DOJ Bolsters Efforts to Dismiss Section 232 Exclusion Challenge Since Entries Are Unliquidated

The DOJ further argued for the dismissal of a lawsuit seeking Section 232 steel and aluminum tariff exclusions since the 19 entries that are the subject of litigation have not been liquidated. In a Nov. 12 brief filed at the Court of International Trade, DOJ said that the plaintiffs, Borusan Mannesmann and Gulf Coast Express Pipeline, wrongly argue that their protests don't concern the tariff classification of their merchandise. The protests at issue seek use of a tariff exclusion, which is a challenge of the tariff classification, DOJ said (Borusan Mannesmann Boru Sanayi ve Ticaret A.S., v. U.S., CIT #21-00186).

The suit seeks the exclusions for 19 entries of steel pipe from Turkey and claims jurisdiction under Section 1581(a). This prompted an initial motion to dismiss from DOJ, seeing as all the entries are not liquidated (see 2108260062). Eighteen of the entries are currently under an injunction in the Transpacific Steel case, which is looking to overturn the tariff hike on Turkish steel made in 2018. That case is currently being appealed to the Supreme Court after it was met with defeat at the U.S. Court of Appeals for the Federal Circuit. The remaining entry is not subject to the Transpacific litigation, but its liquidation has been extended until August 2022.

The plaintiffs argued that they're not protesting the classification and amount of duties charged on the entries but are instead seeking to protest "charges or exactions." DOJ disagreed, arguing that "the protest seeks to change the applicable [Harmonized Tariff Schedule] classification for the subject entries and, operationally, the only way that CBP could approve the protest would be to change the tariff classification to account for the claimed exclusions," the brief said. "... There are no 'charges or exactions' at issue for these entries beyond the duties due by application of the ad valorem tariff rates provided in the relevant HTSUS classification. It is well-established that statutory provisions must not be interpreted in ways that effectively make other provisions meaningless."

The plaintiffs also argued that they are entitled to "pre-liquidation refunds" of estimated deposited duties for the Section 232 tariffs and that CBP's refusal to fork over the refunds is an exaction. "Plaintiffs are mistaken," the brief said. "While the statute authorizes CBP to issue pre-liquidation refunds in appropriate circumstances, there is no statutory requirement to do so."

"In sum, the Court lacks jurisdiction under 28 U.S.C. §1581(a) and this case must be dismissed," DOJ said. "Plaintiffs’ protest, seeking the reclassification of merchandise in nineteen entries that CBP has not yet liquidated, is premature and invalid under 19 U.S.C. § 1514(c)(1)(A). The alternative in 19 U.S.C. § 1514(c)(1)(B) does not apply because this is not a case where liquidation 'is inapplicable' because liquidation is by definition CBP’s 'final computation or ascertainment of duties on entries for consumption.'"