HQ 0220962 - Application for further review of Protest No. 1001-6-000630 under 19 U.S.C. 1520(c)(1) - United States International Trade Commision Rulings

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HQ 220962

March 13, 1991

LIQ-9-01-CO:R:C:E 220962 CB

CATEGORY: ENTRY LIQUIDATION

Regional Commissioner
U.S. Customs Service
New York Region
Suite 716
6 World Trade Center
New York, New York 10048-0945

RE: Application for further review of Protest No. 1001-6-000630 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:

Protest has been filed against the Customs Service denial of a request for reliquidation of the subject entries, pursuant to 19 U.S.C. 1520(c)(1).

Per the record, women's leather handbags made of American components assembled in Haiti were imported between the period of August, 1983 and January, 1984. Allowance for duty was claimed under the provisions of TSUS item 807.00, free of duty (articles assembled abroad of U.S. components). Protestant states that the requisite assembler's declaration was submitted with each entry pursuant to 19 CFR 10.11(b) and 10.24. The entries were liquidated during the period of June and July, 1984 disallowing the importer's claim for item 807 allowance.

According to protestant, the responsible import specialist informally advised protestant that the reason for denial of 807 allowance was the absence of any supporting documentation submitted with the entry. The import specialist claimed that no "work boards" were submitted after repeated requests for information on CF 28's and notices of proposed rate advances on CF 29's. Customs records indicate that the notices were sent to the importer on November 9, 1983 and January 10, 1984 for several of the entries. On December 12, 1984, protestant's representatives visited the responsible commodity specialist team regarding the classification of the merchandise. Subsequently, the information which was apparently requested on the CF 28 was received by Customs on or about December 18, 1984.

On January 22, 1985, a request for reliquidation of the subject entries was filed. In the request, the importer alleged that there were no CF 28's or CF 29's in the Customs Service files on the subject entries. Moreover, the importer claimed that it never received any request for additional information. An affidavit to that effect, from the importer's Import-Export Manager, was submitted with the request. The importer contended that it submitted all of the documentation required by 19 CFR 10.24. According to the importer, it received a CF 29 on June 7, 1984, indicating a proposed rate advance on six entries not the subject of this protest. The importer provided the documentation requested and item 807 allowance was approved. The request for reliquidation of the subject entries was denied on January 2, 1986.

A protest and supplement were filed on January 14, 1986 for refusal to reliquidate under 19 U.S.C. 1520(c)(1), alleging that there is a reasonable presumption that no CF 28's or CF 29's were ever mailed; and, that the mistake of fact was based on the assumption that the importer received the requests for information and negligently failed to respond.

ISSUE:

Whether liquidation of the subject entries was a mistake of fact remediable under 19 U.S.C. 1520(c)(1)?

LAW AND ANALYSIS:

Section 520(c)(1) of the Tariff Act of 1930, as amended (19 U.S.C. 1520(c)(1)), provides that Customs may correct certain errors, if adverse to the importer, within one year of the date of liquidation. An entry may be reliquidated in order to correct a clerical error, mistake of fact, or inadvertence not amounting to an error in the construction of a law. See 19 U.S.C. 1520 (c)(1); 19 CFR 173.4. Section 520(c) is not an alternative to the normal liquidation-protest method of obtaining review, but rather affords limited relief where an unnoticed or unintentional error has been committed. See Computime, Inc. v. United States, 9 Ct. Int'l Trade 553, 554, 622 F. Supp. 1083, 1085 (1985); see also Universal Cooperatives, Inc. v. United States, 23 Cust. B. & Dec. No. 29, p. 38, Slip Op. No. 89-89 (CIT June 27, 1989).

Section 514 of the Tariff Act of 1930, as amended (19 U.S.C. 1514 (1982 & Supp. 1985)), sets forth the proper procedure for an importer to protest the classification and appraised value of its merchandise when it believes Customs has misinterpreted the applicable law and incorrectly classified the imported merchandise. Section 514 makes the tariff treatment of goods final and conclusive, unless the classification is protested within ninety days of liquidation. -3-

Section T.D. 54848 describes and distinguishes correctable errors under 1520(c)(1). Mistake of fact occurs when a person believes the facts to be other than what they really are and takes action based on that erroneous belief. The reason for the belief may be that a fact exists but is unknown to the person or he may believe that something is a fact when in reality it is not. Inadvertence connotes inattention, oversight, negligence, or lack of care while clerical error occurs when a person intends to do one thing but does something else, including mistakes in arithmetic and the failure to associate all the papers in a record under consideration. These errors are not necessarily mutually exclusive. However, errors in the construction of a law are not correctable under 1520(c). Those occur when a person knows the true facts of a case but has a mistaken belief of the legal consequences of those facts and acts on that mistaken belief. 94 Treas. Dec. 244, 245-246 (1959).

