F. Supp. 1032 (August 2, 1996) ("[j]urisdiction for actions challenging Customs’ failure to follow Commerce’s actual liquidation instructions ... is found under 28 U.S.C. 1581(a)") (vol. 30, no. 34, page 56, 62, Customs Bulletin and Decisions, August 21, 1996). As for the claim that the DOC’s delay in issuing liquidation instructions rendered Customs’ liquidation invalid due to the expiration of the applicable statutes of limitations, Protestant asserts that, because of the delay, the entries should have been liquidated “at the rate of duty, value, quantity and amount of duties asserted at the time of entry by the importer.” See 19 U.S.C. 1504(a). In HQ 224778 (December 23, 1993), we ruled that a suspension of liquidation is not lifted until instructions are received from the DOC. See also HQ 225107 (September 20, 1994). Various statements of the courts support this ruling. The Court of International Trade (CIT) has held that Customs’ obligation to collect antidumping duties does not arise until the DOC has "furnished" Customs with the determination upon which assessments must be predicated. American Permac, Inc. v. United States, 10 CIT 535, 542 (1986). The CIT and the Court of Appeals for the Federal Circuit also referred to the DOC as having "notified" or "directed" Customs to proceed with liquidation. See Pagoda Trading Corp. v. United States, 9 CIT 407, 408 (1985), aff'd 5 Fed. Cir. (T) 10, 14 (1986). In this protest, appraisement and liquidation instructions were not received until May 22, 2000, and Customs was unable to liquidate the subject entries until it received those instructions. As a result, the 90-day limitation period tolled on that date, and Customs liquidated the entries well within that period. The Port Director is being notified of this action. Please note that under 19 U.S.C. 1515(c), “[a]ll denials of protests are effective from the date of original denial for purposes of section 2636 of Title 28. Sincerely, John Durant Director, Commercial Rulings Division