CIT Ruling Over Alleged Untimely Filed Protests Leads to 'Nonsensical' Practice, Importer Tells CAFC

The Court of International Trade erred when it found that importer Strategic Import Supply's protests were untimely filed, the tire importer said in its March 4 opening argument at the U.S. Court of Appeals for the Federal Circuit. In fact, SIS should not have had to file the protest in the first place, since the U.S. should have provided the necessary refunds for overpaid countervailing duties without any other filings from SIS, the company said. The result of the trade court's ruling is a practice both "nonsensical" and unsupported by the statute's language (Acquisition 362, LLC dba Strategic Import Supply v. United States, Fed. Cir. #22-1161).

CIT dismissed the case in April 2021, finding that the 180-day deadline for protests of CBP decisions runs from the date of liquidation, rather than the date CBP received updated assessment instructions from the Commerce Department (see 2104210066). SIS, importer of passenger vehicles and light truck tires from China, originally filed the case seeking a lower CVD rate on its entries. In the underlying CVD administrative review, Commerce counted a 30.61% duty rate for the subject entries. After uncovering errors in the case, Commerce amended the final results and reduced the rate to 15.56%. Commerce then instructed CBP to liquidate entries at the new rate.

Some of the relevant entries had already liquidated more than 180 days prior to Commerce's instructions. Nevertheless, the importer filed a protest with CBP, arguing that it was valid because it was filed within 180 days of the instructions. The trade court disagreed, finding that the protest was challenging a Commerce decision, not a Customs one. As such, it belonged under Section 1581(c), as opposed to Section 1581(a), as the plaintiffs had claimed, Judge Stephen Vaden said.

SIS then mounted an unsuccessful bid for reconsideration after CBP later granted another of its protests pushing for the same CVD rate correction. Vaden said that the lesson in the case was both "clear and stark: Don't sit on your rights" (see 2109200019).

The tire importer then appealed to the Federal Circuit, where it is now arguing that its protests were timely filed. CBP's decision not to issue the refund that was required by the law on the overpayment of countervailing duties -- a refund that should have been automatically processed -- prompted the protests out of an "abundance of caution," the brief said. The date the liquidation instructions were issued is "both the earliest date CBP arguably had authority to issue refunds, as well as the earliest date [SIS] could have been alleged to have notice of the CVD rate change."

SIS, which filed the lawsuit under the name Acquisition 362, then sought to convince the appellate court of its jurisdiction under Section 1581(a). The importer said that CIT has decided that even though the company took the proper steps following the rate change, it has no legal right to enforce its demand for the money that it is "unmistakably" owed. "Defendant’s agency fails to uphold the law, Defendant keeps the spoils of that failure, and A362 has no ability to access any court review of those activities," the brief said.

"If affirmed, the CIT dismissal of A362’s timely action leaves A362 without a remedy, establishing precedent that requires A362 to file legally-unsustainable protests even before the CVD rate is changed and before A362 had any entitlement to a refund, the importer said. That is both nonsensical in practical application and unsupported by the language of the guiding statutes."