Protestant contends that denial of item 807 allowance because of failure to furnish additional information is a mistake of fact remediable under 1520(c). In support of its contention, protestant cites Lester Engineering Company v. United States, 3 Ct. Int'l Trade 236 (1982), wherein the Court of International Trade rejected the argument that a determination of constructed value involved a construction of law so as to preclude the applicability of 1520 (c)(1). We disagree with protestant's interpretation of the holding in Lester Engineering. In said case, the court concluded that under the circumstances "it would be premature...to decide whether any error or mistake in the appraisement is of the type that is remedial under section 1520(c)(1)." Lester Engineering 3 Ct. Int'l Trade at 240. In other words, the court merely concluded that it required additional evidence before it could determine whether the alleged error was remediable under 1520 (c)(1).

According to protestant, CF 28's and 29's were never received for the subject entries. An affidavit to that effect, from the importer's Import-Export Manager, was submitted with the request for reliquidation. Protestant contends that since such notices were never received, there is a presumption that they were never mailed. "[T]he failure to receive a notice through the mail raises a presumption that it was not mailed." F.W. Myers & Co., Inc. v. United States, 6 Ct. Int'l Trade 215, 574 F. Supp. 1064 (1983), citing Orlex Dyes & Chemicals Corp. v. United States, 41 Cust. Ct. 168, 170, 168 F. Supp. 222, 229 (1958). In F.W. Myers the court held that when non-receipt has been established, the burden of proof to demonstrate the fact of mailing shifts to the defendant. In the instant protest, the Customs Service has met its burden. Copies of the CF 28's and CF 29's have been produced. The Myers court found that the Government witness made conflicting statements as to whether the documents were mailed. That court also found that an examination -4-
of the Government's master file revealed no indication of mailing. Here, the District retained file copies of the mailed documents which distinguishes the Myers case from the present situation.

Additionally, protestant contends that it submitted all of the documentation required by 19 CFR 10.24 to support the elements of item 807 allowance and that it would be improper to request further information. However, we must point out that under Part 152-Classification and Appraisement of Merchandise- the Customs Service may request additional information. More specifically, 19 CFR 152.2 provides that if "the district director believes that the entered rate or value of any merchandise is too low, ...he shall promptly notify the importer on Custom Form 28...." CF 28 is titled "Request for Information." Therefore, the Customs Service has the authority to request any additional information required to properly appraise merchandise.

Protestant also alleges that Customs could not lawfully rate advance entries for failure to respond to information requested because this is in violation of the holding in Ashland Chemical Co. v. United States, 7 Ct. Int'l Trade 362 (1984). In Ashland, the court held that the appraisement of merchandise solely based on failure to supply information was arbitrary and not in accordance with the law. However, it must be pointed out that, subsequent to Ashland, the Court of International Trade has held that denial of duty-free treatment based on importer's failure to supply the appropriate documents is not in violation of the law. The facts in Occidental Oil & Gas Co., v. United States, 23 Cust. B. & Dec. No. 17, p. 40, Slip Op. No. 89-40 (CIT March 29, 1989), were similar to the subject protest. The importer claimed entry free of duty under item 800 TSUS, at the time of entry. The Customs Service notified the importer that supporting documentation was required. After the importer failed to provide the information, the entry was liquidated without the allowance. The court concluded that "[t]he record shows that plaintiff had not supplied the appropriate documents to support its claim. Hence, the Customs officer made a legal determination as to the classification of the merchandise on the basis of the facts presented." Therefore, liquidation of an entry at a higher rate when the importer fails to document its duty rate claim is not an arbitrary action on the part of the Customs Service nor a violation of the law. Rather, it is a legal determination not subject to reliquidation under 19 U.S.C. 1520(c)(1).

HOLDING:

The subject protest should be DENIED in full.

A copy of this decision should be attached to the CF 19 Notice of Action to satisfy the notice requirement of section 174.30(a), Customs Regulations.

Sincerely,

John A. Durant, Director

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