CAFC Rules U.S. Must Pay Interest on Entry that Reliquidates with a Refund Under 2000 Trade Act (Interest Not Provided for in Trade Act Provision)
In Orlando Food Corp. v. U.S., the Court of Appeals for the Federal Circuit (CAFC) has reversed a Court of International Trade (CIT) decision, ruling that the U.S. government must pay interest to Orlando in connection with the refund of overpaid duties on a 1989 entry.
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According to the CAFC, Orlando imported certain tomato products from the European Community between 1989 and 1990 that were classified under HTS 2002.10.00 (9903.23.15), and subject to a 100% duty rate. The CIT subsequently ruled that the items were classifiable under HTS 2103.90.60. The CAFC states that when Orlando received its duty refunds, it apparently received interest on its overpayment of duties pursuant to 19 USC 1505.
Orlando then petitioned Congress for relief on a single 1989 entry that it failed to protest and Congress provided that relief in section 1408 of the Tariff Suspension and Trade Act of 2000 (2000 Trade Act), which provided for reliquidation of the entry if the request was filed within 90 days after the date of enactment, and the request contained sufficient information to enable Customs to locate the entry or reconstruct it.
The CAFC states that Orlando then requested reliquidation and was paid a refund according to the proper classification; however, the government refused to pay interest on the claim and the CIT upheld this refusal.
According to the CAFC, the government raises a number of arguments to support its position that no interest is due on the claim, including that the award of interest would have to be specifically provided for in section 1408 of the 2000 Trade Act, which it was not.
The CAFC states that it agrees with Orlando's primary argument that the government should pay interest as the authorization of liquidation or reliquidation in section 1408 of the 2000 Trade Act invokes 19 USC 1505(b), which requires Customs to pay interest on "any excess moneys" deposited, upon liquidation or reliquidation.
The CAFC further states that section 1505(b) is not limited to liquidations or reliquidations under any particular provision.
In addition, the CAFC cites discussion from Hartog Foods Int'l v. U.S. stating that section 1505(b) "unambiguously waives sovereign immunityfor interest awards on 'excess moneys deposited'." Also in HartogFoods, the CAFC states that "excess moneys deposited" refers to an overpayment of estimated duties; i.e., the deposit or payment of money beyond legal requirements.
The CAFC finds that there is no principled basis for holding that Orlando's overpayment was not "excess moneys deposited" and has therefore reversed and remanded the CIT's earlier ruling.
CAFC Court No. 04-1612, dated 09/14/05 (includes a dissenting opinion), available at http://www.fedcir.gov/opinions/04-1612.pdf)
CIT Slip Op. 04-95, decided 08/03/04, available at http://www.cit.uscourts.gov/slip_op/Slip_op04/04-95.pdf