Finality of Liquidation Should Block Government Counterclaim, Importer Argues

A government counterclaim, based on classifications not used during the liquidation of the dried botanicals, should be barred by the finality of liquidation, importer Second Nature Designs argued in a March 2 brief at the Court of International Trade (Second Nature Designs v. United States, CIT # 18-00131).

The counterclaim doesn't fall within any of the statutory exceptions to the finality of liquidation, Second Nature said. CBP already said the rate paid by the importer was proper at the tine of liquidation, the brief said.

"CBP cannot collect assessed duties from an importer at the rate and amount the agency itself determined appropriate in liquidation, and then counterclaim under the identical statute invoked by the plaintiff to seek duties in excess of what it determined was proper," Second Nature said. "The government is in essence, asserting a counterclaim against itself. Therefore, it has "no statutory basis to support a cause of action to pursue a claim for more duties than CBP assessed in liquidation," Second Nature said.

Second Nature cited a similar case at CIT involving Cyber Power Systems where the government was found to lack statutory authority to assert a counterclaim (see 2207200052).

Second Nature brought the case in September, arguing that CBP misclassified imports of painted, dyed or glittered dried botanicals, which Second Nature wanted classified under duty-free subheading 0604.90.3000 as "Foliage, branches and other parts of plants, without flowers or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared: Other: dried or bleached." CBP classified the botanicals under subheading 0604.90.6000 as "other," dutiable at 7% (see 2209270032).

The government answered the complaint in a Feb. 14 response, which introduced a counterclaim, asking the court to reclassify 44 product styles as "artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit: Of other materials: Other: Other" under subheading 6702.90.65, dutiable at 17%.