Steel Importer, Purchaser Blast CIT's 'Logical Flaw' in Finding No More Section 232 Refunds

The Court of International Trade committed a logical error when it dismissed a steel importer's and purchaser's bid to reliquidate two entries subject to Section 232 steel and aluminum tariffs, the importer and purchaser said in a brief attempting to keep their case alive. Bilstein Cold Rolled Steel, the purchaser, and Voestalpine USA, the importer, moved for a reconsideration of CIT's decision, which held that the plaintiffs had already received the relief available to them from the Commerce Department in the form of a product exclusion but failed to preserve their ability to receive a refund through a protest or an extension of liquidation (Voestalpine USA Corp., et al. v. United States, CIT Consol. #20-03829).

The issue began when Bilstein submitted a flawed exclusion request to Commerce's Bureau of Industry and Security. The exclusion request was approved, despite including the wrong Harmonized Tariff Schedule subheading and importer of record. The proper importer of record, Voestalpine, then brought in two steel entries that were liquidated with the Section 232 duties.

At the time, the plaintiffs said they “sought advice” from CBP and BIS over the errors in the approved exclusion request. To get retroactive relief, the agencies said, the plaintiffs must file an exclusion request identical to the original one except with the correct information. If it is granted, then the plaintiffs can contact the 232 Help Desk to attempt to open a resubmission case. Bilstein followed those steps, but BIS said that the agency wouldn't accept a resubmission of the exclusion request unless the protest period for the entries hadn't expired.

The plaintiffs then filed their cases at CIT. Despite its initial rejection, BIS then granted the second exclusion request, making it retroactive to the original exclusion request. Failing to file a protest of the liquidation of Voestalpine's two entries, the plaintiffs never sought to extend the approved exclusion to the two entries and thus did not receive a refund of the Section 232 duties paid on them. Bilstein and Voestalpine then sought the reliquidation of these entries in court, where the judge sided with the duo on one of the issues in that the court has the jurisdiction to hear the case (see 2108260024). However, the judge ultimately said that the plaintiffs had already received all the help Commerce could grant them in the form of a product exclusion, dismissing the case for failing to protest or extend the liquidation period.

After properly establishing that the court had jurisdiction to hear the case, though, the only question now becomes whether the court has the power to issue a refund, the plaintiffs said in moving to get the court to reconsider the case. "If it does possess that power, the case is not moot," as the court suggests. "That is not the situation here, unless there is an absolute bar preventing this Court from granting the relief sought by Plaintiffs; ruling on a motion to dismiss is not the time for the weighing of equities," the plaintiffs said.

It doesn't matter that no more relief could be granted just from Commerce, the plaintiffs argued. "The Court must recognize that this suit is not simply against the Department of Commerce; it is against the United States," the brief said. "Doing justice should not depend on the unilateral allocation of responsibility (and the custody of duties) by the Executive Branch among different federal agencies." The "allocations of responsibility" are purely an Executive Branch invention, so holding that the government can keep the Section 232 duties simply due to Commerce's error would weaken the judiciary's ability to "provide equitable relief ... would be weakened."

Bilstein and Voestalpine also argued that the "crux of the case" is actually over whether the final liquidation precludes any possibility of relief for the pair. "If the government’s argument is correct, and this Court is prohibited from granting relief in the form of an order of reliquidation and refund, this case is indeed over," the brief conceded. "If, however, this court has the authority to order reliquidation, this case cannot be moot.

"... Plaintiffs do not claim that they were perfectly diligent. But the responsibility for this situation must be shared by Commerce (and to some degree, Customs for not detecting a non-existent tariff number that did not even exist in the HTSUS). 'Contributory negligence' in steel exclusion proceedings, reminiscent of 19th Century tort law, is not the appropriate standard. The government must defend its action or rectify its mistakes."