HQ 0222610 - Application for further review of Protest No. 3303-8- 000066 under 19 U.S.C. 1520(c)(1) - United States International Trade Commision Rulings

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HQ 222610

November 7, 1990

LIQ-9-01-CO:R:C:E 222610 CB

CATEGORY: LIQUIDATION

Regional Commissioner
U.S. Customs Service
Suite 1501
55 East Monroe Street
Chicago, ILL 60603-5790

RE: Application for further review of Protest No. 3303-8- 000066 under 19 U.S.C. 1520(c)(1)

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised and our decision follows.

FACTS:

Protestant is seeking reliquidation of the subject entries under 19 U.S.C. 1520(c)(1) and is alleging a mistake of fact in the classification of the merchandise.

It appears from the file that certain plastic articles assembled in El Salvador mostly from American goods were entered free under the Generalized System of Preferences (GSP). The merchandise at issue are dialysis kits consisting of blood transfer packs, drainage sets, intravenous infusion sets, cycler sets, and injection sites. The Import Specialist found the merchandise not to be eligible for GSP and assessed duty at 7.9 percent under item 709.27, TSUS. Almost one year after the date of liquidation, the importer filed a request for reliquidation under 19 U.S.C. 1520(c)(1) disputing the Import Specialist's classification. Additionally, the protestant claims the merchandise qualifies for Caribbean Basin Initiative (CBI) treatment instead of GSP and has submitted corrected figures on the form "A". The protestant claims that the liquidation of the entry for duty was a mistake of fact because all of the relevant information was not available at the time of liquidation.

According to protestant, at the time of entry, the Import Specialist was not aware of a Headquarters Ruling classifying similar merchandise under the TSUS item number claimed by protestant. Herein lies protestant's claim of a mistake of fact.

Protestant has also stated that samples of the merchandise were never presented to the Import Specialist. Protestant believes that had the Import Specialist seen the merchandise together with an explanation of its use, the items would have been classified under the item number claimed by protestant. The protestant agrees with the classification of the intravenous infusion sets but, disagrees with the classification of the rest of the merchadnise. The file indicates that the protestant was given an opportunity to furnish additional information. However, when the requested information was not furnished, the Import Specialist classified the merchandise on the basis of the available information.

Regarding the CBI/GSP claim, protestant claims that through inadvertence the form "A" used was not properly annotated to reflect CBI eligibility. Protestant alleges that it has proven that all of the merchandise, except for one item, qualifies for CBI treatment.

ISSUES:

1) Whether relief may be granted under 19 U.S.C. 1520 (c)(1) to correct an alleged error in the classification of merchandise?

2) Whether the denial of GSP/CBI treatment was a mistake of fact or law?

LAW AND ANALYSIS:

Section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514 (1982)), sets forth the proper procedure for an importer to protest the classification and appraisal of merchandise when it believes the Customs Service has misinterpreted the applicable law. A protest must be filed within ninety days after notice of liquidation or reliquidation. Otherwise, the tariff treatment of merchandise is final and conclusive.

Section 520, Tariff Act of 1930, as amended (19 U.S. C. 1520(c)(1)), is an exception to the finality of 514. An entry may be reliquidated to correct a clerical error, mistake of fact, or other inadvertence if it does not amount to an error in the construction of law; is adverse to the importer; is manifest from the record or established by documentary evidence. As stated by the Court of International Trade in United States Steel Corporation, et al v. United States, et al, 7 Ct. Int'l Trade 118, 124 (1984), three conditions must be satisfied under 1520(c)(1):

1. A mistake of fact must exist;
2. The mistake of fact must be manifest from the record or established by documentary evidence; and
3. The mistake of fact must be brought to the attention of the Customs Service within the time requirements of the statute.

However, 1520(c)(1) cannot be used to correct all mistakes, it offers limited relief in certain situations.

