Protest Needed to Challenge Liquidation Even After Amended CVD Rate, US Tells Federal Circuit

Importer Acquisition 362, doing business as Strategic Import Supply, had to file a protest to properly establish jurisdiction to challenge the liquidation of its entries, DOJ argued in an April 8 reply brief at the U.S. Court of Appeals for the Federal Circuit. Responding to SIS's arguments that there was nothing to protest at the time since the countervailing duty rate was not final, DOJ said that this position is incorrect since the importer should have moved to suspend liquidation during the CVD review. Failing to do so precluded the ability to judicially challenge the liquidations, the brief said (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, an importer of passenger vehicle 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 brought its case to the Federal Circuit to contest the ruling, arguing that it should not have had to file the protest in the first place since the U.S. should have provided the necessary refunds for overpaid CV duties (see 2203040065).

In its defense of the CIT's decision, DOJ argued that the belief that a protest could've been filed with CBP only after the final CVD rate was issued is not backed by either statute or case law. "Having missed its chance to protest the liquidation, Acquisition is simply attempting to alter the trigger of the 180-day clock to fit the facts of its erroneous actions," the brief said. "Acquisition’s statutory interpretation is untenable, and there is no reason to disregard Customs’ liquidation and measure the 180-day period from something other than the date of liquidation."

SIS said that there was nothing to protest during the 180-day post-liquidation period since the final CVD rate was unknown. DOJ disagreed, telling the Federal Circuit that if the company believed it was entitled to the application of the rate in the CVD review, it would've acted as if the liquidation was suspended during the review. "Thus, when CBP liquidated the entries prior to the conclusion of the review, alarm bells should have gone off for Acquisition as the liquidations would have been in contravention to its expectation of a suspension," the brief said. "And regardless of whether the final CVD rate was known at the time of liquidation, Acquisition should have filed a protest to challenge Customs’ alleged premature liquidations."