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Importers Are Responsible for Filing Timely Protests, Despite Delays in Exclusion Processes, Gov't Says

Protests seeking refunds for granted exclusions from Section 232 tariffs must be filed in a timely manner, even when the process is complicated by government errors, the DOJ argued in a Jan. 27 motion to dismiss at the Court of International Trade (SXP Schulz Xtruded Products v. United States, CIT # 22-00136).

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The case concerns five entries of Super Duplex Stainless Steel forged and turned bars suitable for use as raw material for producing billet for pipe extrusion, imported by Schulz Xtruded Products (SXP) between April and June 2019. SXP claims that it improperly paid $343,193.50 in Section 232 duties for imported Super Duplex Stainless Steel despite a product exclusion. SXP argued that it requested an exclusion in April 2019, which the Bureau of Industry and Security granted in May 2020. SXP discovered errors in the relevant decision memo, which it says it worked with BIS to resolve.

In July 2020, BIS issued a revised decision memo that erroneously listed the date for the exclusion application as September 2019 instead of April 2019. Because of what it said were incorrect dates, SXP said CBP incorrectly liquidated the five entries without the benefit of the granted exclusion.

SXP then submitted a protest to CBP, challenging the collection of duties, which CBP denied, citing entry dates outside the alleged exclusion period, though SXP contended the exclusion period was incorrect. In August 2021, SXP requested that CBP void the denial of the protest, which CBP declined to do. SXP then sued in May 2022, seeking refunds of the Section 232 duties and asking the court to find that BIS violated the Administrative Procedure Act by incorrectly stating the submission date in the revised decision memo. Exclusions issued by Commerce are retroactive to the date of the request, SXP argued in its initial complaint.

The DOJ seeks to dismiss the case, arguing that all possible relief has already been granted. SXP imported the five entries shortly after it had requested the relevant exclusion and "before Commerce had made a decision on the exclusion request," the DOJ argued. While reviewing the decision memo, SXP never requested an extension of the time for liquidation from CBP and never notified CBP that it had even requested an exclusion from Commerce prior to liquidation. CBP did not know SXP was seeking a duty refund until the November 2020 protest, the DOJ said. Ultimately, SXP's failure was one of timing, the government said, noting that SXP in fact obtained a refund for duties paid on the one of five entries its broker protested within the 180-day statutory time limit.

SXP’s failure to submit timely protests was unrelated to errors in the decision memorandum, the DOJ said. CBP issued a series of informative messages to the importing community that specifically provide information concerning the available procedures for claiming an approved Section 232 exclusion at entry, the DOJ said: "Granted exclusion requests are not self-executing. Without an affirmative request by the importer, a granted exclusion request does not cause or result in a refund." It was SXP's responsibility to notify CBP that it was requesting an exclusion and to "preserve the reviewability of its entries" by filing time extension requests.