United States v. Trek Leather, Inc., No. 11-1527 (Fed. Cir. 2014)Annotate this Case
Trek was the importer of record for 72 entries of men’s suits in 2004. Mercantile was the consignee. Shadadpuri is president and sole shareholder of Trek, and a 40% shareholder of Mercantile. Trek and Mercantile provided fabric “assists” to manufacturers outside the U. S. (items incorporated in the imported merchandise, 19 U.S.C. 1401a(h)(1)(A)(i)). Customs determined that the entry documentation failed to include the cost of the fabric assists in the price paid for the suits which lowered the amount of duty payable by Trek. Shadadpuri had previously failed to include assists in entry declarations when acting on behalf of a corporate importer. The Court of International Trade found Shadadpuri liable for gross negligence in connection with the entry of imported merchandise and imposed penalties under 19 U.S.C. 1592(c)(2). The Federal Circuit reversed the penalty, but, on rehearing en banc, affirmed. What Shadadpuri did comes within the commonsense understanding of the “introduce” language of the statute. While suits invoiced to one company were in transit, he “caused the shipments of the imported merchandise to be transferred” to Trek. Himself and through his aides, he sent invoices to the customs broker for use in completing the entry filings to secure release of the merchandise into U.S. commerce. Applying the statute to Shadadpuri does not require piercing the corporate veil.