CBP's Protest Requirement for Section 301 Refunds Didn't Violate Importer's Due Process Rights, Govt Says

CBP did not violate an importer's due process rights by requiring protests for retroactive refunds of Section 301 duties on imported pressure switches, the government said in an Oct. 25 brief at the Court of International Trade (Environment One v. U.S., CIT # 22-00124). The brief is in support of DOJ's July motion for dismissal claiming lack of jurisdiction and timeliness.

The case concerns 31 entries 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 subheading 8536.50.7000, Harmonized Tariff Schedule of the U.S., 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 Section 301 duties. In May 2021, Environment One filed a protest challenging the liquidation with assessed Section 301 duties, claiming an exclusion granted after entry. The company then sued in April 2022, arguing 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."

DOJ in a July 15 motion sought to have the case dismissed, calling the summons "jurisdictionally defective" for not identifying the specific protests that Environment One sought to challenge and then amending the summons beyond what the government claims is the 180-day limit. Environment One's complaint also alleges jurisdiction pursuant to sections 1581(a) and (i) of 28 U.S.C., which the government argues is incompatible (see 2207180033).

In its Aug. 18 motion opposing the dismissal, Environment One argued that dismissal would harm its due process rights. Protests are not a prerequisite for retroactive Section 301 refunds and the government overstepped its authority in imposing such a requirement, the company said when it asked the court to deny the government's motion to dismiss. The company also said that the government had not demonstrated prejudice from the change 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 statutory overreach by the Office of the U.S. Trade Representative and CBP. "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." Environment One said the government cannot impose an artificial barrier and then rely on a challenge to that barrier as a jurisdictional "gotcha" to prevent a wider challenge to its authority.

DOJ now argues that, even if CBP improperly required protests to process Section 301 refunds, that does not rise to the level of a due process claim. “The Constitution does not provide a right to import merchandise under a particular classification or rate of duty" and there is no right to a particular classification or rate of duty at the time of importation, DOJ said. Therefore, it argued, importers cannot contest the adequacy of the process. Environment One "has not pled, nor could it, that it had a protected interest that would warrant protection under the Due Process Clause," DOJ said.