HQ 0221005 - Request for Further Review of Protest No. 3901-7-000085, dated January 27, 1987 - United States International Trade Commision Rulings

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HQ 221005
December 12, 1988

LIQ-9-01-CO:R:C:E 221005 GG

CATEGORY: LIQUIDATION RELIQUIDATION

District Director of Customs
610 South Canal Street
Chicago, Illinois 60607

RE: Request for Further Review of Protest No. 3901-7-000085, dated January 27, 1987

Dear Sir:

The following is in reply to your request on March 16, 1987, for further review of the above-referenced protest.

FACTS:

Protester imported a West German rebar bending machine. The merchandise was entered on May 7, 1986 and the entry was liquidated on June 13, 1986. The rebar machine was entered and liquidated under item 649.43 of the Tariff Schedules of the United States (TSUS), and a duty of 8.2% was assessed.

The protester's broker filed a 19 U.S.C. 1520(c)(1) request for reliquidation and refund of duty with the U.S. Customs Service (Customs) on November 25, 1986. The request for relief under this provision was based on an alleged error in the original classification of the rebar bending machine. No clerical error or mistake of fact issue was raised. The protester claimed that the goods should have been entered under item 674.35, TSUS which has a lower duty rate of 4.8%. The requested refund was approximately $375. Enclosed with the 19 U.S.C. 1520(c)(1) petition was a corrected entry summary which listed the new TSUS item number.

The claim was denied on January 7, 1987 by the U.S. Customs Service, which stated that the protester had failed to supply evidence to support the request for reliquidation and refund. The importer then protested this adverse decision by filing a protest under section 514(a)(7) of the Tariff Act of 1930, as amended, challenging Customs' refusal to grant relief under 19 U.S.C. 1520(c)(1). In addition to reiterating that the original classification of the bending machine was incorrect, the protester in this protest brought up the new issue that a 3% cash discount had been omitted and not deducted from the entered value of the merchandise.

ISSUES:

1. Whether the protest in question was timely filed;

2. Whether protester's 19 U.S.C. 1520(c)(1) request for reliquidation and refund of duties was properly denied by Customs;

3. Whether a new issue which was not included to support objections raised by a valid protest may be brought up in a 19 U.S.C. 1514 protest against a decision by Customs refusing to reliquidate an entry under 19 U.S.C.

LAW AND ANALYSIS:

As a preliminary matter, both the 19 U.S.C. 1520(C)(1) petition and the subsequent section 514 protest were timely filed. The petition was submitted within a year of the date of liquidation, and the protest was received by Customs before the 90-day time limit had expired. A denial of the claims thus cannot be predicated on the basis that the importer did not comply with filing requirements.

19 U.S.C. 1520(c)(1) allows reliquidation of an entry to correct a clerical error, mistake of fact, or inadvertance not amounting to an error in the construction of a law. Relief is not available under this provision where, as here, the error asserted is one of classification of merchandise, and no other grounds which would permit reliquidation have been set forth. Numerous cases have held that a determination as to the classification of merchandise is a conclusion of law, and an error in this area ordinarily cannot be remedied under 19 U.S.C. 1520(c)(1). See, e.g., Mattel Inc. v. United States, 377 F.Supp. 955, 72 Cust.Ct. 257, C.D. 4547 (1974), C.J. Tower & Sons of Buffalo Inc. v. United States, 336 F.Supp. 1395, 68 Cust.Ct. 17, C.D. 4327 (1972), and Gerry Schmidt & Co. v. United States, 371 F.Supp 1079, 71 Cust.Ct. 194 (1973).

An error in classification, as noted above, is a mistake in the applicable law which can only be corrected by filing a 19 U.S.C. 1514 protest within 90 days after liquidation. Ibid. While courts have allowed conversion of 19 U.S.C. 1520(c) claims into section 514 protests when all 514 requirements have been met, in this case the protester's letter was filed outside the 90 day time limit, therefore cannot be treated as a section 514 protest. See A. Giurlani & Bros., Inc. v. United States, 9 CIT 60 (1985). For these reasons, even if the original classification was wrong, Customs has no authority to reliquidate
the entry.

In addition to there being no evidence to substantiate that a 3% discount had been taken advantage of by the importer, the valuation claim must be denied because it was untimely filed. This issue should have been protested within 90 days after liquidation of the merchandise. 19 U.S.C. 1514(c)(2)(A). A protest of a decision refusing to reliquidate an entry under 19 U.S.C. 1520(c)(1) cannot be expanded to serve as a means to extend the time period within which new and unconnected issues not previously protested may be raised. To allow this claim now would serve to nullify the statute of limitations specified within section 514. See Phillips Petroleum Company v. United States, 54 CCPA 7 (1966).

HOLDING:

In view of the foregoing, you are directed to deny the protest in full.

Sincerely,

John Durant

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