Refunds of customs duty; reconciliation entries | KPMG | GLOBAL

Federal Circuit: Refunds of customs duty; reconciliation entries

Refunds of customs duty; reconciliation entries

The U.S. Court of Appeals for the Federal Circuit today issued a decision upholding the findings of the trade court, that a U.S. automobile manufacturer was not entitled to a refund of overpayments of customs duties as claimed in reconciliation entries.


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The case is: Ford Motor Co. v. United States, 2014-1726 (Fed. Cir. February 3, 2016). Read the Federal Circuit’s decision [PDF 147 KB] that includes a dissenting opinion.

Case history

In this case, the importer in filing for declaratory judgment, asserted that U.S. Customs and Border Protection (CBP) had failed to liquidate in the time required by law. Its complaint asserted jurisdiction under 28 U.S.C. § 1581(i)—the Tariff Act’s grant of residual jurisdiction to the trade court over matters concerning enforcement and administration of, inter alia, duty assessment.

This case was previously before the U.S. Court of International Trade twice—the first time, the trade court’s decision was appealed to the Federal Circuit which remanded the case back to the trade court. Today’s decision is the second appeal to the Federal Circuit.


During 2004 and 2005, a U.S. automobile manufacturer imported Jaguar-brand cars from the United Kingdom. At the time of the cars’ entry into the United States, the U.S. company deposited what it estimated to be appropriate customs duty payments with CBP. 

Later, the company determined it had overpaid the amount of customs duty owed because its estimates had been too high. The company between June 2005 and October 2006 filed nine reconciliation entries with CBP, seeking a total refund of about $6.2 million, asserting that the reconciliation entries (and not the rate in the original entries) represented the correct amounts. 

In April 2009, the company filed suit in the U.S. Court of International Trade, asserting that CBP had not extended the liquidation period as required by statute and, thus, could not recalculate the customs duty. By contrast, CBP asserted that since it had not liquidated any of the nine entries, there were no liquidation decisions to protest. The company countered that its entries were “deemed liquidated” as a matter of law.

While the case was pending, CBP liquidated five of the nine entries. The trade court then granted the government’s motion to dismiss for those entries. Concerning the four remaining entries, the trade court declined to issue the relief requested by the company, explaining that there would be “ample opportunity” for the company to assert claims for those entries in a future action. A short time later, CBP liquidated the remaining entries.

On appeal, the Federal Circuit reversed the trade court’s dismissal relating to the five entries that were liquidated while the case was pending, and vacated the trade court’s discretionary dismissal of the company’s claims that remained unliquidated. 

On remand, the trade court again granted the government’s motion to dismiss, this time on the basis that certain of the company’s claims directed at its 2005 entries were barred by the two-year statute of limitations. 

The Federal Circuit today affirmed, finding that it did not need to address the statute of limitations issue because the “statute is not jurisdictional”—that is, the court did not need to address the limitations issue, as long as the trade court properly dismissed the claims on other grounds. The Federal Circuit also held that the trade court did not abuse its discretion in declining to issue declaratory relief as requested by the company.

The dissent wrote that no one disputed that the import duties had been overpaid, and pointed out that the company “now must repeat this administrative process” to obtain the requested refund.


For more information, contact a professional with KPMG’s Trade & Customs practice:

Douglas Zuvich | +1 (312) 665-1022 |

Andrew Siciliano | +1 (631) 425-6057 |

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