Protests Not Required to Claim Retroactive 301 Exemptions, Importer Says

Protests are not a prerequisite for Section 301 refunds on goods retroactively excluded from the duties on them and the government overstepped its authority in imposing such a requirement, Environment One argued in an Aug. 18 brief at the Court of International Trade (Environment One Corporation v. U.S., CIT # 22-00124).

The case concerns 31 entries of fixed set-point pressure switches filed at either the Port of Newark/New York or the Port of JFK between October 2019 and July 2020. Environment One entered the items under Harmonized Tariff Schedule of the U.S. subheading 8536.50.7000, which is an otherwise duty-free provision subject to Section 301 duties. CBP liquidated the entries between September 2020 and June 2021, classifying the merchandise under subheading 8536.50.7000 and assessing the Section 301 duties. Environment One said that the products at issue had already been specifically excluded by the government retroactively by way of an exclusion granted to another company in September of 2019.

Beginning in May 2021, Environment One filed four protests specifically challenging the assessment of Section 301 duties on liquidation. The company then sued in April 2022, arguing that the government "exceeded their authority under the Trade Act" by creating a protest requirement for Section 301 refunds, "despite that statute applying only to certain enumerated CBP decisions" (see 2204180023).

For its part, the government argued that the case was "jurisdictionally defective," in a July 15 motion to dismiss, for claiming jurisdiction under sections 1581(a) and (i) of 28 U.S.C., for not specifically identifying the protests that Environment One sought to challenge, and for amending the summons beyond what the government claims is the 180-day limit (see 2207180033).

Environment One has asked the court to deny the government's motion to dismiss and to order a refund of the retaliatory duties, arguing that the government has not demonstrated having been prejudiced by the amendment to the summons and that the Court has dual authority under 1581(a), because the case involves the "timely filing of protests," and under 1581(i), due to USTR's and CBP's statutory overreach of authority. "Even if CBP accepted protests, and has given refunds of China 301 duties in response to some protests," the company said, "it had and has no authority to do so." The government cannot impose an "artificial barrier" such as the protest requirement and then rely on a challenge to that barrier as a jurisdictional "gotcha" to prevent a wider challenge to its authority.