CAFC Dismisses CIT Holding that Notice and Comment Required for "Rate Advance" Contrary to Binding Ruling (No Jurisdiction - Protest Should Have Been Filed)
In International Custom Products, Inc. ("ICP") v .U.S., the Court of Appeals for the Federal Circuit reversed the holding of the Court of International Trade, as the CAFC found a lack of jurisdiction, remanding the case with instructions for dismissal.
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The CIT had ruled that U.S. Customs and Border Protection had failed to observe 19 USC 1625(c) which requires, among other things, advance notice and comment when an action is taken to revoke or modify a binding ruling.
ICP had been importing "white sauce" for 10 years under a binding ruling that had classified the merchandise as "other sauces" under HTS 2103.90.9060. In April 2005, CBP notified ICP that any unliquidated entries and all future entries of the "white sauce" would be classified as a butter substitute under HTS 0405.20.3000, which carries a higher rate of duty than that which formerly applied under the binding ruling. ICP did not file a protest to this action, but instead, sought remedy with the CIT.
The CIT based its jurisdiction for this case on 28 USC 1581 (i)(4), which has been described as granting "the court residual jurisdiction of any civil action arising out of the enforcement or administration of the customs laws." The CIT concluded that ICP, having presented unrebutted evidence of the possibility of bankruptcy and irreparable financial harm, was entitled to remedies in 1581(i)(4), and ultimately that the action taken by CBP was null and void.
However, the CAFC ruled that "mere allegations of financial harm, or assertions that an agency failed to follow a statute, do not make the remedy established by Congress manifestly inadequate." The CAFC further stated that Customs regulations do not have built-in unconscionable delay, and that an accelerated review process is available.
The CAFC vacated the CIT's decision due to lack of jurisdiction under 1581 (i), and the case was remanded with instructions to dismiss ICP's complaint.
(See ITT's Online Archives or 03/07/06 news, 06030725 for BP summary of CIT ruling.)
CAFC 05-1444 (dated 10/17/06) available at http://www.fedcir.gov/opinions/05-1444.pdf