Issue #1

Protestant alleges that the subject merchandise was erroneously classified due to a mistake of fact. A mistake of fact has been defined by the courts as any mistake except a mistake of law. It is a mistake which takes place when a fact which exists is unknown, or a fact which is thought to exist, in reality does not exist. C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, C.D. 4327, 336 F. Supp. 1395 (1972), aff'd sub nom., United States v. C.J. Tower & Sons of Buffalo, Inc., 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974). The courts have consistently taken the position that an erroneous classification of merchandise is not a clerical error, mistake of fact, or inadvertence , but it is an error in the construction of a law. See, Mattel Inc. v. United States, 377 F. Supp. 955, 72 Cust. Ct. 257, C.D. 4547 (1974); and C.J. Tower & Sons of Buffalo, Inc. v. United States, 336 F. Supp. 1395, 68 Cust. Ct. 17, C.D. 4327, aff'd, 499 F.2d 1277, 61 C.C.P.A. 90 (1972). A presumption of correctness exists in favor of Customs classification and the importer has the burden to proof otherwise. PPG Industries, Inc. v. United States, 4 Ct. Int'l Trade 143, 147 (1982)

In the instant case, we must separate the merchandise to determine whether classification resulted in a mistake of law or fact. Regarding the cycler sets and drainage sets, it is Customs position that protestant is entitled to reliquidation. The Customs Service has previously ruled that certain classification errors may be corrected under 1520(c)(1). HQ Ruling 75-0026, issued January 24, 1975, indicates that reliquidation is proper when a Customs officer is not aware of a classification ruling. The same holds true for court decisions. In Terumo Corp. v. United States, 10 Ct. Int'l Trade 116 (1986), the court held that medical dialysis machines were classifiable under item 709.17, TSUS. This holding was expanded in HQ 076777, issued July 22, 1986, to include parts of dialysis machines. Therefore, the subject entries should be reliquidated.

The same does not apply to the blood transfer packs, infusion sets and injection sites. Protestant does not contest the classification of the infusion sets. However, protestant does allege that the blood transfer packs and injections sites should have been classified in item 774.60, TSUS, pursuant to HQ 048594, issued April 7, 1976. Protestant's reliance on said ruling is unfounded. It has been clearly established that rulings issued by Headquarters are applicable only to the particular transaction described therein. 19 C.F.R. Part 177.9. Previous rulings are not determinative of classification but rather, merely persuasive. As previously discussed, classification of merchandise is not a clerical error, mistake of fact, or inadvertence. The proper avenue of relief for errors regarding the classification of merchandise is under 19 U.S.C. 1514. Protestant should have filed its protest within ninety (90) days after liquidation.

Issue #2

The file reflects that GSP treatment was claimed at the time of entry. However, protestant is now alleging that the subject merchandise qualifies for CBI treatment. The use of Form A was disallowed because it was merely an assembly operation in El Salvador. The evidence shows that the value information submitted to Customs was reviewed before the disallowance of GSP treatment. The importer was given an opportunity to submit additional information but none was forthcoming. Liquidation occurred after the importer failed to provide additional information.

We agree that, under the available evidence, the denial of GSP treatment was a legal determination and is not correctable under 19 U.S.C. 1520(c)(1). The Customs Service has previously addressed the issue of an importer's failure to provide additional information. In C.S.D. 80-250, Customs determined that the failure of the importer to respond to Customs request for additional information amounted to negligent inaction, and therefore, did not fall within the meaning of 1520(c)(1). This conclusion has been upheld by the courts. In Occidental Oil & Gas Co. v. United States, 23 Cus. Bul. & Dec. No. 17 p. 40, Slip Op. No. 89-40 (CIT 1989), the court held that an importer's delay in forwarding additional information is not an inadvertence or mistake within the scope of 1520(c)(1). The court found that the record showed that the appropriate documents supporting the claim had not been supplied, and therefore, the Customs officer had made a legal determination as to the classification. We see no
reason to reach a different conclusion in the instant case. Protestant was given an opportunity to supply additional information but failed to do so. Otherwise, protestant had ninety (90) days to protest after liquidation under 19 U.S.C. 1514.

HOLDING:

The subject protest should be admitted with respect to the cycler sets and the drainage sets. This protest should be denied with respect to the injection sets and the blood transfer packs. Since protestant is not contesting the classification of the infusion sets, we are not issuing a decision with respect to that merchandise.

Sincerely,

John Durant, Director

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